The secret to making a business work is ensuring performance and creative teams work as one.
While the ICT sector is developing at a rapid pace, the biggest changes are the ones that have been around for a long time. If you could define how tech has changed businesses, it’s more a case of ‘the more things change, the more they stay the same’. Elements that are now seen as exciting and changing are really things that have been around for a long time, much longer than you might realise.
One of the biggest changes in this space is how IT jobs and roles are now outsourced. A few years ago, a business might only outsource two or three parts of its operations but now the average business outsources ten to 15 areas to managed service providers in areas like technical support, telecommunications, security, analytics and printing to name a few. It’s something the director of IT business consulting at Grant Thornton, Ian Cahill, has seen emerge during his twenty-four years of experience in the sector, and while businesses rely more on outsourcing than ever before, it’s how it’s no longer just the one company offering services that is the biggest change.
“The single biggest change is the fragmented nature of outsourcing,” said Cahill. “And the reason that has happened is frankly [putting] too many eggs in the one basket brings risk to the client.
“If I give my IT to one firm then it’s in a strong position with me… [but] maybe they’re not specialised in some of the emerging technologies that are coming out or maybe they become complacent… so the trend has been towards deliberate fragmenting and being more choosey about what bits you outsource to what IT service provider.”
This fragmentation isn’t by any means a bad thing. While it does bring up its own challenges – teaming up with a managed service provider means you have to treat it as a partnership rather than a contract you forget about until it’s renewed – Cahill says the trend exists for a good reason.
“I guess customers haven’t been thrilled with the way that single-party outsourcing has panned out so they’ve gone to individual companies to satisfy individual needs and that creates competition,” he said. “It makes everyone sharpen their pencil, everyone ups their game… [and if I] want to get more of the pie, then I have to show I’m able to do it. Economically it’s a good thing, it drives competition which ups quality and hopefully reduces price.”
When you are outsourcing to a large number of third-parties, it can bring complexity and it feels like an inevitability that either something will go wrong or the business will want new things not contemplated in the original contracts. When that happens or a major shift occurs and you’re slow to react, the managed service providers tend to be the ones that get the blame.
When that happens, the incentive to introduce new processes and ideas to a business that will blame you for any mishaps, regardless of what happened, decreases and in the worst case scenario, it may lead to the provider introducing a rigid, basic service to avoid those problems. It’s something that will only hurt the business availing of the service in the long-run.
“To be fair to the service providers, sometimes this can come across as they’re trying to minimize their risk whilst maximizing their profits when, for the most part, this is not the case. Businesses certainly have a responsibility to manage the performance of their service providers but they should also adopt a partnership approach.” explained Cahill.
“Blame culture is the enemy of innovation in my experience. You have to be safe and steady every time and nobody can blame you for anything but then the client is going to say after two or three years of that, ‘what have you done for me lately?’.
The whole world is changing and there’s cloud, there’s digital business, there’s robotics and automation, AI and machine learning, where are your ideas for using these technologies to help me?” It’s a lose-lose scenario that can be avoided by the adoption of modern techniques such as service integration and management.
Summer of SIAM
“Given the rising numbers of service providers, another major inhibitor of innovation and improvement is poor service integration.” The main thing that a business should be doing is looking at how it manages and integrates these services through SIAM (Service Integration And Management), a discipline that has only recently become internationally recognised as a qualification by BCS, the Chartered Institute of IT – it was launched back in March.
It’s a qualification Cahill has acquired too but while it’s only been officially recognised as one now, it’s been around for just as long as outsourcing. It’s important for businesses to get a grasp on its principles.
“If we accept that [outsourcing and fragmentation is] happening and the statistics are there to support that, then the challenge for businesses is how do they harness all of these suppliers and get the most out of them because these guys are probably better working together than they are on their own,” he said.
“If it’s an unconnected patchwork of suppliers and you have no real service integration management plan or strategy or person, all you’re going to do is chase around and make sure each service provider is performing to their contractual minimum. That’s all they’re going to do and then there will be a blame game between the individual suppliers if something goes wrong.
“So the challenge becomes how do I manage that and get the most out of this stable of talent at my disposal? How I do that is through service integration and management… people have done this kind of job in the past but it has now been codified into a discipline.
“So the onus on the client, I would put forward, is to develop this service integration and management approach. If you can do that, if you can adopt that as a discipline and implement its methodology… then you can integrate those [outsource] suppliers… so they can perform better as part of your IT ecosystem.”
It’s important to mention that part of the ecosystem could also involve your internal IT team. While IT outsourcing continues to grow, there are certain roles that an internal team is best at performing.
