Abstract

Organizations trying to reduce their IT operational cost should think about outsourcing their application management portfolio as part of a larger outsourcing arrangement and in some occasions, as smaller standalone application specific contracts. The outsourced application portfolio can be handled by multiple service providers due to cost drivers, expertise and de-risking from single-vendor scenario. This paper will enquire the reasons of power struggle in multivendor scenarios that may lead to impaired value delivery from the outsourcing agreements. The paper also focuses on how Service Integration can be used as a ‘game changer’ in such situations and its visible results and bi-products (if any). The detailed implementation guidelines, process tailoring and tool set customizations are not in the scope of this document. Application development is outside the scope due to the complexities and several moving parts involved adapting to a typical multi-vendor scenario and then overlaying an SI governance model. The author does not intent to say that Service Integration may not work in application scenarios but just as that we don’t have many successful implementation references. The objective is to rationally review the SI concept in the limited periphery of operational management of application layer, excluding the underlying infrastructure elements and detailed frameworks.

Introduction

In almost all IT departments, there are two distinct area of expertise: The people who manage applications and the people who handle the infrastructure elements. Application support and maintenance has traditionally been aligned to application development for retaining knowledge and provide quick support in crisis situations. This demanded the people responsible for these tasks having good business process knowledge along with ability to understand coding and complex application architectures. The domains of Application Vs Infrastructure still remain disconnected to a great extent, despite recent heroic efforts with the inception of integrated Service Management. The integrated Service Management along with a service desk, just provides a ‘powder coating’ at the superficial layer and quite often end up delivering rudimentary support and eventually acting as a ‘post-man’ to the ‘specialist’ application support teams. Indeed, rather than bridging the silos, this is providing a convenient excuse to centralize the knowledge and expertise to specialist teams more and more. The convergence of application management with infrastructure management or vice versa being a far away dream; organizations are left with no other choice but to deal these two entities separately.

Though the typical boundaries of the application management has remained stable within the circumference of managing the operation, maintenance, and upgrading an application throughout its lifecycle ;there are sea changes in the way that these services are contracted and delivered. Dynamic business scenarios like ‘flattening the OPEX’ and emerging concepts and technologies like ‘Industrialization of IT’ and ‘Cloud Computing’ has brought in a paradigm shift the way organizations have traditionally looked at the application landscape. As organizations transitioned from in-house application management to the entanglement of multi vendor scenarios; the challenges of maintaining quality, traceability, compliance  and most imperatively building cohesiveness and harmony with in the competing entities have elevated. This has resulted burgeoning of management effort and cost which ‘cuts the corners’ of outsourcing benefits to certain dimensions.

Many CxOs are realizing Service Integration as beneficial in two specific planes.

  • One – for the management of separately contracted and supplied IT services and;
  • Two- as a governance framework cutting across multiple technology towers to deliver cohesiveness and business benefits that can be validated.

Let’s now try to infer whether Service Integration can pull together the multi sourcing elements in application management deals or are there other characteristics that are camouflaged and yet to be discovered.

In the following sections, let’s analyze the evolution of IT outsourcing models and investigate typical challenges faced in outsourcing contracts that includes multiple vendors. Further, we’ll try to figure out how these challenges can be addressed by adopting Service Integration. Rather than focusing on the typical cross tower SI model; the paper limits the scope to the SI overlay only for the ‘application tower’. In effect, it will validate whether ‘limited’ edition SI can be applied without excessive tailoring of implementation approach and operating procedures. The benefit for an SI service provide in this scenarios, will be the realization of new avenues of ‘miniature’ Service Integration deals connected with application management or support. This is particularly interesting, because SI deals are often seen as large multi-year engagements; demanding huge resource commitment and spending from the customers. The humongous cost involved in SI consultancy, tool integration and process modeling is some of the key reasons that several organizations choose to go with the ‘Do It Yourself’ approach 

Eating an elephant – Evolution of IT outsourcing models 

If it happens, how do you plan to eat an elephant? Swallow at once, or piece by piece? It is the same that happened to the evolution of contracting in Application Management. This is not too far different from the contemporary IT outsourcing path which includes infrastructure management or transformation.

