SIAM – The Good, The Bad and The Ugly

Preface

Lately I’ve been writing about Cost Optimization in my blog, see 7 ways to improve your Cost Optimization and Cost Optimization .. continues posts.

I haven’t said anything about SIAM (Service Integration and Management) yet. So now it’s about time, because one of the reasons why organizations choose the SIAM model is – surprise surprise – Cost Optimization or ”being more Cost Effective”, which in my opinion means pretty much the same thing: making certain adjustments to optimize the costs to correspond with the business like I stated. Naturally there are other factors behind that as well.

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While SIAM is getting more and more popular, there are some issues to deal with when implementing it, and in fact a number of things must be clarified already in the early phase of planning.

Characteristics of SIAM

Jan Vromant, Product Manager at Fruition Partners has stated the characteristics of SIAM very nicely as follows. Quotation: “The main goal of SIAM is to coordinate internal and external suppliers and their services in a cost-effective way to achieve the end-to-end service levels needed to support the goals of the business functions.

 

SIAM is a layer between the suppliers and the IT functions that supports and enables the integration of the services offered by multiple (internal and external) service providers.”

 

It’s been said SIAM enables a true end-to-end service/supply chain and hides all the mess from customers’ sight. That’s what customers love so much and rave about. What would be better than being truly able to focus on the core business areas and let someone else handle all the supportive IT processes behind the scene? And it works at least theoretically. I also personally like the idea, but let’s take a closer look inside the characteristics of SIAM. Are you ready?

That’s what customers love so much and rave about. What would be better than being truly able to focus on the core business areas and let someone else handle all the supportive IT processes behind the scene?

SIAM – The Good

Customer: It’s great to have someone taking care of the end-to-end daily basis IT –related issues. Now we can finally focus on our core business areas. We can also be sure our business requirements are seriously taken into account.

SIAM Operator: We can add value to our customers’ business by taking care of all IT burden, end-to-end. We will work on our customer’s best interests and achieve the agreed SLAs. At the same time we can also seek to grow our business by examining all the areas of our customer’s business where we can be of assistance.

Suppliers: We are happy there is only one customer interface to be dealing with and they are good at what they do (hopefully!).

That sounds like a deal made in heaven. Unfortunately it’s not that simple, keep on reading:

SIAM – The Bad

Customer: this costs us money. Are we benefiting from this or not? Where are we now? Are the suppliers now developing things according our roadmap and in co-operation with our business? How to measure what and/or how much we are gaining from this? How to be sure this was the right decision?

SIAM Operator: There is vast number of different – small and big – players on the ice. They all seem to have different contracts, different SLA’s, different expectations from customer’s business organization and vice versa. It’s not clear if the customers’ objectives are met.

It’s not clear if the customers’ objectives are met.

Suppliers: We are not being heard anymore. We are just been told to do this-and-this and there’s no real negotiation with our customer. We cannot help customer’s business development with our solutions and we cannot get more business for ourselves either.

SIAM – The Ugly

Customer: We don’t trust anyone. We are questioning our SIAM Operator’s activities and we are establishing new direct communication channels with our suppliers aside, one by one.

SIAM Operator: Customer seems to make very questionable actions and operations; they are spending more and more money but they are not involved enough on this. At the moment they are implementing an overlapping Governance model and bypassing us when dealing with suppliers and other stakeholders.

Suppliers: We don’t want to co-operate with other suppliers, because we are competing against them. We make everything we can to bypass the SIAM Operator and get our customer buy Services from us. We need to refresh our fruitful, direct co-operation with customer’s business department.

Doesn’t sound like a stellar, bullet-proof success story anymore, huh? It’s the same old story: if everything goes well, it’s like a walk in a park on sunny Sunday afternoon. But when things go bad, all the hell may break loose.

How to make sure things don’t start going on wrong direction?

I know I’m a bit boring person because I have a bad habit of always starting with the absolute basics. And exactly that I’m doing right now.

if everything goes well, it’s like a walk in a park on sunny Sunday afternoon. But when things go bad, all the hell may break loose.

Preparations

Have you ever heard of an athelete who won the Olympic Championship gold medal on Javelin with a zero preparation prior to the contest? Me neither.

Have you heard about the equestrian who came third in the US Nationals some ~ 15 years ago? She also never trained. Me neither.