“The key role is that of the service integrator, a person or team of people who can pull that all together for you and make sure all parties perform,” he said. “It’s important that the focus is on quality performance for the client and not individual supplier interests – that’s where your service integrator is critical.”
Demystifying the tech process
Tying in all of these different services is one thing but ensuring that everyone is on the same page is another thing entirely. You could argue that in business, there are three main languages: English, business speak and IT speak.
Since there’s different terminology being used by managers, executives, developers, engineers etc, ensuring that complex terms or jargon can be explained clearly and concisely is no easy task.
It’s something that Cahill feels Grant Thornton is particularly strong at as it avoids the typical IT speak that those within the industry might not realise they’re doing.
“Grounded and pragmatic is our approach,” he said. “Our aim is to demystify the technological tsunami and translate your current and future business needs into practical, actionable plans.
“One of the great things about Grant Thornton is it’s a business company… [and what it does] is bring this grounded, practical, business focus. Our independence is fiercely important to us and that’s why we’re trusted advisers to the client. It’s important for us not to always say your solution is to buy our software product – we will call it as we see it and advise you on the right solution for you.”
Demystifying the tech process so that business leaders and non-IT people can understand is a significant undertaking. Education and processes are incredibly important as when a situation like WannaCry or Petya occurs, those who aren’t up to date can end up panicking.
“The danger where I see a good example of what you said is that when something like that happens, there’s a rush out to buy a product, we buy something to protect ourselves,” explained Cahill. “Far more important is the business processes that you undertake, you can have all the tools you like in the world but if somebody puts their password on a post-it or leaves it behind in a pub, product isn’t going to save you.”
Different styles, same approach
As mentioned before, the main requirement is to ensure that all parties are speaking the same language as there are times where it can feel like there are three main languages spoken, English, Business and IT.
Much focus can be placed on IT speak being translated so that businesspeople can understand it as technology no longer just focuses on one or two sectors, it encompasses every single one. What might be seen as traditional business sectors now have sprawling IT backends powering it and understanding the needs of business leaders and breaking down jargon so they can understand is vitally important.
Another important point that Cahill brings up is understanding the needs of your IT team and how they work, something that can be easily forgotten about. It’s easy to lump each person into the same team and expect them to work cohesively, but it’s where another emerging discipline comes into play: bimodal IT.
To simplify it, bimodal IT splits IT people up into two styles of work. You have Mode 1 people who are concerned about the predictability and performance, and value structure above everything else. Their focus is on what is already known and works with that.
Mode 2 people are more concerned about speed and will look at more creative ways of achieving these aims. This can mean new projects and experiments which they test out and see what works and what doesn’t. Their focus is on what isn’t known and looks to explore that.
The challenge is ensuring that both Mode 1 and Mode 2 styles have roles and aims that complement their styles instead of lumping them into the same general team, something that the bimodal approach hopes to solve.
“The bimodal approach is to recognise that these are two different skills under the whole software development umbrella,” said Cahill. “Stop trying to make the Mode 2 guys just like the Mode 1 guys, stop trying to make the Mode 1 guys turn their hat to be super creative when they’re just not built that way and they don’t think that’s important.
They think it’s more important that there’s stability, and performance”. “[To be] simplistic about it, you pretty much split up your two teams to focus on different things, to be rewarded for different things and to play to their strengths. But then the glue in the middle is the most important thing. Your CIO or head of that area needs to value both the stability and the creativity.”
That person who manages the IT team is the vital lynchpin that bimodal needs to work. Both styles have different approaches and it means both can work on their own projects but then must help each other out. Ensuring that both sides work in tandem and there are no confusion or problems is key as neither style can succeed on their own.
If you master that, then you leave a lot of room for future growth and creativity within your business. “If there’s something creative, how do I scale it? How do I use the creative bit? If it turns out to be a success, how do I make it reachable to the rest of the world? How do I expand it?” says Cahill. “How you do that is you use the bimodal processes instilled by the CIO to say to the Mode 1 guys, we are working on this innovation, how would we operationalise it, make it safe, make it secure, make it perform very well because these modes should not operate in isolation.
“If you don’t have that glue in the middle, what happens is the creatives go off and do the creative stuff, metaphorically fire something over the wall and say ‘over to you Mode 1, I’ve done the thinking, here’s my product, I’m going to the next thing now and you have to make that work’.
And the guys in Mode 1 are thinking, god this is never going to get more than 100 people logged in before it crashes. “That’s where the central point, the arbiter, the person who understands the scalability comes in.”
First appeared in The Sunday Business Post July 2, 2017