IT Services Then and Now
IT services used to be far more straightforward than now, years ago it was typically done in-house however the scope and complexity was limited. Life was much simpler all together.
Today many organisations have a large number of service providers to manage and support the delivery of their end-to-end service. This service is important, it’s the lifeblood of their business but they are wholly reliant on a number of disparate services from a diverse supply chain meshing together and working seamlessly. Note, I am using the word service in its singular form deliberately since what we are talking about here is integrating services from multiple suppliers into a single coherent customer facing service.
Of course, it should all be straightforward, we break down our Service Oriented Architecture (SOA) into elements or towers that can be delivered as shrink wrapped entities that conform to their specifications and SLA’s and everything fits perfectly…or does it.
Commercials, the Spanner in the Works
In practice however commercial pressures get in the way of the perfect solution because service boundaries that looked clean at the contract stage in practice turn out to be wrong or they get ragged over time resulting in duplication and overlap. The commercial drive of each provider means that they are very reluctant to concede on service boundaries, in fact they typically want the opposite. They want to take more from their adjacent provider who is typically a competitor. So overlaps become a nightmare, you are over paying and your suppliers are fighting to increase their share.
Of course you are equally likely to find you have a gap in the service architecture and in this case the commercial drive will have your suppliers climbing over each other to fill the gap because it increases their contract value, again a nightmare making you wish you’d taken that other job.
Experience says that you are never going to achieve what you want from your end-to-end service unless you create an different environment to overcome these problems.
We are seeing the familiar term “Systems Integration” making way for “Service Integration”. The two are similar. Systems Integration brings an engineering system of systems together to form an amazingly complex entity such as a nuclear submarine.
Systems Integration has the same problem of overlap and underlap in scope for different subcontractors but it is typically done once. Once the entity works, the rest is post design upgrades and support.
Service Integration, however, is never done, it’s continuously evolving to meet changes in the service delivered to the customer to improve the value of that service. So it has all of the problems and issues around traditional SI but perpetually, for the life of the service.
Enter the Service Integrator Model
The “Service Integrator Model” (SIM) is a multi-sourcing model that is designed to make your end-to-end service easier to manage. You will hear terms like “plug and play” and “best of breed” used a lot and cost savings and of course the concept of an independent, impartial 3rd party service integrator.
The drive for moving to a Service Integration Model is the potential benefits that can be enjoyed:
- Reduced Opex by removal of duplication and overlap between the Service Providers, making the services really dovetail together.
- Agility by making it easier to plug and unplug service providers since the interfaces are clean, “plug n’ play”.
- Compliance by having clear accountability and governance for each supplier it becomes easier to make the end-to-end service compliant
- Improved customer service by simplifying control and reporting mechanisms for each supplier against OLAs, once you can measure something you can improve it continuously.
In a nutshell, success with this operating model requires coherent reporting across the end-to-end service, that means visibility, consistency, integrity and accountability for the services that are being provided by each supplier to make up the whole service.
However like everything in life there is a cost and that cost is staffing and running the Service Integrator component which is probably either non-existent or vestigial in the existing organisation.
If your CIO and his/her department have sufficient skills and headcount then they can perhaps retain the Service Integrator role in house. Often it is realised that this is not the case and a 3rd party specialist Service Integrator needs to be employed. Either way this costs money but the business case typically says that the funding will come from the savings in the contract value of each of the then ‘commoditised’ suppliers.
Of course if you are one of the suppliers the thought of being ‘commoditised’ will not exactly fill you with enthusiasm for the model. You will feel marginalised, devalued and at threat of losing contract value and maybe market share so typically the suppliers suddenly become commercially sensitised. This is one of the main reasons Service Integrator models fail or revert to some thinly veiled version of the multi-source environment that was in place originally.
We could get into a long discussion about trading off the ‘thickness’ of the Service Integrator layer that you really need to be effective and how this balances with the cost savings that you can really make across the supplier base however there is no one right answer to this, there are plenty of wrong ones but get it wrong and again your Service Integrator model will fail.
First You Need a Collaborative Environment
Let us assume that you have right sized the Service Integrator layer and have correctly decided whether it is best to resource it internally within the CIO department or to go to a 3rd party specialist. There is one other crucial factor in making it work.
The model relies, as I have hinted at, on collaboration. It only really works if all of your suppliers can play nicely together. So how do you achieve this? All of your suppliers are independent commercial organisations. Put all of the suppliers in one room and shut the door and they are likely to migrate to different areas of the room and talk amongst themselves. They are not bound by any agreement. They each have contracts with you and they are very likely to be competitors in some areas. They won’t talk to each other because they don’t want to give anything away, they don’t need to talk. In fact if they had advance notice of being put into a room their commercial officers would have very likely given them special instructions as to what they can and can’t say with particular emphasis on the latter.
