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2. Governance domains. Domains can cover decision making for a specific area of the Service Sourcing strategy. Domains can cover, for example, Service Delivery, Communication, Sourcing Strategy or
Contract Management. Remember, a governance domain does not include the responsibility for its execution, only its
strategic decision making.
3. Creation of a decision-rights matrix. This ties all three recommendations together. RACI or RASIC charts are common forms of a decision-rights matrix.
Partnering with providers who are ISO/IEC 20000 compliant is an important element is reducing the risk of Service Sourcing. Organizations who have achieved this certification are more likely to meet service levels on a sustained basis. This credential is particularly important in multi-sourced environments where a common framework promotes better integration. Multi-sourced environments require common language, integrated processes and a management structure between internal and external providers. ISO/IEC 20000 does not provide all of this but it provides a foundation on which it can be built.
Published in 2005, ISO/IEC 20000 is the first formal international standard specific to IT service management. An organization comfortable with ITIL will find no difficulty in interpreting ISO/IEC 20000.
Service providers should also consider the eSourcing Capability Model for Service Providers Version 2.0 (eSCM-SP v2) developed by a consortium of service providers led by Carnegie Mellon University. Guidance in this model is specific to sourcing of IT-enabled services. The eSCM-SP provides a framework for organizations to develop their service management capabilities from a sourcing perspective. Organizations can have their sourcing capabilities certified by Carnegie Mellon to be one of four capability levels, based on the publicly available eSCM-SP Reference Model and related Capability Determination Methods. The requirements of eSCM-SP v2 are complementary to ISO/IEC 20000.
6.5.6 Critical success factors
The factors for a Service Sourcing strategy frequently depend on:
Desired outcomes, such as cost reduction, improved service quality or diminished business risk
The optimal model for delivering the service
The best location to deliver the service, such as local, off-shore or on-shore.
The recommended approach to deciding on a strategy includes:
Analyse the organization’s internal service management competencies
Compare those findings with industry benchmarks
Assess the organization’s ability to deliver strategic value.
The approach will likely lead to these scenarios:
If the organization’s internal service management competence is high and also provides strategic value, then an internal or shared services strategy is the most likely option. The organization should continue to invest internally, leveraging high-value expert providers to refine and enhance the service management competencies.
If the organization’s internal service management competence is low but provides strategic value, then outsourcing is an option provided services can be maintained or improved through the use of high-value providers.
If the organization’s internal service management competence is high but does not provide strategic value, then there are multiple options. The business may want to invest in its service capabilities so that they do provide strategic value or it may sell off this service capability, because it may be of greater value to a third party.
If the organization’s internal service management competence and strategic value are low, then they should be considered candidates for outsourcing.
Prior to any implementation, an organization should establish and maintain a baseline of its performancemetrics. Without such metrics, it will be difficult to assess the true impact and trends of a service sourcing implementation. Measurements can take on two forms:
Business metrics: financial savings, service level improvements, business process efficiency
Customer metrics: availability and consistency of services, increased offerings, quality of service.
6.5.7 Sourcing roles and responsibilities
A key role to champion the sourcing strategy and lead and direct the sourcing office capabilities is the Chief Sourcing Officer (Figure 6.15).
Figure 6.15 Chief Sourcing Officer
The Chief Sourcing officer
Champions the sourcing strategy and the sourcing office
Works closely with the CIO to develop a sourcing strategy that will determine which roles and responsibilities are best assumed by internal personnel and in which areas external resources should be deployed; sets guiding principles for governance
Coordinates and rallies a mix of external and internal people towards goals through an empowerment-and-trust style, rather than the command-and-control hierarchical structure used with internal resources
Is an integrator, coordinator, communicator, leader, coach: creates a shared identity among external and internal sources so that team members identify themselves first and foremost with the initiative at hand
Has the ability to interact at the executive level, and to inspire and lead at the delivery level.
Other key roles should be clearly defined for coordinating activities across multiple service providers, as shown in Table 6.3.
Role
Description
Key competencies
Director of service management
Senior executive who understands the business and defines, plans, purchases and manages all aspects of service delivery on behalf of business units
Authority and seniority to prioritise and define services for business units
Large-scale service and operations management
Financial and commercial management
Governance, negotiation and Contract Management
Contract manager
Constructs, negotiates, monitors and manages the legal and commercial contract on behalf of the sourcing organization
Contract Management for large scale service provision
Negotiation and conflict resolution
Service definition and management
Translation of business into contractual requirements
Product manager
Defines, plans, purchases and manages sourced elements of the service and performance on behalf of sourcing organization
Authority and seniority to prioritise and define sourcing needs for specific elements of the service
Process Owner