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Why AchievingMulti-ProviderService HarmonyIs No Trivial Task

Some Food for Thought:

Service excellence doesn’t care about service complexity

Avoiding the Watermelon Effect.

A glimpse into the “Gold Standard” SIAM function

What’s Inside

Have you ever experienced a Michelin starred restaurant? As it happened, the other day at an important client dinner at a very famous restaurant in London, I was thoroughly impressed by the swiftness, presentation, quality and sheer “seamlessness” with which a great variety of food was delivered to a very heterogeneous group of people. At the end of it, there wasn’t one soul at the table who didn’t leave without a smile on his or her face. It wasn’t just dinner; it was an experience.

Creating such an experience takes much more than talent and hard work. It takes clear lines of control, teamwork and most of all, it involves the implementation of a very mature service management framework. Imagine a busy kitchen, buzzing with a dozen chefs. Each specializes in a different kind of food--or even parts of the food preparation process--while managing scores of orders in parallel. Now relate this back to the expectation of the customer sitting impatiently in the restaurant, expecting a Michelin starred experience at the table, while oblivious to the complexity between the chefs, the service staff and the various suppliers involved, you might realize that the art of cooking is just one part of the Foie Gras you consume. In fact, cooking is a well-defined process framework with rules, a clear understanding of each service owner's strengths and weaknesses, and a restaurant manager whose job it is to orchestrate all this into the desired experience, delivered every time, and without any scope of error.

If you are in IT, or are a part of the business which depends on IT services, it will not be a stretch for you to realize that a similar weight of customer expectations is on your product or service. Much like a customer at a famous restaurant, your customer is oblivious to the hundreds of cog-wheels in your machine, each performing its own function to the highest efficiency and quality. More importantly, each must be working in perfect harmony together to deliver the desired end experience. For example, every time a shopper clicks the “Buy Now” button on your website, she expects that her coveted purchase is delivered to her door as per the SLA she paid for. She doesn’t care that that the delivery requires the harmonious execution of 10 different processes and five different functions from IT to warehousing, supply chain and finance. And if any of those processes or functions are outsourced, then we are looking at a multi-dimensional, multi-service, multi-SLA management challenge that requires skills not too different from the manager at a Michelin starred restaurant.

This is why SIAM (Service Integration and Management) has been consistently named as a top IT and business service related challenge time and again in various reports and studies. One reason for SIAM’s rise in importance is that high performance organizations are heterogeneous at their core, consuming best of breed services from vendors they painstakingly select and manage.

Service Excellence Doesn't Care about Service Complexity

In simple terms Service integration and management (SIAM) is an approach to managing multiple suppliers of information technology services and integrating them to deliver a unified business-facing IT organization.

In this sense, "service management" refers to managing the service life cycle all the way from strategy to transition, and to operation and improvement. The "service integration" piece is what binds together multiple service providers, streamlining multiple processes and tools to deliver a cohesive service working as a single unit.

ITIL (Information Technology Infrastructure Library) best practices and guidelines form the basic foundation of any SIAM function. But inherent to ITIL are certain limitations ‒ i.e. the guidelines only tell you the principles and best practices for processes, but leave out the “how” part. To be successful and effective, IT Service Management (ITSM) needs more than ITIL; it needs an implementable framework that expands ITIL guidelines to include others (such as COBIT and CMM) to make ITSM practical in real-world scenarios. Implementable ITSM also needs a strong technology platform, and the right skills and partnerships configure and manage the ITSM tools. Finally, successful SIAM implementations, much like a Michelin restaurant, needs an organization responsible for coordination, management, end-to-end service reporting, driving innovation. This is known as the "Service Management Office." In fact, today the prevalent trend is to outsource the SIAM function to capable Service Integrators (SIs) who bring with them implementable ITSM frameworks and the required technology expertise to create, run and manage successful SIAM implementations.

Achieving service excellence through multi-provider harmony isn’t a trivial task, as SIAM requires ‒ focused investment, execution and control. It requires multiple individuals, parties and organizations to be aligned to a single goal ‒ while doing what they do best, and in the best possible way. It requires the focus to shift from the creation of complexity to the consumption of simplicity. If this sounds like no mean task, bringing a smile to a customer's face never is; just ask the manager at any Michelin-starred restaurant.

