Many silo-based IT departments and service providers fail to deliver on their promises of cost savings, service improvements, and innovation. In addition, the finger-pointing among multiple internal and external suppliers and often inflexible contractual constraints render it difficult to address market challenges in an agile way. The complexity and lack of transparency make it hard to understand the necessary action items to achieve the necessary end-to-end service levels and meet the expectations of the service consumers.
Driven by the need to manage the results of typical multi-supplier eco-systems and to accommodate the increasing need for go-to-market speed, organizations are now looking for a multi-supplier sourcing model to address the necessary governance and achieve the expected but hitherto missed opportunities. Service Integration and Management (SIAM) is a sourcing model based on leading practices observed at major global organizations. It is a functional group that provides the governance and a single point of responsibility for the delivery of integrated services to the client, based upon an operating model that focuses on core organizational competencies and delegates or outsources the activities that are deemed non-core or commodity. The granular services, provided by multiple internal or external service providers, are integrated by the SIAM function to ensure end-to-end service levels and transparency. The SIAM function (also called the Guardian Agent or Integration function) is responsible for matters pertaining to interoperability, cross-functional coordination, governance, and end-to-end service levels.
The main goal of SIAM is to coordinate internal and external suppliers and their services in a cost-effective way to achieve the end-to-end service levels needed to support the goals of the business functions. SIAM is a layer between the suppliers and the IT functions that supports and enables the integration of the services offered by multiple (internal and external) service providers.
There are two major components to the service integration layer:
- A commercial component deals with activities around contracts, procurement, service level penalties, invoicing, etc. One can think of this component as the format, the structure, or the commercial and contractual controls of the SIAM concept.
- The integration component is more like the content or the “meat” of the concept. It comprises all activities that focus on the actual coordination of the services provided by the multiple suppliers, and can be split up in three sub-layers: managerial (e.g., vendor analytics, project management), operational (e.g., cross-supplier change management), and infrastructural (e.g., data dictionary management) aspects.
The intention of the multi-supplier sourcing model is to address the following potential pain points:
- Reluctant collaboration across suppliers, caused by unclear delineation of responsibilities and accountability;
- Lack of transparency and incomplete understanding of end-to-end service level performance;
- Contractual compliance without innovation;
- Impotent governance and multiple costly change orders for minimal efforts;
- Poor architectural integration with multiple points of failure;
- Labor-intensive reporting and inadequate data to ensure fact-driven decisions.
The possible benefits of the governance model are to offer:
- An effective framework for managing supplier performance and improving consistency in service levels;
- A single point of accountability for end-to-end service delivery to the business;
- The ability to seize benefits in technology breakthroughs to reduce IT costs;
- The capability for managing IT risks and compliance across the eco-system;
- A mechanism to enhance alignment of IT priorities with business objectives.
Enterprise Service Management
The solution architecture of SIAM relies on the characteristics of service management tools. There are several service management tools on the market, but the main attribute is the functionality of tool modules to share data across the various internal departments (legal, IT, procurement, facilities, HR, etc.) that own and enter the data. This concept is what Fruition Partners calls Unified Service Delivery (USD) and is the foundation for managing services within an enterprise – or Enterprise Service Management (ESM) . ESM is what we want to achieve; USD is how we achieve it.
When considering what is needed to enable multiple stakeholders to plug into a common technology, we first look at the basic building blocks of the technology:
Common usage of data eliminates redundancy and makes it easy to update data elements. The data resides in structured tables that are common to all service management tool modules.
Sectioning off certain data elements is enabled by the domain concept in the tool. Pre-defined roles (e.g., an HR employee or an IT system administrator) enable a role-based access management that dictates who can read, write, modify, or delete data.
The most powerful feature of a service management tool should be its workflow engine. The simplicity with which workflows can be configured is instrumental in the success of the tool’s value to its users.
Forms / UX*
Via Content Management System functionality, the client keeps control of the end-user experience and the forms that are or can be used by particular client roles.
The out-of-the-box graphical capabilities and service-aligned reporting of typical service management tools facilitate decision-making to achieve intended results. Reporting functionality provides the visibility and transparency to understand and manage outcomes.
The service management functionality contains the necessary and sufficient elements to support the goals of multiple stakeholders. As such, the technology has the capability to function as an Enterprise Resource Planning (ERP) tool or system. The ERP functionality provides an integrated real-time view of core business processes, using common databases and a powerful workflow engine.