Historically application services have centered on external management of dedicated infrastructure elements, hosted primarily in house facilities. Initially organizations began with the outsourcing of custom applications, with business-critical need for support. As software and hardware technologies have evolved, breakthroughs in virtualization, remote infrastructure management, modular code development, and service-oriented architecture (SOA)–based architectural models have led to new outsourcing choices at both the infrastructure and application layers.

Availability of dedicated application instances for packaged software (e.g.,ERP, supply chain management, finance and accounting) or shared application instances (e.g., customer relationship management [CRM] and Business Intelligence tools )residing in shared environments is leading to growing adoption of hosted solutions.

These technology advancements are enabling organizations to gradually shift from traditional custom application management to proven standardized hosted offerings and in many cases, this is sourced from multiple service providers.

Power struggle in a multi sourced environment

Whenever a piece of application is being developed or maintained by more than a single person or a group of people, a number of issues arise. These issues in a multi-vendor demography are essentially the same as those in any other domain like Infrastructure Management or Client Computing. If we dissect the root causes in detail, it has been often found that the urge to work with the same interest or goal is missing.

Inadequate Intellectual Property retention – The reason that service providers adopt and maintain multitude of documentation practices, results ‘ups’ and ‘downs’ the way intellectual property are created and stored in silos.  At times, the fear of becoming ‘dispensable’ acts as a mental block for service providers to produce high quality documentation. The result is expending costlier management time to put things straight or accept the status quo with impaired capability to reuse intellectual property.

Perforated quality assurance – Leakage of bugs during enhancements or testing in application management is a result of inappropriate quality assurance. It exaggerates when  Release Management involves several moving parts like one service provider being responsible for development and another for testing and a third one for deployment. Complexities in enhancements and bug fixes forces Change management to move from the role of ‘care taker’ to a ‘spectator’. The outcome is again expending costlier management effort to put things straight.

Competition – It’s quite natural that vendors competing with each other and constantly vying to enhance the share of their pie. The byproduct is that a fume of insecurities which provokes each vendor to shift blame and play down others. Individual agenda and insecurities makes the entire scene of action so politically loaded, often than not, instead of gaining any further maturity or healthy competition resulting value addition except the ever ending fire fight. The management resources of the client will soon see that they are running around the circle with a whistle to balance things.

Kaleidoscope of Application Management and SI overlay

Application Management services includes, but not limited to end-user support, monitoring, proactive problem avoidance, issue resolution, service restoration, and root cause analysis. Patching, application enhancements, and operational responsibility for application performance and uptime are often core services. Various project-based activities can also occur including package customization, implementation and integration, portfolio optimization, and legacy modernization. The main value proposition of application outsourcing services is that they free IT budget and staff from the usually higher cost of in-house management of enterprise applications and allow access to the generally higher service levels and expertise offered by outsourcers.

Typical Application Management Overlay

Typically the ‘Service Integration’ service does not deliver the operational activities, which sit within the technology towers, nor directly own the Service Provider contracts, which are managed by the client. The Service Integrator collaborates with each Service Providers to develop and manage collaborative operational agreements. This is supported with SI operational blueprint of tightly integrated, industry standards based set of policies, process and procedures, automated by a tooling suite, preferably delivered as a SaaS, along with an attuned commercial framework. This overlay ensure separately contracted and supplied IT services consistently work together to deliver business benefits. The standard services within the SI layer are deployed in functional groups containing services aligned and integrated with each other to provide tangible benefits to the client. The number of functions and services required by the client will vary based on client needs.

