In my recent blog entry, I talked about the future of the traditional IT organization and the need for sound governance and processes in the implementation of IT solutions, especially if they are leveraged through cloud and outsourced solution suppliers.
IT service management (ITSM) and IT infrastructure library (ITIL) have become the dominant approach and best practices for operational excellence in most IT organizations. Yet, I question why so many have implemented only four or five of the 26 defined ITIL 2011 processes given the strength and magnitude of guidance that the ITIL IT service lifecycle provides.
The shift in priority for IT to address the Ggovernance gap will require process strength in business relationship management and supplier management. The front and back door of an IT organization is managing customers and suppliers so, even if you aren’t quite ready to build the IT organization of the future, these practices are equally as important as the more commonly implemented processes of change management and incident management.
Business relationship management
Business relationship management (BRM) is the process that is responsible for maintaining a business relationship with the IT Customers. This process helps quantify and communicate how well IT is performing and articulate the value of its services. It is also the method used to gather input from the customers and users to properly understand the need for different services levels or determine required changes to existing IT services.
Many organizations claim to have BRM in place, but, from my experience, most BRM approaches are actually individuals or groups that represent an application team whose primary job is to gather requirements and provide high-level support for key applications. They are not true representatives of IT and are not able to fully present how IT is performing in terms that the business understands. Also, they often do not gather the greater IT requirements and feedback on SLAs, costs, and performance.
It is also important to note that BRM is not a substitute for the Service Desk and is not the communications method to use when an executive has an issue with their PC.
At a high level, a good business relationship management process:
- Creates a better working relationships between IT customers and the IT organization
- Provides regular visibility into the positive performance of IT, instead of only reviewing performance when there is a negative event such as an outage
- Enables IT to truly understand the needs of the business from a business perspective
- Opens a channel of communications to review priorities, service level performance, and changes needed to IT services
- Provides a point of escalation
- Supports the discussion to develop realistic service level agreements between IT and the business supplier management
As IT organizations develop a heavy reliance on third party providers, it is necessary to have a well thought out and closely monitored supplier management process.
Listening to the business and defining services that are in-line with the expectations of the business is not worth the effort if you delegate the IT solutions to suppliers who do not perform as expected. Unfortunately, most attention to the supplier relationship usually only occurs when an issue arises or upon annual reviews. This reactive management is suboptimal and could push the enterprise into compromising positions.
When third party providers fail miserably, often the only recourse in a contract is to cancel a contract early. Many IT solutions cannot be moved quickly, easily and cheaply. Therefore, an organization is often stuck in a poor situation for a lengthy period of time.
By having a robust supplier management process, much risk can be minimized. Contracts can be evaluated before being signed to ensure they have terms to meet certain service levels tied to the organizations IT services. Financial penalties tied to critical performance levels and proper reporting can also be included in a key contract. As contracts get implemented, supplier management will validate vendor’s performance on a weekly, monthly, or quarterly basis and create a channel of communications to ensure that services do not degrade to a point where there is a noticeable impact to the IT User.
Many of these activities of a supplier management process are not covered by most organization’s contract management process and therefore do not provide the value the IT organization requires. At a high level, a good supplier management process should:
- Ensure that providers are keeping to their commitments and providing services and capabilities that meet service levels expectations
- Help implement contracts that includes proper terms including service levels and penalties that are appropriate to the services being delivered to the business
- Provide quick identification and resolution of problems, minimizing the potential for larger contractual issues (and surprises)
- Provide an objective evaluation of performance, ensuring a level playing field for all suppliers (in any “value” assessment)
- Strengthen supplier relationships with continuous performance and executive awareness
- Provide financial benefits or lower costs through continued contract review, supplier consolidation and optimization
- Increase control and predictability of cost for the Enterprise
- Ensure compliance with external audit and internal governance requirements
- Provide a more informed supplier strategy moving forward
Finally, another great reason to implement a supplier management process is after signing a vendor contract, resources can diminish, and focus may move elsewhere (usually supporting business objectives). Given that changes in a business environment are going to happen over the contract’s life, causing a direct impact on service decisions, it is imperative to have a supplier management process oversight that takes over where implementation process leaves off.
So ask yourself, is your IT organization truly in sync with the what the business needs and are there periodic communications to discuss IT service requirements, service level needs and costs? If so, is this conversation a reasonable two-way communication where IT and the business discuss the relationship and reality of IT service capabilities versus costs and service levels? Are service providers helping you achieve the goals of IT service value?
If you have some thoughts or opinions on the subject, please take a moment to share it. Thanks in advance!