Gartner Sourcing & Strategic Vendor Relationships Summit

35 November 2015 | Grapevine, TX

Multisourcing in the Modern Era:

Extending Past Models to Support
Future Growth
Ed Anderson

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1 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Cloud Service Adoption Revitalizes the Need for MSI

Multisourcing Service Cloud Services

Integration (MSI) Brokerage (CSB)
The disciplined provisioning An IT role and business model,
and blending of business in which an intermediary adds
and IT services from the value to one or more (public or
optimal set of internal and private) cloud services on
external providers in the behalf of one or more
pursuit of business goals. consumers of that service.

MSI and CSB will coalesce as part of hybrid IT.

2 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues

1. How can you leverage past multisourcing models to take advantage

of new innovations?
2. How can multisourcing competencies help organizations establish
an IT service brokerage?
3. How does hybrid IT support the move to digital business?

3 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Key Issues

1. How can you leverage past multisourcing models to take advantage

of new innovations?
2. How can multisourcing competencies help organizations establish
an IT service brokerage?
3. How does hybrid IT support the move to digital business?

4 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Digital Business Imperatives Necessitate a New Style
of Multisourcing
Cloud Computing Internet of Things

Real-Time Systems 3D Printing

Mobility

Smart Machines
Customer Intimacy

Real-Time Services Big Data and Analytics

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Evolving Delivery Options Necessitate Comprehensive
Integration Capabilities
External Services

MSI

MSI: Multisourcing Integration

Internal Services
CSB: Cloud Services Brokerage
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Evolving Delivery Options Necessitate Comprehensive
Integration Capabilities
External Services

Cloud Services Private Services

MSI &
MSI
CSB
Public Services Non-Cloud Services

MSI: Multisourcing Integration

Internal Services
CSB: Cloud Services Brokerage
7 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Evolving Delivery Options Necessitate Comprehensive
Integration Capabilities
External Services

Cloud Services Private Services

MSI &
MSI IT
Hybrid
CSB
Public Services Non-Cloud Services

MSI: Multisourcing Integration

Internal Services
CSB: Cloud Services Brokerage
8 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Polling Question No. 1

How would you describe your use of cloud services including

IaaS, PaaS, SaaS and BPaaS today?
1. We are actively using cloud services as a core part of our
IT environment.
2. We are selectively using cloud services for specific situations.
3. We are experimenting with cloud services.
4. We are not using cloud services today, but plan to start using cloud
services in the future.
5. We are not using cloud services, and don't have plans to.

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Strategic Planning Assumption

Through 2016, a hybrid IT model combining internal/external,

public/private services will dominate. Development of a hybrid IT
strategy will be a major factor underpinning successful cloud
computing strategies.

Source: Gartner, "Exploiting MSI and CSB Roles to Effectively Manage Complex Hybrid IT Services Environments" (G00259842)
10 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues

1. How can you leverage past multisourcing models to take advantage

of new innovations?
2. How can multisourcing competencies help organizations establish
an IT service brokerage?
3. How does hybrid IT support the move to digital business?

11 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Service Options Are Both an Opportunity
and a Challenge!
Public cloud
Do YOU have the requisite
skills and technology
to support hybrid IT?
...
You currently manage this.
Who will manage this?

Do you want to?

Can you manage this?

Traditional
Private cloud
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Multisourcing Service Integration (MSI)

Coordinate and integrate service delivery in an environment that uses multiple internal
and external service providers to deliver IT and business process services.

Internal
provider End-to-end services described in
operating-level agreements (OLAs),
signed by multiple parties.

MSI

External External
provider Provider

External provider

13
You can do it yourself or outsource the MSI role.
2015 Gartner, Inc. and/or its affiliates. All rights reserved.
MSI Role What Are the Key Elements?

Multisourcing Service Providers

Service Integration (Internal/External)
Business Functions End-to-End Process
Performance Services
Finance Monitoring
SaaS Application
Risk Management Interprovider
Services
Management DaaS
Sourcing & Vendor
Management Relationship
Workplace PaaS
Coordination Services
Business Groups
Service Delivery Data Center
Marketing Coordination Services
IaaS
Sales Service Desk UCaaS
Network
"Business Line" Service Delivery Services

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Polling Question No. 2

How would you describe the state of multiservices integration

(MSI) in your organization?
1. We have an established MSI role and function in our organization.
2. We do MSI today, but don't have a specific MSI role or function in
our organization.
3. We understand the need for MSI, but we don't do it today.
4. We don't see the need for MSI in our organization.
5. I don't know enough about MSI to answer the question.

15 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Multisourcing Management Plays a Key Role in the
Adaptive Sourcing Model

the Innovation Layer to the Run Layer

Business Outcomes Flow From
Business Process Management
Multisourcing Management
Enterprise Architecture
Innovate

Risk Management
Governance

Differentiate

Run

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Cloud Services Through Intermediation

Aggregation
"Distributor"

Customization
"VAR" Cloud Service Brokerage

Integration
"System Integrator"

Governance
Private Hybrid Public
"MSP"
Other CSB Roles (Starts Overlapping With MSI)
Sourcing | Policy | Security | Compliance | Management | Auditing | Reporting | Billing

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Brokerage Is Like Connecting and Managing Pipes

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Cloud Service Brokerage Adds New Roles
to the MSI Function (Examples)

Aggregate two or more services into a larger,

Aggregation more capable service.

