IT and business services are increasingly being fulfilled across a network of suppliers. As companies become more experienced with outsourcing they start to seek best-in-class suppliers to deliver services, whether within the same function (e.g. , IT infrastructure), across multiple functions (e.g., Finance, HR, IT) or across multiple geographic areas. The upside of this is that you gain much broader knowledge and expertise from across the industry, while keeping all the suppliers on their toes. The downside? They don’t always play nice together like a perfect team.
To get the most out of a multi-supplier environment requires:
- Coordination and transparency of decision-making across all suppliers
- Multi-supplier governance being made a top priority of the retained IT staff’s competency and management focus
- Clearly and consistently defined supplier roles and responsibilities within a service delivery process, including the use of formal cross-supplier procedures (CSPs) and Operational Level Agreements (OLAs)
- Mechanisms to track and ensure that all services and underlying supplier activities contribute to the Business Value of IT investments
- An organizational culture and atmosphere conducive to supplier collaboration in service delivery, while providing defined areas for competition. They should feel secure enough to share innovation ideas while their IP is protected from competitors
- Ensuring accountability for decisions and outcomes across all suppliers during service delivery. Granular, service component-level metrics plus end-to-end service level commitments with shared penalties and rewards are the key
The best way to meet these requirements is by establishing a Multi-supplier Governance Model that provides the organization with a framework and discipline. By establishing this model, you can expect to enhance overall service quality rather quickly:
- Service suppliers will start viewing themselves as members of an interrelated eco-system. They will start working with each other on a first name basis without client intervention
- Service customers’ experience improves drastically, as end-to-end accountability and performance management are promoted. Services will be optimized globally, not just locally
- Suppliers will bring added value to the entire IT service delivery chain via collaboration and joint innovation
- Overhead on IT governance will be lowered via institutionalizing and streamlining the interaction among suppliers – organized meeting cadences, planned participants, agenda, focused point-of-contact etc.
- Business risk is reduced by end-to-end services that actually meet business needs (rather than just meeting IT contractual commitments). There will be faster incident and problem response and resolution times
- Near real-time reporting and dashboards reflecting true cross-supplier performance becomes possible