- With the transformation to a digital service focus, IT operational as well as IT vendor and sourcing leaders must change how they build new services, combining internal/external teams that provide expertise and support.
- Moreover, multi-sourcing is becoming the norm for many organizations that are today at the third or fourth outsourcing generation contract.
- Organizations need to craft a modern service integration and management framework (SIAM) to ensure end-to-end consistency of the IT value chain and manage the ‘intersections’ in a multi-sourced environment.
How are cloud and digital changing the nature of service design strategies?
Digital is transforming the industry and organizations today need to rethink the way they are developing and supporting IT services in order to achieve even higher business outcomes.
The objective today for an efficient IT organization is to help its clients and businesses to pinpoint emerging opportunities and provide value while harnessing the full power of digital. In particular, IT organizations have to demonstrate how to bring value through the service portfolio to achieve the desired business outcome.
The cloud has become a major element in a company’s digital strategy and journey. Indeed, the cloud is a critical asset which can bring agility across the supply chain (scale up / scale down), while reducing risk and management complexity. This is why the organizations that are furthest along their digitalization journey are those which have integrated a cloud strategy to build on as they grow and evolve across their digitalization curve.
However, ‘integrating cloud’ should be understood at a macro level. We are not only talking about the contractual aspect only (and the possibility to rely on cloud providers’ assets), but also about topics such as orchestration, automation, and provisioning, to name a few.
Service integration and management (SIAM) supports the new world of digital
Given the fact that multi-cloud is also the new normal, there is a need to see these activities ensured across different providers, either external but also internal (e.g. when we are talking about hybrid IT).
In order to ensure the most predictability in the way services will be provided across the cloud, IT needs to ensure it will achieve seamless end-to-end service outcomes with a single point of accountability in the multi-sourced cloud environment and act as a cloud aggregator with necessary cloud management/automation platforms.
Outside of cloud providers, organizations are exploiting the benefits of multi-sourcing for the provision of their ICT services. It is not unusual to have organizations relying on an eco-system of more than 10 services suppliers ranging from application development, workplace management, mobile device management, security, predictive analysis, network management, collaboration services to wireless services.
Everyone will appreciate that those multi-sourcing models introduce complexity in the management of suppliers while enforcing the application of a coherent set of standards, measures and methods across the ICT estate.
A SIAM framework will address this complexity issue by maximizing end-to-end efficiency across a multi-supplier base. The aim of SIAM is to provide a single point of visibility and control for the service management and delivery of all services provided by selected suppliers, by:
- Taking end-to-end accountability for the performance and delivery of IT services to the users, irrespective of the number and nature of suppliers
- Co-ordinating service design, delivery, transition and operations across multiple services and suppliers, while ensuring that the services effectively and efficiently meet the business needs
- Managing supplier performance by monitoring the touch points between different internal/external service providers (e.g. OLAs)
- Reducing, ultimately, the ‘visibility gap’ across the IT value chain
SIAM is key in keeping the IT organization in the driver’s seat
The SIAM function will act as the central point of control across all suppliers, implementing common service management processes and driving the necessary strategic change. It will give the IT organization the opportunity to demonstrate its value and retain (or win back) ownership for IT services provisioning and management.
This will contradict what we have sometimes seen in past years where IT, by not demonstrating its value, was just forced to show cost reduction while at the same time losing control of the IT value chain. As an indirect consequence, we have seen ‘shadow IT’ appear, i.e. where business leaders contract directly with third parties, managing contracts and SLAs themselves, with unwanted consequences such as inconsistent support for end-users and security risks for the organization.
So, digital gives another opportunity to IT organizations to take back control of the full IT supply chain by designing, transitioning, and operating new IT services aligned to the business requirements. Having a mature supplier management process, supported by a robust SIAM framework, is the pre-requisite to realizing the benefits of the ‘best-of-breed’ multi-sourcing scenario that companies want to follow as part of their digital journey.
To find out more about KPMG’s IT advisory services, please visit kpmg.lu
By Philippe Bovy – Senior Manager IT Advisory