How is your outsourcing organization?

You use the multi-vendor environment organized by SIAM

Over the years, multi-vendor outsourcing has become a reality for IT departments. What is still changing is the complexity brought about by these environments. Digital transformation is imperative. Strengthening itself as a fundamental aspect of business success, IT departments are increasingly outsourcing to specialized vendors. In recent years, your organization may also need to use DevOps for more automation, machine learning, and CI/CD development… If this is not the case, then it will certainly happen soon.

In this reality, outsourcing is completely reasonable. Compared with only internal development, outsourcing allows you to deploy relevant expertise, accelerate business development and save costs. However, Gartner research shows that more than 60% of outsourcing services fail to deliver the results specified in their contracts.

So what is wrong? In practice, the lack of coordination and cooperation especially means that the potential benefits of outsourcing to multiple suppliers have not been realized. The establishment of a sound management organization is essential to success. In this blog, we discussed the most important parts, through which you can evaluate the management of a multi-vendor environment by yourself.

Will bad organization in a multi-vendor environment increase your costs?
If you look at the current outsourcing settings, how many of your suppliers are collaborating and going beyond their own workflow?

The answer is likely to be zero. As long as the supplier sticks to its own way of working, you have to deal with different digital tools, business models, control methods, and delivery processes. Everyone has their own process. The cost of dealing with all these differences will soon increase. This does not include the cost of managing (managing) data from all these different sources and different formats.

In order to solve this problem, the correct organization of the multi-supplier landscape is essential. By introducing standardized platforms, processes, and working methods that are applicable to all suppliers, you can transform a multi-vendor environment from a complex network to a streamlined and efficient beehive.

Does your supplier communicate effectively?
The “everyone for oneself” mentality often appears in multi-party outsourcing. For each supplier, the focus is to achieve at least the minimum of its own goals. However, as long as all parties continue to work independently, there is little hope for effective communication or mutually beneficial cooperation.

Improving your management organization can completely change this situation. In a well-organized multi-vendor environment, the whole is greater than the sum of its parts.

By introducing effective collaboration and accountability, suppliers understand that you want them to get out of silos and play their part in your well-functioning cooperative machine. In addition, they realize that they can only stay in your IT environment with a proactive attitude.

In addition to organizing communication between suppliers, it is also important to let them understand your expectations of them. Schedule performance evaluations with each of your suppliers on a regular basis. During these evaluations, you agree to what they need, your agreement, and what is actually delivered.

It is best to actually record these periodic performance evaluations in the contract according to a certain timetable, rather than just putting them on the to-do list. This ensures that it actually happened. Ideally, the goal of the organization is lofty: a mature multi-supplier setting fosters a culture in which performance evaluation is performed as agreed without constant reminders.

Do you provide quality and innovation?
Without a clear and consistent standardized process to lay the foundation, accelerating innovation is a daunting task. It’s almost impossible, even. In fact, a disorganized multi-vendor environment means you need to constantly put out fires. If your supplier processes are barely coordinated and automated, the possibility of human error, miscommunication, and information gaps will increase. If you have been pursuing facts, it is unlikely that anyone on your supplier team will have enough room to focus on innovation.

Contrary to your expectations, outsourcing to innovation experts is not a quick solution to all problems immediately. If you do not effectively organize the basic settings of a multi-vendor environment, all the smart ideas in the world will not have a noticeable impact. New innovative software cannot simply solve potential problems such as poor communication, process errors, and incoherent management.

Do your IT customers also benefit from it?
In IT services, the perception of IT customers and end users on the services provided is usually not the first point the company wants to improve. They often get caught up in the technical details of monitoring the daily activities of each supplier.

However, in the final analysis, this is all about these customers. Whether for enterprise customers or end users, optimizing the multi-supplier environment can significantly improve the customer experience.

Multi-vendor outsourcing: know your position
Effectively organizing your multi-supplier environment requires mature processes, which are established with a pragmatic and agile philosophy to add value to your products or services. Fortunately, there is a solution: Service Integration and Management (SIAM).

SIAM implements standardized governance, management, integration, security, and coordination in your multi-vendor environment, and optimizes it from the ground up.

Improving the organization of the entire supplier network can increase efficiency, reliability, and accountability. Ultimately, the quality of the products or services you provide to IT customers and end users.

At Fruition Partners, we use a hands-on approach to implement SIAM within your organization. It is not our style to provide advice on the sidelines. We prefer to deploy our analysts (thinkers) and operations team (actors) to change your multi-vendor environment pragmatically.

Since every company has its own specific organizational pain points, the first step in this journey is to assess your “as is” outsourcing reality. Use our SIAM Quickscan immediately to understand the current organization of your environment immediately.

>> Perform a SIAM quick scan