You are not delivering a product or a service anymore, you are delivering value

We all know this one: The internet connection is down or the SaaS-provided accounting software is down. It just happens to be near the end of the quarter or fiscal year. You, as the service desk manager, can point fingers at the provider, but your end users will still look at you for answers, right? You can future proof against pointing fingers, but to do so you better have a good strategic partnership set up to be able to deal with these kind of situations.

However, just because there is a partnership in place doesn’t mean you have to sacrifice your organization or it services to your end users because of existing service level agreements and operational level agreements.


In fact, in regard to SLAs and OLAs, there are so many war stories around the subject. For example, are we going to base their adherence on response time, uptime, resolution time or a combination of these factors?

Alignment between your internal organization and one supplier is still doable, but what if there are multiple supplier dependencies? Oh, the benign complexity. And what about stepping away from SLAs toward a service catalog. Not only is defining SLAs and services in the catalog hard enough to manage already, but how are you going to integrate your supplier offerings there, and, more importantly, keep the catalog up to date.

The definition of each looks great. They talk about multiple suppliers, and integrating services with the end goal of meeting business requirements. They really are a very good framework; however, there are some pitfalls. Mainly, it is yet another framework. It scares people away, and many don’t know where to start with it.

In many SIAM implementations, we are really creating a layer in between the inside and the outside world. This works fine, but creates extra bureaucracy in a number of ways, so the question arises: Are we just moving the problem instead of solving it?

New frameworks can shift the mindset from the technical connotation to the human part. With my HR background for any ITSM issue I always first look at the people aspect, but that is not obvious to everyone and forgotten at many times. However, it’s important to remember that people process technology and fit into a “relationship” with the ecosystem. In such an approach, you don’t need to see this approach as a new framework, but as a mind shift and a way to get you to thinking and be able to break it down into pieces.

The best thing is that you can choose where you start, but you must keep in mind that the process will depend on where you currently are in it and you must also keep in mind that it’s continuous movement. The following three pieces of guidance should help you get to value delivery. Let me explain all three:

Focus on the value for end users. You are not just delivering a product or a service anymore, you are delivering value. If your end users can focus mostly on what they are good at and what they are hired to do, that is true value. Forrester calls this “workforce enablement.”

A good place to start is to ask questions and don’t assume that you know what your end users expect. You have to be weary of this feedback, however. Like Henry Ford is credited with saying ( some say he didn’t say it): “If I had asked customers what they wanted, they would have said faster horses.” So always bring your own thoughts and innovation ideas to your offerings, as well. Don’t just blindly follow your end user’s expectations.

With a focus on value, service level agreements don’t really work anymore. Of course, they are valuable if we talk about uptime, for example, but there are plenty of examples where an SLA is met but the end user did not have a good experience and is unhappy in the end. (“The operation was a success but the patient died.”) Recommended for You

I am not advocating death to all SLAs. Perhaps this can just be a matter of looking very deeply at what SLAs you currently have, define if they really make sense and add value then make little changes in communication, for instance, to ensure a big impact.

Define and structure suppliers. Using a Kraljic portfolio purchasing model as an example – often used define your suppliers – there are several factors that impact your organization’s supply risk and profit impact. There are “non-critical” items, typically things such as stationary. “Leverage” items are more expensive and are provided by a lot of suppliers, such as hardware. “Bottleneck” items can be relatively expensive and have few suppliers, such as mail delivery. “Strategic” items, such as software, have few suppliers and are pretty expensive. These are things where you will not easily change suppliers. What is important about this is that there is a shift in what is being outsourced. In the past, these used to be more the non-critical items whereas now it is more and more strategic items.

Once defined, your picture shows you where it’s good to spend time in your supplier relationships. It’s pretty obvious that no one is going to invest a lot of time in suppliers, such as Staples and Office Depot, regarding non-critical items. They are too low cost and provide low value add.

Investing a lot of time in “leverage” or “bottleneck” item suppliers is too costly and doesn’t provide enough benefit. For “strategic” item suppliers, it does make sense to invest more time in those suppliers as it can really help with the added value. For strategic items a strategic partnership is very important.

Creating a partnership is not solely focusing on penalty clauses and contracts, but also on a joint motivation. Tight, waterproof agreements and clauses in the contract do not always work best and can actually make things worse. Asking for a fixed pricing agreement, for instance, usually means the supplier is going to put in very detailed and specific clauses about what is and is not included. This typically takes away freedom from both parties and so motivation is lost.

The next step can be more futuristic for some organizations than others. It is about tying it all together and breaking through silos — within IT, between departments and in the interactions with your suppliers. I am sometimes amazed how many silos there still are — your end users do not benefit from that. The real future of ecosystems is about shared service management throughout the entire chain beyond just IT ecosystem integration alone. A good example of this is employee on-boarding. All parts of the chain are involved in all of the steps. That is true value as a service for your customers.

Ultimately, you need to first focus on the end goal, which is happy customers. Secondly, work on your strategic supplier management, and thirdly, choose relationships over procedures and agreements externally with suppliers, but also internally.