Managed Services – Understanding Relationship Complexities

on Jun 18th, 2013 in Managed Services, | Comments Off on Managed Services – Understanding Relationship Complexities

This blog series discusses the four dimensions of potential conflict in a managed services agreement ( content complexity, supply chain complexity, contract complexity, and relationship complexity. In this episode I would like to address the issue of relationship complexity.

A newlywed´s classic mistake is the belief that one only marries his spouse. In fact, you get married with the whole family, which is important to take into account at every opportunity. A happy marriage requires understanding and careful balancing of the entire environment. This small example demonstrates that simple bilateral relationships in life are the exception, not the rule. Managed services relationships are no different.

Again and again I hear from consultant colleagues that they have built up a fruitful, trusting relationship with their clients. At the same time, a client recently complained that they do not realize what we do and what we spend their money for. So we ask ourselves: how can we close that gap?

First, let me share a small view on the key features of such a relationship. This view consists of four parties, each with specific interests:

• The customer’s business departments are the ultimate end-users, and the main contact of our subject matter experts (or SMEs). They want to be served as quickly and competently as possible. This ranges from solving their everyday problems through the implementation of specific requests to the consultation process regarding the optimal use and development of their IT landscape.

• The customer’s IT department seeks to ensure a high level of satisfaction of the departments and at the same time to control costs. Often they fear being left behind. They have a natural desire to represent their own value within the company, although, in a managed services relationship, they do not provide direct IT services: their focus is the management of IT suppliers.

• The Ciber subject matter experts (SMEs) have a dual charter: to fulfill the client’s expectations as well as the formalities of the contract (see previous episodes). They have a very strong interest to reduce the complexity of everyday work.

• The Ciber service manager is the bridge between customer and Ciber, trying to balance all the formal and informal aspects of the relationship and to draw on the right resources as needed. He must always be vigilant, intentional, and able to demonstrate achievement of all contractual agreements. As the relationship manager, their main requirement is to keep in touch with all stakeholders, understand their roles and responsibilities, and to involve them as necessary.

Of course, information transfer is only one of the factors for a successful relationship: commitment, accountability, compliance, and communication rules, foresight, understanding of the needs of the customer and respect are the glue that holds together the heterogeneous structure.

Regular direct contact between all customer functions and Ciber´s SME is essential for a functioning relationship. Ultimately, managed services is “people business”. To quote a client about Ciber’s recipe for success in relationship management: “We feel it is very important that Ciber respects its client and is willing and able, if necessary, to change.”

Understanding Contract Complexities

on May 16th, 2013 in Managed Services, | Comments Off on Understanding Contract Complexities

In the continuing exploration of the four dimensions of potential conflict in a managed services agreement (Managed Services Complexities), in this episode, I will focus on the issue of complexity of the contract.

A managed services contract describes the terms of the transfer of control over a defined portion of the corporate IT functions. The purpose of the contract is to:

• define the scope and structure the terms of the relationship,
• document the expectations, and
• define the quality of the service provided to make performance measurable.

Structuring the relationship

To help structure the managed services relationship, concepts and categories of the Information Technology Infrastructure Library (ITIL) are used. Everything occurring in the context of the contractual relationship is classified as incidents, service requests, or changes – which are often subdivided to help further differentiate them.
Each of the categories agreed upon in a managed services contract is called a service level agreement (SLA) which governs the relationship in detail. Typical components of an SLA are the success criteria, which are defined with the help of Key Performance Indicators (KPIs). The fulfillment of these KPIs becomes the centerpiece of the managed services contract.

Managing the interaction

A contract describes not only what needs to be achieved in the treatment of an incident but also how the interaction between customer and Ciber takes place. Again, we rely on ITIL to provide a set of processes that structure the interaction: Incident Management, Change Management, Problem Management, etc. Also included are the internal processes and rules, such as those relating to the time accounting or IT security.
During the negotiations with our customers we always try to stick to standard, best practice SLA and processes. Having defined flexibility and customer orientation as two of our major competitive advantages, means that customer specific deviations from our standards are not unusual and have to be followed during our day-to-day work.

Managing day-to-day work

What happens when an incident occurs? As managed services consultants, we ask questions – such as:

• Is the incident defined as part of the contractual relationship with the customer?
• Who is the right person to handle the incident or this requirement?
• What is appropriate ITIL category or sub-category on this subject?
• What have we agreed to with the customer in this incident? (which KPIs are concerned, what are the target values to be achieved, what process must be followed)
• What internal requirements have to be met? (e.g. concerning time accounting)
• And of course the most important thing: How do I solve the customer’s problem or I meet his requirement?

In my experience with the management of large customers with complex contractual relationships, I’ve learned that it takes a lot of time and energy by all involved persons (both on the client and on the Ciber-side) to learn and follow these rules. While ticketing systems can help by documenting agreements, defining rules and creating a positive control of processes, without the human factor, nothing works. During the last months I have developed a lot of respect for colleagues who do it – and do it well.

I’m eager to learn of your experience with managed services contracts – please share in the comment field below.

Managed Services – Understanding Global Supply Chain Complexities

on May 3rd, 2013 in Managed Services, | Comments Off on Managed Services – Understanding Global Supply Chain Complexities

In a previous episode , I named four dimensions of potential conflict in a managed services engagement:

  • Content complexity
  • Supply chain complexity
  • Contract complexity
  • Relationship complexity

In this episode I would like to address the issue of complexity of the global supply chain.

