Stan Lepeak, Managing Director, Global Research
Tony Rawlinson, Managing Director, Financial Services Advisory (Europe & Asia Pacific)

EquaTerra research alliance partner HorsesforSources/HfS Research recently released its requisite top 2011 outsourcing predictions. Making number four on the list was a somewhat pithy prediction that “service integration becomes the new fad, replacing innovation as the buzzword of the day.” Acknowledging the potential and danger for buzzword hype around any concept that promises to make outsourcing deliver more than just cost savings, EquaTerra too has high hopes for the service integration concept and role.

EquaTerra defines service integration (SI), as it relates to sourcing, as the co-ordination of people, processes, tools and technology across multiple third party service providers, both internal and external, to manage the delivery of end-to-end business and IT services to end-users. The SI model is specifically designed to provide a common operating model and ensure seamless end-to-end service delivery across all service providers. Practically, service integration involves the implementation of processes, models and best practices to mange multi-provider service delivery. Given the increased use of third-party services overall and the proliferation of multi-sourcing, SI is becoming ever more important.

One important aspect of service integration is which party should take the lead role of service integrator. While the work of service integration will fall across multiple participants in the service delivery chain, who should take the lead integrator role? The client, one of the tower service provider(s) or perhaps even a third party specialist provider? The answer to this question is situational and will depend on the nature and scope of the sourcing effort and the skills and preferences of the buyer organization.

Regardless of who plays the role, the service integrator has many responsibilities and performs numerous roles including the following:-

• Provide clear end-to-end ownership of the end-to-end service
• Provide a single point of responsibility and accountability to the end user for the service
• Manage the end-to-end system availability to the end user in accordance with the service levels
• Create, agree and implement collaborative agreements and operational-level agreements with each major service provider
• Define, implement and manage a consistent standard set of processes and procedures for the end-to-end service
• Act as performance manager on behalf of the customer with respect to all major service providers, working with them to diagnose and fix root causes of problems and incidents
• Monitor, measure and report the end-to-end service

Service integration and the role of the service integrator are not new concepts. Most buyers perform SI activities today to varying extents, although often it is not formally recognized and is inconsistent and uncoordinated with inadequate overall accountability. What is new in service integration today is the recognition of it as a core sourcing function and a service in its own right—a recognition that it is key to harnessing the benefits of a multi-sourced environment. Buyers must increasingly emphasize SI as they move from a tower or siloed-based service model to an end user outcome-based service model that is better aligned to the business needs. Improvement to service integration capabilities and a further honing of the services integrator role is a core element of improving the overall value derived from outsourcing.

Learn more in a paper by EquaTerra’s Phil Brooke and Tony Rawlinson, Service Integration: Maximising the Benefits of a Multi-Sourced IT Environment,  and for the latest on information technology-related topics from EquaTerra, visit www.equaterra.com/it.

Filed under: Information Technology (IT), Market Trends and News, Offshore & Captive Centers by EquaTerra