Efforts and Limitations in Creating Key Performance Indicators

If senior management teams were omnipotent then all decisions would be perfect, market share would increase, sales would spike, profitability would skyrocket and employee morale would be unparalleled. Unfortunately, the reality is that even the most sophisticated company rarely knows its financial position until the end of the month. Even then the metrics that determine competitiveness are obscured by financial discussions regarding budget, the annual business plan and a plethora of system issues. The true competitive driving force is obscured by financial double speak. Senior leaders may smile and accept what “is” but nothing takes the places of what is “needed.”

After a few monthly reviews and more than a few requests, I decided to publish my first set of key business indicators as “needed” by the senior management team of a Fortune 100 beverage company. The first round did not meet the team’s approval and I was sent back to the drawing board more times than I care to remember.

My first attempt was focused on retroactive indicators, using financial data driven by the monthly results to create the key indicators. I scrapped that idea, however, since I knew there were manual entries, assumptions and systematic gyrations included in the results.

My second attempt was a little more unorthodox. I proposed using proactive indicators, such as shipped cost per mile, pallet cost, unit handling, routing guide performance, etc. data that was extracted directly from our enterprise software system. The metric of cost per mile is a data indicator that compares the average cost per mile shipped versus a historical actual cost or annual business plan. If the actual cost per mile increased it may be due to higher fuel costs, shipping closer distances, to different locations or selecting a more expensive carrier – all of which need to be fully investigated and explained. A higher cost per mile would mean that the actual spend would be higher than the amount accounted for in the annual business plan and would require either a downhill cost offset or, worse yet, approval from senior management to increase the yearly transportation forecast.

The data from the enterprise system is updated in real time, creating true proactive measures. But I cautioned the management team that although these measures were directionally correct, they may change each week or even daily. I also advised that enterprise data in its purest form might have keypunch errors or missing information that may skew the key performance indicator (KPI) results.

Management decided to move forward with the enterprise data. After the initial successful roll out of the proactive indicators, my heart fluttered in anticipation of the praise for completing the project. I anxiously awaited the “atta boys” about to come my way. But that exuberance had to wait. The question that I feared the most came: “How can we tie the proactive/directional results with the financial results?”

The quick answer was, “It won’t match.” Now, that was not exactly true, nor was that the answer the management team wanted, so I acquiesced and created the reconciliation. The exercise was comparing line-by-line data of an enterprise system with missing values and voided transactions with that of SAP, our financial reporting package. If it were a simple direct flow of data it would have been easy, but given accruals, assumptions, journal entries and the accounting adjustments necessary to have accurate monthly results, the reconciliation quickly turned into a monstrosity.

After a week, I completed my reconciliation with a special accounting catchall category called “accounting adjustments.” After explaining all of the elements that go into a financial month close, the senior management team reluctantly agreed that the proactive reporting was far more valuable than a schedule tying the two results together. Success!

But my success was limited. I found that although the KPIs were helpful in the decision-making process, it took undue time for the senior managers to review each metric. To help them, I color-coded each metric result as follows:

• Red: Corrective action required and follow up is necessary
• Yellow: Corrective action is not required but follow up is necessary
• Green: No corrective action necessary

The following figure is an example of the shipped cost per mile KPI report that I prepare on a monthly basis.

Example: Shipped Cost Per Mile KPI Report

Usually the green items were either quickly reviewed or entirely ignored; the items in red and yellow were discussed more thoroughly. Unsurprisingly, I found that a chart has more meaning than just a numeric indicator. A simple visualization leads the eye to potential issues and away from successful projects.

In my efforts to add more value to these KPIs, I established a goal for each indicator. The goal-setting process should be driven by operations in conjunction with company leaders as the leaders are ultimately responsible for the success of the business. And without goals, it is impossible to determine a business or functions success or failure.

Adding text to accompany the charts adds context or a functional perspective to the indicators. For example, if an analyst identifies an upward spending trend in transportation, the analyst should be able to identify the cost driver, quantify the incremental cost and, if possible, offer a potential solution. These explanations not only help explain potential deviations but also assist in finding opportunities to offset potential losses.

