An introduction to Service

Integration and Management

and ITIL®
Kevin Holland

AXELOS.com

White Paper
January 2015
Contents
Foreword 3
Introduction 4
Models for SIAM 7
Principles and considerations 9
The benefits and investment objectives of SIAM 15
When should you consider using a SIAM model? 17
Sourcing strategy for SIAM 19
Governance of SIAM 22
Transition to new SIAM operating models 22
About the author 24
About AXELOS 24
Acknowledgments 24
Trade marks and statements 24
 An introduction to Service Integration and Management and ITIL® 3

Foreword
ITIL® has always, quite rightly, promoted the primary importance of managing the end to end service
that IT delivers to their customers. The increasing complexity of the IT value chain and the rise of
multi‑vendor supplier eco-systems has led to the rise of Service Integration and Management (SIAM)
as a new approach.
SIAM is a relatively new and fast evolving concept, but it is far from being theoretical. SIAM teams
are being established as part of some of the largest strategic sourcing initiatives around the world and
across many different sectors.
In this White Paper, Kevin Holland cogently argues that a successful implementation of SIAM rests
upon the guidance provided by ITIL while also highlighting the need to adopt and adapt the guidance it
contains to reflect the multi-tenant model. He also provides an overview of the drivers for developing a
SIAM strategy and the specific challenges that it generates. A second White Paper, An example model
for effective Service Integration and Management describes one example model for SIAM.
As Kevin states in this White Paper the IT industry has yet to develop an authoritative model for
describing SIAM, and the objective evidence does not yet exist to reliably assess whether any specific
option for SIAM is more or less effective.
However, the two White Papers are a major step forward in the global, industry-wide dialogue that
needs to precede the development of an authoritative set of SIAM guidance.
James Finister, Tata Consultancy Services
4 An introduction to Service Integration and Management and ITIL®

1 Introduction
The purpose of this White Paper is to introduce the concepts for an effective way of managing services
in a multi-supplier environment. It identifies the benefits of adopting a Service Integration and
Management (SIAM) based approach, and how ITIL provides the foundations for best practice.
This paper is intended for:
●● IT service management (ITSM) professionals already using ITIL in a multi-supplier environment
●● ITSM professionals who understand ITIL and its benefits, and want to adopt ITIL for their
multi-supplier management requirements
●● IT service providers (internal and external to a business)
●● SIAM providers
●● SIAM consultants
●● ITSM consultants.

There are a number of challenges to planning and designing for SIAM, including:
●● A general lack of published detailed best practice for SIAM
●● No common understanding of what SIAM is and is not
●● No common terminology (SIAM, MSI, SI, SI&M, etc.)
●● Lack of understanding of the application of ITIL to SIAM
●● Misconceptions about when SIAM is required
●● A selection of the most appropriate sourcing model for SIAM
●● A lack of available models for managing SIAM performance
●● Ensuring improvements in service quality, while at the same time reducing costs
●● A historic tendency to manage suppliers activities instead of outcomes.

These challenges result in:

●● Some businesses who could benefit from SIAM are missing the opportunity
●● Some businesses are adopting SIAM but are failing to achieve the benefits.

This White Paper will help to address these challenges by providing an introduction to the subject and
some practical guidance on how to make SIAM work.
The accompanying White Paper An example model for effective Service Integration and Management
will build on this by describing an example SIAM model, with examples of adaptations of ITIL including
specific SIAM functions and techniques.
There are also challenges with implementing, operating, and improving SIAM. These will be covered in a
future publication.

1.1 KEY DEFINITIONS

The following terms are used throughout this publication.
Service management is responsible for managing the delivery of IT services from within a Service
Provider, as described in the core ITIL publications. Within this publication, this is also referred to as
Operational Service Management.
Service provider is an organisation or team providing one or more specific IT based services to the
business. It can be either internal or external to the business organisation. The term supplier is used
synonymously in this publication for brevity. This also re-enforces the concept that within SIAM models
a supplier can be an organisational unit within a business, not just an external service provider.
Service integration is a set of practices and an accompanying model and approach that adapt and
augment the guidance in the ITIL publications for managing, governing, and co-ordinating the delivery
of services provided by multiple suppliers (internal and external to the business organisation).
 An introduction to Service Integration and Management and ITIL® 5

