The state was midway through a significant change initiative and needed to recover within a restricted budget. The benefits of the multi-sourcing service integration model addressed the state's critical objectives in the short and long-term: operational visibility, contractual flexibility, and efficient pricing. The alternatives--a single provider or multiple providers without Integration-as-a-Service--did not meet these critical objectives.
When will you know the new model is working in Texas? What will be the key indicators of success there?
We get asked this a lot. Ultimately, like any sourcing initiative, the key indicator will be that the state agencies are receiving the services they have contracted for within the context of a client's objectives. All indications are that the model is working and benefits are evident in the early stages of a recently transitioned service environment.
Are there any other high profile examples of the third-party integration model for outsourcing at work?
There are a number of organizations, such as General Motors [GM], that have successfully implemented elements of the multi-sourcing integration structure over many years. There have been recent announcements similar structures within the public sector in the U.K. and numerous examples in commercial environments, such as at Rolls-Royce. Different models and methods of implementation are being developed and tested by IT service providers.
But GM, which managed much of its multi-sourced IT itself, recently announced plans to bring much of that work back in-house. Is that a rejection of multi-sourcing and service integration?
My understanding is that GM is moving from a predominantly outsourced to a predominantly insourced environment. Whether an organization is outsourced or insourced, service integration is a critical function.
You say that the adoption of ITIL and process improvement programs is accelerating the trend toward third-party management of multi-sourced environments. But some industry watchers have argued that these process frameworks fail to take hold when implemented by outsourcing providers. How do you address that?
It is very important that the goals and the plan of adoption of the service integration model are aligned both with the maturity of the service component provider(s) and the operational dynamics of the client environment. Most implementation models focus on staged introduction and adoption, with pilot programs to confirm the value at each stage.