The addition of new functionality on top of a

Customization standard cloud offering.

Integrate the capabilities of two or more cloud

Integration services to produce a "super service."

Manage and enforce service levels, security,

Governance compliance and service usage.

Note: The CSB role is evolving to include orchestration and CMP functions: governance
and policy enforcement, billing, compliance, and identity and access management.

19 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Comparing and Contrasting the MSI and CSB Roles

MSI role IT service attributes CSB role

Confined ecosystem Ecosystem Expansive cloud ecosystem

Fewer, static providers Dynamics More, dynamic providers

Fewer, larger service deals Granularity More, smaller service deals

Fewer MSAs more SLAs Outcome Simpler MSAs and SLAs

Centralized-transactional Service desk More federated, complex

Operational/tactical focus Governance Automated/policy-driven

More control of IT assets Control Less control of IT assets

Source: Gartner "Essential Provider Selection Criteria to Use When Outsourcing the CSB Role" (G00230681)
20 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues

1. How can you leverage past multisourcing models to take advantage

of new innovations?
2. How can multisourcing competencies help organizations establish
an IT service brokerage?
3. How does hybrid IT support the move to digital business?

21 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

 Hybrid IT

A trusted broker and provider for all IT

services including services provided by
the IT organization and external providers
using both cloud computing styles and
traditional styles of computing.

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Initially: MSI and CSB Will Be Seen as Complementary
Within Hybrid IT

Hybrid IT Integrated and Managed | Internal and External Services

Multisourcing Services Integration Cloud Service Brokerage
Public | Private | Hybrid Cloud

Traditional Traditional
IT IT
(Outsourced) (Internal) Private Cloud Hybrid Cloud Public Cloud

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Polling Question No. 3

What are your plans for implementing a hybrid IT environment?

1. We have implemented and are using a hybrid IT environment today.
2. We are planning on implementing a hybrid IT environment in the
near future (within two years).
3. We expect to eventually implement a hybrid IT environment (more
than two years out).
4. We expect to keep our cloud environment separate from our
traditional (noncloud) environment.
5. We don't plan to adopt cloud services any time in the near future.

24 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

In the Future: MSI and CSB Will Coalesce as Part
of Hybrid IT and ITaaS

IT as a Service
Hybrid IT Integrated and Managed | Internal and External Services
Multisourcing Services Integration
Cloud Service Brokerage

Traditional Traditional
IT IT
(Outsourced) (Internal) Private Cloud Hybrid Cloud Public Cloud

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IT Service Brokerage: Applying MSI & CSB Best Practices

Business Process Management

Business Unit Business Unit External Business
Processes Processes Partners Processes

(Driven by KPIs and Business Outcomes)

IT as a Service (ITaaS)
E2E Performance Management Dynamic Service Brokerage
Interprovider Management Service Delivery Coordination Service Integration
Service Brokerage
Relationship Coordination Service Desk
Service Management

Traditional Traditional
IT IT
(Outsourced) (Internal) Private Cloud Hybrid Cloud Public Cloud

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Strategic Planning Assumption

By 2018, IT organizations that have assumed the role

of trusted services broker will have aligned IT governance, sourcing
strategy and BPM competencies and will deliver IT as a service
(ITaaS) to business process owners who are
the change agents for business process reinvention.

Source: "2014 Strategic Road Map for Business Process Innovation in Hybrid IT" (G00248340)
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Recommendations for Sourcing Managers

Revisit your multisourcing capabilities to ensure your practices are still state
of the art. Update your skills as necessary.
Embed the CSB role in your service ecosystem to optimize dynamic service
delivery especially for cloud services.
Leverage the MSI role to integrate the CSB functions as part
of the "IT as a service" operational role.
Seek service integration offerings matching your complete management
needs. Ensure your chosen offerings meet your MSI and CSB requirements.
Evaluate cloud brokers on their ability to target specific use-case scenarios
for the aggregation or integration of services specific to their industries.

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Action Plan for Sourcing Managers

Monday Morning:
Assess the current state of cloud service adoption in your organization.
Build on cloud sourcing practices and begin exploring the possibility of establishing cloud brokerage
services (internally or externally).
Next 90 Days:
Assess how your IT services ecosystem is likely to evolve.
Raise awareness of ITaaS broker option and the roles CSB and MSI will play, and begin to establish
the new CSB and MSI roles.
Assess the capabilities of existing and potential external providers for CSB and MSI capabilities.
Next 12 Months:
Make a start to:
Establish a modern sourcing practice to include cloud and noncloud and internal and external services.
Facilitate organizational adjustments to establish ITaaS roles.
Manage and monitor your multivendor IT ecosystem using suitable dashboards and cloud
management platforms.

29 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Recommended Gartner Research

Exploiting MSI and CSB Roles to Effectively Manage Complex Hybrid IT

Services Environments
Jim Longwood (G00259842)
How to Effectively Retrofit the MSI/SIAM Role Into Existing Multisourced
Environments
Jim Longwood (G00249248)
Become a Cloud Enabler by Following Our Eight Steps to Hybrid IT
Thomas J. Bittman (G00259266)
2014 Strategic Road Map for Business Process Innovation in Hybrid IT
Michele Cantara and Daryl C. Plummer (G00248340)
Business Outcomes, Differentiation and Performance Drive Bimodal
Adaptive Sourcing Decisions
Claudio Da Rold (G00272645)
For more information, stop by Gartner Research Zone.
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