Vivid lessons from a troubled decade in outsourcing hold warnings for IT managers to be careful what they wish for from vendor service level agreements (SLAs) if they want to avoid "witch hunts."
Delivering a workshop on how to jump start the adoption of the IT Infrastructure Library (ITIL) through business-centric reporting (BCR) at the IT Services Management Forum in Brisbane last week, Nik Laskaris said many outsourcing contracts didn't reflect 'on the ground' reality and how it impacts on business operations and customer service. Drawing on his experience as a project manager at EDS and its long-term outsourcing contract with the Commonwealth Bank of Australia, Laskaris said BCR is about building a relationship.
"The service levels are not going to change...these contracts never run their full life and often change every three to four years, he said. "But even this frequency of change may not be adequate for the business lines facing constant change."
Laskaris, who is now government project manager at EDS, said many IT shops suffer from a poor ability to prove, in business terms, the impact that withdrawing services or infrastructure can have - what he calls "the box test."
This test poses the question, he said, of: "If I turn off that box or application, what will happen to the business or its customers?"
Laskaris said joint development of one project had gone ahead without agreed SLAs; the inevitable fallout caused a series of "witch hunts."
"[The outsourcer] had thrown in a whole lot of money...there was a lot of angst. We couldn't see what the customers wanted," he said. He also said he had seen "managers want to reach across the table and strangle people because they don't understand."
However, when business-centric reporting was introduced, the issues subsided as the focus was on service and processes not people. "IT failures are communications failures," he added.
However, Laskaris stressed it is possible to gain from the cries of pain inside the business, and urged IT managers to conduct an "impact assessment" immediately incidents occur, rather than in retrospect.
"You have to ask the question when the fire is burning - how many people are in the house?
"Someone who is bitching is better than someone who is saying nothing. At least you can hear what they are saying. It's the silent ones you have to worry about," Laskaris warned.
Laskaris also warned companies not to be fooled into thinking improvements in service quality from vendors comes without a price tag.
"Some of the outsourcing clauses are ridiculous, such as the ratchet: it just goes up and up and up.
"You have to say to the business: prove to me why you need 99.99 percent uptime all of the time. It's a matter of talking with the business to see if [the requirement] is worth it."
Top tips for business-centric reporting
- Always establish a single source of the truth
- Evaluate problems when they happen, not retrospectively
- Always get 'the business' to chair IT and business coordination meetings
- Sell solutions to business in business language
- Understand that improvements are neither free nor infinite
Julian Bajkowski attended the conference as a guest of IT Service Management Forum