Service Integration Frustrations

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Making it Work for Everyone Service Integration Frustrations

September 10, 2013

Scott Bonneau, VP IT, Finance & Hosting Services, Dr Pepper Snapple Group Dave Tienstra, Partner, ISG Lois Coatney, Director, ISG

© 2013 Information Services Group, Inc. All Rights Reserved 2

o Introduction: Service Integration - Past, Present & Future

o Roundtable Participants Introduction

o Topics o Lite or Heavy Service Integration – How Much Legislation is

Required? o Incenting End to End Service Performance – Are Pain Sharing

SLAs the Answer? o Who should be the Service Integrator? o Tools – Yours, Mine or Ours? o How do we Minimize Risk During Transition and Transformation? o Others …..

© 2013 Information Services Group, Inc. All Rights Reserved

Service Integration Past, Present & Future Introduction


The Evolution of Outsourcing and Service Integration

As IT and outsourcing evolved so too did the Integration of IT Services:

The evolution of Service Integration

ITIL first published IT is delivered

in-house

Large single-source/ Prime contractor deals. (Provider acts as integrator)

ITIL v2 and 3 Early 2000s, SI

overlooked Late 2000s SI

sourced as a discrete function

Global awareness and interest in SIAM SIAM models

mature and vary

The evolution of Outsourcing

Outsourcing is a business strategy

Outsourcing is in vogue Long duration

(~7-10 ) Lift and shift

Diversification of supply base Drop duration

(~5 – 7) Rise of Eastern

based Providers

Multi-sourcing in vogue Shorter

duration (~5 years)

1980s 1990s

Monolithic

2000s

Bipartisan

2010s

Pluralistic

2020s

Confederate

Focus on plug & play, flexibility, scalability, automation Standard

interaction model

Functional out-tasking New

technology based players Duration – 3

Years


ISG’s Prediction: The Future of Sourcing

Multi-Sourcing and confederation brings new players, more automation, provides room for XaaS solutions.

Internal Shared Services / Captives

Function

Function

Function

Function

Function

All Towers

OR

Infrastructure ADM BPO Function(s)

Tower

Tower

Tower

Tower

Importance of Labor Arbitrage

Importance of Software, Platforms,

Labor Automation, & Scalability

Function

Social Media Collaboration

Mobility BYOD

Analytics & Big Data

Cloud

Computing & Storage

Service Integration

Strategic & Selective Sourcing Multi-Sourcing Confederation

MARKET 5 – 10 YEARS AGO LAST 5 YEARS NEXT 3 TO 5 YEARS


The Exponential Need for Service Integration

Integrated Demand – Supply Dynamics

Security

LAN / WAN

Collaboration

App Maintenance

Salary/Benefits

Workplace

Sales

Purchasing

Claims Processing

Service Integration

Distribution

. . .

Business Services

Service Desk

Facilities

End User Equipment

. . .

Payment Processing

PM Services

Component Services

Who will correlate Service Levels?

Who will manage cross-provider

incidents? Who will ensure

capacity is meeting demand?

Who will hold Providers

accountable?

Who will assure change

orchestration? Who will drive end to

end continuous improvement

Who will manage cost to value?

New players, more automation, XaaS solutions … the ability to orchestrate services becomes more complex.


Transformation

Inevitable Solution: Service Integration

The ultimate goal of Service Integration is to provide business value to end users.

Evolved Multi-Sourcing Integrated Services

! ! Successful management of Multi-Sourcing or Confederation consists of the strategic sourcing and integration of services from the optimal set of internal and external Service Providers and Suppliers to fulfill business goals.


How do you Scope Service Integration?

S = Service P = Process

Dem

and

(Bus

ines

s)

Supply

Service Integration and Management

Corporate Support Functions

Legal Audit Compliance Procurement Human Resources

Finance & Controlling

Communication & Change Mgt. Risk

Service Strategy, Planning & Control

Service Portfolio Management P Project Portfolio

Management P Sourcing Strategy & Lifecycle Management P Enterprise Architecture

Management P Security Policy & Standards P

Business Value Management

Demand Mgt. P

Request Mgt. P

Customer Satisf. Mgt. P

Pricing and Chargeback P

Service Catalog Mgt. P

Supplier Management

Compliance & Deliverables Change Request &

Amendments Contract Interpretations Issue Mgt. Supplier Audit Governance Library Consumption Mgt. SW Compliance Mgt.