By applying these methods, the number of key performance indicators has grown steadily over the last year – encompassing transportation, warehousing, supply and demand planning, marketing, and sales. Each of these metrics helps drive a first-in-class company, defined by an environment of hands-on management and responsive problem solving.

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Deploying a Measurement System: What Does It Take?

Management concepts such as the balanced scorecard, process management, key performance indicators and strategy deployment have prompted many executives to revisit their measurement systems. As more and more companies have initiated Six Sigma during the last two decades, the use of dashboards to measure process and business performance has become increasingly popular.

As a result, many companies are revamping their measurement systems. The objectives vary from focusing attention on the vital few measures, to instilling the principles of managing by fact throughout the organization, to simply arraying the organization around a core set of metrics that are aligned with the business strategy or customer expectations. There is a framework for launching and deploying a new measurement system that can be used for communicating a new way to manage with existing metrics as well as deploying new metrics.

Providing Management with a Visual Perspective

The basic idea behind a dashboard is to provide management with a visual perspective of vital aspects of its business and facilitate a dialogue on where to focus, how to establish clear goals and who is accountable. Control charts are becoming more and more frequent, as managers strive to understand how the business is performing and how they should invest their scarce resources. Pareto charts are being used as an effective tool to visualize where efforts should be concentrated to achieve the highest return on investment. Management teams are using the concept of cause and effect to understand the relationship between leading and lagging indicators and to create a balanced portfolio of measures that allow them to understand the key drivers of performance.

However, launching a new measurement system goes beyond defining new metrics or developing new displays of existing data. In almost every instance, the expectation is that new or different metrics will help achieve a higher level of performance. Delivering on this expectation requires a well-thought-out plan that takes into account the change management challenges involved with changing the way results are being measured, and that maximizes buy-in and ownership by those who will ultimately use these metrics to drive performance at all levels of the organization.

Success in Deploying a New Measurement System

Ten activities are critical to successfully launch and deploy a new measurement system:

1. Validate the measurement system to ensure that the right metrics get measured right: An effective measurement is one that not only measures the right things but also measures them correctly. Reliability and reproducibility are two major concerns. To what extent can the metric be manipulated? Can the data be reliably collected? Are the definitions clear for each metric? While significant efforts are being invested to validate the financial and accounting systems (in the United States partially due to the Sarbanes-Oxley Act), it is rare that the same level of diligence is being applied to other measurement systems. Deploying a measurement system that cannot be trusted is in most instances the worst possible outcome – not only is it ineffective to drive performance, but also the discussions around whether the numbers can be trusted is a significant drain on scarce management resources.

2. Educate the users of this system on how to manage with the new system: The success of every new measurement system hinges on the ability of its users to effectively manage with the system. This requires:

• Developing a shared understanding of what the measurement is and how it ties to business results and customer experience.
• Knowing how to analyze the metrics, being able to distinguish between signals and noise, and being capable of making informed decisions about appropriate corrective actions.
• Knowing how to scope improvement efforts and basic knowledge of a number of alternative approaches for addressing the issue (process improvement methods, etc).
• Being able to prioritize efforts and assign appropriate resources to improvement efforts.
• Understanding how to assess whether corrective actions were successful and how to hold the organization accountable for sustaining the results.
• Being able to assess how changes to processes will impact the measurement system.

Customized education for leadership teams and key stakeholders can significantly increase the ability of the management team to manage and improve performance.

3. Establish accountability and ownership at the right management levels: A critical issue for every measurement system deployment is establishing ownership and accountability. To be able to take ownership, those responsible must have the appropriate authority and knowledge to manage the performance of the underlying work processes. The leadership team needs to identify process and metrics owners at the right levels and establish process management teams with representatives from the critical functions that impact the performance of the measure.

4. Set goals for each of the core metrics consistent with the priorities and strategy of the business: Once the measurement system has been validated and a baseline has been established, the critical next step is to set realistic goals for each of the metrics. The strategy of each business unit is a vital input to ensure that goals are realistic and align customer and business needs. In this phase, the leadership team needs to define priorities and establish smart goals that support critical business objectives. Every business unit will have different needs and opportunities, and the process of setting goals needs to reflect those realities. Equally important is making sure the leadership team buys into the goals and has a clear understanding of how meeting the goals will impact overall business results.