The growing trend of organizations sourcing services from an expanding number of suppliers is akin to a restaurant managing its employees. As chefs, servers, cleaning crews, etc have their individual skillsets and ways of working, they jointly aim to provide to customers the finest food and customer experience possible--as governed by the restaurateur. Similarly, organizations may follow their own processes, but still have to deliver discrete individual components (servers, storage, network, etc.) to support and deliver an end to end service based on an agreed SLA to achieve a common purpose.

Service integration and Management lets an organisation manage multiple service providers in a consistent and efficient way, ensuring that performance across a portfolio of multisourced goods and services are delivered as a seamless service and meet user needs

Service Integration Service Management

SI is the binding together of multiple suppliers by joining up processes and managing the disparate organisations to function as a single “IT Team” to deliver a common service

ITSM is driven by the ITIL framework. Considered as the standard; these are processes used to manage operations and the service lifecycle

SIAM Function or SMO

Manage Enabled by

Process Tools

Process operation Roles

Operated by

Ena

bled

BY

Avoiding the Watermelon Effect.Are 100% of IT SLAs green, but your business still sees red?The solution could lie in implementing successful SIAM.

While SIAM is not a new concept, the current pace at which

the IT landscape is changing has brought it to the top of a

CIO’s or business manager’s list of priorities. As businesses

depend more and more on IT delivering on or even exceeding

the promise of technology, the demands placed on IT

mandate the leverage of best-of-breed suppliers. Similarly,

Service Management has evolved from a stage where the

challenge was integrating the retained organization and the

single, large supplier, to todays challenges of much higher

magnitude that require the integration and management of

multiple vendors and a complex mix of services.

Bringing together multiple suppliers, each with their own style of working, processes, tools etc. and molding them into one cohesive service is not a walk in the park.

Understanding the Challenges of SuccessfullyImplementing SIAM

Complex supplier to supplier accountabilities:The services and the criticality of a supplier in the service value chain decides the accountabilities and the roles. Since very clear accountabilities between different suppliers is difficult to achieve, especially in today’s dynamic, complex and often-times cloud based IT environment, this becomes one of the major challenges while implementing SIAM.

Different SLA’s mean different measuring tapes:Contract terms and SLAs agreed with suppliers are more unique than similar, rendering a one size fits all kind of service level measurement unworkable. Complexities to be considered can range from different incident priority matrices to something as basic as different contracted hours and even currencies!

Difference in organizational culture of suppliers:A business issue resulting from a complex service value-chain needs to be resolved even if not within the scope of the contract. This can, for some suppliers, mean getting into long contract change discussions. Successful SIAM requires an open collaborative culture where suppliers act responsibly and do all they can to support the customer, even if it is something which hasn’t been specifically included within the contractual scope.

A few challenges that organizations facewhile implementing SIAM function are:

Data transfer issues between suppliers due to different tools and processes being usedReduced collaboration due to different physical locations, languages and time zonesDifferences in delivery models (some using shared staff, others a dedicated team, etc.) Different incentives to transform, improve and innovate

There can be several other challenges in implementing successfulSIAM, such as:

Creating an Effective SIAM FunctionThe SIAM function, which is enabled through a combination of processes and tools, is executed by a human workforce and usually assisted by automation. As we had seen through the example of the Michelin starred restaurant and the challenges enumerated in the previous section, creating a seamless multi-vendor organization is easier said than done. But as scores successful high-performing organizations can testify, it is difficult but not impossible. We distilled the key elements of effective SIAM from more than twenty such successful implementations to give the user a perspective of what it takes to build effective SIAM.

The key elements which need to be defined and implemented when building a SIAM function are:

Service Management Processes & Tools The service management processes and tools deployed to enforce, support and enable the SIAM function form the foundation of managing operations and integrating multiple suppliers to align them towards ONE single process goal.

There can be three different use cases to consider while deciding on the SIAM processes and tools:

• One common ITSM framework (tool + process): This is the most ideal scenario where the supplier and the service integrators use the same ITSM tool and follow the same process guidelines, hence doing away with the need to define additional ways of working together.

• Supplier brings tools and process to the table: Alternately some suppliers may use their own ITSM tool and processes. In this case, the proper workflows would need to be defined, agreed upon and implemented. Unfortunately, this is not an Unfortunately, this is a common scenario and definitely not a preferred option as this would mean that all the various ITSM tools being used in the SIAM environment would have to be integrated to talk to each other. This in turn could require complex and laborious data transformation and consolidation to enable consistent and understandable flow of information.

• Swivel: This is commonly used when suppliers’ criticality in the service chain is low. Here, a manual swivel chair approach integration is used (i.e. tickets can be keyed into two tools manually, and the ticket numbers entered into the tools provide an end-to-end audit trail).