Contract Mgt. P

Invoice Mgt. Performance Credits &

Earnbacks Contract Pricing Adjust. Value Assurance Financial Analysis &

Planning Spend Pool Mgt. Suppl. Intelligence Mgt.

Commercial Mgt. P

Service Level Compliance Mgt. Request Mgt. &

Authorization Benchmarking Supplier Risk Mgt. Consumption Mgt. –

Operational Compliance

Performance Mgt. P

Governance Administration Customer Survey Mgt. Regulatory & Compliance

Mgt. Supplier Comm. Mgt. Supplier Program Mgt.

Relationship Mgt. P

Project Delivery

Program & Project Mgt. S

Systems Integration S

Cross-Functional

Service Design Design Coordination Service Level Mgt. Capacity Mgt. Availability Mgt. IT Service Continuity Mgt.

Service Transition Service Transition Planning

& Support Change Mgt. Change Evaluation Service Valid. & Testing Release & Deploy. Mgt. Knowledge Mgt. S. Assest & Config. Mgt.

Service Operations Incident Mgt. Problem Mgt. Request Fulfillment Mgt. Access Mgt. Event Mgt.

Service Improvements Continual Service

Improvement Quality Assurance

Service Lifecycle Mgt. P

Service Desk Services P


How is Service Integration Delivered Successfully?

There are many dimensions of scope to be considered when providing a solution for Service Integration.

Service Desk

Service Lifecycle

Management

Process Advisory

& Assurance

Supplier Management

Security Infrastructure

Dashboard & Reporting

Tools

Client Org Change

Mgt

Independent Service

Provider

Sourcing

Performing Service

Provider


Roundtable Participants Introduction


How Much Legislation is Required? Lite or Heavy Service Integration


Lite or Heavy Service Integration – How Much Legislation is Required?

Integrated Demand – Supply Dynamics

Security

LAN / WAN

Collaboration

App Maintenance

Salary/Benefits

Workplace

Sales

Purchasing

Claims Processing

Service Integration

Distribution

. . .

Business Services

Service Desk

Facilities

End User Equipment

. . .

Payment Processing

PM Services

Component Services

Who will correlate Service Levels?

Who will manage cross-provider

incidents? Who will ensure

capacity is meeting demand?

Who will hold Providers

accountable?

Who will assure change

orchestration? Who will drive end to

end continuous improvement

Who will manage cost to value?

To ensure collaboration across Service Providers and integration of services, should the delivery of services be heavily or lightly managed?

Standards Assurance &

Reporting Transactional Management



o Lite or Heavy Service Integration – How Much Client Legislation is Required to ensure Service Integration? ISG introduce the topic with some key definitions / background Question to a Client: How often do you get engaged during incidents

or changes to orchestrate actions between suppliers? … Is this what you prefer?

Question to a Supplier: Would you rather orchestrate incidents and changes with other Service Providers in the environment without client intervention? … If so, do you, or are there any barriers?

Question: The Pros and Cons to a heavy or lite service integration model. What model would yield the best result for both client and Service Provider?

Question: What mechanisms would you like to see in the environment to better enable you to collaborate more effectively?

Topics to Discuss


Are Pain Sharing SLAs the Answer? Incenting End to End Service Performance


Standard Service Level Framework

In order to be able to guarantee end-to-end SLAs, the service delivery chain needs to be delineated across the different Suppliers and be supported by OLAs.

