As we move into 2014, the ramifications of the government's announcement made in summer 2013, that 50 per cent of all new IT public sector contracts would be awarded to smaller and medium-sized (SME) IT suppliers, will start to be felt.
Designed to reduce the reliance on a small number of large IT providers, the drive doubles the previous target the government had set. In addition the traditional large IT suppliers are also being strongly encouraged to use more SMEs as subcontractors in their work. While this increases the choice on offer across the public sector IT environment and boosts the growth of SMEs, IT managers in the public sector will inevitably find themselves managing an increasing number of smaller outsourcing contracts.
The challenge will be to do this without significantly increasing overheads and while continuing to ensure that IT services meet the demands of their organisation and deliver excellent service. Plainly this is not an easy task; although the challenges should be set in context against the benefits of choice in using a wider variety of outsourced suppliers. The keys to success lie in ensuring that the right metrics and KPIs are in place to assess outsourcer performance; and to make sure this measurement takes place while a project is in progress, not simply retrospectively when it's too late to influence outcomes.
Best-of-breed: the benefits and the challenges
The benefit of buying from a wider range of suppliers is the access to 'best-of-breed' solutions, rather than average solutions from a monolithic vendor. The typical downside to this is that an organisation then ends up with several 'best-of-breed' players in 'service towers' with little attention paid to how these different vendors will be coordinated into coherent single service provision. This leads to a confusing supply chain and one that demands more effort from the buyer than in the past when, historically, a single service partner might have delivered all these services and required less management.
If responsibility can't be outsourced then it's still the job of the business, and ultimately the IT department, to ensure that outsourced services are delivering as promised and to measure them accordingly. The question for many public sector organisations is just how to do that? As standard, outsourcing agreements have Service Level Agreements (SLAs) in place; as such, many IT managers think this protects them from poor service. However, if they aren't looking at the right metrics, or indeed measuring them until the job is done, then they are running serious risks of delivering sub-standard service.
Creating a service management function
How can IT departments avoid these kinds of issues? First, they must ensure that a service management layer overlays all the towers with their individual SLAs and that this includes a good service catalogue with the SLAs clearly defined within it, as recommended by ITIL. This approach has recently been endorsed by the UK government with the 2012 publication of a draft Service Integration and Management (SIAM) framework.
In parallel with the creation of this service management function, organisations also need to ensure that they have the right tools and processes in place to ensure that they can track performance and ensure coordination of the different suppliers. There is a range of increasingly sophisticated tools on the market which can deliver these requirements, including those required by SIAM, providing they are configured in the right way.
Do metrics measure up?
Most importantly, public sector organisations should ensure they have adequately defined the metrics they need to track performance across the various service towers on a continuous basis. Defining these indicators is obviously complex, and will depend on each individual organisation's requirements. But IT managers can help identify the right metrics by understanding their own level of maturity and how well the IT function is integrated into the wider organisation.
Broadly, there are five key levers of ITSM excellence:
- Organisational alignment: monitoring how closely IT services are supporting the strategy and delivering customer satisfaction
- Process: defining the right SLAs, and tracking performance against them on an ongoing basis
- Technology: measuring the investment, deployment and performance of infrastructure
- Organisation: aligning people with technology, process and SLAs, and ensuring the right skills are in place
- Culture: the experience of doing business with the IT function.
Learning from experience
Some public sector organisations have already learnt the hard way that scenarios that feature multiple IT subcontractors and outsourced services mean that they need to manage traceability and accountability on a continuous basis if they want to avoid the risks of sub-standard IT services. There are process definitions, standards and products that exist to ensure greater compliance and quality control throughout the IT supply chain; organisations that do not embrace these, or fail to establish appropriate metrics, run the risk of uncovering poor outsourcer performance when the damage is already done.
Paul Cash, Managing Director, Partners in IT