Service integration and management has the same meaning as Service Integration.
SIAM is a term that is used as an abbreviation for Service Integration and Management, and is also
used to describe a service capability for Service Integration and Management, or a function providing
that capability.
Governance in this publication is the application of techniques for evaluating, directing and monitoring
to deliver the agreed levels of service and meet business and corporate requirements.
Systems integration is responsible for getting solutions, differing technologies, applications and
infrastructure to work together, with a focus on technology integration. Implementation of SIAM models
often requires some element of Systems Integration, but it is important to understand the differences
between the two definitions. Techniques for Systems Integration are not described in this publication.
Tower is a term often used to describe a set of services typically determined by technology type or
by specific applications, provided by one or more suppliers, for example, a Mainframe Tower which
provides applications that run on a particular mainframe technology. It is preferable in a SIAM context
to use the term ‘service’ rather than Tower, as SIAM models can be applied to any grouping of services,
irrespective of any technology.
Service line is a term used to describe a grouping of services under SIAM management and governance,
grouped by either business function type (Business service line) or technology type (Technology service
line). Defining and maintaining services, service boundaries and service lines is part of the key to
effective SIAM.
Business in this publication is the organisation that commissions the SIAM. The ITIL term ‘customer’
is deliberately not used, as in SIAM models the customer who buys an IT service may be a different
organisation to the one that pays for the SIAM.

1.2 WHAT IS SERVICE INTEGRATION AND MANAGEMENT?

SIAM is an adaptation of ITIL that focuses on managing the delivery of services provided by
multiple suppliers.
SIAM is not a process. SIAM is a service capability and set of practices in a model and approach that
build on, elaborate, and complement every part of the ITIL practices.
Effective SIAM seeks to combine the benefits of best-of-breed based multi-sourcing of services with the
simplicity of single sourcing, minimising the risks inherent in multi-sourced approaches and masking the
supply chain complexity from the consumers of the services. SIAM assists in the situation where policy
and execution can no longer be defined absolutely by a single authority, supporting the development of
supply chains into supply networks.
The primary focus of SIAM is on providing the necessary consistent governance, assurance, and
management of these multiple suppliers and services, whether these suppliers are external, internal, or a
combination of. It includes approaches for supplier co-ordination, integration, collaboration, interoperability
and delivery. This creates an environment where all parties know their role, responsibilities, context and
are empowered to deliver – and are then also held accountable for the outcomes.
Businesses that use or wish to use multiple suppliers to deliver integrated services can benefit from
a re‑interpretation and re-focusing of core ITIL principles, methods and techniques, adapting and
augmenting them as the basis for effective SIAM. This provides a different perspective from the situation
where the majority of services are provided from within the same organisation, and brings out ITIL's
‘multi-tenant’ capabilities.
The need for a specific SIAM approach is exacerbated by the increasing complexity and diversity of the
IT value network, supply chain, and service provider characteristics. An example is where the overall
service delivered to users is dependent on underpinning services that are a mix of utility/commodity
services and value-added services provided by a number of different suppliers.
6 An introduction to Service Integration and Management and ITIL®

The aim of SIAM is to provide a single point of visibility and control for the service management and
delivery of all services provided by suppliers, by:
●● Taking end-to-end accountability for the performance and delivery of IT services to the
users, irrespective of the number and nature of suppliers
●● Co-ordinating delivery, integration, and interoperability across multiple services and suppliers
●● Assuring suppliers performance
●● Ensuring that the services effectively and efficiently meet the business need
●● Providing the necessary governance over suppliers on behalf of the business.

SIAM can be provided from within the business organisation, outsourced to an external provider, or
using a combination. Chapter 5 discusses potential sourcing strategies. Irrespective of the sourcing
strategy for SIAM, business strategy, corporate governance, and the associated management of
commercial relationships should not be outsourced.
Effective SIAM is dependent on the co-operation
and involvement of the suppliers and the business. SIAM cannot be imposed. Because a SIAM model
includes all of these parties, moving to a SIAM approach will involve changes to their ways of working.
Many of the ITIL principles, methods and techniques can be, and have been, applied to non-IT service
landscapes. Precisely the same is true for SIAM, but the focus of this White Paper is the application of
SIAM to IT services.

1.3 DRIVERS FOR ADOPTING SIAM

The initial service and supplier landscapes that many service management functions were set up to
manage are now subject to significant change. This necessitates a shift in the way that these services
and their suppliers are managed.
Drivers for adopting SIAM focused models include the following:
●● The move to the use of disaggregated multi-supplier contracts instead of using a single-sourced
prime contractor approach necessitates effective service integration
●● The increasing use of commodity services such as IaaS and SaaS results in limitations to
achieving consistency through imposing ways of working on suppliers
●● Within larger businesses, the existence of several services, often similar in nature,
managed in different ways by different teams in the business
●● Tensions between suppliers who want to commoditise and optimise their services and customers
who want services personalised to their requirements, but integrated with other services
that they consume
●● The requirement to make best use of a business’s skilled resources by using standardised
models with a focus on adding value
●● Increasing quality expectations from users within continuing budget constraints.
●● The need to integrate selected services selected by business users while maintaining
overall quality and performance
●● Mismatches between the service target achievement of individual component services and
the customers’ perception of the overall service that they receive
●● The flexibility required to support changing business models and IT supply models
●● The emerging customer/supplier landscape of more specialised service providers and
technologies, multiple delivery channels, diversity of customer communities,
and a rapid rate of change to requirements
●● A move from supply chains to supply networks for the delivery of services.
 An introduction to Service Integration and Management and ITIL® 7

