SIAM: Keeping the governance of external IT service providers in-house
Companies that outsource IT activities to different service providers must maintain a coherent IT environment for their own users. This coordinating role, referred to by the acronym SIAM (Service Integration and Management), is a role that can in turn be outsourced. But it would be sensible for companies not to do so.
IT outsourcing has already evolved dramatically. Last century, companies were still looking for a single partner to fulfill most of their IT needs. Later, this became multiple specialized firms (best-of-breed suppliers), each with its own task. This was then followed by SaaS (Software-as-a-Service) providers that were contracted – sometimes bypassing the IT department – to perform business functions. However, if software maintenance, customer management, telephony services, the IT helpdesk and other activities are handled by different providers (multisourcing), coordination becomes highly complex, as the companies concerned have experienced. The ‘market’ responded early to this. “We already began designing the governance of outsourcing-related IT services back in 2001,” explains Frank Grift, Financial Director of Quint Wellington Redwood and an expert in the field of IT management. This activity has only been known as SIAM (Service Integration and Management) for a few years. According to the most widely accepted definition, SIAM is what you should do to enable organizations and their service providers to actually benefit from the advantages of multisourcing. In this regard, the integration of all the separate services into one model ensures that all parties (client and service providers alike) know what the desired results are, are able to deliver these results and can be held responsible for them. The SIAM function will push the standardization of the processes of each supplier forward in order to make integration and good end-to-end service provision possible.
Falling through the cracks
If all goes well, identified problems (‘the internet’s not working!’) will no longer fall through the cracks. However, especially since the emergence of the expanded SaaS offering, many companies are having difficulty with the proper governance of demand and supply across the sometimes intangible IT landscape, Grift adds. “Many traditional outsourcing providers, like Fujitsu, Accenture and Atos, have responded to this by providing integration services which we can define as SIAM services.” Currently, Grift sees two ways in which SIAM is being approached. On the one hand, there are those service providers that create – in the multivendor-sourcing landscape – a kind of integration layer between the supply side and the retained organization (which, for example, manages the contracts). “What you have then is a kind of four-layer model: the business, the retained organization, the SIAM organization, and the sourcing providers.” Sometimes, this SIAM function is in the hands of a service provider that also provides one of the other packages. Such a solution is somewhat one-sidedly focused on the supply side of IT services, according to Grift.
On the other hand, Grift sees that growing numbers of larger companies are consciously choosing to insource their SIAM function. “They want to do this in order to ensure better control over external service provision. An external provider cannot do this. And, in addition, they want to exercise proper governance over the supply side of the IT services, but also to focus expressly on the demand for IT services within the company itself. You have to explain clearly to providers exactly what requirements the business processes set for the IT services.” Digital transformations and other changes to the business processes demand many changes on the side of the providers. In such cases, it doesn’t help if SIAM has been sourced out and only looks at the supply side. Things can still go wrong even when the SIAM function is provided in-house. “You need a certain kind of person to develop this integration function, and they are often not your typical IT people. SIAM is an intermediary function.” Moreover, companies that implement SIAM themselves can sometimes make the processes and organization too complex by detailing all kinds of process steps. “And then you have to explain all of that to every single one of the different providers.”
Something companies should be alert to when their SIAM function has been outsourced is the tendency to make the contracts complicated. “If SIAM is outsourced, a separate sourcing contract will be concluded with each provider. These contracts fall under a ‘SIAM Integration Contract’ that contains agreements on how the providers must work together. This is difficult, especially when more than five providers are involved. Experience shows that people simply have to cooperate and that is more important than setting down every last detail in a contract.” When the SIAM function is provided in-house, there is no integration contract and the focus is automatically on the nature of the cooperation. Generally speaking, an optimal number of external IT providers cannot be set. Flexible service providers and SaaS providers are vital to a company that has to respond quickly to the environment and at which business models change rapidly. A traditional and stable company needs fewer providers.
One of the major factors for success is technical in nature. Regardless of whether the SIAM function is to be provided in-house or outsourced, everyone needs consistent, uniform information. The varied reports providers deliver regarding their performance, costs, volumes and service levels say little about how the provision of IT services is doing as a whole. You therefore need to be able to report on this yourself from the SIAM perspective. Grift: “So, you need to have an integrated service management system that collects the data of the various providers, integrates this data and, for example, reports on dashboards. In this way you create a single source of truth, as it were, to which client and providers alike can commit themselves.” Quint itself often works with the ServiceNow platform, but HP, BMC or CA software can also be used for this purpose.
Quint Wellington Redwood can lay claim to more than fifteen years of experience in providing the service we now refer to as SIAM. Moreover, the company also provides services such as assessments of the design of the SIAM organization and/or demand-supply governance organization. If so desired, Quint can also actively help you to carry out SIAM activities. “But we always do this in-house, as part of our client’s organization,” says Grift. Something else that sets Quint apart from other SIAM providers is, according to Grift, that Quint is independent because it does not provide IT services itself.