IT Service Management with Multiple Supplier Integration (MSI): why governance is key for success

integration.jpgThere are lots of good reasons for a growing, global enterprise to contract with multiple IT outsourcing suppliers.  One reason is to drive down pricing – when vendors compete, you win. Another reason is to minimize service delivery risk – if one supplier fails to deliver then it impacts a smaller portion of the end-to-end delivery chain and other suppliers are ready to step in.  Finally, a best-of-breed sourcing strategy can improve service quality and customer satisfaction.   But if not managed properly, you could be faced with more problems and risks than if you had outsourced to a single supplier.

 

A primary reason why many companies encounter additional problems and risks after adopting a multi-supplier outsourcing model is due to a lack of proper governance. Without strong governance, a company can end up with fragmented IT business operations, and diminished visibility. Magnifying the problem is the fact that more and more IT organizations are starting to incorporate cloud services into their IT environment.  As a result of these trends, companies can be faced with any of these following outcomes:

 

  • Sub-optimal Value to the BusinessA lack of processes, tools, and governance standards make it difficult to correlate IT outsourcing contracts to business benefits.
  • Missed Service Levels– Without a mechanism to monitor requests, orders and incidents, service quality will erode over time.
  • Incomplete TCO – Disparate IT service contracts, purchase orders, and invoices can lead to inconsistent or incomplete reports regarding IT-related issues.
  • Increased Overhead – Multiple suppliers use various processes and systems.  Without proper governance, managing these disparate systems and coordinating efforts across suppliers becomes a costly, resource-intensive effort.

 By installing a unified governance framework (a combination of people, process and tools), companies can better assess and manage their multi-sourced service portfolio.   But what constitutes such a framework?  Let me share some best practices developed over years of experience working with various organizations.  A good governance framework must have three major components: 

 

1)   IT/business alignment – a focus on the business objectives of the customer

       a. Translate business needs into IT solutions

       b. Assess gaps in delivery that impact the business

       c. Maintain a forward view of significant business changes

       d. Act as the customer’s senior point of contact for issue resolution and service improvement initiatives

 

2)   Supplier management – a focus on the behavior and performance of each service provider  under contract

       a. Perform service provider on-boarding and off-boarding, including training on customer expectations

       b. Address service provider performance issues & compliance, including necessary escalations

           for non-compliance

       c. Conduct periodic performance reviews

 

3)   Service delivery performance – a focus on end-to-end delivery performance across all service providers

      a. Serve as the escalation point for service delivery issues across multiple suppliers

      b. Manage and approve operational changes across multiple suppliers

      c. Manage cross-supplier service performance dashboards, reports and trend analysis

      d. Prioritize and drive cross-supplier delivery performance improvement

 

With a governance framework in place, companies can connect the delivery work of IT to the business value chain, keep suppliers honest with respect to their behavior and performance and increase the consistency and visibility of end-to-end service value to the customer.  

 cloud.png

Are service integration and a governance framework still important in the ever-increasing hybrid and cloud-based service environments going forward?  Actually it becomes even more important to provide service integration supported by governance to realize end-to-end service value and avoid a fragmented, tactical view of service delivery.  And this can easily happen given the remote and opaque nature of cloud-based services. Only through that strong governance framework can the IT organization deliver and communicate the value of a diverse set of services (some within the cloud and some without). 

 

So, what are your options in setting up a governance framework to successfully manage multi-supplier integration?  First, you can decide to outsource the governance function to a service integrator who will manage all contracted suppliers on your behalf. Alternatively, you could hire a consultant to help you establish the proper governance framework (including training, process definition and tool implementation) within your own organization.  Finally, if you are interested in developing a governance framework on your own, consider consulting with your ITSM software vendor to obtain best practices and standard Case Exchange protocols that better enable the transfer of information between disparate service management systems.

 

If you are interested to learn more, join Felix Fernandez, CTO of HP Software Services and Chuck Darst, ITSM Product Marketing Manager, for their upcoming Brightalk webinar IT Service Management in a hybrid, multi-sourced world this Thursday, December 5th. REGISTER HERE. 

 

Felix Fernandez will also be discussing the costs and drivers behind managing multiple suppliers in a cloud-based IT environment at this scheduled session as part of HP Discover Barcelona.

 

For all things ITSM, be sure to visit hp.com/go/itsm and our blog.

And as usual, leave us a comment or tweet us @HPITSM!

Comments
chuck_darst | ‎12-03-2013 01:34 PM

Thanks Yvonne for the link to the Brighttalk webinar this Thursday!!!

 

And in case you haven't seen, the making the most of this increasingly hybrid, multi-sourced world has been in the HP Headlines today with the announcement of Propel.

 

Check out the new website - www.hp.com/go/propel and I would also recommend reading an overview blog post by June Manley.

 

Chuck

 

 

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About the Author
A 25+ year veteran of HP, Yvonne is currently a Senior Product Manager of HP ITSM software including HP Service Anywhere and HP Service Man...


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