IT's new role, and how to succeed in it: Core vs. chore, part 2

Core or chore? It's the most critical factor to consider when making a decision about how to source a given business service. If it's core, it has to be managed internally. If it's a chore, look to an external service provider.

As mentioned in my post on managing infrastructure to support business services , IT has been undergoing a fundamental transformation as its role changes from managing infrastructure to supporting business services. Today, determining how to source a given service is one of the most critical decisions CIOs have to make. Following are some insights on this front.

The broker role is critical

IT has gone from an infrastructure builder to a service broker. One of the implications of this change is that IT needs to lead the selection process by either seeking out the right service provider or evaluating those that the business wants to bring in.

As broker, it's critical that the CIO and team have a central, comprehensive view of, and focus on, the customer. IT needs to understand what their experience is and take responsibility for ensuring that the experience is optimal. If a given service falls below required service levels, it has the potential to adversely impact the business.

Just because you migrate services to a Software-as-a-Service (SaaS) provider doesn't mean this charter goes away. If anything, the charter becomes even more serious. Today, many organizations have a fragmented approach to their SaaS-based operations, with different individuals managing the provider relationship and each provider working toward their own individual SLAs. In these environments, when things go south, you'll see some serious conflict and finger pointing.

Many business owners have gone directly to SaaS providers, without IT's involvement. Over time, some business owners even questioned whether, given the company was signing up with several service providers, IT was needed at all. In these cases, it only takes a few instances in which issues arise -- and business sponsors who led the initial outsourcing decisions don't have anyone to turn to -- that people realize how critical a role IT still played. Business managers quickly realize they don't want to be in the position of assuming the responsibility for service levels, for holding providers accountable, for managing those relationships, and all the other efforts required including exploring the possibility of changing to a new and better alternative.

Managing vendors by establishing the right metrics

In spite of what a service provider may say during a sales pitch like claiming transparency, promising there won't be finger pointing, and so on, it doesn't change a fundamental reality: ultimately it's the reputation of the business and its relationship with its customers that are on the line.

Negotiation and management don't end when the contract is signed. In fact, that's when the process is just getting started. It's a full-time job managing the relationship and ensuring customers are getting an optimal experience. Ultimately, managing toward this experience is what's key to success.

People often focus on metric-driven service level agreements (SLAs) rather than business-driven measures. It's understandable that vendors want to be measured on what they can control, but ultimately, the throughput of the network or the uptime of a given server doesn't really matter. If each subsystem meets its metrics, but the customer isn't satisfied, it's all for naught.

For example, if the network is up, the application is running, and the database is available, a service provider could be hitting all their metric-driven SLAs. But if the application isn't communicating correctly with the database, the customer may experience issues or downtime. That's why savvy CIOs are focused on establishing business-level metrics that will get tripped when these kinds of systemic issues arise. When developing SLAs, these CIOs look at things like content availability, time to complete a transaction, and so on-issues that would speak directly to an unacceptable customer experience.

Conclusion

The transformation from infrastructure builder to service broker requires an entirely new approach to sourcing decisions. To make these decisions effectively, you have to have a firm grasp on whether an effort is core or chore. And you need a comprehensive plan for ensuring service levels are met, regardless of the service source. 

Chris O'Malley is CEO of Nimsoft.  He has devoted 25 years to innovation in the IT industry -- most recently growing businesses in cloud and IT Management as a Service solutions. Contact Chris via the comments below or via Twitter at @chris_t_omalley.

Copyright © 2011 IDG Communications, Inc.

  
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