5. Help the management teams identify and launch appropriate improvement efforts to close performance gaps: Establishing a baseline and setting goals will define the gaps in performance that the business needs to address. Management teams need to understand how to scope improvement efforts aimed at closing the gaps and to select the appropriate improvement methods. These methods can range from “just do it” efforts to comprehensive process improvement projects using Lean or Six Sigma tools. It is vital that the management teams have a good understanding of these methods and are able to scope projects effectively.

6. Develop a framework for sharing lessons learned across the business: As a result of managing with the new system, the various management teams will develop a deeper understanding of the cause and effect relationships driving those metrics. They will learn what works and what does not. Being able to assess what decisions and actions are successful in closing performance gaps and having a mechanism to share those learning across the business is critical to leverage the tool effectively. This requires establishing processes for sharing lessons learned and disseminating learning across the business, resulting in rapid identification and adoption of best practices.

7. Address the human behavior aspects involved in adopting a new measurement system: This is not a purely technical change. Everybody in the organization will be impacted by the adoption of the dashboard approach (including how leaders are compensated). Leadership teams should take an active role in managing the change. A change readiness assessment can help identify the key issues, concerns and stakeholders. While a large number of employees and managers will undoubtedly see the new system as a valuable tool and critical to the success of the business, others will feel threatened. No matter how they feel about the effort, all of them will be expected to change the way they perform the work. An effective change management plan will help management anticipate the resistance and develop countermeasures to ensure a successful launch.

8. Define a plan for updating and extending the system: Once the system goes live, the real learning starts. Over time, management will experience the need to add additional metrics to the system or drop some that are less relevant once performance gaps have been addressed. Effective measurement systems are never cast in stone and are subject to change based on improvements made and sustained, new insights into cause-and-effect relationships, and changing business needs and organizational structures. Changes to the measurement system need to be managed well and aligned with performance management.

9. Manage the risk of rolling out a new measurement system: The risks involved in deploying the new system are real and substantial – lack of management commitment, changes in business priorities and inadequate resources are the risks encountered most frequently. This necessitates an integrated approach to managing risk, based on an initial risk assessment and a comprehensive plan for mitigating those risks through targeted actions.

10. Develop a comprehensive communication strategy aimed at maximizing understanding and acceptance: An effective deployment hinges on getting the word to all employees about the importance of the system as well as their roles. Every employee must have a clear understanding of the overall approach as well as how they, individually, impact key metrics, and what they can do to improve the customer experience. A carefully thought-out and executed communication plan helps to maximize understanding and acceptance. Simulations for management teams, developing communication aids such as learning maps, and utilizing corporate and business leaders to communicate effectively the importance of this effort are often useful to increase acceptance.

All Together: The Integrated Deployment Plan

Based on the specifics of the situation, a business should develop an integrated deployment plan that effectively leverages the internal resources and minimizes the risk of a false start. The lack of an integrated approach and plan is the most common failure in deploying a measurement system. Success is a function of the quality of the solution (i.e., the design of the system and the underlying research) and the acceptance by those who are expected to manage with the system. What appears rational for those who are involved in designing the system will require substantial changes in the way management teams are operating.

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Using Performance Boards Successfully in Services

Faced with stiffening competition, increasingly demanding customers, high labor costs, and, in some markets, slowing growth, service businesses around the world are trying to boost their productivity. Although manufacturing businesses can raise productivity levels by monitoring and reducing waste and variance in their relatively homogeneous production and distribution processes, service businesses find that improving performance is trickier; their customers, activities and volumes vary too widely. Moreover, services are highly customizable and people, the basic unit of productivity in service, bring unpredictable differences in experience, skills and motivation to the job. A simple system, process performance boards, can be implemented and used to create an accurate system for improving productivity.

Our team was working with a leading medical diagnostics firm to analyze and improve their performance as it pertains to receiving, logging in and sorting human bio specimens for analysis. Accuracy and speed are critical.

