Capping IT Off

Capping IT Off

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

A business case for Service Integration - where to start?

Category : Governance

This blog is the collective work of the itSMF Service Integration and Management Special Interests Group’s working party on a SIAM business case.  Particular thanks for their contributions are due to:

Simon Durbin                                    ISG

Andrew Gilbertson                        ITSIAM

Martin Goble                                    TCS

Ben Wigley                                        SopraSteria

and to Steve Morgan of Syniad Solutions for his overall support.  It will appear in a forthcoming issue of serviceTALK, the magazine of the itSMF.

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Everyone can understand the benefits of SIAM.  We talk a lot about increased alignment of IT services with the business, end-to-end visibility and de-duplication of roles.  But putting a financial value on those is difficult, especially if you are at the start of a multi-sourcing programme.

Justifying SIAM today is like justifying ITIL used to be - there is no obvious Return On Investment.  In very immature environments it is even worse – it will all be extra cost as basic things may not be in place today.  Inevitably many SIAM savings come from reducing the numbers of people – and if the people are not there to be removed, you cannot remove them.

Of course, at the top level a business case for SIAM is like any other business case – you calculate the costs, estimate the savings, add a bit of contingency for risk, wrap it up in some qualitative benefits and you are done.  If you are building the business case as part of an overall new multi-sourcing strategy then SIAM is just part of the wider business case; it will represent a cost that has to be incurred to enable the delivery of the benefits of multi-sourcing. 

But, if you are already multi-sourced then it can look like an additional cost required to deliver what your sourcing strategy promised in the first place. In that situation, what’s the trigger for SIAM?   It is likely to be business dissatisfaction with the level of service.  Not a great time to be asking for more money, especially as it probably comes on the back of a significant investment in the last few years.

If you do find yourself in the fortunate position of including SIAM in a wider business case there are a number of cost areas to be considered – SIAM design, process development, tools and tools integration, external advice, training and up-skilling your own and service provider people and organisational change management.

Difficult though those figures may be to estimate, that’s the easy part.  You will need to demonstrate all that SIAM delivers above core ITIL.  Contract consolidation or price reduction is another area where costs can be reduced – but how do you estimate a price reduction on a contract you have not let yet?

One approach may be to think about the cost of doing nothing.  If you don't put a formal SIAM capability in place or your SIAM capability is not following best practices then it is reasonable to assume that the intended benefits of the initiative will not be fully realised.

The actual SIAM costs will vary depending on the SIAM model adopted so you need to produce multiple sets of figures or decide on one model early.

The SIAM business case must be based on contribution to business value; there may be an opportunity to show how it supports continual service improvement.  But the core of the business case must balance SIAM costs against business value;  this might be increased sales,  productivity, availability or agility. In the public sector it could be linked to customer satisfaction or employee retention.

Our latest thinking is around a ‘SIAM Multiplier’.  First assess the planned value and assume that an effective and efficient SIAM delivers 100%; improving SIAM can push above 100%.  That increased value is the SIAM Multiplier.  Therefore ROI = Planned Value x SIAM Multiplier.

However you approach building a SIAM business case, make sure you do your research.  Few people have created even one SIAM business case, little or no reliable market data exists and the multiple forms of SIAM make comparison difficult.  But a well argued business case up-front is the best basis for a successful SIAM going forward.

About the author

David Griffiths
David Griffiths
David has over 30 years experience in the IT services industry with a record of success in consulting, business unit management and business development roles. He combines a broad understanding of infrastructure and applications technologies with a deep recognition of the need for solutions to be tightly aligned with business issues. David is responsible for the development and communication of Capgemini's Service Integration solution; this combines David’s deep knowledge of outsourcing with his understanding of how organizations behave.

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