2 Models for SIAM

2.1 HIGH-LEVEL SIAM MODEL
Operating models for SIAM need to reflect the particular requirements of businesses and the particular
nature of their supplier landscapes, so the precise models can vary. However, at a high level, the models
all fit the same conceptual structure and share some common characteristics.
The following figure provides a high level model with the Service Integrator in the centre between the
service consumers and the service suppliers. Having a homogeneous SIAM provides consistency for
the governance, management, and co-ordination for all services, irrespective of the type of services,
organisational relationships with the suppliers, type of supplier, type of service consumers or number of
different parties.

Internal Internal External

service service service
consumers A consumers B consumers C

SIAM

Service A Service B, C Service D,E

provided by provided by provided by
external external external
supplier 1 supplier 2 supplier 3

Figure 2.1 High-level SIAM model

2.2 BREAKING SIAM DOWN INTO COMPONENTS

SIAM should always be broken down into a logical grouping of different but interrelated components,
process areas, capabilities, functions, activities and principles.
If a business uses a SIAM model without fully understanding and validating against requirements
precisely what is provided by the SIAM, the following risks will exist:
●● Costs of SIAM outweigh the available benefits
●● Benefits of SIAM cannot be realised
●● Service quality is adversely affected
●● Incorrect sourcing approach for SIAM
●● SIAM model does not fit the needs of the business
●● SIAM model cannot be applied to the suppliers
●● High cost of changing to a different SIAM provider
●● Paying for unnecessary capabilities
●● The SIAM does not provide what was expected
●● Costs exceed any market rate for specific activities
●● Inability to add new suppliers into the SIAM model
●● Increased resources in the business to manage the SIAM and fill any gaps in provision.
8 An introduction to Service Integration and Management and ITIL®

This is due to:

●● Different interpretations of what activities are done within SIAM
●● Challenges in comparing the offerings from different potential SIAM providers
●● No common approach to SIAM, resulting in many proprietary models
●● No consistency of application
●● Perceived high costs of provision as non-SIAM activities are buried in SIAM
●● Challenges of moving from one SIAM provider to another
●● Inability to benchmark SIAM provision.

Breaking SIAM down into a standardised component model supports:

●● Better understanding of SIAM
●● Informed decisions to outsource/insource all of part of SIAM
●● Ability to apply consistent terminology and approaches
●● Flexibility to accommodate a variety of different services
●● Flexibility for change to the model
●● Capability to be applied to a variety of sizes and shapes of business organisations, supplier,
and consumer landscapes
●● Cost–benefit comparisons across different SIAM providers
●● Increased agility to accommodate new and changed services and service providers.

SIAM cannot operate in isolation. As well as the suppliers of the IT services, SIAM also needs specific
support from the business organisation in areas that should include:
●● Enterprise architecture
●● Programme and project management
●● Systems integration
●● Commercial procurement.

Figure 2.2 illustrates an example of a SIAM model that has been broken down into components. This is
based on the UK Public Sector’s SIAM Enterprise Model. It should be used when designing or reviewing
specific SIAM models to initiate detailed review and discussion, and to ensure that all of the aspects
included are considered.
More information on this example model, its components and how to use it are provided in the related
White Paper, An example model for effective Service Integration and Management.

Business and Customer organisations

Business/Customer Relationship Management

Service catalogue & portfolio SIAM IT Information

Service desk
management design security

Business & Service transition

Toolset Service Operations
integration planning &
continuity bridge
support

Multi-supplier co-ordination Service validation

& testing Operational
service
Supplier & service assurance Knowledge management
management

