Sean Harapko, Global Media & Entertainment Supply Chain leader at EY, discusses the benefits of service management integration (SMI) and the CIO’s role in it.
While yesterday’s companies were expected to cover and do everything themselves, today’s technology advances and talent shortages are driving them to outsource an increasing amount of services to providers that move up the value chain into front-office functions. Examples of such services are R&D, infrastructure as a service, software as a service or analytics as a service. Effectively managing an increasingly complex and specialized supplier landscape is fraught with challenges. Many of these apply to both the suppliers and the retained organization. Without effective control of these areas, delivery costs can spiral out of control.
Therefore, service management integration (SMI) – a means of managing and governing the delivery of services across the enterprise – is becoming increasingly important. It is evolving into a bridge that links the enterprise, the vendor base and shared delivery. If implemented correctly, SMI can help to secure compliance to service level agreements, but also to drive innovation across the enterprise while optimizing total cost of the delivery model.
In detail, SMI can provide CIOs and their companies with several advantages, including:
- The ability to seize benefits in technology breakthroughs to reduce IT costs while delivering superior functionality to the business
- A single point of accountability for end-to-end service delivery to the business
- A consistent service framework globally with incentives for service improvement and innovation
- Enterprise-wide capability for managing IT risks and compliance across complex environments of IT service providers
- A mechanism to increase alignment of IT priorities with business objectives
Cashing in on the opportunity
Taking companies’ operational processes one step further, many services will be provisioned externally, with core operations closely aligned to strategic value and new, more formal integration layers being defined. This provides a large opportunity for the CIO, who is able to help with the transformational process of implementing the SMI.
Like all transformations, SMI will require a credible business case, which shows – where possible – how the program can be self-funding. To implement SMI successfully, the CIO will have to work with several internal stakeholders – including executives from finance, HR and procurement. This is important to gain buy-in at all levels and to separate transformation from operations and this collaboration will help to achieve the end state more quickly.
A well thought-out implementation plan and the right resources and skills are needed to make the transition a success. CIOs will have to get involved in changing the existing reactive approach to service delivery into a proactive one. Creating an achievable plan that builds upon quick wins and initial success stories, using a phased approach, is critical. And, lastly, CIOs can show their strategic sourcing, contracting, negotiating and program management skills to achieve cost savings.
Getting organizations to implement SMI, and assisting them with the implementation can provide significant opportunity for CIOs in delivering additional value, and providing innovation and continuous improvement to the key customer base. It also offers CIOs the opportunity to continue playing a leadership role as IT migrates to an “as-a-service” model, and there is less reliance on internal IT organizations to support internal applications and infrastructure.