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By Roger Camrass; CIO-Connect Chris King; Capgemini
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The Multi-sourcing Challenge
Roger Camrass; CIO-Connect
Chris King; Capgemini
Horizons 2012 survey identified multi-sourcing and Service Integration as leading CIO issues
2012 Horizons
Research question: How critical is Service Integration in achieving effective multi-sourcing?
How do we define service integration & management?
Business Stakeholders
Strategy, Sourcing Governance VMO Level
Operational Services Integration Layer
Service Desk
Comms Deskside Desktop InfrastructureApplications
Management
Applications
Development
Forrester Research Inc, “Building The Services Integration Layer In Multisourcing” Bill Martorelli, September 28, 2011
Service Integration & Management
We conducted 25 face-to-face interviews with CIOs
Aggregate Industries Alliance Boots Astellas Bank of America Bank of England BAT BUPA UK Camelot Coop Group Essex CC E-sure Igloo
Jardine Lloyd Thompson Kingfisher Legal & General NSG Pilkington Nationwide RSA UK Severn Trent TD Bank TT Electronics TJX Tullow Oil Virgin Media
The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
a. Outsourcing no longer meets CIO expectations – 70% of contracts fail to deliver full value
First Generation
Second Generation
Third Generation ??
Prime Contractor Best in Breed Utility
A. CIOs see a gap in their internal IT capabilities
1.Skills
2.Processes
3.Tools
• Outsourcing of IT has diminished the internal skills base
• Many of the core processes are not visible to IT
• Retained tools are frequently inadequate to monitor performance
a. Cloud is enjoying widespread adoption ….
Cloud class Examples 2016 revenue
Infrastructure Amazon $71B
Platform Microsoft Azure $35B
Service Management Service Now $3B
Software Salesforce $103B
Digital Marketing Adobe $21B
TOTAL $228B
The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
b. Back-office systems require efficiency and stability
Key parameters for back-office systems (under CFO influence) • Cost (efficiency)
• Performance (Stability)
• Timescales (Change)
b. Front-office systems require speed and agility
Key parameters for front office systems (influenced by CXOs) • Business Value (growth)
• Business agility (change)
• Business Risk (investment)
c. The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
c. Tier One maintains the IT Vendor ‘ecosystem’
Applications • SAP • Non-SAP
Infrastructure • End User • Data Centre • Networks
c. Tier Two seek new cloud providers
2. Business Units - Revenue driven
3. Enterprise IT - Efficiency driven
1. End-Users - Convenience driven
The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
d. To re-cap, businesses are polarising in 2 directions
• Inside-out requirements that arise from back and mid-office operations (e.g. finance; HR and supply chain)
• Outside-in requirements that arise from customer facing activities in the front office (e.g. mobile applications and social media)
• Decision timescales within the front office are becoming dramatically shorter – often weeks or months rather than years
• Each area requires a very different IT response
d. Cloud sourcing decisions are often made by others
Source: Capgemini, “Business Cloud: The State of Play Shifts Rapidly”, November 2012
d. CIOs have to satisfy two masters
Demand side
Supply side Strategic relationships Transactional relationships
discovery
planned
1. IT is the Business
2. IT is an enabler
3. IT is master of enterprise
services
4. IT manages the ‘walled
garden’
OUTSIDE-IN
INSIDE-OUT
d. And there are some tough strategic challenges
Stressed ITbudgets
Renewals & Remediation
Cloud serviceadoption
Need for innovation
Stressed ITbudgets
Renewals & Remediation
Cloud serviceadoption
Need for innovation
Stressed ITbudgets
Renewals & Remediation
Cloud serviceadoption
Need for innovation
Stressed ITbudgets
Renewals & Remediation
Cloud serviceadoption
Need for innovation
• Having control of IT service delivery is a pre-requisite to being able to exploit cloud services...
• You have the best IT suppliers but have you got the best IT service?
• Just conduct another procurement and hope that it works better this time...
• Cost Pressures, access to skills and quality, need to invest in new services...
d. This is what we see in the market
Considering the Future • No significant issues with current relationships • Formulating future strategy for IT service
delivery and sourcing
•How do I shape the future •What do I do next? •How should be set up for the next 3-5 years?
1
Considerations Three typical scenarios
Dissatisfied • Existing supplier operating to contractual
commitments but still not delivering value • Not happy with governance & control
•Is there an alternative? •How can I improve my existing approach? •How can safely introduce a change?
2
Distressed • Unacceptable supplier performance • Inadequate governance, measurement, control • Unable to resolve within the current
framework
•I need to change quickly, but not sure how •I don’t want to end up in the same situation through a costly procurement
•My business feels IT is constraining
3
d. What is the ‘size of the prize’ for SIAM?
Business Stakeholders
Strategy, Sourcing Governance VMO Level
Operational Services Integration Layer
Service Desk
Comms Deskside Desktop InfrastructureApplications
Management
Applications
Development
Forrester Research Inc, “Building The Services Integration Layer In Multisourcing” Bill Martorelli, September 28, 2011
Waste!
d. What does success look like?
Our experience is:
• Major incidents reduced by c40%
• Time to fulfil service requests reduced by c50%
• Retained IT FTEs reduced by c40%
• Governance overhead reduced by c80%
• An ecosystem speaking the same language
d. How do you get there?
Transform
Extend
Connect Connect the Operations
Extend the Reach
Transform the Business
d. Where does the CIO go from here?
1. Develop and implement your own processes
2. Build your own tooling platform
3. Hire the skills from the market
d. Where does the CIO go from here?
1. Buy a managed service keeping control of tooling and processes
2. Outsource taking advantage a complete and proven offering
3. Engage a partner to take-on, transform and work-out leaving you in control