Have you heard that a few weeks ago a random drunken woman won the poker game against a local well-known semi-pro poker player? They say it was a lucky shot and I believe that.

Have you heard of an Organization who decided to go to SIAM model with a zero preparation? Maybe they think they can shoot the lucky shot. Would you support the idea? Me neither.

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Preparation starts at day one. Customer’s executives must go through a comprehensive determination of their intent:

  • Are we ready to open up major elements of our core business to external Organization (the SIAM Operator, that is)?
  • What’s our own Organization’s mental condition, are we ready, able and willing to let go steering the IT Support Services and relying it to some other party to carry out?
  • Do we know what we are doing – and most importantly why we are doing it?

If there’s any hesitation, it’s better take a time-out and go through all the issues in detail before making any moves forward.

  • Do we know what we are doing – and most importantly why we are doing it?

If the answer is clear ”Yes” then the Customer can proceed to the next step and start planning implementation of SIAM. I’m on the opinion, that you should make a long-term contract with your SIAM Operator. I know it’s like taking a leap of faith, but I would suggest making at least a five (5)-year contract to provide enough time to enable build a true partnership. The SIAM Operator is in my opinion the one single most important supplier from Customer’s point of view.

Bear in mind to bring SIAM into use comprehensively. If you want to achieve the cost effectiveness, there’s no room for overlapping governance models let alone unclear duties and responsibilities. In other words: Implement SIAM totally or don’t do it at all.

 

Planning phase

Be sure to involve all the required parties into the planning phase from day one. That includes the people from your own business organization, your internal IT department, your suppliers and vendors, including obviously your chosen SIAM Operator.

  • Confirm the requirements from your business.
  • Review all your underpinning contracts as well as OLA’s.
    • Investigate the potential gap.
    • Make all the actions you can do to narrow the gap; re-check the business requirements, re-negotiate contracts if/when possible etc.
  • Design a comprehensive and complete governance model. Don’t underestimate the effect of good Governance!
  • Plan a solid communications plan along with the governance model.
  • Keep on mind potential resistance of change and act accordingly.
  • Give your BEST support to your chosen SIAM Operator. There must not be any ambiguity regarding the Governance model and command relationship.
    • It’s your SIAM Operator who will very soon be responsible for running the daily basis end-to-end IT operations.

Give your BEST support to your chosen SIAM Operator. There must not be any ambiguity regarding the Governance model and command relationship.

Implementation

There are many ways to implement SIAM, but I’ll share some ideas how I’d carry out the implementation phase:

  • Big Bang approach: Keep the transition phase as short as possible.
  • Intensive communication: follow the communication plan and remember to inform rather too much than too little especially at the starting phase.
  • Invest some extra effort into the starting phase in order to pursuit quick wins and ensure good customer experience from the very beginning.

Remaining issues

Putting a number of suppliers under the governance of another supplier can be .. well, not in the best interest of the suppliers. Think about it: different suppliers might be positioned into competitive status with each other and they might not be too willing to co-operate under the governance of a new supplier.

It’s also worth noting that while implementing SIAM model, it’s easy to lose the link between the customer’s business unit and suppliers. Why would the SIAM Operator make an effort to boost supplier’s business with the customer? What if the SIAM Operator itself has interests to crab some of the business to itself from different vendors?

On the other hand, it’s most certainly one of customer’s most remarkable interests: to make sure there are suppliers developing their stuff in co-operation with the business!

I would suggest establishing a development steering group with the customer’s business and the key suppliers. That might not solve all the problems, but it would at least help maintain the link between the customer’s business units and suppliers.

I would suggest establishing a development steering group with the customer’s business and the key suppliers.

Here are two pictures illustrating the change:

1 The old world: Customer’s IT Dept works as an interface between the business and suppliers.

Old_World

 

 

2 The gallant new powered-by-SIAM world: SIAM Operator orchestrating the ensemble.

IT Dept’s role has shrunk while the SIAM Operator has taken over.

SIAM

 

Predicting is difficult, especially when predicting the future

I was discussing about the whole SIAM theme with my peer mentor, who works for Canon. I predicted him that SIAM will become even more popular in the coming years, until we notice we have gone too far with splitting the Services into too many small pieces and start rolling back. That might happen around 2026. I’ll check back to this blogwriting in 10 years and see how good or bad I was in predicting the future!

Pictures are from Pixabay.

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