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Organizations are going through unprecedented level of changes to meet their changing customer behaviours

Organizations are going through unprecedented level of changes to meet their changing customer behaviours and advancements in the IT such as Service Orientation and Cloud-based services.  In this status quo, Organisations are facing with challenges ranging from changing their workforce to adapt to the needs of the new IT initiatives to building a sustainable platform for future growth.  While this is not imperative at first, every enterprise architect will be facing some form or shape of these challenges in the organisation. Although there is an argument that outsource service providers or system integrators may have a little value in provisioning cloud based offering, these new initiatives present unique set of challenges to the organisation.

Danger of missing requirements:
First and foremost, the weakness to assume the solution to a problem too quickly, without sufficiently analysing the problem space. For example, it is easy for an organisation to engage in a strategic service offering from a cloud service provider for a CRM initiative either for cost reduction or for increasing operational excellence.  While majority (60% approximate) of the requirements could be offered by the cloud service provider, the rest of the requirements (40%) become very difficult to meet.  And most often, this could be to do with the way the organisation is doing its business, its differentiation in the market place or could be attributed to its own ineffciencies.    As an end result the organisation may have deployed a cloud based offering but still failed to address the rest of the requirements which will lead to building solutions that create IT silos leading to lack of operational efficiency in handling customer needs.

While the initial journey to use the cloud service may seem lucrative, these challenges are hidden or not thought through in its fullest depth leading to fragmentation in organisation's information processing ability.

Traditional Contracts
Adding to the complexity, the legacy IT systems are outsourced to the System Integrators or Outsourced service providers based on their execution competency.  For example, the number of operational reports, governance methodologies, monitoring, SLAs and their ability to convince the organisation that they can deliver the job.  Surely the organisation spent lot of time in structuring these contracts not based on what service the service provider can offer but based on how they could be a potential fit by understanding their business problems.  Note that the focus here is not "standard service offering" instead it is to do with validating whether the outsource provider or SI has understood my unique problem or business?  A shift from this perspective to a "standardised" cloud based offering involves a significant business change.  It is important that the organisation has an appetite to understand these challenges and find a way of driving this through.  In other words, while ensuring that the traditional execution knowledge is not lost and equally sailing the organisation to the new cloud based offering.

A way out
An approach to address this shift is to empower the business to define the requirements not at the functional or micro level but at the capability level.  In particular what outcome does the business is after by deploying a specific capability.  Then give additional considerations to constraints and analyse the impact of delivering that capability within the organisation.

The next step is to get the Enterprise Architecture team to assess the potential cloud services that can be leveraged.  However, there is significant value in ensuring that your SI or outsource vendor is engaged in providing a point of view in getting the business value of the initiative.  While the cloud computing vendor can sell you to SLAs, services and how quick and easy to deploy the services,  your system integrator or Service provider will augment your rationale by providing organisational constraints and challenges making the transition easier.

A new engagement model
Depends on the System Integrator maturity the organisation can benefit immensely by embedding a hybrid execution model as shown below.

The business and IT teams are anchored through Enterprise Architecture in defining the capability and outcomes of the business initiative and define the execution approach.  If the implementation option is cloud service or platform then there are two levels of gap identified.  Gap at the level of business change required to support the new initiative within the organisation.  This will be addressed and dealt with by the Enterprise Architecture practice alongside the business and the second dimension is operational gap i.e., know-how involved in delivering critical services to the customers or business.  This can be filled in by the SI assuming the execution ownership.  Note that the cloud service provider will only focus on providing standard out of the box service to the organisation.  Therefore it is critical to drive the implementation changes required to make that cloud service realise the benefit for the organisation.  This is where the outsource service providers and SI's can play a strategic partnership with both cloud service providers and for the organisations.

Governance
This model establishes a collaborative approach between the Cloud service providers, the System Integrators and the organisation.  This requires effective governance ensuring that strategic drift and operational challenges are addressed in a collaborative and consistent manner.  While the predictability of the service levels and availability are provided as standard service contracts from the cloud service providers,  additional challenges of end to end service management, ability to provide business continuity in some form or shape to maintain the organisation status quo and the management of overall service requires higher level of competency from the traditional operating model.  This can be fulfilled either by in-house team or by SI.  However due to the traditional operating model of managing the detailed contracts, the new approach requires significant learning to empower the inhouse team to manage this new types of contracts.  Therefore, an SI's engagement comes very handy as they normally do this for the outsourced services.  In this case, they will provide the overall service management to the services acquired from one or more cloud service providers.

Also, it is essential to manage the contract as a framework instead of accurate details as it may change over time.  Therefore it is easier to manage the overall governance of SI and Cloud service providers through Control Objectives.  In a simplistic way, the objective is to govern the process and not to prescribe the outcome.  For example, it is not advisable to prescribe that the service availability to be 99.8% or so instead it is to govern the control objective of "managing the availability".  This allows all parties involved in assessing their roles, responsibilities and actions that they may take in supporting the control objective.

SI / Outsourcing Firms - Recommendations
This changing landscape provides the System integrators and Outsourcing firms to stretch their boundaries to operate in a collaborative environment where they not only take the ownership of their specific deliverables but to provide an end to end service management, management of contexts within the relationships (i.e., between the organisation and cloud service providers) and acting as a trusted partner or arbitrator in provisioning quality service to customers.

While it may be true, some of the actual implementation work may not happen, there are still reasons why outsourcing partners or SI's can bring in their Service Management and Outsourcing competency into the service provisioning model to create a win-win solution to everyone involved.

The key recommendations for SI's and Outsourcing firms are as follows:

  1. Increase the level of organisation appetite in managing risks across different industry verticals.
  2. Be innovative in providing rapid alternate solutions and services should a cloud service is impacted by any kind of outages.
  3. Increase the competency in managing the overall governance of the engagement through standardised control objectives.
  4. Enrich your competency in providing end-to-end visibility of services in a real production scenario through sophisticated Service Management tools.
  5. Finally, increase the technical competency in resolving issues that stretch across different solutions through innovative and new execution approaches.
About Nandakumar Balasubramaniyan
Nanda is working as Principal Architect with Infosys Technologies Ltd. He brings in more than 15 years of online experience. Prior to joining Infosys, Nanda worked in Public Sector and Consulting organisations. He has been awarded as the “Consultant of the Year” in 2008 by British Computer Society for delivering business value to customers through his exceptional planning, leadership and organisational skills. He has demonstrated capabilities in developing large scale transformation from procurement to Transitional state. He holds an MBA from University of Wales.

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