The discerning reader would have guessed by now that in reality, typical multi-supplier environments combine the best of the above three scenarios where the kind of tools and processes being used depend upon the criticality of the supplier in such an environment. This is a viable approach to SIAM, which ensures that investments are directed towards the most critical services and suppliers first.

As in all complex undertakings, the devil lies in the details and this is where organizations fail to notice the smaller cogs that make up for a well-oiled SIAM function. Details such as factors related to the data important for each process, security and compliance, access and user profile management, cost chargebacks, etc., can all impact the architecture and design of the SIAM function. Additionally, the service management solution should be robust enough to be able to cater to these requirements.

While typical Configuration Management Databases (CMDB) provide a route map for service delivery components (CI’s) and their interrelationships, to understand the impact of these services on business requires that this mapping is extended to the service and process layers. This helps cover additional attributes to support the SIAM organization (eg the SLA, the criticality, the vendor supporting the CI, their support hours, etc). These service maps form a critical component for implementation especially if the SIAM function is being provided by an external supplier, as they may not have adequate visibility or the understanding of the complexities and inter-dependencies of the prevalent environment.

This is the organization that needs to be designed and put in place to run the SIAM function. Factors such as scale and complexity of the services landscape, and the locations of the service providers and the consumer of the services need to be considered while figuring out the SIAM organization. The other important consideration is that of internal-external mix. Making smart decisions on how much of the organization needs to be retained vs. what needs to be outsourced to capable SIs will determine the eventual success and ramp-up speed of the SIAM function.

The truth of the matter is that suppliers are rarely contracted for business outcomes; instead their SLAs only cover their area of responsibility as captured by their contracts. So who owns the SLA on business outcome? This disconnect leads to fragmentation of responsibility, eventually leading to lack of accountability for business performance. This can be changed by defining clear Operating Level Agreements (OLAs) as a part of the ITSM implementation, and ensuring that internal and external services providers are all aware of--and align their SLAs to--the overall OLAs. Here are a few other steps you can take to ensure business accountability:

• Capture inter-supplier dependencies very clearly in your OLAs while doing any ITIL implementation.• Incentivize good behavior and foster a culture of collaboration and innovation between suppliers.• Ensure that the ball is not dropped when an issue is handed over to another supplier for resolution

by including generic dependencies between suppliers in your contract.

Service Management Architecture

Service Maps

Functional Structure

Contract Structure

By its very nature, SIAM is a very dynamic function with many players with multiple inter-dependencies and lines of control. To ensure smooth operations and guaranteed business performance, well-planned governance structures need to be put in place to manage and obliterate potential loopholes. This can be done through forums such as :

• Proactive issue resolution and operational reviews• End-to-end performance and compliance review of the suppliers • Steering committees which drive continuous innovation and improvement in the SIAM function

Governance

Source: Gartner: Use Effective Multisourcing OLAs to Deliver Integrated Services and Business OutcomesPublished: 28 May 2014, Analyst(s): Jim Longwood, Gilbert van der Heiden, William Maurer

Operating-Level Agreement

Business Context Service Integrationand Management

End-to-End Service Commitments Annexures and Schedules

Introduction Service Desk Coordination Technology Environment and Standards Governance

OLA Purpose and Objectives Service Operation Management

Technology Environment and Standards

OLA Change Management and Implementation

Shared Values and Common Operating Principles

Performance Management and Reporting

End-to-End Service Levels and OLOs

Common Operating Process Documentation

Overarching Role of MSI/SIAM provider

Service Knowledge Management Incentive and Penalties Toolsets and Messaging

protocols

up

Service Delivery Reviews

Supplier Service Managers

Operational ReviewsSuppliers Process

Managers

SIAM MSI Suppliers

Conceptual Structure of Key Components in a Best-Practice OLA

Design an effective operating model to foster a culture of collaboration, innovation and success.The industry now believes that creating a multi-source ecosystem with the right mix of collaboration and competitive tension could help organizations that they need, while effectively integrating and evolving those services in lock-step with rapid business growth.The simplified goal is to coordinate internal and external suppliers and the services they deliver in an efficient, but cost-effective way. To achieve this, however, the design of the overall SIAM function should drive a culture of “customer and the ecosystem” first and “supplier needs” second. Does this mean that if you are putting an agile, responsible and responsive service ecosystem in place that you need to go back to the drawing board? With the right framework and operating model you don’t have to. An operating model helps decipher and simplify the scope of the SIAM office into components, towers and organizations, and depicts how the whole eco-system works. It can help suppliers and the business stakeholders understand the whole picture. Thus the operating model provides a blueprint for multiple domains ‒ including processes, people and technology used for service management. The world's leading SIAM suppliers have established operating models by combining ITIL with other prevalent service management and compliance guidelines. One such example is the Gold Standard SIAM Process Framework from HCL.