As with any task or operation, to improve the productivity of services, you must apply the lessons of experience. Consequently, measuring and monitoring performance is a fundamental prerequisite for identifying efficiencies and best practices and for spreading them throughout the organization. Service companies need to compare themselves against their own performance rather than against poorly-defined external measures. Using external benchmarks only compounds the difficulties that service companies face in getting comparable measurements from different parts of the organization.

Some people in the organization may insist that services are inherently random and unique and that accurate measurement is difficult. But only by implementing rigorous measurement systems throughout the organization can you begin to identify variability and take the first steps toward bringing down costs and improving the pricing and delivery of services.

One of the first problems that organizations face is the inability to identify what must be measured. And even when companies know what to measure, they struggle to achieve accuracy. Data is rarely defined or collected uniformly across an organization’s environments.

It is important that organizations use internal benchmarks. While a company must know what its peers are achieving, it’s a mistake to measure its performance against the competition; these benchmarks are typically just samples of data with little explanation behind them. Companies that use external benchmarks are often frustrated to find themselves off by a factor of five to ten, positively or negatively.

Measuring and monitoring performance is a fundamental prerequisite for identifying efficiencies and best practices and for spreading them throughout an organization. Service companies need to compare themselves against their own performance rather than against poorly defined external measures. Using external benchmarks only compounds the difficulties that service companies face in getting comparable measurements from different parts of the organization.

What is the answer? Visual measurement display systems. When we think of visual measurement display systems we think of the latest technology – large screen TVs displaying detail performance data that is updated several times per hour, or faster. But these systems take time to develop, set up and cost money.

The approach should be immediate! Set up process performance boards at key locations based on work group or functional execution. The team leader, or the designee, is responsible for ensuring that the previous day’s data is updated and displayed on the board. So you may be saying to yourself “this is not real time performance.” You are right, at this point getting this system started is more important than minute-by-minute data display. Real-time data comes later.

Any configuration with the appropriate information can be used. That’s the beauty of a simple board; it is easily configurable and can be changed in minutes

The performance board model we use has seven key areas.

1. Record yesterday’s number of employees on shift and volume, the date and shifts.
2. Safety: Provide safety data pertinent to the work function.
3. Service: Start to display performance. The run chart helps the team visualize how performance varies with time of day. It also provides a visual on how we are doing compared to the target. (In the example shown in the figure below, there are 90 samples.)
4. Quality: Tracking quality is essential. In this case we are measuring mismatched (samples with wrong patient ID) and mistested (wrong test requested for the type of sample) items.
5. Productivity: In this area we could look at individual technician actual productivity or the desired team productivity on an hourly basis.
6. Announcements: Key business-related announcements as well as information that is of personal interest (for example, a holiday party in the cafeteria at noon).
7. Issue resolution: Team members have input and get feedback on concerns and issues as well has progress for resolution. Team members are encouraged to raise issues, concerns or suggestions for improvement.

Now that team members, team leaders and management can see actual performance and variance data, they can focus on reducing wasting and improving the delivery of services.

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3 Keys to Project Success with PRINCE2

PMI’s most recent Pulse of the Profession report focused on the rising success rates of projects. They identified trends that wasted 20% less money than the previous year. Here, we detail some of these positive trends and tell you how to apply them to your own PRINCE2 projects.

1. Reduce waste

Reducing waste might be the most obvious way to save money. Despite that, time and money sinks can come from many places. Sources of waste can be hard to anticipate. When they’re part of the corporate culture, they’re even harder to eliminate. This is where PRINCE2 can help:

• Project Assurance – This is an essential to a PRINCE2 project. Project assurance is an ongoing audit with accurate information reported to the project board. This keeps the project properly scrutinised. You wouldn’t plan a financial merger without a financial audit. Yet, so many projects have operated without an assurance audit. The latest report from PMI suggests organisations are smartening up to this.
• Tailoring – Some frameworks aren’t suited to tailoring. Others aren’t compatible with agile methodologies. With PRINCE2, you can tailor projects to make them small but keep them effective. There’s even a dedicated PRINCE2 Agile course, which many projects could benefit from. Missing opportunities to streamline projects creates waste. Culture conflicts also create waste, so adjust your jargon and methods to the project environment. You can read more about this in our blog about managing small-scale projects in PRINCE2.