One of the core ideas of economics is the comparative competitive advantage. The idea was first mentioned in Adam Smith’s standard work “Wealth of Nations” (1776) and links the prosperity of nations with their ability to produce something cheaper than others. If we replace the term “cheaper” by the term “better”, we are now in the competitive environment of modern businesses with their practice to distribute not only work — but also work areas –around the world. For such a distribution (as is true in any globally managed services engagement), several factors are relevant: cost structures, available staff skills and capacities, possibilities of flexible staff deployment, regulatory environment, need of a local presence, quality of infrastructure, etc.

Globalization is not a modern concept but has been the norm throughout the centuries. In its current occurrence, the concepts of a “global village” and “networked society” promise uniform ways of thinking and unrestricted communications as a lever for an almost unlimited distribution of work. However, these global network supply chains can present some interesting challenges for managed services:

  • At the strategic level, the decision about the shape of the supply chain has to be made and consistently implemented: how many locations, where, with what tasks and what size.
  • At the control level, the questions are, how the management structures should look like (e.g. country vs. practices predominance) and which target systems can both motivate each independent unit and the cooperation between the units.
  • On a procedural level, consistent ways of working are needed to manage the interaction of the elements involved. Several frameworks are used as a guide (ITIL, CoBIT, PRICE, etc.), but they mostly describe what is done –and not how. The defined processes must not only exist on paper, of course, but also need to be implemented throughout the organization.
  • The information technology is not without pitfalls. It is a fact, that information can be exchanged at an enormous speed without regard to national borders, but the exchange of structured information (e.g. between two ticketing systems) is still more complex than any affected party would like.
  • Although a gradual alignment of cultures is occurring, there are still enough differences to make daily interaction a challenge. People in different countries react differently to tasks, schedules, and quality requirements. Successful collaboration means to understand the unique style of thinking and working of the other– with respect for the person behind it. This is no easy task without personal contact across several thousand kilometers – and when the cultural areas involved are merely known from TV and movies.
  • The last factor are the people themselves They are often called upon to give up tasks which they have mastered perfectly and to develop new skills, to follow rules that make little sense from a strictly local point of view and to feel comfortable in a “company town”, in which the sun never goes down.

Globalization is a mixture of real life opportunities and an unavoidable way of life. Success in a managed services global supply chain requires not only mastery of diverse IT systems, but of diverse cultures as well.

I look forward to your comments – have you encountered complexities in your global supply chain?

Managed Services – Understanding Content Complexity

on Apr 24th, 2013 in Managed Services, | Comments Off on Managed Services – Understanding Content Complexity

In the last episode , I named four dimensions of potential conflict in a managed services engagement: Content complexity, supply chain complexity, contract complexity and relationship complexity. In this episode, I would like to share a few thoughts on content complexity with you.

As technologies grow more complex, IT departments turn to their managed services partner to track the ever-shortening cycle of innovation, and advise them on how best to take advantage of these new technologies within their business framework.

So, what is expected from us? From my experience as a managed services partner, it is to:
• understand the client’s business, or at least to deduct the requirements of that business for the IT together with the business department
• master the latest functionality of the IT infrastructure and application environment
• align business needs and technological capabilities in order to develop alternative solutions, assess the solutions both qualitatively and financially, and recommend the most favorable one. The alternative solutions should not be limited to the existing application landscape, but should also consider new approaches and the transition from the old to a new world
• think in processes instead of functions. The clients increasingly focus is on the entire process, not simply the IT modules that are required for its implementation
• master key success factors including: understanding the client’s systems, managing complex projects, navigating within politically explosive situations and optimizing processes.

Given these content complexities, managed service partners must act as trusted advisors of their customers (alias consultants). In this role, we cannot expect to get some customer guidance but have to draw upon our expertise to develop proposals for business, process, and IT solutions in advance, and then collaborate with client teams to optimize and finalize them.

I look forward to your comments – what content complexities have you encountered and how you establish yourselves as advisors of your customers?

Managed Services Complexities

on Apr 16th, 2013 in Managed Services, | Comments Off on Managed Services Complexities

One of our managed services clients recently exclaimed: “You are my IT!”

This CIO, like many of our managed services clients, has taken some courageous steps: losing direct control, reducing their IT team, and putting the welfare of their own department/clients in our hands. This results in a field of tension in which we, as their Managed Services partner, have to prove our qualities. I would like to describe the complexity of this field in the following dimensions:

Content complexity: Understanding the current and future client requirements is essential in a managed services contract. This means we master the client’s business processes in addition to the IT infrastructure and IT applications.

Supply chain complexity: Managed Services is the playground of global players; a single country is typically not in a position to meet client requirements regarding local presence, breadth of expertise, availability, and pricing. Our clients value our global reach. This means that we deliver not only from one location such as e.g. Freiburg – but from a composite of German, British, Indian, Dutch and Polish consultants a in some of our current contracts.

Contract complexity: Managed services contracts involve a wide variety of processes, events to handled, players, and quality requirements. This means relationships with our clients are strongly structured by contracts in which all occurring events are divided into various categories: incidents, service requests, changes, projects, etc. Each category is then sub-structured (e.g. incidents of different urgency) and is subject to our client’s specific processes, rules and target values.

Relationship complexity: Several parties have to be satisfied simultaneously: the supervised department (s) of the client, colleagues along the supply chain, etc. This means we work together with stakeholders having different character, background and interests to fulfill compliance requirements of all processes.

Managed Services consultants must move seamlessly and simultaneously within these dimensions. I look forward to sharing a few thoughts with you in the coming weeks about what is expected when moving within these different dimensions — and why.

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