2. Horizons 2012 survey identified multi-sourcing and
Service Integration as leading CIO issues
2012
Horizons
Research question:
How critical is Service
Integration in
achieving effective
multi-sourcing?
3. How do we define service integration &
management?
Business Stakeholders
Strategy, Sourcing Governance VMO Level
Operational Services Integration Layer
Service Desk
Comms Deskside Desktop Infrastructure
Applications
Management
Applications
Development
Forrester Research Inc, “Building The Services Integration Layer In Multisourcing” Bill Martorelli, September 28, 2011
Service
Integration &
Management
4. We conducted 25 face-to-face interviews with CIOs
Aggregate Industries
Alliance Boots
Astellas
Bank of America
Bank of England
BAT
BUPA UK
Camelot
Coop Group
Essex CC
E-sure
Igloo
Jardine Lloyd Thompson
Kingfisher
Legal & General
NSG Pilkington
Nationwide
RSA UK
Severn Trent
TD Bank
TT Electronics
TJX
Tullow Oil
Virgin Media
5. The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
6. The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
7. a. Outsourcing no longer meets CIO expectations
– 70% of contracts fail to deliver full value
First
Generation
Second
Generation
Third
Generation ??
Prime Contractor Best in Breed Utility
8. A. CIOs see a gap in their internal IT capabilities
1.Skills
2.Processes
3.Tools
• Outsourcing of IT has
diminished the internal
skills base
• Many of the core processes
are not visible to IT
• Retained tools are frequently
inadequate to monitor
performance
9. a. Cloud is enjoying widespread adoption ….
Cloud class Examples 2016 revenue
Infrastructure Amazon $71B
Platform Microsoft Azure $35B
Service Management Service Now $3B
Software Salesforce $103B
Digital Marketing Adobe $21B
TOTAL $228B
10. The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
11. b. Back-office systems require efficiency and stability
Key parameters for back-office
systems (under CFO influence)
• Cost (efficiency)
• Performance (Stability)
• Timescales (Change)
12. b. Front-office systems require speed and agility
Key parameters for front office
systems
(influenced by CXOs)
• Business Value (growth)
• Business agility (change)
• Business Risk (investment)
13. c. The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
14. c. Tier One maintains the IT Vendor ‘ecosystem’
Applications
• SAP
• Non-SAP
Infrastructure
• End User
• Data Centre
• Networks
15. c. Tier Two seek new cloud providers
2. Business Units -
Revenue driven
3. Enterprise IT -
Efficiency driven
1. End-Users -
Convenience
driven
16. The Multi-sourcing Challenge
A Why has multi-sourcing and SIAM become so
important to the CIO community?
B How are business requirements for IT services
evolving?
C How are CIOs adapting currently changes in the
supply-demand environment?
D How might CIOs best prepare to exploit multi-
sourcing in the next two years?
17. d. To re-cap, businesses are polarising in 2 directions
• Inside-out requirements that arise from back and mid-office operations
(e.g. finance; HR and supply chain)
• Outside-in requirements that arise from customer facing activities in
the front office (e.g. mobile applications and social media)
• Decision timescales within the front office are becoming dramatically
shorter – often weeks or months rather than years
• Each area requires a very different IT response
18. d. Cloud sourcing decisions are often made by others
Source: Capgemini, “Business Cloud: The State of Play Shifts Rapidly”, November 2012
19. d. CIOs have to satisfy two masters
Demand side
Supply
side Strategic relationships Transactional relationships
discovery
planned
1. IT is the
Business
2. IT is an
enabler
3. IT is master
of enterprise
services
4. IT manages
the ‘walled
garden’
OUTSIDE
-IN
INSIDE-
OUT
20. d. And there are some tough strategic challenges
Stressed IT
budgets
Renewals &
Remediation
Cloud service
adoption
Need for
innovation
Stressed IT
budgets
Renewals &
Remediation
Cloud service
adoption
Need for
innovation
Stressed IT
budgets
Renewals &
Remediation
Cloud service
adoption
Need for
innovation
Stressed IT
budgets
Renewals &
Remediation
Cloud service
adoption
Need for
innovation
• Having control of IT service delivery is a pre-requisite to
being able to exploit cloud services...
• You have the best IT suppliers but have you got the best
IT service?
• Just conduct another procurement and hope that it works
better this time...
• Cost Pressures, access to skills and quality, need to invest
in new services...
21. d. This is what we see in the market
Considering the Future
• No significant issues with current relationships
• Formulating future strategy for IT service
delivery and sourcing
•How do I shape the future
•What do I do next?
•How should be set up for the next 3-5 years?
1
ConsiderationsThree typical scenarios
Dissatisfied
• Existing supplier operating to contractual
commitments but still not delivering value
• Not happy with governance & control
•Is there an alternative?
•How can I improve my existing approach?
•How can safely introduce a change?
2
Distressed
• Unacceptable supplier performance
• Inadequate governance, measurement, control
• Unable to resolve within the current
framework
•I need to change quickly, but not sure how
•I don’t want to end up in the same situation
through a costly procurement
•My business feels IT is constraining
3
22. d. What is the ‘size of the prize’ for SIAM?
Business Stakeholders
Strategy, Sourcing Governance VMO Level
Operational Services Integration Layer
Service Desk
Comms Deskside Desktop Infrastructure
Applications
Management
Applications
Development
Forrester Research Inc, “Building The Services Integration Layer In Multisourcing” Bill Martorelli, September 28, 2011
Waste!
23. d. What does success look like?
Our experience is:
• Major incidents reduced by c40%
• Time to fulfil service requests reduced by c50%
• Retained IT FTEs reduced by c40%
• Governance overhead reduced by c80%
• An ecosystem speaking the same language
24. d. How do you get there?
Transform
Extend
Connect Connect the Operations
Extend the Reach
Transform the Business
25. d. Where does the CIO go from here?
1. Develop and implement your own
processes
2. Build your own tooling platform
3. Hire the skills from the market
26. d. Where does the CIO go from here?
1. Buy a managed service keeping
control of tooling and processes
2. Outsource taking advantage a
complete and proven offering
3. Engage a partner to take-on,
transform and work-out leaving you
in control