The orchestration of self-help IT tools, intelligent automation and digital labor can deliver differentiated IT service management that enables dramatic productivity improvements for today's IT organizations. This includes an IT organization that is more in harmony with business needs. However, buyer beware, as there is a potential sting in the tail of this effort that could limit future consideration of other providers.
ITSM automation cuts costs, boosts productivity
Productivity improvements often translate into generating more for less, i.e., increased performance expectations at a much lower price point. Providers deliver this by eliminating 30% to 40% of help desk tickets and the corresponding need for service desk or operational support staff. By intelligently automating repetitive and programmatic tasks, IT resources can focus on putting creativity, passion and imagination into projects, providing greater value to the dynamic business environment while still achieving incremental savings of another 15% or more.
The composite of intelligent automation and RPA technologies creates a digital workforce that uses the predictability of infrastructure and application failures, proactively applying break fixes to prevent service degradations and improving systems performance. This digital workforce gains intelligence through ongoing knowledge acquisition, synthesis and machine learning in an environment that is constantly changing. In combination, all of these ITSM automation improvements can reduce run or support costs in excess of 60% over a multiyear term.
Losing intelligent automation gains when changing providers
The potential risk, however, comes into play when your IT organization decides to change providers at the end of the term of service. Even if a service provider has met or exceeded expectations during the term of an agreement, it is still common practice to rebid the work in advance of the expiration of the term. The goal may be to realign services, SLAs, pricing and other terms with current market expectations or to take advantage of advances in tools, ITSM automation, machine learning, cognitive analysis and artificial intelligence. Other drivers could be to choose a partner better suited to taking the relationship to the next level or to consolidate to a smaller number of strategic suppliers and, in the process, harness the synergies.
Regardless, changing providers may mean the ITSM buyer loses all the hard-won gains at the end of the provider's term of service, which would mean cost increases as work is no longer eliminated, ITSM automation is limited and reliability or responsiveness of ITSM services is lost.
Five tips to protect automated ITSM gains
To address the risk of lost gains and to sustain services, IT organizations using automated ITSM services need to address the following considerations and mitigating actions:
- How much efficiency has been achieved?
Ensure that baseline cost and service levels are fully documented at the time of contract execution, and that the true drivers of efficiency gains through the term of the agreement are understood. This includes jointly applying effective value realization tracking so that both your organization and the provider have visibility into and are aligned on how gains are generated.
- How much efficiency is transferrable?
Build clarity into the agreement regarding the ownership of intellectual property rights and derived products. This includes the basis for the digital workforce and the continued right to use proprietary technologies and tools as part of an end of term sourcing to a competing provider or as a repatriation of services to the retained IT organization.
- How can your organization ensure that a transfer occurs and is effective?
Traditional disengagement services within market-aligned agreements help ensure the orderly transfer of knowledge and critical resources, assets and facilities on the termination of services. In the era of the digital workforce, machine learning, cognitive analysis and artificial intelligence, the definitions of what is to be transferred and measures of success must be broadened with explicit call out of the building blocks that deliver the efficiency, as well as the core rules, knowledge and analytical results from the full term of the agreement. This ensures that a new provider can apply the same level of learning, knowledge and capability into its differentiating tools.
- Who assumes the costs and risks of transfer?
It is essential to structure the financial responsibility matrix such that the costs, risks and mitigating actions for the transfer are exclusive between the incumbent and the new provider. In the event that joint investments have been made with the incumbent, then governance processes should be applied to disengagement to ensure a fair and equitable distribution of the results from such an investment and a mutually agreeable disposition regarding any costs of disentanglement.
- How can your organization benchmark accurately during the term of the engagement in order to establish a future "should cost" projection at the time of rebid?
Ensure benchmarking provisions offer the IT organization visibility into the provider's "secret sauce." Also ensure that the benchmarker includes the normalization of data to address factors that might otherwise mask the true levels of efficiency, effectiveness and drivers of cost and performance, including:
- the impacts of organic and inorganic growth and shrinkage on resource units and volumetric data;
- commitments to continuous productivity improvements and anticipated transformations leading to different state models through the term of the agreement; and
- contributions attributable to other buyer or ecosystem initiatives, technology updates and tech refreshes.
There is a real risk of slippage in capability and unexpected jump in cost upon the termination of an intelligently automated ITSM service. However, with the right upfront contract terms in place, IT organizations can mitigate this risk by maintaining a strong supplier management capability and effective governance or documentation of eliminated work and by having visibility into how ITSM automation is being delivered, and the level and nature of the contribution being made through bots, machine learning and AI.