AVOIDING THE BLAME GAME. DRIVING COLLABORATION THROUGH EFFECTIVE SERVICE INTEGRATION AND MANAGEMENT

AVOIDING THE BLAME GAME. DRIVING COLLABORATION THROUGH EFFECTIVE SERVICE INTEGRATION AND MANAGEMENT

Government and commercial organisations are striving to deliver increasingly flexible and agile ICT whilst working in a heavily cost constrained environment. It s a major challenge. And sights are increasingly focused on realising the benefits from multi-sourced ICT working with a range of best of breed service providers rather than with one major systems integrator and sourcing capabilities from the Cloud, where appropriate. Whilst the benefits of this approach are significant research suggests some organisations achieve cost savings exceeding 40% (Source: Service Integration and Management in a Multisourced ICT Operating Model, ISG, 2013) a multi-source environment creates its own challenges. Delivering a seamless ICT service spanning multiple service providers requires strong operational governance, new commercial models and a collaborative working environment. Typically this leads organisations to develop a Service Integration and Management function (a SIAM ) to manage these challenges. The SIAM can be outsourced, or developed as an in-house capability, often using a trusted SIAM partner to support the initial transition and in-house capability development. But real challenges exist in designing and managing any of these models. The key questions many are asking are: How can we establish a collaborative environment where all our suppliers are working effectively together and the emphasis is on continually driving up the quality of our service whilst driving down our costs? How can our SIAM incentivise collaborative behaviour without the use of onerous and potentially divisive commercial carrots and sticks? How can a blame culture be avoided? This paper presents some new insight and ideas for how you can design and manage an effective multi-source ICT operating model. It is based on our experiences of delivering an in-house SIAM for BAE Systems, developing an outsourced SIAM model with the Foreign and Commonwealth Office and in helping many other organisations on the journey. SO WHAT DOES A GOOD SERVICE PROVIDER ENGAGEMENT MODEL LOOK LIKE? Most organisations are aiming for the same outcome from their engagement with their service providers: that they consistently deliver the performance demanded at an affordable price point. But the real test of this engagement comes when things go wrong which they inevitably will. For example, how are major incidents handled when multiple suppliers are involved? Or more difficult still, what happens when performance is slow but there is no obvious cause? In these situations, it s effective collaboration between your service providers that is the key to getting effective resolution. 2

In our experience there are some common characteristics of an effective collaborative environment. These include: Problems being shared openly between service providers; A fix first culture with multi-disciplinary teams working together to resolve issues, first and foremost; Service providers proactively seeking out opportunities to improve performance and the price point at which they can deliver the required service; Incentive models reinforcing positive behaviours; An environment where all the service providers trust each other to do the right thing for the good of the client. SO WHAT HAPPENS WHEN IT DOES GO WRONG? When these characteristics are missing, the experience of delivering ICT services can be very different. A blame culture can develop where significant effort is invested in attributing blame and financial penalties at the expense of fixing problems and improving service quality; A reluctance to take responsibility for problems can develop that results in complicated problems such as slow performance remaining unresolved; There is insufficient time or a real desire to implement the strategic changes required to meet the evolving business needs of the client organisation. A BLUEPRINT FOR EFFECTIVE MULTI-SOURCED ICT In dealing with some of our client s most complex SIAM related challenges we have developed four core principles for establishing the trust, collaboration and agility that s critical to effective service integration and management collaboration. Together these principles form our blueprint for effective multi-sourced ICT. 1. ESTABLISHING SHARED GOALS As a first step in creating a collaborative multi-supplier environment you need to establish shared goals that are embraced by the SIAM and service providers alike. The shared goals should operate on two levels: Strategic: encapsulated in the organisation s ICT vision and strategy; Operational service delivery: reflecting end-to-end service delivery performance and the end user experience. Establishing trust, collaboration and agility is key to success. 3

Ensuring that there is a common understanding of the strategic direction and priorities of the organisation, be they increased workforce mobility, better knowledge management or simply cost reduction, creates a solid foundation for a collaborative working environment. It provides service providers with the context for the customer s decisions and enables service providers to focus innovation and investment where it will have the most impact. Whilst the role of the SIAM in driving strategic change varies, embedding strategic goals in the SIAM s terms of reference incentivises the creation of a multisupplier environment aligned with the organisation s overall direction. It is equally important that end-to-end service delivery goals are clearly articulated and shared with all service providers. Service delivery goals are best communicated via a series of Key Performance Indicators (KPIs) that focus on end-to-end measures representing the end user s actual experience, for example, overall service availability measures like Lost Users Hours and end-to end service restoration time without clock-stopping. In most cases, no single tower service provider will be responsible for end-to-end delivery. So their Service Level Agreements (SLAs) should be aligned with these end-toend KPIs, rather than mirror them, as this would introduce significant complexity in determining the financial impact of SLA failures. So how do you incentivise the service providers (and SIAM, if it is outsourced) to deliver against these shared goals? Our experience has taught that this is best achieved by sticking to two relatively simple mechanisms: Including Problem resolution metrics as significant SLAs in individual service providers contracts. These are triggered whenever an end-to-end KPI is missed, leading to Root Cause Analysis and Service Improvement Actions, orchestrated and allocated by the SIAM. Service providers are thereby incentivised to work with the SIAM and other providers to identify the root cause and fix problems which are causing poor end-to-end service. Including a Balanced Scorecard in the major service providers contracts. This includes an assessment against achievement of strategic and end-to-end goals as well as management behaviours, continual service improvement, cost reduction etc. ACHIEVEMENT OF SHARED ORGANISATIONAL GOALS User satisfaction End-to-end KPIs Support for strategic goals COST REDUCTION Achievement of objectives New opportunities identified Compelling business cases CONTINUAL SERVICE IMPROVEMENT (CSI) Achievement of objectives New opportunities identified Compelling business cases MANAGEMENT BEHAVIOURS 360 feedback from other service providers Escalations Collaborative engagement 4

