Friday, 28 October 2016

SIAM: The Key Lessons

Next week Martin Goble and I will be speaking about SIAM from the Frontlines at Fusion 16

I spent ages handcrafting a blog to support the session, but since it doesn't seem to have made the grade for inclusion on the Fusion site for some reason, here it is for everyone to enjoy:

SIAM, Service Integration and Management, has become the default sourcing strategy in many parts of the world. It can transform the way IT services are delivered. Yet it remains poorly understood and not all moves to a SIAM model have delivered the expected benefits.

So what is SIAM, and what distinguishes the successful approaches?

SIAM developed as a response to experience with traditional sourcing models, such as prime vendor, best of breed and outsourcing to a single vendor. Whilst these models remain viable options they can also lead to:

  • The watermelon effect where individual vendors achieve contractual targets but overall service satisfaction is low
  • A lack of flexibility and innovation
  • High transaction costs with a wasteful  management overhead
SIAM begins with identifying the desired end to end (E2E) outcomes and then constructs a contractual and managerial framework to achieve those outcomes.

A useful working definition of SIAM is:

“The vertical and horizontal coordination of
people, processes, tools, technology, data and governance
across multiple suppliers,
 to ensure efficient, predictable and flexible delivery of
end-to-end services to the business user to maximize business value

This can be achieved in many ways, but a common approach is for the internal IT department to establish a Service Integration team that calls upon resources from one of its strategic suppliers as well as internal resources.

Risk and Reward

Working with strategic suppliers who are willing to commit to those outcomes and share the risk of not achieving them is key to SIAM. In return for that commitment suppliers need the freedom to innovate and optimise their services. A common failing is to expect suppliers to sign up to the delivery of business outcomes and risk and reward models that are incompatible with the detailed contractual terms specifying how their services are to be delivered.

The approach to the contractual framework has to be realistic and appropriate to where suppliers are in the value network. Unlike traditional sourcing models, a vital element of SIAM is that value network perspective, in which all suppliers are seen not just in terms of their own encapsulated responsibilities, but in terms of how they work in combination to achieve mutually beneficial outcomes.

Commodity IT

Commercial realities have to be taken into account and this is particularly the case when sourcing commodity services. The advantages that SIAM provides in these areas, particularly the plug and play approach of constant competition between commodity suppliers to provide dynamic capacity comes at the cost of having limited control over the services levels they provide. Unfortunately, many organisations have adopted SIAM after signing up to cloud services that have very limited service levels and expect SIAM to fix this by re-negotiating the contract. This is rarely feasible.

Internal Integration

Although much of SIAM thinking developed from a perceived need to make external suppliers "play ball together" it is clear that SIAM needs to embrace integration across enterprise IT and IT in the Business. That integration also needs to be orchestrated across the service lifecycle. Whilst ITIL provides a useful foundation for SIAM it is only part of the overall SIAM capability that an organisation needs to consider, along with programme management, security, architecture and transformation.

Governance and Change

Because of the scope of SIAM it is obviously important to recognise that changing to the model has itself to be a long term strategic transformational activity. That in turn requires strong governance, clear responsibilities and a commitment to organisational change management if it is to be successful.

And to end where we began, that success has to be judged in terms of business outcomes, not improvements with the IT department that are never passed to the business. Getting business buy in to the new approach requires the senior IT team to build a robust business case based on tangible improvements.

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