2. Improve strategic business alignment

Running a project that works toward the business’s goals should be one of the most basic things to get right. It’s surprising then, how many fail to do this. A project out of sync with the business is likely to fail, or at least underperform. Make sure your project is equipped with these:

• Continued business justification – One of the fundamental principles of PRINCE2. A project should only run if it’s aligned with the organisation’s objectives. This can also apply to the size of the team, resources used and any other potential source of waste. If you anticipate sunk costs, you can plan a lean, effective project.
• Business Case – This helps you put continued business justification into practice. The Business Case records the reasons, costs and expected benefits for a project. Like a lot of PRINCE2, it seems like common sense until you realise it’s not that common. A poor (or even no) business case can create projects with mutually inconsistent or duplicated objectives.

3. Sponsor engagement

Overlook the sponsor at your peril. PMI’s report states that executive sponsors can “use their position and authority to clear roadblocks, make quick and effective decisions, and influence executive leadership.” They can be a valuable ally and even a difference maker for your project. This is the key to keeping them engaged:

• Communication – Keep all stakeholders in the loop, including sponsors. If everyone interested in the project remains up-to-speed, they’ll likely stay interested. PRINCE2 uses the term stakeholder engagement. This is more encompassing and useful than sponsor engagement.
• Communication Management Strategy – A document that describes how you’ll communicate with stakeholders. It may vary depending on organisation and project size. You can set a communication strategy for a whole group, e.g. a monthly meeting with the project team. You could also have a communication strategy for individuals, depending on how they prefer to communicate. Consider asking the executive sponsor how best to reach them and stick to that method.

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Multiprovider Management: SIAM Toolset

The service landscape has changed massively. With the increase in the digitalization of IT through increased use of automation and cloud services, a highly complex and highly fragmented system landscape has emerged, and there is also a growing number of external providers whose performance has to be coordinated. With the increase in business requirements, the volume of data, systems and contracts is also increasing. On the other hand, the size of the responsible IT organization remains the same - or is outsourced in whole or in part. The management of the IT, the procurement processes and the monitoring of the services of the involved suppliers place completely new requirements on the remaining company IT.

It is a new operating model (Target Operation Model, TOM ), which provides a shift away from infrastructure-focused management to a holistic service orientation. The holistic service is increasingly composed of controllable, technical components such as applications, databases, infrastructures and networks. The service is rather an aggregation of services (service towers), supplied by the different involved suppliers. In part, it is also a combination of internal, on-premise systems and external services - which makes their control not easier. Databases, infrastructures and networks. The service is rather an aggregation of services (service towers), supplied by the various involved suppliers. In part, it is also a combination of internal, on-premise systems and external services - which makes their control not easier. Databases, infrastructures and networks. The service is rather an aggregation of services (service towers), supplied by the various involved suppliers. In part, it is also a combination of internal, on-premise systems and external services - which makes their control not easier.

SIAM - Service Integration and Management

It is eminently important for an organization to clarify the role of internal IT in the case of a multiprovider strategy. Without a clear sourcing strategy and without clarifying the positioning of the remaining IT, a company will sooner or later face a host of external providers, which are not or very difficult to coordinate. Each supplier manages its service and the lifecycle of the integrated components autonomously, and it is difficult to provide coordination services in the case of major disturbances or complex changes if these can not be clearly assigned to it and its contract. Ultimately, the customer is confronted with difficultly controllable additional costs, which the suppliers want to have compensated for services outside their area of ​​responsibility.

Overview SIAM model

The role of the end-to-end service responsible for business must be clarified and the necessary governance structures established. SIAM - Service Integration and Management is currently the most frequently used concept, which provides the basis for a multiprovider operating concept. The model is specialized not only to ensure the integration and consistency of the service, but also to coordinate the management of the different suppliers, thereby minimizing the risk to the company and ensuring the overriding responsibilities through targeted incentives.  SIAM is therefore an operating model, which is made up of processes, governance principles, organizational structures, employees and also tool support.