Externally provided services Internally provided services

Figure 2.2 SIAM component model

 An introduction to Service Integration and Management and ITIL® 9

2.3 PROCESS AREAS AND CAPABILITIES

Effective models for SIAM include the following process areas and capabilities:
●● Process integration across multiple suppliers
●● Multi-supplier co-ordination (change/release/capacity/incident/problem, etc.)
●● Supplier performance management against SLAs and OLAs
●● Supplier management against contract requirements
●● Business Relationship Management
●● Service level management of individual and end-to-end services
●● Supplier and service assurance (audits, assessments, KPIs, etc.)
●● Collaboration between multiple suppliers
●● Common standards/policies/templates definition and application
●● Service introduction on-boarding of new and changed services and suppliers,
and the related off-boarding of previous services and suppliers
●● Service reporting consolidation of service quality and performance reports
●● SIAM design of changes to the SIAM model and for new services coming under the SIAM model
●● Service catalogue and service portfolio creation and management
●● Toolset integration between suppliers and SIAM toolsets
●● Testing of integrated solution
●● IT information security support assuring and managing security
●● Release management of integrated solution
●● Strategy for services and sourcing
●● Innovation culture and management.

Some SIAM models also include a centralised Service desk function (incident, service request, access
management), recognising that this can also be considered as a service that could be provided by a
separate service provider.
SIAM models can also include other functions where the business can gain from standardisation and
economies of scale, for example, a centralised procurement function. There is value in this approach,
but the core purpose of SIAM is multi-supplier integration, not organisational consolidation.

3 Principles and considerations

Focusing on processes and technology alone will not deliver the expected benefits. Effective SIAM
requires consideration of People, Process, Partners and Products.
The following sections will provide an overview of the considerations that are required for
effective SIAM.

3.1 PEOPLE
People make SIAM work, not just processes. There is need to embed a supportive culture in the
business organisation, the SIAM function, and in the suppliers, building effective people relationships
at all levels.
The key staff engaged in SIAM, particularly the process owners and service owners, need to be at least
as qualified and knowledgeable in ITSM and related techniques as the staff in the suppliers. Without
that, they will not be able to effectively design and govern the necessary processes and activities. That
does not mean that all staff have to be at this level, but a SIAM organisation that relies on a very small
number of qualified and experienced staff is unlikely to succeed.
10 An introduction to Service Integration and Management and ITIL®

Effective SIAM needs soft skills as well as technical/process skills. Key soft skills are:
●● Relationship management
●● Conflict management
●● Persuasion
●● Negotiation
●● Stakeholder management.

This is because many of the SIAM staff will spend most of their time dealing with staff outside of their
direct management control. They may come from other parts of their own organisation, or from external
suppliers who may even be contracted to a different organisation.
The existence and maturity of these soft skills is critical to effective SIAM. SIAM requires an evolution
in approach and thinking from the situation where solely contractual statements and obligations can be
used to define action and behaviour in any given situation. Just like any marriage, the initial vows can
only define some general principles that can then be used to guide the relationship.
Establish and maintain trust, at every level; between peers in the SIAM organisation, between the SIAM
function and the business organisation outside SIAM, and critically between the SIAM and the suppliers.
If this trust is not established, there is a risk that the business will have an overhead of staff checking
and sometimes re-doing the work that they have contracted an external SIAM provider to do. Trust is
built by building good personal working relationships and by empowerment; allowing each party to do
what they are responsible for in order to deliver the agreed outputs.
All of the functions in SIAM need to be seen to work as one. They should always act as the agent of
the business regardless of the SIAM sourcing arrangements, with good working relationships between
all parties.
One of the ways to achieve this is to build leveraged teams within SIAM that perform a specific set of
SIAM activities across all suppliers. For example, the SIAM Change Management team should co-
ordinate changes across all services, and not just a specific set such as changes to a particular set of
applications. Apart from designated Service Owner roles, do not assign staff to one particular application
or technology, as this will result in silo working and go against the principle of leveraging key skills.
These working relationships can be further strengthened by the lead from the SIAM facilitating cross-
supplier process groups to drive continuous service improvement.
Always focus on the business outcomes; the SIAM must act as the ‘informed customer’, representing
them to the suppliers, and representing the suppliers to the business. Every member of staff in the SIAM
function should be able to articulate how they individually support the business, and provide specific
examples of where they have done that.
Maintain flexibility in the SIAM organisational structure, in order to avoid creating a monolithic inflexible
SIAM function that is not in touch with the business. Services will change over time, some will require
more attention than others, and the structure needs to be able to flex to accommodate. Multi-skilling
SIAM staff is a good way to support this, allowing the movement of staff at short notice to support
specific hotspots.

