Conversations from the Mirror42 Team

03/31/08

Royal Dutch Shell will spend nearly $4 billion during the next five years on outsourcing contracts with AT&T, T-Systems and EDS. The petroleum giant awarded $1.6 billion to AT&T, $1 billion to T-Systems and $1 billion to EDS.

An amazing outsourcing deal. Surprisingly enough, Shell has gone with a multi-vendor outsourcing strategy rather then naming one of the MSP to take the lead and manage the others on behalf of Shell.

Now it is up to Shell to implement a framework that allows them to keep a tight contol on the entire supply chain. After all, the service is a sum of its components: The SAP environment managed by T-Systems -> over the network managed by AT&T -> to the desktops managed by EDS. My advise to Shell:

• A common set of KPI definitions and control framework for the IT supply chain
• A role and web-based information hub where all suppliers will participate
• Agreement on what KPI information the suppliers will share, how they will share and how often they will share.
• An audit trail on the reliability of this information

Such an information hub should allow Shell to monitor the costs & quality of services, and drive improvements across the entire IT supply chain. The result: there is an incentive for all vendors not only to focus on their own component, but also on the entire value chain.

If anyone at Shell is reading this and thinks this make sense…. We are Dutch & Direct too and we believe we can be of help in implementing a control framework for your outsourcing contracts.

This article from InformationWeek discusses the difficulties and steps in creating CIO dashboards.

This article describes the concepts of Critical Succes Factors (CSF’s), Key Performance Indicators (KPI’s), Metrics, and Outcomes & Benefits. It describes these concepts and it includes some examples within the context of IT service management.

This interesting blogpost made think of what is necessary from a management perpective when a company outsources (parts of) the IT infrastructure, applications, people and processes. The blogpost states, among others:

• SLA’s and KPI’s rule the day. Make them the centerpiece of periodic business reviews and use them to determine penalties and rewards.
• Include reward/penalty statements in each SLA/KPI.
• Importantly, require the provider to report how they are meeting the SLA’s and KPI’s, not just the volume.

But imagine what kind of information infrastructure is required to manage such outsourcing contracts based on SLAs and KPIs. Most often, companies tend to have a multi-vendor strategy, which suggests that with each vendor SLA/KPI information needs to be shared, and, for e.g. comparision and ease of reading, consolidated.

At Mirror42 we believe that this flow of this kind of information, not only from vendor to client but also vice versa, should be managed via a “Supply-and-Demand Information Hub”. This hub is responsible for connecting the IT management information flow between the supply-side (IT outsourcers) and the demand-side (clients), and if multiple vendors are responsible for the delivery chain, even between players on the supply-side.

This “Supply-and-Demand Information Hub” enables efficient and effective information sharing on for example SLAs and KPIs. In this world ‘old reporting technologies’ will not suffice, since the information is silo-ed either on supply or demand side. The hub, based on Internet technologies (such as webservices and RSS), enables collecting the relevant data and sharing it by distributing it in personalized dashboard-like ’spaces’ for members playing a part in the IT supply and demand chain. Envision a Facebook or Linkedin like network that enables sharing management information accross organizations, making sure that each member has the right information at the right time.

If you are interested in a demo or are interested how our customers implement these kinds of solutions, I would suggest that you visit our website for more information.