Service Integration Frustrations

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At the 2013 ISG Sourcing Industry Conference in the Americas, Dave Tienstra and Lois Coatney of ISG spoke on service integration, it's evolution and solutions for tomorrow.

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Service Integration Frustrations

  1. 1. © 2013 Information Services Group, Inc. All Rights Reserved. Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval devices or systems, without prior written permission from Information Services Group, Inc. #ISGSIC 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
  2. 2. © 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 …..
  3. 3. © 2013 Information Services Group, Inc. All Rights Reserved Service Integration Past, Present & Future Introduction
  4. 4. © 2013 Information Services Group, Inc. All Rights Reserved 4 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
  5. 5. © 2013 Information Services Group, Inc. All Rights Reserved 5 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
  6. 6. © 2013 Information Services Group, Inc. All Rights Reserved 6 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.
  7. 7. © 2013 Information Services Group, Inc. All Rights Reserved 7 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.
  8. 8. © 2013 Information Services Group, Inc. All Rights Reserved 8 How do you Scope Service Integration? S = ServiceP = Process Demand(Business) Supply Service Integration and Management Corporate Support Functions LegalAudit 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
  9. 9. © 2013 Information Services Group, Inc. All Rights Reserved 9 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 SecurityInfrastructure Dashboard & Reporting Tools Client Org Change Mgt Independent Service Provider Sourcing Performing Service Provider
  10. 10. © 2013 Information Services Group, Inc. All Rights Reserved Roundtable Participants Introduction
  11. 11. © 2013 Information Services Group, Inc. All Rights Reserved How Much Legislation is Required? Lite or Heavy Service Integration
  12. 12. © 2013 Information Services Group, Inc. All Rights Reserved 12 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
  13. 13. © 2013 Information Services Group, Inc. All Rights Reserved 13
  14. 14. © 2013 Information Services Group, Inc. All Rights Reserved 14 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
  15. 15. © 2013 Information Services Group, Inc. All Rights Reserved Are Pain Sharing SLAs the Answer? Incenting End to End Service Performance
  16. 16. © 2013 Information Services Group, Inc. All Rights Reserved 16 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
  17. 17. © 2013 Information Services Group, Inc. All Rights Reserved 17
  18. 18. © 2013 Information Services Group, Inc. All Rights Reserved 18 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
  19. 19. © 2013 Information Services Group, Inc. All Rights Reserved Service Integration Model Options Who Should be the Service Integrator?
  20. 20. © 2013 Information Services Group, Inc. All Rights Reserved 20 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: GuardianModel 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 IT Infrastructure Applications Business Processes SIAM SIAM Client IT Infrastructure Applications Business Processes SIAM
  21. 21. © 2013 Information Services Group, Inc. All Rights Reserved 21 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 SecurityInfrastructure Dashboard & Reporting Tools Client Org Change Mgt Independent Service Provider Sourcing Performing Service Provider
  22. 22. © 2013 Information Services Group, Inc. All Rights Reserved 22 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
  23. 23. © 2013 Information Services Group, Inc. All Rights Reserved Tools – Yours, Mine or Ours?
  24. 24. © 2013 Information Services Group, Inc. All Rights Reserved 24 Tools – Yours, Mine or Ours? Requirements of the future – Plug & Play, Flexibility, Scalability, Data Visibility, Automation …. Integrated Service Desk Change & Request Management IncidentManagement ProblemManagement ... CMDBKMDB Events (Monitoring) Frontend Services Backend Services Resolver Group 1 Resolver Group 2 Resolver Group n  Portal Dashboard Service Mgt Tool Reports
  25. 25. © 2013 Information Services Group, Inc. All Rights Reserved 25 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
  26. 26. © 2013 Information Services Group, Inc. All Rights Reserved How do we minimize during transition and transformation? Risk
  27. 27. © 2013 Information Services Group, Inc. All Rights Reserved 27 How do we Minimize Risk during Transition and Transformation? What are the imperatives during the first few months following contract signature?
  28. 28. © 2013 Information Services Group, Inc. All Rights Reserved 28 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
  29. 29. 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. knowledge powering results® #ISGSIC

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