Wednesday, 27 March 2013

Service Integration Demystified - At Least for Lawyers

As a continuation of my last blog, I actually promised that I would write a few words about service integrators – those relatively new creatures at least for us lawyers (as there have not been that many “true” service integrator models available). So in brief about the background, multi-sourcing environments have been a very hot topic. Consequently, traditional system integrators have been playing an increasingly important role on the market. To me, it would seem that the main points that distinguish these former system integrators from the modern service integrators are: 1) supplier management; 2) contractual integration; and 3) overall level of responsibility; and finally 4) KPIs (also it should be noted that KPIs are different in this setup). As part of KPIs, service integrators would assume also part of the typical promises an IT department would need to give to their business units. Not necessarily uptimes or downtimes only, but also usability and quality promises.

But this is not all: are there different service integrators or does one size fit everyone? The right answer to this question is, “Of course there are many different varieties!”

First of all, a service integrator could operate as a sourcing strategist and, if that is the case, then an integrator would own and be accountable for the IT, they would govern the vendor relationships and generally be responsible for the governance and sourcing strategy.

An alternative model is that the service integrator acts as a vendor manager. In this case, it would have the E2E responsibility and even contracts with other vendors. The governance and sourcing strategy, on the other hand, would be shared between the integrator and the customer.

So, the terminology is not clear and I do not think that it will be any clearer at least in the near future. Perhaps it is also too optimistic to say that these models would become very popular with Finnish companies this year. While we are in a transitional stage towards something new, as general advice, the scope of an agreement for service integration needs to clearly specify the substance. I hope that this helps to you and next time I will speak about divestments.

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