However, Service Integration necessitates a very different kind of agreement between client and service providers from those associated with either prime contractor or multiple individual client-managed contracts.
For me Service Integration requires instead a series of individual agreements that are consistent with an overall commercial framework. This framework must lay down the “rules of the club” that client and providers will abide by and adhere to; it must also enhance transparency and eliminate ambiguity about each parties’ roles and responsibilities. There are clearly challenges in setting up such a framework, but I strongly believe an experienced Service Integrator can play a vital and essential enabling role.
Experience shows that typical outsourcing agreements rarely foster the style and level of collaboration that Service Integration needs. These contracts, associated with the traditional structure of prime contractor and sub-contractor, puts the prime contractor in charge; they control how all things are done and are often opaque. Client-managed contracts on the other hand have difficulties of their own; they usually result in discreet silos of activity with disparate contractual and performance terms.
So for Service Integration to work a new commercial framework is required with new core characteristics and a fundamentally different intent.
- All of the providers, including the Service Integrator, each have a separate direct contractual relationship with the client.
- Relationships between the parties are on an equal footing; instead of a prime contractor who controls the providers, there is a Service Integrator who is empowered to manage and coordinate the service providers and is accountable for service performance. For this to work all parties, including the client, need to understand, honour, and formally recognise their interdependencies.
- The Service Integrator, client, and service providers become an ecosystem that is operationally bound together through the implementation of multi-dimensional SLAs and detailed OLAs to remove ambiguity and drive collaboration.
What’s more, the framework, whilst clearly defining who is accountable for what, also needs to encourage and facilitate change – particularly a change towards a more collaborative approach to dealing with problems, their fundamental causes and comprehensive solutions.
Service Integration is a radically different way of doing outsourcing it offers control, flexibility and efficiency through the building of collaboration, however all parties need to be absolutely committed to it. This applies not just to new providers but also to existing ones, who must be willing to accept commercial change and alter their behaviour.
When fully embraced I believe Service Integration is a “win” for all parties, with providers collaboratively working together for the good of their common client in the delivery of value to the business.
Service Integration requires new ways of thinking and very new way of working both of which must be underpinned by a new type of agreement. That’s why I advise Service Integration is only for consenting adults and should not be undertaken lightly.