Uber Won’t Take You Far—Digital Needs Engagement and Management Models

Almost every discussion we have in the industry these days comes around to “digital transformation” at some point and often the dialogue includes reference to the customer experience of digital disruptors such as Uber and Airbnb. For most enterprises that were not “born in the cloud,” the journey toward “digital” means transforming a traditional delivery capability to support this digital transformation. However, technology innovations are just one enabler for this transformation and we need to spend much more time looking at how this new multi-sourced digital environment will be governed and managed.

In more traditional IT service delivery the model of service integration and management (SIAM) was meant to help enterprises overcome some of the challenges in the management and governance of multi-sourcing. Layers of control and notion of the plug-and-play integration of services and self-service approaches to service management tools were critical to addressing these challenges and making the model work. However, in this new emerging digital and As-a-Service Economy the application of SIAM principles in new contracts awards appears to have stalled. For example, the UK government is re-evaluating its mandate for SIAM and the recent Georgia Technology Authority award to Capgemini have not been followed up by other contracts that we have seen in the industry. Its not a question of terminology as for instance US enterprises prefer the term multi-supplier integration, but about the adoption (or lack therefore) of the key principles. So what are the management models that will take multi-sourcing to the next maturity level? If SIAM is not moving into the mainstream what then are other approaches that could lead to higher quality of service delivery? Or even more radical, what are the engagement models to supersede the tower model that was so prevalent in traditional IT contracting?

On the commodity side marketplaces such as the UK public sector G-cloud are still in its infancy. G-cloud is a marketplace where public sector organizations can buy services without having to tender as framework agreements with suppliers have been agreed. Similarly, extending the concept of service brokerage from infrastructure to application and business services will take a time to mature. For instance, the vision of the business cloud whereby business services are consumed in a plug and play way are still largely aspirational as service providers are still investing in early stage innovation here. Thus, service providers are focusing on vertical cloud platforms as the key building blocks for supporting a client’s journey toward digital. What is largely lacking when focusing on the product solutions such as the business cloud is the required change in organizational models and the way these new environments are being managed. A good example for that are discussions on multi-sourcing where all too often cloud is being referred to as sitting in the respective towers rather than discussing the necessity of getting to new management models for leveraging these new services. Put in simple words, many organizations are stuck legacy management approaches for technology innovations that are meant to disrupt legacy environments.

The common theme in these approaches (and challenges) is that we cannot simply prolong legacy sourcing models while evangelizing on digital technologies and assume that this alone will eventually lead us to the As-a-Service Economy.

We need a discussion on new models that reflect the fundamental shift of risk to the supplier through digital platforms, through replacing labor with automation and through outcome oriented pricing models. Reference points should rely less on born-in-the-cloud disruptive outliers like Uber and Airbnb but instead on traditional organizations with challenges arising from having one foot in the past and one in the future.

That is where biggest market opportunity and challenge is for service providers today.

HfS does not profess to have all the answers, but our extensive research into the As-a-Service Economy throws up new questions every day. If you are interested in engaging with us, just drop us a line at [email protected] or [email protected].