Unified Service Delivery
Unified Service Delivery is the concept of facilitating the information flow between business functions, using the building blocks of the service management tool technology.
A typical example is the effort of onboarding a new employee: Facilities needs to take care of office space; HR will need to determine the role of the new employee and his or her access needs to particular applications; IT needs to provide a laptop and provide access to various applications; Procurement may need to provide a mobile phone; Security needs to provide building access; HR needs data to ensure the employee will get paid; etc. The shared data and workflow rules of the service management tool enable such routine onboarding requests to take on the characteristics of transactions we are now accustomed to on websites such as eBay or Amazon.
The success of the internet-like transactions paradigm in the tool eco-system is based upon multiple factors, such as employee self-service, speed, reduced costs, immediate feedback of request status to the user, consistent graphical user interfaces, and reporting capabilities.
Unified Service Delivery is the effective, efficient, and consistent delivery of services, calling upon intertwined enterprise stakeholders and using common data, powerful workflows, comprehensive security, consistent user experiences, and suitable reporting tools.
Similar to the concept of the Unified Service Delivery explained above, the modules that make up the service management system share the building blocks across the various internal and external groups that provide and use the data.
The system facilitates information flow between the stakeholders. More importantly, it enables the client enterprise to keep control over data, its security and access, the workflows that use the data (e.g., in service requests), the user interface and user experience, and the reporting. The service management tool hence plays the role of a transaction bus, channeling data and activities from one stakeholder to the next, based upon the path in the workflow, and within the security guidelines (e.g., encrypting certain data) and access parameters.
A good example is the roll-out of a new module for an existing application in the enterprise. The Application Development or commercial off-the-shelf software (COTS) supplier provides the code; the network people ensure that additional bandwidth will be available for the encrypted application data; the internal data center has the servers ready for the application and the data; the HelpDesk prepares for the initial wave of questions by developing frequently asked questions (FAQs); an external disaster recovery supplier ensures backups of the data; the application maintenance group puts the final touches on the user acceptance testing (UAT); the change advisory board (CAB) makes sure that checklists have been checked off and all relevant stakeholders are informed and give their thumbs up. The complexity and number of interactions between the different groups can be difficult to manage if it is done without a centralized ERP tool.
An effective service management tool allows the smooth interaction of stakeholders and enables the seamless transition from one task to the next. Its functionality also allows the auditability and full traceability of approvals and who did (or failed to do) what. The fact that the facilitation happens in the cloud, with a minimal footprint in the internal IT architecture, can be a happy bonus.
The SIAM concepts rests upon this functionality and the tool functionality enables the core value of SIAM to shine. The client controls the data entered by the different stakeholders and achieves a transparency and visibility in the system that is unprecedented.
The SIAM layer itself can be outsourced – completely or partially. The decision about outsourcing particular activities within the SIAM layer should be based on (a) the capabilities of the potential internal or external agents that can perform the necessary activities; and (b) the consideration if the activity is a core competency or not. Typically, strategy and architecture are not good candidates for outsourcing as they are key ingredients of the enterprise’s business model.
It is useful to look at a SIAM outsourcing decision from the perspective of process, people, and tools.
Some of the questions to consider when structuring the SIAM activities are related to the process maturity of the environment and its stakeholders:
- Are the process activities and cross-supplier coordination efforts well-defined?
- Is there a comprehensive RACI matrix in place? Do the contracts contain clauses to address changes in the RACI matrix?
- Do any or some or all of the service providers adhere to ITIL v3 or COBIT?
These questions will guide you in scoping the organizational change and process redesign efforts.
The success of the SIAM model is heavily dependent on the knowledge and experience of the resources that perform the SIAM activities. The combination of IT operational skills and a deep understanding of processes are critical to achieve the SIAM goals. Expertise with the structure of outsourcing contracts and with legal aspects, together with a solid foundation in procurement and supply-chain processes can also strongly influence the success of SIAM initiatives.
The focus of the technology considerations should be on the degree of architectural integration. Examples of this integration could be a common data dictionary, federated configuration management databases, discovery tools, orchestration, and automation.
To ensure the multi-sourcing technology is effectively reducing the complexity of the multi-supplier eco-system, it is critical that the architectural structure of the technology aspects is well thought through. Rapid deployment attributes, common data repositories, agreed-upon definitions and workflows, and defined access and identity management are examples of characteristics of an enabling tool and functionality architecture.
