Delivery model options
Although the readiness assessment determines the gap between the current and desired capabilities, an IT organization should not necessarily try to bridge that gap by itself. There are many different delivery strategies that can be used. Each one has its own set of advantages and disadvantages, but all require some level of adaptation and customization for the situation at hand. Table 3.2 lists the main categories of sourcing strategies with a short abstract for each. Delivery practices tend to fall into one of these categories or some variant of them.
Table 3.2 Main service delivery strategies
Table 3.2 highlights a key point: the set of delivery strategies varies widely and ranges from a relatively straightforward situation, solely managed within the boundaries of a company, all the way to a full KPO situation. This broad range of alternatives provides significant flexibility, but often with added complexity, and in some cases additional risk. The advantages and disadvantages of each type of delivery strategy are discussed in Table 3.3 below.
All of the above arrangements can be provided in both an off-shore or on-shore situation. In the on-shore case, both organizations are based within the same country/continent, whereas in the off-shore situation the organizations are in different countries/continents. Very complex sourcing arrangements exist within the IT industry and it is impossible to cover all combinations and their implications here. ITIL Service Management Practice Complementary Series will provide additional guidance on sourcing strategies.
Mergers and acquisitions can also complicate the issues. These situations occur when one company acquires or merges with another company for cash and/or equity swaps of the company’s stock. Again, this occurs generally in response to industry consolidations, market expansion, or in direct response to competitive pressures. If companies that have different service delivery strategies are acquired or merge, a period of review and consolidation is often required to determine the most appropriate sourcing strategy for the newly merged organization. However, mergers and acquisitions can often provide organizations with the opportunity to consolidate the best practice from each organization, thereby improving the overall service capability and achieving synergies across the organization. Opportunities will also exist to provide improved career development options to Service Management personnel and to consolidate supplier contract for services.