Capping IT Off

Capping IT Off

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

The Art, Philosophy and Pragmatisms of SIAM Supplier Management

SIAM market place is growing due to the adoption of cloud, commoditization of IT Operation and progression of third platforms Social, Mobile, Analytics and Internet of Things (IOT).

This has led to diverse combinations and amalgamations in the design of the SIAM function from organizations to organization. Many have opted for comprehensively outsourcing to a specialist SIAM provider, some may choose a ‘do it yourself’ approach and a few have taken on a ‘mixed’ approach of partially outsourcing the SIAM activities fencing vital elements of control in-house.

The third option, where clients kept strategic control of Contract Management, IT Procurement, Architecture and Service Design functions in house, leaving typical SIAM processes, including supplier management, to an external third party.

A key difference between SIAM Supplier Management with traditional Vendor Management Office (VMO) is that SIAM is intended to build collaboration between the multiple, separate suppliers i.e. rationalize the differences in their ways of working, processes, procedures and often the tools; hence develop a cohesive SIAM eco system rather than simply enforcing the agreements.

While traditional VMOs enjoy the liberty of having one-to-one approach to suppliers, the SIAM Supplier Management has to build trust and transparency to establish complex accountabilities and responsibilities. In-house VMOs typically reflect their organizations interests, however the SIAM Supplier Management should be seen as neutral and fostering the air of ‘win-win’ between the eco system and client.

Gartner’s famous term ‘water melon effect’ – where all IT SLAs are green whilst business services fail to meet the business need, is seldom addressed by traditional VMOs.  The purpose of SIAM Supplier Management is to identifying the cause of the ‘water melon effect’ and fix it.

Validating the scope of processes and defining the functional requirements are the most difficult part of SIAM Supplier Management implementation.  Process scope defines the boundaries and interlocking of IT with the business. The functional requirements defines the operational activities that need to be carried out e.g. conducting review meetings every six months with the suppliers. 

The challenge of identifying client side process owners and developing an effective working relationship with him/her cannot be underestimated. Sound operations require supportive process owners who knows the client’s business functions and its people.

A culture where suppliers work with each other and with the client, to the benefit of all is at the core of a successful Service Integration implementation and where many in-house implementations fail.

Once the boundaries, scope and functional requirements have been established; the next steps are: to

1.      Development of implementation plan describing the list of deliverables and at the approach to materialize them.

2.      Discuss and agree with the client process owner about how he/she would like to sign off the deliverables.

3.      Conduct structured workshops to agree the supplier management policies, number of supplier relationships to be managed and the need for different types of templates.

Trying to embrace all suppliers at once is unlikely to succeed so client process owners must identify a manageable supplier footprint to start with. One of the benefits of the SIAM Supplier Management processes will be to optimize the vendor footprints.

The SIAM Supplier Management process defines, as a minimum, supplier onboarding, supplier off boarding, supplier performance management, governance and compliance.

An implementation approach typically has three major activities:

1.      Process Development – This includes all the above including chalking out the scope, target supplier footprints, creating the required documentations, required technology and identifying and/or gaining commitment from operation team to execute the process activities. 

2.      Supplier Engagement – This is the step where you start communicating to the targeted suppliers and educates them about the proposed Service Integration model, its objectives and ‘way of working’.

3.      Hand over to operations – If the process has been developed and deployed sufficiently, the next steps shall be to educate who so ever going to own and operate the Supplier Management process.

To nurture collaboration an ‘ecosystem’ approach – an evolving network of relationships between the suppliers – must be adopted as it is into this ecosystem that new suppliers are on-boarded. Consistent delivery of on-boarding workshop is essential to building confidence in the ecosystem that SIAM will work for all parties.

 Capgemini’s experience shows that typical outsourcing agreements rarely encourage the change in behavior that fosters collaboration within the ecosystem. Multi-sourced IT services require a different sort of agreement with a different tone from those associated with either prime contractor or multiple individual client-managed contracts. The client, Service Integrator, and service providers operate as an ecosystem that is operationally bound together by shared e-2-e service delivery obligations i.e. SLAs and detailed OLAs, to remove ambiguity and drive collaboration.

The SIAM Supplier Manager act as an ecosystem ‘arbiter’ – an expert who acts as a focal point, coaches the parties (including the client), calls out good and bad behavior and helps everyone lift their game. 

Implementing SIAM Supplier Management is a journey that requires perseverance as well as the ability to focus on the big picture. A travel plan which is based on common sense but flexible to adapt to practicalities is obligatory. Although there is no panacea to implementing SIAM Supplier Management, the key to success is whether you can combine philosophy with practicalities.

Author: Biju Pillai Associate Director | Service Integration, Cloud Infrastructure Services, Chennai, India, with contributions from Chris King

References:

1.      Collaboration agreements in a digital world, Capgemini http://www.content-loop.com/collaboration-agreements-in-a-digital-world/

2.      Improving service integration: how to build a successful ecosystem, PA consulting 

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Chris King

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