With the increased complexity and diversity of the IT portfolio, CIOs today face a tough balancing act orchestrating multiple vendors, varied technologies, accelerating time to market and resolving priority conflicts among them. The most arduous part for CIOs is the time spent in managing the interdependencies between third-party vendors, service partners and other stakeholders to make sure that the portfolio continues to support and add value to the business. Organizations that choose to source from multiple vendors tend to spend significantly higher amount on these services due to lack of adequate Service Integration and Management (SIAM) practices. In such situations, up to 40% of additional spend can occur due to sub-optimal or non-existent SIAM.
SIAM initiatives help address this problem through contractual agreements with a prime vendor, and Operational Level Agreements (OLAs), i.e., right to manage, license management, etc., between the prime vendor and other service partners. Most SIAM contracts tend to have broad and aggregate level KPIs to track service performances.
For instance, for a telecommunications company, the KPIs are senior stakeholder satisfaction, overall system availability and other such measures. As these KPIs are more in the aggregate rather than directly actionable metrics, they don’t provide unfiltered visibility into service performance. Better contracting practices can mitigate some of the governance-related issues, but cannot aid cross-vendor dependency mapping, tracking and management. That can happen only through a service delivery platform that integrates the workflow and aggregates performance metrics of individual vendors into a business-centric set of metrics. Thus, a platform-based approach is essential for effective implementation of SIAM.
Engagement models that are based on the results (SLA or BLA and/ or service improvement goals) and volumes (tickets, transactions) lend themselves to be considered for SIAM introduction. Time and Material (T&M) with its variations or effort-based pricing models are not suited for buying services in an integrated manner. Further, service agreement frameworks and the right to manage contracts, including the institution of cross-supplier agreements and establishing multilateral governance, become critical for the success of SIAM initiatives.
The factors that need to be kept in mind for selecting a service integrator (who is also another service provider) are:
- Capability in application support and maintenance, and in infrastructure management
- Strong relationships with hardware and third-party software product vendors
- Proven capability to integrate application and infrastructure support
- Providing a platform-based solution that offers a “single pane of glass” view of portfolio performance
- Ability to provide services against Business Level Agreements
A platform that supports vendor processes or tasks individually (e.g. monitoring and event correlation) and integrates it with IT service management processes (e.g. incident management), while deriving meaningful service performance information becomes essential for implementing a full-fledged SIAM program. This platform should inherently support and, in some cases, enforce process compliance and provide visibility into service performance.