3.2 PROCESS
An adoption of SIAM should always start by developing a service portfolio and service catalogue.
Without this the operating model cannot be fully designed and adopted. The portfolio and catalogue
must include the business services, IT services, and the individual SIAM components, all mapped with
clear dependencies and service characteristics. Care should be taken to ensure that this is done in a
consistent way, using a common template, definitions and classifications for all of the services. This will
help in building a full understanding of the service landscape, and enable effective use of the knowledge
held in the service portfolio and catalogue, for example, when designing changes to services.
 An introduction to Service Integration and Management and ITIL® 11

The key to effective SIAM is to clearly understand the boundaries and dependencies between each
of the services. There should be a visual map of the service hierarchy, especially any technical
interdependences between services, as well as services that have no dependencies. The majority of
services will have dependencies on at least one of the other services.
When documenting the necessary processes for SIAM, the scope must be constrained to be within
the SIAM provider and the interfaces with the suppliers, the business, and the service consumers.
Management of these process interfaces is essential.
Be aware that documenting detailed ‘End to end transparent processes’ that encompass the SIAM and
all suppliers is largely unachievable in many organisations, and will create an inflexible model that will
stifle continual improvement. This is particularly the case where suppliers are large-scale cloud providers
who are unlikely to share their processes, or where a supplier has a number of subcontractors.
The critical area of focus for process documentation should be the boundary where information needs
to be exchanged between suppliers and the SIAM – and between suppliers and users. The focus should
be on mapping inputs to outputs and ensuring the flow across the boundaries. The level of detail should
enable consistency of approach without prescribing the detailed working procedures that each supplier
needs to adopt.
To support the above, the standards for exchanging service management information must be defined,
for example, a minimum dataset for incident records. Where possible, suppliers should be encouraged to
adopt these standards, either using contractual clauses, or through persuasion and an articulation of the
benefits to all parties coupled with a precise definition of the interface requirements.
The SIAM must recognise though that it may not be possible to get all suppliers to comply, and that the
SIAM will need to be competent in translating and managing multiple standards.
The SIAM must be capable of responding to variations in inputs, while at the same time maintaining
consistency of its own internal processes, in order to avoid the additional costs and resources to
maintain and operate multiple process variants. This requires the transformation of information where
necessary into a consistent format by the SIAM at point of entry. A SIAM must recognise that one size
will not fit all, while at the same time recognising the value of maintaining consistency as much as
possible and maintaining the flexibility to be able to interface with a wide range of different suppliers.
An example would be a Request for Change, where a supplier supplies the necessary information, but
not in the standard template developed by the SIAM.
Knowledge management techniques from ITIL can be used effectively to support the design and
development of processes and the necessary information exchanges, as they will ensure the necessary
focus on providing the correct data, information and knowledge.

3.3 PARTNERS
Good processes alone will not guarantee success in SIAM. Effective SIAM is heavily dependent on:
●● Understanding the capabilities and responsibilities of each supplier
●● For suppliers where this is possible, building good working relationships between SIAM
process owners and supplier process owners, and across the supplier process owners
●● Building a network of suppliers who will work with and support each other.

3.3.1 SIAM accountability

In a SIAM environment, the SIAM is as good as their weakest supplier. Because the SIAM has overall
accountability for providing the required quality of services to the business, any failures by a supplier
automatically become the responsibility of the SIAM provider to a) explain and b) ensure resolution.
12 An introduction to Service Integration and Management and ITIL®

That puts healthy pressure onto the SIAM provider to:

●● Perform appropriate assurance during the introduction of new and changed services
●● Assess to an appropriate level the performance and capability of the suppliers
●● Establish the necessary processes for managing and governing the suppliers
●● Understand the business and their requirements and language.

It also requires the SIAM provider to build constructive working relationships with each supplier –
a SIAM should not have to reach for the contract every time there is a failure. The best results are also
obtained through building good personal relationships between peers in the SIAM and
in the suppliers.

3.3.2 Flow down of responsibilities

The SIAM is accountable to the business for the overall performance and delivery of the IT services.
External suppliers are accountable for their own delivery, and hence the execution of the necessary
service management processes. The SIAM should as far as possible flow down the responsibilities for
process execution to the suppliers responsible for the individual services. The role of the SIAM is to
assure that the correct outputs are achieved.