Decomposition of the Service Integration Layer
As mentioned earlier, the Service Integration Layer has (1) a commercial component and (2) an integration component. Below is a breakdown of typical sets of activities one can find under these headers. The decomposition is not intended to be exhaustive, but provides a guiding structure or framework and a suggested common taxonomy.
- Procurement – Procurement is the acquisition of goods, services or works from an outside external source. The Service Integration Layer assists in finding the best possible cost to meet the needs of the client in terms of quality and quantity, time, and location.
- Auditing – Auditing is defined as a systematic and independent examination of data, statements, records, operations and performance, including operational and service levels, adherence to process directives and legal / compliance requirements. The Integration Layer reports on the audit results, the corrective actions, and the continual improvement efforts of the service provider.
- Invoicing – Invoicing not only covers the actual matching of the delivery of services with the purchase or service orders, but also covers the auditing of skill sets, hours, and appropriate levels of resources.
- Contract Management – Contract management is the management of contracts made with customers, vendors, or partners. It includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution.
- Governance, Risk, and Control – The GRC area deals with risk management, refining of cross-supplier procedures, and other aspects that relate to governance.
1. Managerial aspects
- Service Level Management and Service Reporting – The functional area of service level management and service reporting covers the consolidation and coordination of the end-to-end service levels and the related reporting per service. The service levels include run-of-the-mill metrics such as first call resolution (FCR), mean time to restore (MTTR), or number of unauthorized changes, but may also include more complex service levels such as disaster preparedness, recoverability of services, and joint testing.
- Continual Service Improvement – The SIAM function is expected to manage and coordinate the continual service improvements across the suppliers, and monitor and report the results of the individual suppliers’ improvements.
- Program and Project Management – The PPM is responsible for the management of projects and programs that span suppliers and should coordinate their input into the project or program.
- Financial Management – This process deals with all cost, charging, accounting, and budgeting aspects and benchmarks each provided service that is delivered to its value.
- Vendor Performance and Analytics – These areas cover the analysis and reporting of the individual and end-to-end performance of the suppliers and the eco-system. This is where typically the different individual service levels are broken down to the operational granularity and compared with the contractual indicators.
- Service Catalog – This process manages the services and their subcomponents, the Service Requests.
2. Operational aspects
- Operations Center or Operations Bridge – One of the major elements of SIAM is coordinating the monitoring of IT events, together with the cross-supplier management of major incidents and the related root cause analysis efforts. The Operations Center could include such systems as the “single pane of glass” and may also feature a combination of network operating center and security operating center to account for a seamless transition between IT Operations and Network or Security towers.
- Change Advisory Board – The SIAM function can be charged with managing the Change Advisory Board (CAB), producing an integrated change calendar, coordinating change windows, and generally, communicating aspects related to risk and impact of changes.
- Major Incident Coordination – This header covers the coordination of major incidents across suppliers, including the oversight of effective cooperation to restore services as quickly as mandated by the end-to-end service levels
- Problem Management Oversight– This aspect involves ensuring consistent root cause analysis and proactive problem tackling by the multiple suppliers to prevent reoccurrence of incident tickets.
- Release and Deployment Management – The topic of release and deployment management for SIAM covers the responsibility to coordinate the deployment of major applications and the related integration insofar it relates to multiple service providers.
- Request Fulfillment – This covers keeping track of service requests, managing the related workflows and interactions, together with the associated user interfaces and choices.
3. Infrastructural aspects
- Service Asset and Configuration Management– The SIAM responsibility is to understand the landscape of configuration items (CIs) and software and hardware assets as they pertain to end-to-end service levels. This may include software licensing compliance aspects, cross-suppliers CI relationships, the tie between particular CIs and major incidents, etc. In contrast to the typical narrow and deep data repositories that can be found at each supplier, SIAM focuses on a broad and shallow configuration management database (CMDB) containing only the CIs relevant to the end-to-end service levels.
- Service Management Tool Application Maintenance – This set of activities covers incidents, problems, and changes related to the tool environment. It also includes minor and possibly major enhancements to the service management tool platform.
- Automation and Platform Management – The need to reduce complexity is best served by a single architecture and data model. The Platform and Automation management focuses on the architectural execution of this mandate with a periodical review and the generation of a set of recommendations.
To achieve the governance that will make multi-sourcing arrangements effective, clients must get internal service providers and external suppliers to work together, both from a commercial and operational standpoint. The integration layer, consisting of elements of process, tools, and people, is critical to the success of these arrangements.