A Glimpse into the "Gold Standard" SIAM FunctionBest Practices from a SIAM Supplier’s perspective, gleaned from more than 100 successful implementations

The processes and activities to be performed by the SIAM supplier can be fit into two broad stacks`

Service design, transition and operation processes (e.g. incident, change, release, etc.) Contract and commercial management processes

There are varying views in the industry, and several organizations include the contract and commercial management processes within the external suppliers scope as well. This is not unusual as invoice management has traditionally been outsourced to BPOs.

However, depending on the operating model, it may be advisable for the contract and commercial management” processes to be retained by the customer or separated from the service operations part of the SIAM organization, to ensure that:

If the SI supplier is also an organization providing one or more technology services, then they are not managing their own invoices, service credits, penalties, etc. (akin to “the fox guarding the hen house”)Since the SI partner may be competing with the other suppliers in the marketplace, if they are not directly involved in the commercial management of the contract of the suppliers, this will help avoid issues within the ecosystem and help support the culture of collaboration

There are several views in the industry as to what should form part of the SIAM supplier’s scope. The SIAM function should be designed not only as an enabler to functionally aggregate and coordinate component services from discrete service providers to deliver a seamless end to end service, but also to foster a culture of cooperation and collaboration within the ecosystem.

One of the key success factors for the model to succeed is neutrality. The SIAM supplier cannot be seen as being partial or biased towards the resources/teams (if any) from their own organization providing services in one of the towers. Another important aspect to consider is that the suppliers in the ecosystem, may also be competing in the marketplace.

What to look for when evaluating a SIAM supplier?

Track Record in MultisourcedEnvironment

Ability to Integrate Operations at First level Help Desk

Ability to Deliver and Manage an End-to-End Service

Ability to integrate cloud Service Brokerage Functions

Experienced in managing multiple traditional and cloud Service providers

Industrial-strength help desk capable of supporting of supporting an ecosystem of providers

End-to-end service delivery quality – including related end-to-end performance reporting

Automated service brokerage and orchestration functions.

Service management framework Supports multivendor service portfolio/catalog.

Collaborative service management of multiple providers.

Toolsets for integration between cloud management platforms and CSB aggregation tools.

Quality management framework Ability to establish, measure and enforce OLA

Understanding of business objectives.

Cross-platform integration toolkits for laaS to aPaaS to SaaS layers, for example.

Value-added governance frameworks and OLA templates

NA Workable governance frameworks.

Ability to Establish, measure and enforce extended OLA across IT and Cloud Service.

OLA= Operational Level Agreement: MSI = Multisourcing Services Integrator: CSB = Cloud Services Brokerage. laaS= Integration as a Service; aPaaS = Application Platform as a Service: N/A = Not ApplicableFor further information on CSB integration see “Manage Your cloud services With the right Roles and Technologies” (G00238933) and “What IT leaders Need to Know About Cloud Services Integration: Proactively Address the Challenge” (G00247426).

Source: Gartner (August 2013)

A tried and tested operating model can expedite the establishment of an effective SIAM function, but not until it is actually implemented through an IT Service Management Technology platform, such as ServiceNow or BMC Remedy. On their own, these platforms do not bring any of the common ITSM processes to life, and configuring and programming them to accept different inputs and connect with a variety of systems, building complex workflows and rule engines etc, can be time-consuming to the point of being harmful to the overall SIAM establishment exercise. One solution could be to leverage prepackaged “distributables” ‒ which can significantly expedite SIAM “go-live”. One such example of a prepackaged SIAM solution is HCL’s Gold Blueprint, which, as a ServiceNow image, can help organizations launch the SIAM function in a short timeframe.In summary, effective SIAM is not a task. It requires diligence, planning and focused execution across three towers: people (culture), process and technology. And sometimes, choosing the right SIAM partner with experience across all three can mean the difference between effective SIAM and a long hard road that leads to eventual business dissatisfaction.

