The music of multi-sourcing (Part 2): Achieving harmonious customer outcomes

Orchestra Conductor

In part one of this blog series, I looked at some of the fundamental problems of managing multiple service providers. However, to keep up with customer demand and expectations, employing a number of third-party providers to deliver services to customers is inevitable. So the question becomes – how do we make it work?

The promise of SIAM

Service Integration and Management (SIAM) comes from the long-standing ITIL framework and multi sourcing strategies of the 90s – with the specific promise of improving the way IT organisations manage multiple providers.

Critical success factors for SIAM are:

  • Strong governance to an agreed-upon operating model between the organisation and service providers
  • A deeply embedded culture of customer care and focus that is understood by service providers
  • A strong emphasis on organsational change management — engaging service providers and business stakeholders during design of service integration models
  • “One way, same way” – process roles and responsibilities that are clear across the end-to-end service
  • Where possible, an integrated toolset used across the organisation and service providers

Some of SIAM’s ideas for overcoming the overall challenge of managing multiple providers to deliver an end-to-end service are:

  • Integration of services managed as a portfolio, aiming for optimal end-to-end execution and performance based on customer needs and enterprise objectives
  • Address operational integration of separate services by maintaining a collaborative community of service providers (in terms of knowledge-sharing, problem teams and service forums).
  • Produce dashboards and methods of reporting that provide “a single version of the truth” and overall measurement of delivery performance across providers, which is over and above typical SLA deliverable reporting offered by the provider.

Since it emerged in early 2015, several large global organisations have embraced and started to adopt SIAM. The trouble is that an industry framework for SIAM has yet to be formalised.

IDSM holds some clues

DXC’s Integrated Digital Service Management (IDSM) extends and consolidates thinking on ITSM, SIAM, governance, automation/orchestration, DevOps and continual delivery. It is a data-driven, automated approach to how IT services are delivered and managed, where multi-sourced IT solutions have grown too complex and dynamic as a result of digital disruption.

IDSM does offer a new way of thinking for anyone trying to juggle multiple providers into delivering a desired business outcome beyond the strict boundaries of their service contract. Its tenets include:

  • Focus on user experience vs cost of delivery
  • Manage services, rather than systems
  • Speed of restoration is more important than failure avoidance
  • Take an outside-in view (not inside-out)
  • Be streamlined, not bureaucratic
  • Focus on outcomes over process

Some specific recommendations include:

  • Re-evaluate current service performance metrics and indicators to ensure they are focused on business outcomes.
  • Re-evaluate supplier contracts to ensure that they incentivise behaviour to prioritise business requirements and outcomes over individual service levels. All too often, service provider contracts penalise the supplier for prioritising cross-team efforts over staying within their own lane.
  • Develop a culture of accountability. That is, suppliers and employees alike are responsible for business outcomes, not individual successes. Downplay heroism in favour of depth of support.

Don’t forget people and culture

Perhaps the most important question to ask is: what do IDSM or SIAM offer for the cultural integration of people and processes across providers?

How do they ensure the delivery of a common, positive customer experience throughout service delivery that is aligned to the organisation’s ethos and customer engagement attitude?

For example, you can easily set a rigid requirement on how quickly to answer a customer service call or reply to an email . You can even provide call scripts and email templates that tick all your boxes for brand tone and legislative compliance, etc. You can also mandate training for their staff. But if the human who responds sounds ‘short’ or otherwise fails to satisfy the information needs of your customer (and you aren’t offering anywhere else for them to go), the damage is done.

In today’s online environment, that damage can be immense.

Organisational culture is a huge factor. Organisations invest significantly in creating an internal enterprise culture, as well as promoting it to existing or potential customers and business partners. But do your service providers share the same cultural values and imperatives? If not, any effort to integrate them within your service delivery model could be futile.

What you need to build into your end-to-end customer service – beyond service management, governance and your own internal process requirements – is cultural alignment and the confidence that you are working with your service providers towards similar customer engagement goals.

The way forward

As a consultant, I focus on getting the best outcome for my clients. Today, this requires identifying and integrating multiple best-of-breed, third-party business and IT services with an organisation’s unique business and technology capabilities. These must be aligned to the organisation’s cultural ethos and customer engagement philosophy.

I believe we can take a leaf out of proven IT service management practices to take ownership and responsibility for the definition and management of the end-to-end customer service, and the discrete service requirements that will deliver agreed business outcomes.

Contracts can be put in place that drive service providers to deliver effectively with clear and measurable responsibility for their services, accountability to collaboratively achieve business outcomes, and flexibility to enhance and continually improve their services.

Tools, information and governance models can assist in establishing transparency, supporting day-to-day management of service requests and enabling effective performance monitoring.

Service providers must be selected on the basis of aligned organisational culture and customer engagement ethos, with the flexibility to review and change providers as required.

In the end, we can provide optimal results and value generated from an organisation’s diverse services and provider landscape.


Michelle Hides

Michelle Hides is a Principal Consultant within Digital Transformation at DXC Technology. She focuses on business architecture, business value chains, process analysis and redesign, and the delivery of complex integration projects. With 30 years in the IT industry, she has worked in the Utilities, Insurance, Transport, Mining, Manufacturing, Telecommunications, Financial Markets, Health, Federal Government and Defence industries.

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Comments

  1. Tim Coote says:

    I’ve looked at several multi-sourced relationships, mostly in very large govt. contracts, but some commercial, too. What usually happens is that the end customer is usually missing some core capability leading to them to experience a very poor service.

    Usually, there is no clear accountability for overall service – as you noted in the first piece – which makes the customer the de facto systems integrator. If they’ve fallen into that role, they clearly don’t have the competence to fill it! At best this leads the customer to build capability that overlaps with what they thought they had already bought.

    Where there is a contractual accountability to one service provider, there’s rarely any decent accounting and review of the outcomes and the customer gets buried in meaningless process that she does not have the capacity to deal with. ITIL is often used as the basis of the processes but does not work well in a digitalisation strategy as it makes poor assumptions about how data on systems configuration can be captured and maintained: a better approach is to use a mix of Agile/DevOps. I have seen such processes used to bury huge overspends.

    I concluded that the cause of many of the anti-patterns was poorly conceived commercial and contractual arrangements: there has to be good alignment of interests of all parties. If the customer buying the multi-sourced arrangement wants to optimise costs and service levels, or market expansion and costs, unless the contracts and working relationships reflect the ambition, the arrangement will fail. Typically, and unfortunately, the contracts are set up as zero sum games, leading to suppliers maximising returns by fighting each other and ignoring the customer, let alone her customers.

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  2. Michelle hides says:

    Yes agree poorly conceived contracts without clear alignment of customer focused objectives, and cultural values inhibits the harmony we are looking for across service providers.
    Interesting observation that the end customer (the loan applicant) in my example, can become the default services integrator in an attempt to get what they want. Definitely not an ideal customer experience and would take a a very dedicated customer, who really wanted the product, to persevere without any real ability to influence the individual service providers.
    I am interested to understand how agile/ Devops could improve the customer experience. Understand it in a development and systems integration build / test scenario. But not sure how it applies to a business service integration scenario.

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