Written by John A G Smith – Wed 08 Jun 2016
The outsourcing of IT and other services is now common practise. Problems can arise when it is seen as a means to pass on responsibility for service management or IT service management.
Image -'Service' by Sascha Kohlmann
As with many technical subjects, a little storytelling makes concepts easier to understand, so we asked our expert John A.G. Smith takes a lighter look at the subject of ITIL Contracts, Services and Agreements.
I was a bit like a kid at Christmas but who can blame me? It was Stylish, had gigabytes, gigahertz and so many megapixels it made my head swim. As instructed, I charged the battery until full so all I had to do was turn it on.
Nothing. Zero. Zilch.
Again. Same result.
Having tried everything (turning it off is no good when it doesn’t turn on!) I called the supplier and was told to ‘bring it back’, they swapped it and I got one that worked. Result!
And that’s the thing about about something tangible. When you buy it you have expectations of what it should do or how it should do it. There may be a specification to compare it against and, if it doesn’t measure up, you can have it replaced or repaired or refunded. Even the most non-technical person can tell when their mobile phone doesn’t work!
But what about a service?
Imagine this. Two diners share a meal in a swanky restaurant. The food is great and well presented. But the bill arrives and they’ve charged you for a bottle of wine you did not have. No problem … as soon as it is pointed out the maitre d’ whisks the bill away and returns with the correct version.
Now ask the two diners for their opinion of the experience (the service): scores out of ten. One will give it ‘9’ and the other – probably the one who nearly got stripped for a bottle of Chateau de Chassilier – marks it down at ‘2’. Why the difference? Because ‘service’ is subjective.
And this gives us a problem when it comes to IT services because if it is subjective, how can you measure it? And, to quote the old management adage,
“If you can’t measure it, you can’t manage it!”
Not many years ago this was not really an issue because IT departments were nearly all ‘in-house’ so system failures and upgrades were assigned to ‘Fred in Computing’. Fred would appear, listen, suck air though his teeth and say, “Three days.” Then, three days later (or more) – the requirement would be supplied.
Outsourcing came along. So now there is no ‘Fred in Computing.’ There may not even be ‘Computing’. And new requirements become the province of contracts and agreements and invoices and payments. Whereas Fred would ‘get around to it’, the outsourcers will be expected to give an accurate timescale and an exact cost. And the business is expected to carefully and accurately specify the requirements … and pay the bill. Even with in-house developments we have all seen the: “It’s not what we asked for,” … “Oh yes it is,” ‘discussions’ (Okay, I was being polite there.) And when we end up with contracts using terms such as ‘best endeavours’ the only people who ever come out of it happy are the lawyers.
Well, yes there is but it’s not easy and it takes work … by all parties.
The first part of the process is to prepare the organisation for outsourcing. Many organisations seem to believe that outsourcing is a bit like getting the windows cleaned: call in an expert, point them at the windows, pay them at the end. This is very naive.
Organisations that relinquish their IT expertise to a third party supplier invariably regret it. In my experience a core of IT expertise should always be retained in-house to oversee the work of a third party. This internal expertise may be regarded by the Service Users as the IT Service Provider and their role is to make the provision of those services invisible. Services may then be supplied by either Internal or External Suppliers but, to the business they must appear as a seamless whole.
Furthermore, this internal IT Service Provider presents the face of the business to suppliers, ensuring levels of service are consistent.
In the drive for consistency there needs to be two levels of ‘agreement’.
Service Level Agreements - business language documents that detail what service the Service Provider (NB: NOT the supplier) will give to the business.
Service Contracts - the legal, binding agreements between the Service Provider (NB: NOT the service users) and the Service Suppliers.
A third type of document: Operational Level Agreements may be required as a technical description of services supplied by Internal Service Suppliers.
The creation of these agreements and contracts is no quick or easy task. Simply listing and documenting services currently supplied by an in-house Service Supplier can take months. For departments that have never been charged, even nominally, for IT services it can be a mammoth task and that is before trying to objectively measure the level of service … remember our diners?
The creation of a Service Catalogue requires expertise down through the ranks of the organisation. The task would overwhelm a group of a few senior IT staff with the knowledge of IT Services. But even with the basic level of understanding obtained from the ITIL Foundation course, Service Users will be able to play a full and active role in identifying and documenting all IT services.
Then there is the task of costing the services. What is the value of the service we are getting from ‘Fred in Computing?’ After the above exercise, an organisation may find the in-house service is so good that outsourcing is not as attractive as it may at first have appeared.
Then after that they need to create the Service Level Agreements … Ah!