SLAs & OLAs

Four types of SLAs: Component Service Level

Agreements (SLAs) between Client and every Supplier

Operating Level Agreements (OLAs) for hand-offs between Suppliers – typically agreed by Service Integrator

End-to-End Service Levels between Client and the business – parts to be fulfilled by Service Integrator

Collaborative Service Levels for shared Accountability across all Suppliers

Commercial Framework

1

2

3

4

Interne Kunden (z.B. Segmente, Tochtergesellschaften) Interne Kunden (z.B. Segmente, Tochtergesellschaften)

Multi-Supplier Governance

1

2

4

3

Contract Supplier 1

X-Functional

EUC

Contract Supplier 2

X-Functional

WAN/LAN

Contract Supplier n

X-Functional

Service Desk

OLAs OLAs

OLA

IT SIAM*

SLAs SLAs SLAs

Business (Demand)

End-to-End SLAs



o Incenting End to End Service Performance – Are Pain Sharing SLAs the Answer? ISG introduce the topic with some key definitions / background Question to a Client: Do wish to or have you instituted cross-

service provider SLAs in your environment, and if so, in what way?

Question to a Supplier: Are there any barriers to accepting pain sharing SLAs with other Service Providers?

Question: What are other methods (other than penalizing SLAs) that will incent proactive and collaborative end to end business service management across Service Providers?

Question: Are there any issues with all Service Providers in an environment seeing each other’s performance to SLAs and Key measures?

Topics to Discuss


Service Integration Model Options Who Should be the Service Integrator?


Service Integration Model Options

The following options have been applied to manage the integration of multiple Service Providers; whether internal, external, IT or non-IT.

Model 2: Guardian

Model 1: Prime

Client

Single service provider with Service Integration implicitly included

Model 4: In-house

The client retains accountability and responsibility for Service Integration

Model 3: Independent

SIAM is discretely contracted for and delivered by the provider of other services

Client

Client

A SIAM service is procured from a provider which does not deliver other service towers

Applications IT Infrastructure

Business Processes

IT Infrastructure Applications Business Processes


SIAM

SIAM

Client


SIAM


How is Service Integration Delivered Successfully?

There are many dimensions of scope to be considered when providing a solution for Service Integration.

Service Desk

Service Lifecycle

Management

Process Advisory

& Assurance

Supplier Management

Security Infrastructure

Dashboard & Reporting

Tools

Client Org Change

Mgt

Independent Service

Provider

Sourcing

Performing Service

Provider


o Who Should be the Service Integrator? Question to the Client: Would you rather be your own Service

Integrator, or hire a “soup to nuts” Service Integrator as a Managed Services, or somewhere in between?

Question to Suppliers: Do you see a conflict of interest or cause you hesitation to work with another Service Provider as the Service Integrator?

What are the key components of Service Integration Delivery? Tools? OLAs? Consistent Processes? Cross Supplier Forums

to work through day to day delivery?

Topics to Discuss


Tools – Yours, Mine or Ours?


Tools – Yours, Mine or Ours?

Requirements of the future – Plug & Play, Flexibility, Scalability, Data Visibility, Automation ….

Integrated Service Desk

Change & Request Management

Inci

dent

Man

agem

ent Problem

Managem

ent

...

CMDB KMDB

Events (Monitoring)

Frontend Services

Backend Services

Resolver Group 1

Resolver Group 2

Resolver Group n

Portal

Dashboard

Service Mgt Tool

Reports


o Tools – Yours, Mine or Ours? ISG introduce the topic with some key definitions / background Question to a Client: What are the biggest risks or issues you

have experienced with tools (yours or Service Provider tools)? Do you prefer to have ownership or control of your own tools?

Question to a Supplier : What are the determining factors in determining if you use the client’s tool or interface with the client’s tool?

Question: Tool Integration tends to be the long pole of the tent. What can we do minimize the risk?

Topics to Discuss


How do we minimize during transition and transformation? Risk


How do we Minimize Risk during Transition and Transformation?

What are the imperatives during the first few months following contract signature?


o The critical first few months – What is needed to minimize risk during transition and transformation? ISG introduce the topic with some key definitions / background Question to a Client: How would you characterize transitions or

transformations within your environment? What were key lessons learned?

Question to a Supplier : What do you believe are the key critical success factors to effective transition and transformation?

What are some actions that could be done during the transaction phase to reduce some of the risk across the environment?

Topics to Discuss

www.isg-one.com

Information Services Group is a leading technology insights, market intelligence and advisory services company, serving more than 450 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 800 employees and operates in 21 countries.

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