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Why it’s time to set standards for outsourcing providers

Stephanie Overby | March 23, 2016
Sure, you and all your IT service providers follow ITIL guidelines, but you interpret those standards differently. And those little inconsistencies can lead to big problems.

One of the biggest challenges IT leaders face in a multi-vendor outsourcing environment is getting all the suppliers to speak the same language. Service providers today will typically follow Information Technology Infrastructure Library (ITIL) guidelines around basic IT activities such as incident and change management—and most customers require that their vendors do so — every party has its own interpretations of those guidelines.

Wipro may manage and incident slight differently than HP, which in theory doesn’t sound like a major issue. But for a large global organization managing thousands of incidents a day, even a slight variance in reporting becomes a big deal creating significant complexity for the client and compromising standardization. “The issue is that the standards describe what has to be done… but not how those things are done. The result is that the standards mean slightly different things to different people,” says David England, director with outsourcing consultancy Alsbridge. “So when different providers execute and report those tasks and functions, inconsistencies result. And those inconsistencies create problems.”

What happens —very quickly — is that instead of collecting consistent and useful operational data that could drive continuous improvement, outsourcing customers are dealing with sloppy data that limits their ability to effectively govern their outsourcing portfolio. “It’s that there’s one big issue,” England says, “but rather it’s a case of death by a thousand cuts.”

An effective solution is for outsourcing customers to come up with a clear definition of the processes they want their vendors to follow and make sure that all providers understand the terminology and requirements precisely in the same way.

Creating a Statement of Work for service providers

That effort should be a priority when creating the Statement of Work (SOW) documentation that defines the tasks for the service providers. More often than not, that SOW will stipulate that “all providers adhere to ITIL definitions.” Instead, says England, outsourcing customers should get much more specific about ITIL definitions in the SOW “and specify, ‘this is what we mean by incident resolution and this is how incidents will be reported.’”

Providers are amenable to adhering to client definitions if the requirements are clearly spelled out, says England. “It’s not that one approach is necessarily better than the other, it’s just that they’re different in an apples and oranges way. And effective governance absolutely requires apples to apples and oranges to oranges.”

Without any client direction, for example, Provider A might consider an incident closed when the technician reports the incident resolved. Provider B, meanwhile, may call the incident closed when the user who reported the incident indicates that it’s resolved. That seemingly slight difference had a significant impact on the performance metric of incident resolution time.

 

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