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3 Key Success Factors for Multi-sourcing

The rise of multi-sourced IT delivery models is well documented, and multi-sourcing is now accepted as the new normal. Today’s outsourcing market demands solutions that anticipate and respond to business activity inside and outside the organization while simultaneously dealing with a rapidly shifting landscape of providers. This drives the need for a global digital infrastructure in which information is used to help organizations create real time links between IT organizations seeking to manage support complexity and a growing and ever shifting array of external service partners that includes traditional outsourcers, managed service providers, telecom operators, and cloud service providers. Enabling this shift are three key success factors:

  1. The dynamic nature of this ever shifting landscape becomes a defining point in new strategies and new tools are needed to address that new reality.
  2. Decisions being made 24/7 are profoundly impacted by an organization’s capacity to have every available piece of information, from all sources, accessible immediately.
  3. The ability to deliver services of all kinds faster, more reliably and more affordability is of prime importance in today’s market.

Sourcing is becoming a critical success factor for IT management;  in fact many now consider the CIO the “Chief Integration Officer”. The multi-sourcing challenges that IT and business managers are facing today have never been so complex. In addition to cost considerations there’s a simultaneous laser focus on security, agility, alignment between sourcing and business strategy are more and more in focus.

Conquering Complexity in a Multi-Sourced Ecosystem

Multi-sourcing is not as straightforward as it might appear. There are challenges even for organizations that have spent time developing their future operating model and included a Service Integration and Management (SIAM) function. The  factors in the figure below underpin successful multi-sourcing with SIAM:

Key Success Factors for Multi-sourcing

Figure includes success factors for effectively operating in a multi-sourced environment.

 Critical Components

  • Effective client organization:
    In any sourcing arrangement, the client IT department is accountable for the IT services delivered to their business. When multi-sourcing, the client has multiple direct contracts with many suppliers, so a strong commercial management function is also required.

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Service Integration and Management (SIAM): Helps You Efficiently Manage Your Support Ecosystem

“Simply put, successful multisourcing requires establishing end-to-end visibility, reporting and accountability for services that are delivered by multiple suppliers.”1

-Bill Martorelli, Principal Analyst, Forrester Research

For the past two decades many enterprises managed their IT vendor relationships pretty much the same with batch updates and reviews. That worked well when they were fully outsourcing their IT function with a single service vendor. But, in our hyper-connected world IT departments are managing five times as many providers as they were seven years ago and the pace and scale are increasing.

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SIAM: the next ITIL?

The acronym SIAM stands for Service Integration And Management, and it is a hot topic in the world of IT Service Management…..but why? Service integration models have been around awhile, but are evolving from the challenges of managing a small number of large service partners to a model of managing a larger number of smaller partners. As the services and businesses become more critical or complex, the level of service integration becomes deeper. SIAM builds on the ITIL framework, and expands it.

What is SIAM?

  • According to Wikipedia: “Service integration and management (SIAM) is a framework for managing multiple suppliers of information technology services and integrating them to provide a single business-facing IT organization.”
  • The UK Government defines it as “Service integration and management lets an organization manage it’s service providers in a consistent and efficient way, making sure that performance across a portfolio of multi-sourced goods and services meets user needs.
  • Kevin Holland, ITIL expert is a bit more specific “Service Integration and Management(SIAM) is both a model and a function which provides a single point of accountability for the service management and delivery of all services provided by internal and external service providers, by taking responsibility for and assuring suppliers performance ,  coordinating delivery, integration , and interoperability across multiple providers, and providing the necessary governance on behalf of the users.”

Essentially, it is about keeping (or recovering) control – IT organizations use more and more external support providers today, and managing these relationships is getting more complex. SIAM might be the answer to this challenge, because it is all about how IT will deliver the capability to achieve end-to-end service excellence in an increasingly complicated environment by actively managing all aspects of service performance.  Basically, it supports businesses by helping them get the most out of their outsourced and externally managed services.

Why is SIAM important now?

SIAM is in the spotlight of the key analyst groups, Forrester and Gartner.  Spending on external and internal IT services is higher than ever; However, according to Gartner’s 2014 key metrics survey, only 11% of respondents  say that they have mastered their approach to sourcing, and 89% need to improve competencies and significantly raise their maturity levels in order to manage multi-sourcing successfully. (Source)  These metrics show large future potential for SIAM.

If you decide to research SIAM further, keep in mind that SIAM is sometimes referred to as MSI (Multi-sourcing Service Integration)

Are you using or considering a SIAM framework? I would love to hear your thoughts.


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Cloud and the Dark Side of “Easy On”

Cloud providers justifiably tout the ease and speed in which services can be implemented, but behind the curtain a dark reality lurks. “Easy on” is a key selling feature of cloud services and for good reason. I well remember leading enterprise application implementation projects in the pre-cloud era. The initial thrill of taking on a major new initiative that could transform the business was quickly overcome by the stark reality of years of highly complex work before going live, only to find out that you were several releases out of date and needed a multi-million dollar upgrade!

In my first major cloud project (to deploy a cloud service management application to 16,000 service engineers) we had users up and running in a couple of months. The business began seeing results quickly and as the software was upgraded we gained advantage of new features immediately. Soon after implementation, we began experiencing problems. It turned out all of the support and operational complexity had been masked from us. Behind the simple outward appearance lay dozens of different software, hardware, data centers and networks. The cloud service provider took first support calls, but getting issues resolved took a long time – and worse, we never were quite sure who was currently working the issue or the status.

Recent studies have identified service and support as the number one decision criteria for customers purchasing new cloud services. In fact, one recent study of the SMB market for cloud services found that the TOP THREE concerns were service related:

  • Provide an SLA to ensure application is accessible at all times (53%)
  • Provide 24×7 customer support (47%)
  • Provide better notification of upgrades, changes and downtime (45%)

Much as cloud providers would like to address these concerns, it’s very difficult operationally to do so because of the multiple back end providers. Cloud customers, in turn, typically use phone, web or email interface with cloud providers to raise and get status on service incidents, so they have no real-time or proactive visibility into issues or outages. As companies put more mission critical applications into the cloud, this dysfunctional support model is causing growing concern and slowing the adoption of cloud services.

Cisco believes the answer is simple. No matter how many different providers might have to get involved to solve a problem, to the original customer it should look like one organization.  All information, data and workflows would be shared in an automated way, eliminating manual practices and bottlenecks.
Cisco ServiceGrid enables such integration with a “connect once, connect all” approach, integrating all participants in the support process to the cloud platform only once, instead of integrating everyone one at a time. In speaking with customers who have moved to such a model, they report 40% or more reduction in case resolution times and lower support costs. More importantly, the end user sees what’s happening on the case while it is happening – no finding out hours or days later – resulting in real time SLA’s.

The promise of cloud is incredible, however, cloud customers and cloud service providers need to recognize and address the growing concern about how it will all be supported. Together we can remove a powerful obstacle to cloud adoption, by adding an “easy button” for multi-party support.

source: Techaisle SMB Channel Partner Survey 2012

You may want also to read
Multi-Party Support – The Emergence of a Dynamic Support Network

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