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3 Key Success Factors for Multi-sourcing

- November 2, 2015 - 2 Comments

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.
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  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.
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  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.

  • Clear boundaries of responsibility:
    These are captured in the service descriptions of contracts and charters for organizational units. The boundaries of responsibility for each party must be firm and clear.
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  • Contracts that support integration:
    SIAM is more effectively embedded into an organization if the supplier contracts reflect the requirement to engage with the SIAM. Suppliers may refuse to engage with the SIAM supplier since it is not in the contract.
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  • Culture of collaboration:
    Ensuring that contracts support integration can help enable collaboration, but often the key to effective collaboration is about culture. Treating suppliers more like an opponent than a partner, the client is unlikely to achieve the integrated, collaborative multi-sourced ecosystem to which they aspire.
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  • Integrated service management processes:
    It is essential to have a common set of service management processes into which all providers and receivers of service are integrated. These processes should not mandate how a supplier performs their incident, capacity, and other ITIL processes, but should describe the transitions between suppliers and the SIAM function.
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  • Integrated tooling:
    Process automation can be realized by embedding the processes into tooling solutions, and by integrating those tools with one another. This automation makes sure that processes are consistent; efficiencies are increased in terms of both time and cost. Without this automation it is not possible to achieve the provision of real-time information.
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  • Meaningful reporting:
    This means getting the right data, with the right level of analysis, (including data correlation) to the right people at the right time.
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  • Integrated governance:
    While individual suppliers require one-to-one management, there also must be governance forums that span all suppliers for estate-wide visibility and to encourage collaboration.

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2 Comments

  1. Jim - thanks, a useful framework for managing not only the complexity but also the scale created by the proliferation of systems. This is an increasing challenge for all "Chief Integration Officers”. The multi-sourcing challenge thinking can and indeed should also apply on different levels or layers. Take the delivery layer of increasingly fragmented provision, which needs system control and holistic reporting - as per ServiceGrid - and apply it to the output layer where customers touch the brand. The similar complexity, and scale, of digital eBusiness presentation requires parallel system control and reporting - brand presentation measurement and governance across an enterprise's websites and social media presence (themselves created by the underlying systems!). The model of integrated governance would help foster collaboration between teams to improve digital brand presentation too - Richard

      Richard, completely agree the paradigm applies in multiple areas - provisioning and digital eBusiness are great examples, thanks for the feedback. I really like your point about fostering collaboration - we see this as a major benefit of real integration, changing the paradigm from "we vs them" to "us".

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