2. Establishing a clear remit for your SIAM Regardless of whether your SIAM function is in-sourced, outsourced or adopts a hybrid model, creating a SIAM with an unambiguous remit, appropriate delegated authorities and independence from service providers is critical in establishing an effective collaborative environment. Clear remit: the starting point for a creating a collaborative environment is to ensure all parties understand what they are responsible for and what is expected from them. This is particularly important where there are multiple service providers, where the potential for issues to fall into the gaps between them is greater. This clear remit is best achieved by designing and communicating unambiguous terms of reference for the key service providers, including the SIAM, and underpinning it with robust governance. Without this, issues can quickly lead to the development of a blame culture. Independent: it is the SIAM s role to create a culture of trust in order to lead the service provider community to achieve your objectives. This leadership can only take place if the service provider community has confidence that the SIAM is acting fairly and appropriately during the resolution of issues and problems. Any suggestion that the SIAM may have reason to act in an unbalanced way across service providers will hamper and, ultimately conflict with, effective leadership and collaboration. For this reason we believe that there must be clear separation between the SIAM and the service providers ideally by creating a SIAM that is independent from the interests of the service providers. Empowered: it is critical that the SIAM is empowered to act on your behalf with the appropriate delegated authorities understood and accepted by all parties. Any attempts to by-pass the SIAM, whether in-house or outsourced, must be firmly resisted thereby mitigating the risk of any loss of confidence in the SIAM or any confusion about their role. Combined, these steps provide all the parties concerned with the clarity required to form the basis of a supportive, collaborative culture focusing on your end-to-end ICT delivery. 3. Incentivising Continual Service Improvement Careful design of the service provider performance incentive regime is important in driving collaborative behaviours and preventing defensive behaviours that lead to underperformance and increased cost. The performance regime needs to shift the balance of activity away from attributing blame for past errors on to understanding what happened and making the necessary improvements to stop it happening again. A well designed performance regime should: Be simple to understand and operate; Incentivise service providers to work together effectively to resolve problems, regardless of fault ; Encourage the focus on continual service improvement by recognising that mistakes can happen once, but by penalising repeat failures. An independent SIAM helps create a culture of trust. 5

This would typically be achieved by: Establishing service credit regimes with individual service providers for the services or service elements for which they have sole responsibility; Increased weighting for repeat failures to incentivise improvement actions; Increased weighting for problem resolution regardless of cause to incentivise suppliers to deliver and support Root Cause Analysis (RCA) and Service Improvement Actions set by the SIAM. The SIAM has the key role in operating the incentive regime across service providers and driving the service providers to implement improvement actions in response to problems and missed KPIs. The incentive regime supports the SIAM s role by incentivising service providers to prioritise the resulting Service Improvement Actions. This approach sets out very clear behaviours for the service providers: Get the basics right for the service you deliver; Focus on making sure that your problems don t happen again and that you work collaboratively with others to support fixing their problems. 4. CLUB RULES OR CLEAR PRINCIPLES ARE AGREED GOVERNING HOW THE SIAM AND SERVICE PROVIDERS BEHAVE The final step in establishing supportive, collaborative patterns for working together is to agree target behaviours at the outset. Mechanisms are often considered which involve multi-party signatures to collaboration contracts setting out the details of how service providers are going to work together. However, these can be highly complicated to set-up, complicated to change following transition to another service provider and costly to administer in live operation as the complexity of ICT delivery means that there are frequent changes required to keep them current. In our experience it is simpler for the SIAM to lead a process that agrees a set of principles or club rules with all service providers that defines how everyone will behave. These club rules would typically include target behaviours and the principles that would be followed if things go wrong for example, fix first, argue later. 6

Our experience suggests that the process of agreeing these rules with each service provider is a vitally important step in establishing a collaborative working environment. But it shouldn t stop there the club rules should be regularly reviewed as the relationship develops, matures and as desired behaviours are challenged. SO WHAT QUESTIONS DO YOU NEED TO ASK IN DEVELOPING OR REVIEW- ING THE ROLE OF A SIAM? Here s a checklist of questions we use when designing or reviewing the role of a SIAM in creating a collaborative supplier environment: Are the organisational goals well-articulated and understood by service providers? Is the supplier incentive model simple to operate and driving the behaviours required for success? Have the SIAM and the service providers agreed how they are going to behave? Is the role of the SIAM clearly understood and is it empowered to take action? Do all parties view the SIAM as acting independently of the service providers? Do the service providers understand their role in delivering the required level of end-to-end services to you? Collaboration should be a key criteria in SIAM operating model design. 7

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