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Troy DuMoulin, VP, Research & Development

Troy is a leading ITIL® IT Governance and Lean IT authority with a solid and rich background in Executive IT Management consulting. Troy holds the ITIL Expert certifications and has extensive experience in leading IT Service Management (ITSM) programs with a regional and global scope.

He is a frequent speaker at IT Management events and is a contributing author to multiple ITSM and Lean IT books, papers and official ITIL publications including ITIL’s Planning To Implement IT Service Management and Continual Service Improvement.

 

The Guide

"This blog is dedicated to making sense out of the shifting landscape of IT Management. Just when we thought we had a good handle on managing technology, the job we thought we knew is being threatened by strange acronym’s like ITIL, CMMI, COBIT, ect.. Suddenly the rules have changed and we are not sure why. The goal of this blog is to offer an element of sanity and logic to what can appear to be chaos."


Hitch Hiker's Guide to the Galaxy

"In many of the more relaxed civilizations on the Outer Eastern Rim of the Galaxy, the Hitch Hiker’s Guide has already supplanted the great Encyclopedia Galactic as the standard repository of all knowledge and wisdom, for though it has many omissions and contains much that is apocryphal, or at least wildly inaccurate, it scores over the older more pedestrian work in two important respects.

First, it is slightly cheaper: and secondly it has the words DON’T PANIC inscribed in large friendly letters on its cover."
~Douglas Adams

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Tuesday, July 29, 2008

Your IT Outsourcer - A Brother of Another Mother

You may not share the same DNA but you’re an extended family just the same.

The reality of our IT world today is that the business has an ever increasing set of “options” for how, when, where and from whom it buys IT services. In other words there are more and more fish in the sea and the local pond has expanded to now include the possibility of buying services from anywhere in the global economy with a dizzying array of options.  The World Is Flat

In my last article I stated that this external pressure will play a significant role in pushing the internal IT organization from its comfort zone of focusing on technology optimization and cost reduction to a service provider value-oriented mindset. When this occurs in your IT shop - and it will - the reality of the many available options may not point to the most effective solution being an internal IT service.

Today I am speaking at an ISACA Conference on IT Governance in Toronto. I will be presenting at 1:30 on the evolution of the ITIL v3 IT Service Lifecycle Model. This morning I had the opportunity to attend a session titled:“Governance Of Outsourced IT Services” and it has inspired me to sit down between sessions and hammer out this post.

I was personally struck by a question asked by one of the over 150 session attendees of the presenter and the rest of the session audience: “Do you or does anyone in this session know of an IT Outsourcer relationship that has ever gone well? In my 10 years of managing these relationships I have not seen this happen.”  The response to this question was utter silence without one positive voice to be heard!

Why is this the case and is this not a major risk based on what I have written so far?

I have my personal opinions which I would like to share with you.

The Rise Of the Managed Service Provider (MSP)

Organizations are increasingly turning to external IT service providers who are in the business of taking responsibility for, and providing to their customers a part if not the entirety of end-to-end IT services in a profitable manner. In this relationship they are often paid to deliver an IT Service where they own the technology assets and provide the human expertise and personnel.  The increased use of MSPs as part of the IT service strategy can be observed across all industries and at all sizes of companies. Even the smallest IT department will have an external supplier for services such as Internet access, hardware repair and perhaps telephony support.

So with this growing reality, it becomes increasingly more important to figure out why most of these relationships with external providers end in tears and how we can do something about improving these relationships.

From my perspective the following list represents the top 4 most common reasons for this tendency for failed relationships with your managed service provider. However, I would invite the readers to add their own perspective as comments on this article.

* Outsourcing Services or Processes That Are Not Defined Or Are Broken: Consider that one of the classic mistakes we make is to attempt to outsource a something which we don’t understand or which currently has problems. The session I attended this morning was called “Governance Of Outsourced IT Services.” The presenters did a great job on their topic but what kept coming to my mind during the session was the fact that in my experience, most IT shops are just beginning to define what they do and expect to deliver from a service perspective. Today many if not most organizations manage their technology as isolated domains and have little knowledge or history about what to expect of a service. So consider what happens when you outsource something that you don’t understand, currently have issues with, don’t understand your requirements for, or don’t understand how to measure. The answer to this question is that you get compounded problems since your contract will typically not reflect what is needed and you have added another level of bureaucracy protected by contract language and legalese. This concept of “I can’t deal with my problems, so I will pay you take them” leads to arguments and broken relationships with perhaps the only benefit being the fact that you have someone else to yell at rather than the improved services or processes you were hoping for.

* Outsourcing Accountability/Governance: Building on the first issue, the second most common mistake we typically make is that we often completely pass the oversight, strategy, delivery and measurement of outsourced services to the MSP. After all the very word outsource means we send it outside our walls right? Sadly this sentiment is not practical, healthy, beneficial and even legal in some countries. A primary reason that many MSP relationships falter and fail is that the organization that has contracted for the service has not retained the strategy and oversight of the service. While it is very possible to outsource the responsibility for the provisioning of the service it is not advisable at any time to outsource accountability. Consider that if an external audit finds a deficiency in the service/process or the controls managed by the outsourcer the risk and legal implication impacts the customer not the MSP.  The organization who has contracted for the services provided by the MSP must have people who’s primary function it is to retain the governance, strategy, oversight and management of the MSP relationship for the services you have purchased externally.


