Your Mission, Should You Choose to Accept It

The following analysis is a revised version of an article that originally ran in the April 2002 edition of SummitVision.

Our March 2002 SummitVision View From the Summit article, "Hosting Is Dead! Long Live Multisourcing!," showed why "multisourcing" is the future of hosting in the enterprise.

Multisourcing is a combination of professional services, mission-critical support, remote management and hosting services that are offered to customers in any combination they wish — from a relatively standardized hosted offering to a highly customized on-site solution. It is essentially a flexible form of "outtasking," where customers maintain control of their overall IT strategy and key applications, but offload lower value-add, ministerial tasks to suppliers with particular expertise and cost economies.

In whichever venue — and in whichever way — these services are initially offered, they're designed from the ground up for hosting. They allow customers to migrate seamlessly to a hosted infrastructure at any pace they choose: with a single daring leap, after a succession of baby steps (such as where most initial services are delivered at the customer's own site and managed remotely) or not at all. Ideally, the multisourcer — alone or in conjunction with closely aligned partners — will also offer a range of complementary services.

These services may begin with on-site and remote infrastructure-management and managed hosting, then progress through a succession of higher value-added offerings, such as applications hosting, transitional outsourcing and even business-process outsourcing.

Multisourcing Means Multiple Backgrounds
A number of providers from all types of backgrounds — management service providers (MSPs), infrastructure hosts, ASPs, systems integrators (SIs) and outsourcers — are already moving toward multisourcing by making their offerings more flexible, or by adding new capabilities.

Most managed hosting providers and ASPs, for example, now offer remote-management options; and some even certify customers' existing system configurations, rather than insisting on new systems, for the delivery of services. And, if these vendors don't already have all the required capabilities, they can develop them themselves (as is AT&T, for example), license them (Sprint), acquire them or partner for them.

These infrastructure and ASP strategies do indeed allow the providers to deliver relatively flexible managed-hosting and remote-management capabilities. They are a far cry, however, from the type of comprehensive multisourcing value chains that integrate business consulting, systems integration, applications development, on-site and remote systems and applications management, data-center operations, and ongoing training and support skills.

A few companies — specifically global mega-outsourcers IBM Global Services (IGS) and EDS — are actively putting together the range of capabilities required to deliver comprehensive multisourcing services. Although a few global SIs are moving in this direction, few really have the type of data-center-operations capabilities or replicable-management frameworks required to deliver efficient managed solutions. Most acknowledge that such capabilities are not among their core competencies or consistent with their business models. They would prefer to partner to deliver those solutions, rather than develop them themselves.

This is leading to a wide range of bilateral relationships, in which SIs play critical demand-creation, application-development, customization and general-contracting roles. Given the strength of these SIs' capabilities and client relationships, hosting and MSPs are falling over each other to partner with integrators.

This gives SIs a choice of partners. They are capitalizing by forming relationships with systems vendors, application vendors, capacity service providers (CSPs), ASPs, MSPs and many others to deliver more comprehensive offerings. Although most of these relationships are relatively ad hoc "clean handshake" deals, some — such as Accenture's work with Hewlett-Packard (HP), EDS's alliance with Sun Microsystems, and Cap Gemini Ernst & Young's relationships with Genuity and Corio — really seem to have some teeth. These agreements often have defined customer-engagement models; explicit integration points; and, in some instances, even integrated methodologies.

Good Start Up to a Point
These relationships are nice starts. Yet even the most defined and secure of today's relationships are relative point solutions — one company partnering with another to deliver a specific type of solution to a group of customers. They may be suitable for relatively straightforward, local engagements. Unfortunately, many of today's environments — not to mention tomorrow's Web-services-based ones — are more complex.

Some engagements, for example, require multilateral and continually evolving combinations of providers. They may, for instance, begin with custom development and on-site implementation and management; evolve to remote management; and then develop to a hosted solution. Moreover, large enterprises are increasingly looking for seamless, integrated global rollouts across multiple business units. These corporate clients often have pre-established relations with their own partners, and each business unit within those clients may well have different partners.

Ad hoc, or even closely integrated, bilateral relationships among a relative handful of partners are not sufficient to provide the type of fast, flexible, seamless solutions — or the single-source accountability — that will be required. Even if they are, they will not yield the level of repeatability necessary for delivering cost-efficient implementations with guaranteed high-level service-level agreements (SLAs), or the type of substitutability required to allow one partner to be replaced or supplemented, easily and seamlessly, by another. These flexible, multifaceted, multinational value chains will require predefined integration points and methodologies that are standardized across multiple providers at every level of the value chain.

This will allow an account leader or general contractor — prior to actually performing any work for a customer — to define the set of skills required for a particular engagement and choose among any number of "interchangeable" specialist partners. These partners then can be brought together to provide an ideal solution that is tailored for the needs of a specific application and/or vertical industry, and that is uniform across geographies.

Although the various providers may have never heard of each other before the engagement, their offerings and their work practices will have to mesh seamlessly to create uniform, assured, efficient and repeatable solutions — without the need for costly on-the-job training.

How can such a flexible, multifaceted value chain be put together? More important, how can it be run in a way that each participant will have both an opportunity to make money and an incentive to make the value chain work — rather than trying to extend its own role by cannibalizing partner offerings? And, how will the value chain maintain the flexibility required to adapt to rapidly changing conditions, while simultaneously having the required structure and stability to ensure standardized and cost-efficient interactions between each partner — rather than forcing partners to reinvent the wheel for each engagement?

"Mission Impossible" — An Early Example of Multisourcing
Think back to the classic TV series, "Mission Impossible," where specialized agents with distinct skills were called together — under one team leader — to battle the world's evildoers. In the realm of project management for a multisourcing engagement, a team leader could select among any combination of domain experts, with the assurance that each:

• Has achieved a predefined set of skills (such as through a rigid certification program).

• Has or can quickly develop components that can seamlessly integrate with those of other partners (as though developing to standard APIs).

• Works in accordance with common processes that will allow them to complement other partners' efforts (as through an SI's methodologies), and not overlap them.

Most important, what are best practices in each of the elements and how can they be combined into a single killer program that is likely to lead the industry? We at Summit Strategies are spending much of our time and devoting much of our work to these important —and, we hope, not impossible —questions. You'll be hearing more from us on these and other related issues in the coming months.

Tools:

Add aspnews.com to your favorites Add aspnews.com to your browser search box IE 7 | Firefox 2.0 | Firefox 1.5.x

Back to Analyst Columns