3.3.3 Understanding different types of supplier

A SIAM provider must recognise the different types of supplier, apply appropriate levels of management,
and where necessary take on more work themselves.
For example, it is highly unlikely that a SIAM will get a provider of a commodity service that is used
by hundreds of customers worldwide to adopt its definition of incident severities. The SIAM still needs
consistency so that its staff can understand what a severity 2 incident is as opposed to a severity 1, but
in this case the SIAM will have to map the providers severity levels to its own.
The same is true for templates, such as an RFC template. The SIAM provider needs to understand
suppliers who will happily adopt their standard template, ones that won’t, and ones that will not directly
advise the SIAM of an impending change, but do publish it somewhere on their website.
An example model considers four types of supplier. Note that this applies to suppliers that are internal to
the business organisation as well as external suppliers:
1. Integration services: a supplier that provides technical integration of multiple services into a single
coherent supported service to meet the business requirements, for example, integration of multiple
applications into a single product
2. Bespoke services: a supplier who provides a service that has been uniquely developed by them
for the customer. For example, a custom software application developed to the customer’s
specification. Agile developments fall into this category
3. Standard services: a service based on a configurable standard application where the supplier
provides support. For example, a payroll application
4. Commodity services: a service that is standard in the market and that is not configurable, for
example, infrastructure as a service.

The first two types require a close relationship between the SIAM and the supplier. This needs good
communication and collaboration to ensure agility and innovation as well as good service delivery.
The third type requires a good relationship to support service delivery, recognising that this is almost a
commodity service.
The fourth type is likely to have a purely contractual relationship, without any ability to build a
close relationship.
 An introduction to Service Integration and Management and ITIL® 13

3.3.4 Build good personal relationships

Where the supplier type allows, create an environment and a culture to build good personal
relationships between process owners in the SIAM and process owners in the suppliers, and also
across the suppliers.
In some businesses the relationships with suppliers are often largely the responsibility of the service
level manager. While this relationship is important, the experience is that SIAM is most effective when
relationships are also built between ITIL process owner peers across the different organisations. This
supports joint development of interface standards, such as common minimum incident datasets, and
also supports the resolution of issues with process capability and maturity without continually reaching
for the contract. The model looks like this:
SIAM Suppliers

Problem management Problem management

Change management Change management

Capacity management Capacity management

Service level management Service level management

Figure 3.3 Example SIAM and peer-to-peer relationships

Each process owner within SIAM should have regular one-to-one meetings with their peers in each of
the suppliers. These can be informal, which supports the building of the necessary mutual trust, but
should also be supplemented by formal meetings to document and manage to resolution any issues
or concerns with the process. This approach is reciprocal – it is viable for a supplier process owner to
raise concerns over the effectiveness of a SIAM process or interface, as well as the SIAM process owner
raising concerns with the supplier.
The peer-to-peer relationships should be supported by creating special interest groups for specific ITIL
practices, with wider membership from the SIAM and the individual suppliers. For example, a special interest
group for IT service continuity management. For their process area, these groups can work jointly on:
●● Development of common standards (for example, severity level definitions)
●● Development of effective policies (for example, change management policy)
●● Development of templates (for example, capacity forecast template)
●● Development of toolset integration standards (for example, a common XML schema for the exchange
of incidents between suppliers)
●● Development and improvement of Key Performance Indicators
●● Service improvements that apply across all suppliers
●● Development of benchmarking approaches for capability and maturity assessment and improvement.

This approach also supports building supportive and collaborative communities across the suppliers,
and aids in building a value network where suppliers engage with and support each other. Joint working
and gaining mutual agreement on the ways of working and the associated responsibilities of each party
form the foundations of such collaboration. This approach also provides a platform for the process area
specialists in one supplier to assist another supplier in improving their capability and maturity. This is
14 An introduction to Service Integration and Management and ITIL®

much more important than the contractual and legal constructs, which for some supplier types may not
even be practical to implement.
A related approach is to build the same community from the service management executives from each
supplier and the SIAM. They can focus on strategic initiatives, and act as a steering group for the special
interest groups.

3.4 PRODUCTS
The primary products for effective SIAM are supportive tools. In the smallest business organisations with
a simple service landscape it is possible to perform SIAM with minimal tool support, but as the size,
complexity and scale grow, it is challenging to maintain the necessary efficiencies.
The same is true for service management in general, but SIAM adds the extra complication of having to
integrate inputs and outputs to/from external suppliers.
Particular areas where a SIAM needs the support that tools can provide include:
●● Service reporting
●● Operational service management, including incident management, problem management,
and service request management
●● Service monitoring
●● Capacity modelling
●● Workflow management
●● Service portfolio
●● Service catalogue
●● Interchanges with suppliers.

As explained elsewhere, ITIL processes require adaptation and augmentation for effective SIAM, so any
selected toolset must be configurable.

