White Paper RIGHT SOURCING. Application Management & Modernization

Transcription

1 White Paper RIGHT SOURCING Application Management & Modernization PrOduct Product & Solution

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3 Content Introduction RIGHT SOURCING Requirements Model Success Factors and Challenges Additional Information Sources & Figures

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5 Introduction In enterprises nowadays across different industries, the focus of CIOs is primarily: Meeting business requirements, Dealing with economic necessities and handling changes in business and technologies. With the focus above in mind, CIOs often take cost reduction and efficiency improvement as the top two fundamental drivers when IT outsourcing is considered as an option. A Gartner report form 2013 stated similar findings Organizations have indicated to Gartner that, after enterprise growth and operational results, reducing enterprise costs is a priority when contracting with service providers. 1 To fulfill the requirements of CIOs and retain the competitive advantages in the market, Application Management (AM) service providers, especially the ones competing in the international market, will have no choice but to deliver AM services through a global delivery network with reduced cost and improved efficiency. This global delivery poses new challenges as pointed out by the experts from IBM TJ Watson Research Center 3 : Local regulatory environment differences, cultural differences, time zone differences Integration of distributed resources to provide unified service Tight margins and high SLA penalties Lack of industry-wide standardization Processes, materials, configurations Lack of automation, high variability in tools, service times, no standard workflow management CIOs' Top BUSINESS Strategies (GLOBAL) 2 CIOs selected as one of their top 3 Increasing enterprise growth Delivering operational results Reducing enterpise costs 2013 No. 1 No. 2 No No. 1 No. 5 No. 3 In response to the challenges mentioned above and also to address the two focuses of CIOs stated at the beginning of this chapter, the Global AM Delivery Model is developed as a framework for delivering AM service globally with resources deployed around the world. FIG. 1 1) "Outsourcing Trends 2013: Exploit Alternatives to Infrastructure Outsourcing Services for Agility. Gartner, Jan ) New Priorities, Technologies and Leaders Shaping the Future of IT ; Gartner Webinar, Feb ) "Challenges in the Global Delivery ; Heching, Abhijit 5

6 Global AM Delivery Model Requirements With the aim of cost reduction and efficiency improvement, this delivery model is designed to meet four basic requirements: 1. Transparency in service monitoring on a global setup With distributed delivery units/teams involved in one service and working in parallel mode, transparency in service processes, ticket tracking and SLA management is the key for efficiency improvement and customer satisfaction. 2. Cost issues in delivery units Choosing flexibly the most proper unit/team for specific tickets by always taking the cost optimization possibility into account is the basic but most effective way to realize cost reduction. 3. Global reach (365x24x7 and language) To satisfy customers who are constantly growing their global footprint, service providers capability of organizing swiftly global delivery taskforces while crossing different time zones and overcoming any language barriers is a fundamental winning factor in AM service business. 4. Identification of the right resources and skill sets With all the delivery capabilities in place, identifying the solution unit in real time that has the right skill sets and availability for any incoming tickets or service requests is critical to make the efficiency improvement possible. Model Based on modular principle, this model revolutionizes the conventional ITIL three level service support. As illustrated in Figure 1, there are in total seven building blocks in this delivery model. Each of the blocks could be used as a stand-alone functional module. Global AM Delivery Model Overview HW/SW Manufacturers Excellence Team FIG. 2 Ticket Receiving/Checking Central Dispatching SME Team Translation General Team Ticket Receiving/Checking, General and SME Team (Subject Matter Experts) are the service units that are similar to the 1st and 2nd level support in a common ITIL service delivery model. All three functional blocks have the most potential of being deployed globally and represent the chance of utilizing resources in low cost locations. The choices of these teams could be made based on legal constraints, customer requirements, technical competency and cost structure. 6

7 Excellence Team can be the last resort of a ticket solution within the service organization that could be very well regarded as traditional 3rd level support in ITIL service delivery model. Hardware/Software Vendor would be working together with Excellence Team. Central Dispatching function is the core part that differentiates this model from a commonly used delivery model with its intelligent dispatching grid. This unit changes the workflow from ITIL s one directional to multidirectional. Its main tasks include: 1. Route new tickets to the best fitting service unit that could provide solutions with the least effort and lowest cost. 2. Re-route tickets to another service unit once the first unit could not work out a resolution. 3. Keep tracking all tickets in the service phase. With the central dispatching units, global low cost resources could be integrated into a service project rather flexibly with less effort. In a running service, tickets could be solved efficiently because service units who could find solutions with the least effort and cost will receive the ticket as early as possible with not much ticket ping-pong between different teams. Moreover, central dispatching easily provides high service transparency by knowing exactly where a particular ticket is and which team is working on what issues as well as the status of tickets. The requirement of service monitoring transparency is addressed in service level management a lot easier. Translation is an optional function unit that can be deployed according to a specific service requirement. This is very valuable in case customers want to create tickets in the language that is not commonly used by the service units around the globe. Success Factors and Challenges For a successful implementation of the Global AM Delivery Model, the following three critical factors have to be considered: 1. Dispatching grid Without the intelligent routing, no efficiency and cost saving could be realized with this delivery model. The routing cannot be accurate and time saving without a properly defined dispatching grid. Due to the rich variety of AM service, there is no fit-for-all dispatching grid. All the criteria for a dispatching grid have to be defined and fine-tuned on a case by case base. This is why a well-functioning dispatching grid needs the human expert judgment from the very beginning. The development of a successful dispatch grid relies on the experiences accumulated over time. The smooth operation of the grid relies on timely incorporation of all expert experience into one software dispatching tool. 2. Location of the resolution teams Though all resolution teams in this model should be able to work independently and could be setup in different time zones, one option could be that the General and SME Team are established together in one low cost location to create a shortcut between them. One good example of this establishment is that any tickets where no solution is found by the General Team could be forwarded directly to the SME Team with just an indication to dispatching function. By doing this, the routing effort could be saved and close communication on issue analysis could expedite the ticket solving. 3. Transition When taking over a new AM service, the transition and transformation represent a crucial challenge most of the time. To transition a service into this delivery model successfully, focus has to be given to following three tasks in particular: Selection of the low cost teams Clear definition of the workflow and responsibilities Thorough workflow training across all service teams If the skill sets and cost factor of the low cost teams are not matching to the requirement of the service, in-time resolution with expected cost saving would not be realized. Only when all service teams understand the complete workflow and their individual role/responsibilities in the model, the seamless collaboration among the teams is possible. 7