In this blog post, I focus on the question of tool integration.

SIAM - Toolset Strategy

The SIAM operating model must ensure the provision of the services and the consistent execution of the processes at all involved technical service providers. This must be done at an integrated, automated level. Manual interfaces between the parties involved are simply unacceptable when it comes to dynamic and fast handling of changes, disturbance corrections or new instances. On the other hand, all providers can not be expected to use the same tools as the customer. When a company enters a multiprovider engagement, the question of tool integration becomes very central. Today, the IT tools are scattered within IT within the different departments, and their ownership is decentralized. A coordination of the tools and their integration often does not take place internally - let alone with the increasing external suppliers. This must change. When building a SIAM operating model, it also needs a toolset strategy that is geared to it. This will most likely result in the need to reconfigure or even replace existing tool environments.

The following 9 primary tool areas must be defined in a multiprovider environment and the requirements for the integration of service providers must be defined:

• Service management
• Service catalog management
• Software Asset Management and Discovery
• Identity and User Administration
• Monitoring & Event Management
• Service orchestration
• Service configuration & capacity management
• Performance Management & Service Reporting
• Software package management & release management

Each supplier has a dedicated service management system and appropriate tool support, if he is professionally trained. He will always want to use this to continue his service business. But the seamless integration of the offered services with its customers also requires an automatic integration of the management systems.

In the following, I would like to discuss the essential requirements of the individual tool areas, which customers should consider when developing the tool strategy in the multiprovider environment:

A) Service management

The use of an integrated service management tool is central to any service management system implementation. Workflow processes such as incident management, problem management, change management and configuration management are essential for efficient service operation.

SIAM ITSM Integration

When integrating external vendors with their own tools, it is important that standard APIs be used to provide seamless linking. The real-time exchange of incident, problem or change tickets between different systems is a prerequisite as these processes often involve several suppliers. From the point of view of the SIAM model, the status and assignment of the process steps must be monitored at any time. There is usually a single source of record data under the control of the service integrator. However, a clarity of the data integration editor has to be defined, which data is stored where and who can see which data.

This is especially true when defining the CMDB data structure and the CIs to be managed. This requires a clear clarification and definition of the CI attributes, relationships and the defined statuses and the processes for maintaining the data. If possible, it should be avoided that the supplier first maintains its own CMDB, and only afterwards the SIAM CMDB. This can lead to problems of integrity, which lead to considerable overhead, false estimation and delays in service operations.

Another challenge is the definition of clear definitions in the field of priorities definitions, service groups, risk categories and so on. If suppliers use different names, which is often the case, appropriate translations are to be ensured.

B) Service catalog management and request fulfillment

Internal IT is increasingly taking the role of the service broker and ensuring the integration of defined cloud services. This requires a central service portal in which the service catalogs of the company's own organization as well as the various external suppliers are integrated and are offered to the business user for subscribing to subscribe services. Changes to the service offer or change of service providers should be ensured seamlessly in this central portal without affecting the user's use - and not to be referred to new portals.

A service catalog is also important in that the end-to-end service view with all its suppliers, interfaces and responsibilities involved can be represented centrally.

Many service offers are displayed as service requests to be retrieved. The tools must be able to map complex workflows, which allow the assignment of tasks to different internal and external parties. In many cases, other tools must be triggered by suppliers.

SIAM Toolintegration

If end-to-end workflows can not be realized across the entire Supplier Eco system, manual work steps or data transfers are necessary, which greatly slows down the run. There is also the risk of misapplication.

C) Software Asset Management and Discovery

In the context of cloud integration, the management of the hardware components will become less important. On the other hand, the software assets and in particular the licenses used must be monitored. As a rule, the suppliers assign the responsibility for the use of the software to the customer and therefore also the obligations laid down in the software use agreements.

In addition, it must be ensured that a consolidation can take place in the management of software authorizations and the use of data by several suppliers.

It is recommended that the SIAM organization use a central software asset management tool which is able to receive and analyze data from the suppliers - and thus represent the company's position when using the software solutions.