Depicted below is a sample SIAM operating model (process and tower view)

Below is a depiction of an Enterprise Service Integration Platform

Service Integration & Management

Customer Business Divisions

Business Unit 1 Business Unit 1 Business Unit 1

Commercial/ Contract Mgmt.

¡ Financial Management Contract Management

¡ Commercial Issue Management

¡ Supplier Risk and Contractual Compliance

¡ Invoice Management

¡ Performance penalties and earn backs

¡ Commercial adjustments

Dem

and

¡ Demand Management¡ Service portfolio management ¡ Service Catalogue Management¡ Service Level Management¡ Availability Management¡ Capacity Management ¡ IT Service Continuity Management¡ Information Security Management

Service Strategy & Design

¡ Transition planning and Support ¡ Change Management¡ Asset Management¡ Configuration Management¡ Release & Deployment Management¡ Service Validation and Testing ¡ Knowledge Management

Service Transition

¡ Event Management¡ Incident Management including Major¡ Incident Management¡ Request Fulfillment¡ Problem Management¡ Access Management

Service Operation

SupplyService Measurement and Reporting

Continual Service Improvement & Innovation

Part

ner E

co-S

yste

m

Service Desk

Enterprise Operations Center (Monitoring)

Apps

Dev

elop

men

t&M

aint

enan

ce s

uppl

iers

SIAM interface

End User Services Supplier

¡ EUS Device Mgmt¡ VDI and Citrix¡ S/W Configuration and

Distribution¡ Mobile Device Mgmt¡ Field Services ¡ etc

SIAM interface

Managed Network Services Supplier

¡ WAW Services¡ LAN services¡ Commo Network

Services¡ etc

SIAM interface

Hosting Service Supplier

¡ Data Center Hosting¡ Physical Platform¡ Virtual Platforms¡ Mainframe¡ etc

Oth

er S

uppl

ier

… …

Ask Ask

Implied OLA matrix

Billing & Metering Payment Dynamic Service Store Reporting Service/ Asset View

Enterprise self service

Partner On Premise/ Cloud Services

ITSM Aggregation (HCL GBP) ESM Aggregation (HCL Event Mgmt GBP)

Asset & CI Aggregation (HCL GBP)

Cloud Aggregation (HCL My Cloud & My Workplace)

Interface with PMO, VMO,

EA

IT Business Mgmt

Operational Integration

Unified Service Desk & Command

Center

Service Lifecycle

Mgmt

Service Mgmt Office

Supply Demand

Supplier C ESM

Supplier A ITSM ESM

CMDB

Supplier B ITSM ESM

CMDB

Supplier D

ITSM ESM

CMDB

Role-based access

Service Provider Ecosystem

IaaS Offerings PaaS Services SaaS Services Virtualization Physical

Internal On Premise/ Cloud Services

External On Premise/ Cloud Services

Service C

reation & P

ublishing Service Resell Service Intermediation Service Arbitrage Service Aggregation

Appstore/ Marketplace

Adjust

List

en &

Cre

ate

Rep

eat

ArcelorMittal Europe , the world’s largest steel producer, with an IT portfolio which comprises of Dozens of shared IT services and Hundreds of IT service providers spread all over the globe lists “Service Integration & Management” as a vital need for business.

Christophe Bauret, Head of Service Management, ArcelorMittal Europe - "In the current IT landscape, business functions do not necessarily rely on their IT organization to provide computerized services and apps. Cloud and web-based solutions and managed services are addressed by the business functions as extensions of their IT organization. The advent of new services appearing and sold as "ready to use," or "plug and play" have added to the confusion. Thus the need for complex service integration has brought on a shift in everyone's mindset, and is one of the key focus areas of the Arcleor Mittal IT organization. HCL is helping ArcelorMittal in this journey by providing a common Europe Service Desk and a common set up ITIL process and tools based on their Gold Blueprint and ServiceNow propositions."

with HCL Multi-Provider Service Harmony

Experience

SIAM Gold Blueprint

BluePrintIs your IT prone to the watermelon effect?Is your ITSM rollout suffering from the "are we there yet?” syndrome?Are you discussing ‘exceptions’ more than ‘innovations’ with your service providers?Are your SLA and CSAT results misaligned?

The HCL philosophy of systems integration revolves around enterprise architecture methodologies, application-centricity and a vendor neutral approach, with a view to build a robust, business aligned and optimized IT environment for customers. Leveraging ServiceNow, HCL SIAM Gold Blueprint can reduce complexity and time-to-value while protecting your existing investments with a tried-and-true solution.

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