This is a reflection of the interesting panel discussion I facilitated at the ITSMF Lead IT 2011 conference at Perth.
I initially intended to present a paper on multi-channel service delivery. When I meant “channel”, it is the service delivery channels like online, face-to-face etc. However, the organizers interpreted the term “multi-channel” as “multi sourcing” and asked me to facilitate a “hot topic”. I gladly accepted because I find mulit-sourcing equally interesting.
The panel consisted of the following industry veterans.
- Gary Pettigrove – CIO, Australian National Audit Office
- Tim Sheedy – Senior Analyst, Forrester Research
- Robert Stroud – Vice President – CA Technologies
I contacted the panelists and briefed my discussion approach nearly a month before the conference. I deliberately kept very open ended questions. I wanted to talk each of the panel members before arriving at Perth. I could talk to Gary who gave me an overview of his organization and how they manage the multi-sourcing.
The day before the panel, I met with Tim and Gary. This pre-panel discussion was very interesting as we had no time pressure and everyone loved sharing their inputs. I told that I want to start with the question “is multi-sourcing a really hot-topic?”.
Here is my rationale behind this question. Outsourcing was pioneered by Ross Perot of EDS in 1962. So we are taking about a topic which is nearly 50 years old. We consider the outsourcing concept as “common sense”. It seems Perot was refused 77 times before he landed on his first contract! (http://en.wikipedia.org/wiki/Ross_Perot)
The topic is still “hot” because of the complex nature of the relationships. Among the panelists, Gary advocated a “lead provider” structure. His organization contracts Unisys to manage the suppliers on ANAO’s behalf. Gary mentioned this model works well for his organization. Many organizations often need to manage the supplier relationships. Vendor cooperation cannot be taken for granted as some of the vendors may be aggressive competitors.
I asked the panelists about their views on SLAs and Financial penalties as a mean to manage the relationships and service delivery. They felt it is not the ideal approach to build relationships. Tim Sheedy gave an interesting example of South Australian Government contract with an innovative SLA reward scheme. In 2005 SA Government went for a multi-sourcing arrangement moving away from a long term single sourcing contract with EDS. Tim told that the multi-sourcing SLA rewards and penalties were based on a “team based” model. That is, even if one provider did not meet the SLA none of the other service providers will get the reward.
Tim was not sure whether this approach worked well in practice. If you have come across similar structures, please share your ideas.
I strongly believe that the role of IT is changing over the years and especially with cloud computing the future roles will be very different. Please see my earlier blogs about new orgnisational roles that are needed.
In the panel, we discussed how IT will be adding value. Robert Stroud used the term “service broker” to describe the new role of IT. It is an interesting concept. IT will change its role from “provider” to “broker”.
I came across this term last year when talking to David Dowling. (David is the founder and Principal consultant of Dowling Consulting). David presented the following concept:
In this model, the IT organization of the business is structured differently from the external service provider. The business IT’s role is to act as a service broker – to ensure that the best external service is available to their business customers.
I mentioned in the panel that multi-sourcing will always remain as “hot topic” as it involves human relationships. The relationships are complex and any advancement in technology and service provision cannot take away this complexity. It is what makes the life interesting!