Someone asked me the other day, how do you measure the value of managed IT Service Delivery? He is a CIO, a CIO whose job spec, spectrum of responsibilities and portfolio of outsourced IT vendors have all grown in an attempt to keep pace with business demand – the only two things that haven’t grown, he jokes, are his salary and staff.
Like most IT departments – he is expected to do more with less – justify every penny spent and show significant return on investment. Which is what has brought him to explore outsourcing of IT service delivery – buying in service delivery and management as a service in itself. Ahead of a meeting with the board to progress the idea – he asked, how do you measure its value?
It’s not a new concept. Not really. We call it Service Delivery Management, you’ll hear others refer to Service Integration and Management (SIAM for short) or IT Service Management (ITSM) and you’d be both right and wrong in assuming that they are all the same thing.
They all have broadly the same intention – to deliver IT solutions, manage service demand and supply, and to bring all the delivery, reporting and management of your services into one simple to administer service contract. Thing is, even within the cluster of organisations that offer either ITSM or SIAM as “a concept” you can find that what you get may differ greatly from one provider to the next.
As I say, it’s not new. Not really … but the approach to it has changed and the client gets more out of the arrangement now.
In the traditional concept of supply and demand, the supply chain held most of the power … the more demand there was for the product the more the customer would be expected to pay for it – the supplier’s mantra was make hay while the sun shines. For an IT managed service delivery model to truly work it has to sit client-side – IT Service Delivery Management has to benefit the demand side of the equation first. Increased customer benefit drives extra demand and soon vendors begin to benefit from more regular work – more sun … more hay.
That has to be your first key measurement marker – As the client … is the Service Delivery Provider tipping the supply/demand see-saw in your favour? Secondly, evaluate the perks – what’s in it for you? Your managed IT service offer should release you from service contract ‘lock-in’ for example, giving you more flexibility and freedom to benefit from cutting edge technologies and best practice – even ones that have not hit the market at the start of the lifecycle of your outsourced service.
Thirdly, your outsourced managed service should reduce costs but provide better service in return – it should add value to the business. IT services can evolve from being a necessary “cost centre” to something that really adds value to the business – delivered and managed correctly with consistent quality supplier services and appropriate SLAs and KPIs even the most cynical finance director can get excited at the paradigm shift that can occur.
Fourth, take time throughout the lifecycle of your managed IT service to evaluate how it has evolved – is there continual service improvement or two years in are you getting the same return you got in week one? Ask your potential service delivery partner how they will drive improvements during the life of the deal – if they look blankly at you walk away. The old supply led outsourcing model did not have to deliver increasingly better service, higher returns or greater efficiencies, the client-side model must and does.
Finally, measure what’s left for you to do. Service Delivery Management should provide quality service management – that’s a given – but beyond that you should expect supplier management, contracts and negotiation, quality control and reporting all via a single, fully structured Managed service that is guaranteed by KPIs, SLAs and ITIL best practice service frameworks. All of this frees up your resources to concentrate on your business. If you are having to still do any of these things whilst hiring in IT managed services you have to question whether you’re getting maximum value for money.
There are further ways, beyond these five, that you can assess the value of managed IT services and some will be specific to your business and where it is within its lifecycle. But ultimately the best measure is one that it’s really hard to measure – it’s a feeling.
By entrusting your daily lights-on IT functionality to experienced Service Delivery Management, and removing the cumbersome burden of managing multiple suppliers and contracts you will experience a peace of mind that cannot be measured – not on a balance sheet at least – but when you’re sleeping well and leaving the office on time – you’ll know that you chose the right solution.