So you have here perhaps the biggest obstacle to success. They are each conditioned to be anti-collaborative, in another word competitive.
How do you get 6 to 12 suppliers to play nicely together so that you can deliver a wonderful service, save lots of Opex and declare the Service Integrator Model a resounding success?
Behavioural and Transactional Change Management
The solution is in two parts. The first part is behavioural, you need to get each supplier to understand that success with this model requires a journey that will benefit each of them. There has to be something in it for them not just you. Somehow you need to show them that you can lower their costs and give them the prospect of new work without the costs of winning it in a competitive environment. (remember the overlaps and gaps).
Behavoural Change – Creating the Service Integration Enterprise
Now all companies will have a set of values that are more or less similar but the first thing you will need to do is to introduce a common set of values and behaviours for a supplier to adhere to as a condition of being in this “Service Integration Enterprise”. See how it already starts to feel that you would rather be part of it than not.
Then you need to create an environment of mutual respect and trust, not just within each supplier but also between them all. The way to do this is to put them into interleaved groups call them names like house names in schools if you like but something company agnostic that they will remember. Remember what you are trying to do is to break down the barriers and form people alliances across the company boundaries. Do this by taking each group through some behavioural training workshops where they will have to learn:
- The ‘values’ of the end-to-end enterprise
- What makes people think and act differently and how to best interact
- How to develop trust quickly and what trust really means
- How to form teams that deliver great results
- How to act with integrity
- How to act in the the best interests of both the Service Integration Enterprise and their company
The behavioural change is an essential ingredient for success however on its own is not enough.
Transactional Change – Change Managers to Navigate the Journey
The supplier group needs to go though an evolution in maturity to reach a truly collaborative state. In my experience it is important to realise that this evolution can’t be done overnight, the supplier group or enterprise need to be taken on the journey together in stages so that at the completion of each stage they take stock of the changes and benefits that they have collectively achieved and then set the objectives for the next stage. Like all the best things I have defined this journey in 3 phases:
- An Initiation Phase
- A Transformation Phase
- A Coherence Phase
At the conclusion of each phase we have a gate review and we refresh objective setting, the Service Integration Enterprise must get consensus on the phase objectives completing before moving on, they can agree to extend the current phase until specific benefits are realised or move on to the next. The consensus at each stage helps ratchet the evolution and helps prevents reversion to the comfort of the old ways of working.
To make this change work requires bringing in some external, impartial, experienced Change Managers, who know how to do it, these need to be embedded within the Service Integrator Enterprise. It doesn’t matter if it’s the CIO team performing the Service Integrator role or a 3rd party you still need these Change Managers to make the business change work and to make it stick.
The timeframe depends on the size of the Service Integration Enterprise and the complexity of the end-to-end service, each stage could be between 3 and 6 months and this applies equally to:
- IT service providers
- Telecom service providers
- Public services such as local authorities, prisons, hospitals and border control
- Transport services such as airlines, airports, rail companies
- Retail services
- Financial services
- Energy Services
In fact any business that relies on technology or multi-sourcing to deliver an end-to-end service sufficiently to have appointed a CIO team.
As the business change evolves though the 3 phases the Service Integrator layers dependence on the external Change Managers reduces and at the end of the final phase the model should be working autonomously and delivering the benefits in the original business model.
10 Steps to ‘Service Integrator Model’ Success
- Communicate the vision and objectives for moving to the Service Integrator Model to your suppliers
- Get commitment and participative buy in from all suppliers
- Decide on CIO team or 3rd party Service Integrator layer
- Get the ‘thickness’ of the Service Integrator layer balanced with the business case and test for realism
- Interleave the supplier teams into groups for workshops and cross supplier team building, give them agnostic team names to form a bond orthogonal to their companies.
- Embark on a series of behavoural workshops that takes in the whole supplier base, performing them in team groups not company groups
- Workshops must cover, values, behaviours, developing trust, acting with integrity and how they people can balance allegiance to the Service Integration Enterprise and their company
- Don’t ignore the transactional side, assume you will need Change Managers embedded in the Service Integrator team to help navigate the journey to benefit realisation and act as independent arbiters
- Recognise that just as Rome wasn’t built in a day, this transformation needs to be done in 3 stages and will take some time
- Consensus on progress and objective setting is key so make sure that the conclusion of each stage includes a review and objective setting for the next stage to prevent reversion