Don’t take service delivery
at face value
Organisations need be more specific about what they
want from IT services agreements if they are to achieve
the best outcomes for the business.
Five steps to maximising
value from IT services
partners
1.Agree on key definitions and
responsibilities at the outset of
the contract
2.Establish an innovation roadmap
that supports both IT and
business change – and review it
on a regular basis
3.Introduce a measurement
framework for innovation,
continual service improvement
and value, and, where possible,
link this to business KPIs
4.Unlock new continual service
improvement opportunities by
combining service management
metrics with business
intelligence data
5.Assess a supplier’s financial
stability in tandem with their
ability to innovate
It could mean greater efficiency. It could mean lower costs. It could mean higher
satisfaction rates. Value has become a firm fixture in the IT service delivery lexicon; its
definition, however, is far from fixed.
Value is the shape-shifter of IT service delivery: not only does every individual, every
customer and every service provider have their only definition but these definitions will
change several times during the lifetime of a contract.
Steve Parlett, Director of Contractual Services at Computacenter, comments: “Value
must be defined, agreed and routinely reviewed by all parties involved in IT service
delivery to ensure everyone is working towards the same outcomes.”
To deliver better value, IT departments and their suppliers must also tackle two other
ambiguous facets of service delivery: continual service improvement and innovation.
These two activities are fundamental to maximising value but, once again, their
definitions are at best variable, at worst downright vague.
“Many IT service agreements have turned sour simply due to an issue of semantics,”
comments Steve. “Both customer and provider need to understand what constitutes
continual service improvement versus innovation.”
The elusive KPI
This differentiation is particularly important as continual service improvement becomes
increasingly viewed as a commodity, while innovation develops into a hotly contested –
and desired - KPI.
In KPMG’s UK Service Provider and Performance Satisfaction Survey for 2012,
innovation was among 10 KPIs measured along with quality, flexibility and price. Notably,
continual service improvement was not on the list.
As well as reinforcing the importance of innovation, the survey also revealed that it’s a
highly intangible and inaccessible KPI. As the report states: “The innovation KPI remains
the most difficult for service providers to deliver and score well against. Innovation does
not have to entail just broad transformation efforts, but can also involve identifying new
and innovative ways to improve daily operational practices.”
www.computacenter.com
With such ambiguity about what can be classified as innovation, it’s not surprising that
suppliers are struggling to deliver. Even though Computacenter took the number one slot
for innovation in KPMG’s 2012 survey, its score was a modest 65 per cent.2
“We have listened to our customers and have taken a number of steps to enable us to meet
their innovation expectations,” comments Steve. “However we recognise, we need to do
more and have a number of initiatives underway for this year.”
Keeping score
The demand for innovation is likely to continue as KPMG observes: “Innovation has
increased in importance over the past few years as buyers look beyond just cost savings as
a reason to pursue or expand outsourcing efforts.”2
To meet this demand, Gartner recommends that organisations: “Incorporate definitions,
processes and ways to measure the level of innovation in outsourcing deals.”1
Computacenter has taken this one step further and applied this approach to continual
service improvement, innovation and value via its unique Customer Value Scorecard. As
Rik Hawke, who heads up the company’s Continual Service Improvement team, explains:
“The scorecard helps us establish what matters to each customer - from results and
relationships to quality and people. This enables us to focus on delivering the innovations
and improvements that match their specific value goals.”
The Customer Value Scorecard has helped Computacenter achieve excellent levels of
satisfaction across its client base. In KPMG’s 2012 survey, Computacenter achieved the
highest customer satisfaction rating out of 25 UK IT service providers.
Industrialising innovation
Although defining value and innovation is an important first step, organisations also need
to accelerate the time to value. As Rik confirms: “Organisations are increasingly opting for
shorter term contracts, which means both the IT department and the service provider need
to be able to deliver improvements and innovations in a tighter timeframe if they are to
prove value.”
To help its customers achieve their goals faster, Computacenter has taken an industrialised
approach to innovation and improvement. “We have collated a massive library of ideas and
solutions that have already delivered value to our customers,” comments Rik. “Our goal is
to match these initiatives to other organisations with similar challenges and goals to help
accelerate change and remove both cost and risk.”
Such a repeatable approach to innovation and continual service improvement could prove
key, with Gartner recommending that organisations’ sourcing managers “rely on strategic
suppliers to bring forward new IT ideas to solve business problems”.1
As this reliance increases, organisations will find the need for common definitions intensifies.
“Value can’t be measured unless it has set parameters,” comments Steve. “With both
IT departments and service providers coming under increasing scrutiny from business
stakeholders, we need to get smarter about how we define, demonstrate and deliver not
just value but also innovation and continuous improvement.”
1 Outsourcing Trends 2013: Growing IT Impact on the Business Drives New Sourcing Decisions, Gartner, February 2013
2 UK IT Service Provider Performance and Satisfaction Survey 2012, KPMG