Data integrity in the SIAM environment

A corresponding solution can also be a discovery tool, which can serve during the initial filling of the CMDB. This can lead to greater discussions, as most suppliers insist on their own tools and refer to their trained employees who have these in their hands. It is important, however, as already mentioned under «Service Management», to define a clear scoping of the data and to determine which data will be kept where. To do this, you differentiate between data that is stored by the SIAM provider (retained tool) or data that is located at the provider.

D) Identity and User Administration

It is all about the central question: how can I ensure that only the person who accesses data and services is actually entitled to do so? How do I determine who accessed what when and where? So it's all about the digital identity of people, devices, and things connected to the company. The identities and their assigned authorizations are the new perimeters, which each company will deal with centrally. Not only the authorizations are linked to identities, but also all personal data that require special protection. If customers are left behind by the use of our services, they will automatically be linked to their protection. Corresponding regulators are in the starting holes and will deal with us as well as above all all cloud service providers. Read my blog post ( Identity - the new perimeter ).

The management of roles, rights and identities must remain with the company itself. Solutions must support the current security concepts and the inheritance of rights must be supported by suppliers. The IAM solution for SIAM operation must at all times be able to withdraw rights and monitor the use of identities - across the entire Supplier Eco system.

E) Monitoring & Event Management

The status of the services and monitoring of the statuses in the entire Supplier-Eco system is a central requirement in order to react in time. If an infrastructure fails anywhere in the system, it can impact other service components from other vendors, or even disrupt the overall service. The SIAM organization needs a monitoring and event correlation tool to recognize these situations in time and to react efficiently and effectively.

Here, too, clarification of the CMDB data and its responsibility is important because, as a rule, the events are linked to the components to be responsible. The dependency of the services on the service towers from external suppliers must be correctly represented in the CI relationships in the CMDB.

F) Service orchestration

Especially when using cloud services, one can no longer go without an orchestration tool. An orchestrant includes, on the one hand, automated workflows for integrating the various components from the cloud and also locally (on-premise). In a heterogeneous multiprovider environment, this is relatively complex because the components are required to be deployed at several sites and have to be triggered via defined processes in the cloud environment. This is to ensure that the configurations are correctly stored and the usage is simplified.

SIAM Enterprices Service Management

When choosing the solution, it is important that the workflows are defined in advance and the necessary information flows are clarified. Here the requirements for the workflows are best recognized and determined in the evaluation of the appropriate tool.

G) Service configuration & capacity management

When services are purchased, the only thing to be paid is what you actually use. This is one of the great advantages in the cloud service environment, because no more expensive infrastructure projects have to be done: «Pay as you use».

To ensure that the operating costs are not driven up to a high level, it is now important to monitor and control the capacities. In a service-tower environment, it is important to understand the impact of resource bottlenecks on the entire service. The data must be consolidated and ready for decision-making.

Unused capacities should be released as quickly as possible and the operating costs should be relieved. This is a large potential savings especially in large development environments if test and integration environments have to be provided only in a targeted manner. Even the release of surroundings over the weekend can lead to considerable savings.

H) Performance Management & Service Reporting

One major problem within the SIAM organization is uniform service reporting and performance monitoring. Each supplier creates their own reports, which can not be easily correlated. In addition, the measured KPIs are not uniform - and if not determined by the SIAM organization - difficult to understand.

SIAM service accounting

A central reporting system is therefore a major relief and belongs to the tools of a SIAM organization. The measurement criteria and the data to be supplied form an integral part of the service relationship with the suppliers. Reporting should include both commercial aspects, supplier services, service volumes used, and end-to-end service delivery. As a rule, data from the Service Management Tool is also integrated.

I) Software package management & release management

Continuous Integration and Continuous Delivery (CI / CD) are currently the keywords of an agile IT organization. The pressure for more frequent releases and faster as well as better software solutions means high automation of the build, test and deployment processes. Accordingly, tools must be able to support these integral functions as part of a Multiprovider Eco system.

SIAM Aggregated

Again, the tool is not important, but the basic principles and co-operation culture. Ultimately, tools must support these principles and integrate external suppliers.

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