8 Additional Information Global AM Delivery Model is an integral part within T-Systems AMM outsourcing portfolio. A framework for implementation has been defined for this model. As a quick reference, it is illustrated in Figure 2 below. Implementation Framework Requirement Analysis Choice of Teams Workflow Definition Transition Customer Requirements Legal Constraints Security Constraints Technical Requirement Time Zone Feasibility Skill Sets Service Process Maturity Locations Cost structure Roles Responsibilities Flow chart Dispatching Grid Contingency Plan Workflow Training Knowledge Transfer Shadow/Share Lead OPTIMIZED SERVICE EFFICIENCY AND COST STRUCTURE FIG. 3 T-Systems is Deutsche Telekom s corporate customer arm. Using a global infrastructure of data centers and networks, T-Systems operates information and communication technology (ICT) systems for multinational corporations and public sector institutions. With offices in over 20 countries and global delivery capabilities, T-Systems serves companies in all industries from the automotive industry to telecommunications, the financial sector, retail, services, media, energy, and the manufacturing industry all the way to government agencies and the healthcare sector. Approximately 48,200 employees worldwide use their industry expertise and ICT know-how to provide top-quality service. T-Systems generated revenue of around EUR 9.2 billion in the 2011 financial year. 8

9 About the experts Gang Liu is a Senior Consultant within the Global Competence Center (GCC) for Application Management & Modernization (AMM) in T-Systems International GmbH. He is a member of the AMM Advisory practice and provides consulting for AMM topics such as IT-Strategy, sourcing, operational excellence. He can be reached at Gang.Liu@t-systems.com With both Engineering and MBA degrees, he has accumulated extensive experience on IT development project management, pricing model design for IT projects, AM Delivery Model and solution design, AMbition methodology training. He has been one of the main contributors to Global AM Delivery Model, modernization engine and operational integrator quick scan initiatives within the GCC s innovation and modernization program. In the last twelve months, he has provided consulting services for multiple AM RFIs, RFPs. Dr. Hilmar Binzenhöfer is a Senior Consultant within the GCC for AMM at T-Systems International. He leads the AMM Advisory practice and provides consulting for topics such as strategic sourcing, and IT strategy & governance. He can be reached at Hilmar.Binzenhoefer@t-systems.com During the last years he was working in different international AMM projects with the focus on defining IT sourcing strategy and supporting companies to move from the CMO into the defined FMO. His experience includes also the ramp up of global delivery hubs and the contractual negotiation with service providers. Additional to that he is also a lecturer at the FHS St. Gallen for Business Information Management. Shyamsunder Alagandula is a Senior Consultant within the GCC for AMM at T-Systems International. He is part of the AMM Advisory practice and provides consulting for topics such as strategic sourcing, bid and vendor management and operational excellence. He can be reached at Shyamsunder.Alagandula@t-systems.com His experience includes accessing management organizations and processes and helping them to build Outsourcing Strategy. He has got extensive experience in Vendor Management, contract management and negotiation, implementation of external services providers solutions and managing Offshore Development Center (ODC) in India. Recently he also has been involved in various RFP responses. The GCC AMM is a multinational team of more than 30 consultants and project managers who specialize in the implementation of critical application outsourcing projects. Big AMM deals are accompanied from Lead to FMO above all branches, technologies and countries. This Expert Paper is published within the Experts on Application Management & Modernization column. For more information go to: 9

10 Sources & Figures Sources [Gartner] New Priorities, Technologies and Leaders Shaping the Future of IT, 2013 [Aliza Heching, Abhijit Bose] Challenges in the Global Delivery: IBM TJ Watson Research Center Figures Figure 1 Figure 2 Figure 3 CIOs' Top Strategies Global AM Delivery Model Overview Implementation Framework 10

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12 CONTACT T-Systems International GmbH Product Marketing Stefan Spielbauer Dachauer Str München, Germany T-Systems International GmbH Global Competence Center AMM Gang Liu Fasanenweg Leinfelden-Echterdingen, Germany GCC.AMM@t-systems.com T-Systems International GmbH Market Intelligence Hermann Hänle Fasanenweg Leinfelden-Echterdingen, Germany Hermann.Haenle@t-systems.com Published by T-Systems International GmbH Hahnstraße 43d Frankfurt, Germany Responsible for content: Product Marketing Status: July 2013