In that sense, it is not difficult for a Service Integrator to apply the entire framework and practices with in the application management tower.SI framework is to provides the ‘glue’ and ‘wire frame’ for the more efficient and pragmatic operations and governance across the multiple service providers. The well structured auxiliary services like Continual Service Improvement, Project Management, Risk Management etc of the SI overlay, which is either obvious in a typical Application Management contract or if included comes with a fancy price tag will become the natural flavors of this SI layer.

Let’s see what additional benefits and capability that Service Integration brings in for Application Management

The Service Assurance function cuts across the Service Providers to ensure all service provider teams comply with standard processes, and are aligned with the clients’ service strategy and policies.Service Assurance is responsible for high level process design, roll-out and maintenance.

The SI Operations function provides management and supervision of the process execution across towers and provision. In Application Management scenario this provides the most required stickiness between various towers like End User Support, Application Monitoring, and Enhancement, Performance Management etc. by providing vital support elements like IPC Management (Incident, Problem, and Change).

Service Performance Management function provides a centralised view of the catalogue of services delivered within the environment which is proactively managed to ensure that service definitions are current. It also delivers flexible views of integrated performance reporting and analysis to enable management of cross-tower operations, contracted Service Levels and Service Providers. The representation of the end to end mapping of the services not worrying about which supplier owns what will certainly be heaven for the client’s IT Managers. They can easily traverse up and down through the application lifecycle and if needed by diving in to the most bottom element of the service.

There is a need to define a well thought about quality and compliance framework to deliver; Risk Management, Quality and Compliance guidelines and governance.  A Jointly developed and maintained Service Quality Plan will clearly set forth how the Services are to be delivered and governed to achieve client specific quality and regulatory requirements. Spiced up with pragmatism and commitment, this can generate enormous value in a very short period.

It will add value to implement a SI Programme Office to govern all Application Management projects which includes the identification and escalation of issues, tracking and management of all programme dependencies, milestones and obligations and providing a single unbiased view of the program and project estate. This is also critical to guide the behavior of all application teams jointly “owned” and managed by the client; it defines and administers the “rules of the club” by which all suppliers must abide.

Organizations are increasingly outsourcing their application portfolio to reduce OPEX, rationalize systems and improve efficiency by industrializing the service provision. However glitches and conflicts can take this transformation to a standstill in a multi-sourced scene. Organizations should carefully select their service providers, as many of them claims to have mastered industrialization of application management. Adapting Service Integration in these scenarios should be viewed as managing in the short term, while developing the plans for the long term.

If we analyze this perspective in a different angle – despite outsourcing, traditional application management approaches are ill-equipped to handle the complexity of today’s application stack and end user expectations. As IT organizations pressurized to deliver more with less, converging Application and Infrastructure domains are critical and need to be viewed as a transformational milestone in any organization’ IT strategy map . A properly implemented SI framework achieves effectiveness and efficiency in running application support, creating application knowledge pools by structured practices and training. This will ensure that operations knowledge is institutionalized and not dependant of the people supporting it. This is one of the first steps that are required for matured industrialization and also the realization of additional avenues like cloud adoption and service aggregation.

Conclusion

Beyond helping organizations to realize the underlying value in multi-sourced engagements, there are significant bi-products too in adopting Service Integration. The potential of optimization of cost and manpower by integrating Application and Infrastructure operations are enormous. Significant improvements in ticket/call resolutions due to the integrated service desk (Level 1 teams of application & infrastructure integrated) will result a fresh identity for IT.

If some of the standard SI elements which were apt for other scenarios (like in Infrastructure Management) are not adaptable to application scenarios, it should not be considered as a handicap but opportunity to infuse more agility to the model. Be clear on the objective that Service Integration is not about acquiring and replacing supplier’s intellectual properties of technical expertise. It is about conducting an orchestra of constantly evolving activities in a very complex and competitive environment. So as in any orchestra as seamless and mistake proofed music will be delivered with continuous practice, Service Integration will bring efficiency and unheard ‘harmonic’ nuances as time passes by.

 

References:  Application Management & Modernization by T-Systems