* Beating The MSP Down To the Lowest Possible Price: Many organizations place the negotiation of their MSP contracts solely in the hands of a procurement group who’s primary key performance indicator is to get lowest possible cost for anything. I have seen this process carried as far as the procurement person forbidding the involvement of any of the stakeholders who are actually interested in the service becoming part of the negotiation as they might possibly compromise the goal of lowest cost possible. Consider for a moment what the most probably outcome of this strategy will be. You will beat the MSP down to a level where they are bordering on unprofitability and this will lead them to become rigid, inflexible and surly. Also as a consumer and purchaser of goods ask yourself if you actually fill your home with the cheapest priced goods and hire contractors for important home improvement projects at the lowest priced you can find.  Chances are that you may do so for commodity products but for the goods that need to be relied on and that protect your loved ones the lowest price will not be your primary selection criteria. So it is not surprising that your relationship with your MSP starts on a bad footing when you beat them down to the lowest possible price. No one wins in this scenario.

* Pretending and Acting As If The MSP Is A Stranger Outside The Family Circle: The fourth factor on my list is perhaps the most emotional but emotion is often one the most powerful contributors to failed relationships. In reality the relationship between the internal IT staff towards the MSP is often one of hostility, mistrust and fear. The causes for this negative set of emotions are many and range from the fear of losing their jobs and privileges to the reality of the fact that in some instances the internal IT staff had no involvement in the discussion and contracting of the MSP and feel they have been told to accept an outsider whom they don’t trust at the family table. The analogy of a family is appropriate here in light of the comment I made in the earlier point about the inability to outsource accountability. To extend the family analogy a bit further, when an organization decides to contract out a component of or the majority of its IT services, the MSP is being brought inside the family circle albeit on a contractual and temporary basis. When this occurs the MSP becomes a legally adopted member of the extended family for the term of the contract and as such is part of the organization’s Service Value Network in practice and in the eyes of the law. This means that to be an effective family member the MSP must agree with, participate in and share responsibility for following the organization’s policies, processes and standards. However, even more importantly the internal IT staff must stop treating the MSP as an outsider, stranger or unwelcomed dinner guest but accept the fact that at least for the time being the MSP is an adopted brother or sister and should be treated with courtesy and respect.

Troy’s Thoughts.  What Are Yours?

“You can pick your friends but you are stuck with your family” ~Anon

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Posted by Troy DuMoulin on 07/29 at 09:44 PM
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Thursday, July 10, 2008

The ITIL Incident, Problem and Change Dance

Sometimes You Have To Dance To A Different Beat

Every road trip offers a potential treasure trove of memories that we will share over and over again with our friends and family.

This experience is no less true of Pink road trips. in this case the recent Pink Perspective series of events.

As many of the readers of this blog may know I speak and write often about the fact that although ITIL is 20 years old, the vast majority of organizations that have begun to implement ITIL processes have never progressed past Change Management.

Most organizations will start with Incident Management, add in some request elements, move on to working on Problem (specifically what is often called an RCA process) and then proceed to Change Management. (And Stop)

At this point the wind dies out of the ITIL sails and the IT organization struggles to build a business case to move forward since they start running into processes such as Service Asset & Configuration Management, Service Catalog Management, Service Level Management and Release & Deployment Management, etc..

Company after company deploys these processes and then hits a proverbial wall and can seem to go no further. Why do companies hit this wall? 

Many might say that these other processes are harder and in some respects, this statement is true. However, in my opinion the reason that the majority of companies go no further than Change Management is because the remaining processes require an IT organization to understand what an IT service is and wish to manage and organize around a service model.

In my personal experience I would estimate that the majority of IT organizations I have worked with are primarily if not solely focused on managing IT technology assets and are not organized around service delivery concepts.

This lack of cultural recognition of IT as a provider of services is a global IT issue.There is no country in the world where IT Service Management principles have been adopted fully by the general IT industry. In short there is no ITIL Shangri-La hidden in the snowy peaks of some far off mountain range.

However, today (2007-2008), the concept of IT services are finally beginning to be understood. The driver for this birth of understanding is not ITIL adoption as some might suggest but is being driven by forces outside the traditional internal IT function.

The pressure to adopt a service model is coming from the business customers of IT who are being approach by Managed Service Providers (IT Outsourcers). These IT outsourcers are educating IT’s business customers about the availability of Software As A Service (SaaS) options for core business functions and the emerging hosted infrastructure options such as Cloud Computing. All of these services can be purchased by the business in units of consumption that vary based on actual use. In short the business can buy IT services without having to own their own assets.

However, while these external sources are pushing many companies to adopt IT Service Management concepts this adoption is still in its infancy as the IT culture slowly changes. 

With that background, on with the fun part of my story.

So going back to the Pink Perspectives, (I think it was the Washington event) I was going on as usual about the fact that most companies stop at Change Management as I have described above.

At which point, my friend George Spalding, who many of you may know is our Vice President of Events and a fellow Pink speaker upstages me. He, of course, has heard my rant often. George gets up on the stage and begins what he calls the Incident, Problem, Change Dance.

Yes, that’s right, a dance.

Picture George doing a quasi Can Can Routine.

Incident, Problem, Change, Stop (Kick)
Incident, Problem, Change, Stop (Kick)
Incident, Problem, Change, Stop (Kick)

Add the beat and the rhythm and you get the picture. Needless to say, it became quite a hit and we had to do it at all the remaining events.

Ok so maybe you had to be there and know George for this to be funny but it is certainly something I will share for years to come with my fellow Pinkers as we down our recreational beverages.

Troy’s Thoughts What Are Yours?


“Never trust a leader who cannot dance.  ~Mr. Miyagi, The Next Karate Kid, 1994

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Posted by Troy DuMoulin on 07/10 at 02:14 PM
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