3.4.1 Toolset integration

The tools used by the SIAM provider and the suppliers require integration to provide effective
information exchange without the overhead and risks of rekeying.
The challenges and complexities of integrating all suppliers’ toolsets with a SIAM toolset are significant,
due to the diversity of tools, lack of standards, information security requirements and data protection
legislation. It is highly likely that bespoke configuration of the integration will be required, as there are
currently no commonly used interface standards for the exchange of service management information.
Integration may also require providing external suppliers with access to the SIAM toolset, with the
associated complexities of user management, access control, security and training for the supplier’s staff.
Mandating that every supplier uses the same tool as the SIAM provider many not be viable. This may
seem to aid integration between the SIAM and the suppliers but, in reality, it can drive increased costs
and complexities of governance and administration, for example, in license management. Suppliers who
have their own toolsets may also be unwilling to adopt this approach, as it would increase their costs
and be of limited value to them. However, because of the lack of standards for integration, this may be
the only option.
The SIAM must therefore be prepared to integrate different tools used by the suppliers with their toolset.
It may also be challenging to get the suppliers to adapt their toolsets to achieve the necessary
integration. Once again, if the supplier can be influenced to do this, then it is worth doing, but it is more
likely that the SIAM provider will have to do some or all of the integration work, using existing feeds
from the suppliers toolsets.
The technical integration of different toolsets should be relatively straightforward, using techniques
such as Application Programming Interfaces (APIs), batch input, batch output and XML file exchange.
However, the challenge is in defining the information standard for the interchange.
 An introduction to Service Integration and Management and ITIL® 15

For example, to exchange incident information between the SIAM and two different suppliers, all with
different toolsets:
●● Do all parties share a common definition and characteristics of each service, and the related
configuration items?
●● Do all parties use exactly the same severity definitions?
●● What if the SIAM uses severity 1 to 5, with 1 highest, but the supplier uses 3 to 1 with 3 highest?
●● What method does each provider’s tool support for incident closure? Single step, where it is
closed as soon as the service desk say it is resolved? Two step where a user has to confirm
resolution before it can be closed?
●● What method does each provider’s tool use if a ‘resolved’ incident isn’t actually resolved?
●● Do they allow an incident to be re-opened, or does a new one have to be created?

These are just a few examples to illustrate the challenges of integrating with different suppliers. A
SIAM implementation must initially focus on the business rules for integration of each process, using
standards, templates and policies, before focusing on the much easier technical integration.
When investing in toolset integration, attempt to automate as much as possible. This assists in getting
operational efficiencies. An integration that relies on cutting and pasting from emails or manually
checking that an interchange has been successful, adds very little value.
Toolset implementation plans should look to bring the more strategic process areas of Service Portfolio
Management and the associated Service Design processes in early. This will ensure that the broader
management of services is maintained at the centre of the SIAM delivery function and aid the drive for
best value and performance across the estate.
This is another area where knowledge management techniques from ITIL can be used effectively to
support the design and development of toolset integration and the related information exchanges, as
they will ensure the necessary focus on providing the correct data, information, and knowledge. For
example, capturing and sharing relevant incident and restoration information across all suppliers, to
prevent re-occurrence irrespective of which service was initially affected. In essence, considering all
suppliers to be part of the same enterprise.

4 The benefits and investment objectives of SIAM

4.1 BENEFITS
Adapting to a SIAM approach is a business change. The benefits of this change are precisely the same
as the benefits of any other business change that provides a consistent approach for a particular set of
activities, e.g. consolidation of finance teams across a diverse business, standardising to use the same
processes and tools.
These include:
●● Optimised overall costs of providing the services to the business
●● Reduced risks to the business
●● Economies of scale
●● Improved customer satisfaction
●● Consistency of management, governance, and controls
●● Improved quality of service to users
●● A single point of ownership, visibility, and control of services
●● Clearly defined roles and responsibilities
●● Consistent use of quality processes
●● Best use of skilled (and often scarce) resources
●● Removed duplication of effort
●● Ability to support changes to the supplier landscape
16 An introduction to Service Integration and Management and ITIL®

●● Improved organisational capability and capacity

●● Improved value of the services
●● Increased responsiveness to change.

For SIAM, these benefits are most evident in areas including:

●● Supplier contract optimisation
●● Consistent supplier performance management
●● Robust cost management
●● Clear ownership of incidents and problems
●● Improved incident resolution times
●● Improved service availability
●● Consolidated service reporting
●● Multi-supplier governance
●● Multi-supplier co-ordination
●● Effective introduction of new and changed services.

These are achieved through outcomes including the following:

●● The creation of a homogeneous SIAM service capability
●● Design, implementation, and use of a consistent SIAM operating model
●● Designing for flexibility in the ability to manage a variety of existing and new services
●● Delivering best balance between quality and lowest total cost of ownership.

Specific examples of additional benefits include:

●● An improved understanding and overall reduction in service related risks to the business
●● Clear ownership of major incidents and problems where the causing supplier is unclear
(the well-known ‘bouncing problem’, where no supplier accepts responsibility)
●● A holistic model for capacity planning, linking business demand with supply from all suppliers
●● The ability to compare and contrast the performance of services against service levels across
multiple suppliers
●● Mechanisms to highlight potential impacts of one suppliers release on another suppliers service
before any user impacts are experienced
●● One place for users to understand in a consistent format the projected availability and status of
all of the services, irrespective of who is the supplier.

In any supply chain value can be added at every interaction. Effective SIAM builds supply networks
rather than supply chains (see section 7 for considerations on how to do this). This supports a move
to value networks instead of value chains, as the number of interactions between parties and hence
opportunities to add value increase. These networks can lower the cost for developing and maintaining
services, increase the ability to innovate, and increase agility and flexibility. SIAM therefore increases
value much more than traditional methods of supplier management.
As SIAM models move to a standard approach, suppliers are also likely to see many of the same benefits
as they no longer have to customise their ways of working to comply with customer’s unique operating
model requirements.

4.2 INVESTMENT OBJECTIVES

The objectives of any investment in SIAM should include:
●● To improve the quality of all services
●● To provide best value for money for the management and delivery of all services
●● To avoid ‘lock-in’ to any supplier, including any suppliers of SIAM services
 An introduction to Service Integration and Management and ITIL® 17

●● To establish a capability and capacity to support the successful introduction of new services
and suppliers, and transition from previous arrangements
●● To enable multiple providers to integrate together to deliver end-to-end services that meet or
exceed the expectations of IT customers and consumers
●● To ensure the flexibility and scalability of the SIAM function.

5 When should you consider using a SIAM model?

As models for IT delivery move from full outsourcing or full insourcing to a mixed sourcing economy,
correctly designed and implemented SIAM models can provide a solution to the complexities of
managing multiple suppliers, while providing the flexibility to change providers in a rapidly evolving
service marketplace.
SIAM is therefore appropriate for businesses that are moving to or already have a multi-sourced
environment. The benefits of a well-designed, planned and executed SIAM model can be realised by
businesses that use multiple external suppliers, a mix of internal and external suppliers, or several
internal suppliers. SIAM is therefore appropriate for most of today’s businesses.
The following sections provide examples of service management models that are often seen in business
organisations that would benefit from adapting to a SIAM model and approach.

5.1 EXAMPLE 1: SILOED SERVICE MANAGEMENT

In this example, the business has service management resources and capabilities embedded into
different internal functions that support specific technologies or applications, or dedicated to specific
projects. These are ‘silos’ of service management.
For example, a business may have one service management team dedicated to a particular applications
that run on a mainframe, with separate teams dedicated to website support, and to email support, each
with different service desks, different ways of reviewing and approving changes, and each with different
levels of maturity and capability.
In this type of business organisation there is no consistency of how service management is executed,
and no sharing of skilled resource across the different teams. This leads to increased costs to the
business, inconsistent quality of service, inconsistent controls, and poor user experience due to:
●● No single point of accountability for the services
●● No consistent view of how services are performing
●● Users are unsure who to call when the service fails
●● A change to one service unexpectedly affects another service
●● No clear ownership of problems leading to extended resolution times
●● Some teams are over-resourced while others are under-resourced
●● Best practice in one function is not shared with other functions
●● Widely varying levels of capability and maturity.

User department User department User department

A B C

Service desk
Change management Service desk
Change management Service desk
Problem management
Release management Problem management

Mainframe Website
applications Email support

Figure 5.1 Silos of service management

18 An introduction to Service Integration and Management and ITIL®

5.2 EXAMPLE 2: SILOED SUPPLIER MANAGEMENT

In this example the business uses external suppliers to deliver services to its users. These are typically
‘managed services’, where the supplier is accountable for delivery to specific service levels using their
own service management processes.
Different suppliers are managed from within different functions in the business organisation, typically
by specialism, with no consistency of approach or co-ordination across dependent services. In some
businesses, it is also possible that different functions manage the same supplier, as they each obtain
services from them. These are ‘silos’ of supplier management.
For example, the supplier of network services is managed by the corporate services function, who also
get telephony services from the same supplier. The supplier of payroll services, which depend on the
network services, is managed by the Human Resources department. The supplier of the businesses
website development and hosting is managed by the corporate communications department. The IT
department manages a supplier who provides infrastructure as a service hosting. Service management
only have responsibility for internally provided services.
In this type of business organisation there is no consistency of how supplier management is executed,
and no sharing of skilled supplier management resources across the different teams. The symptoms and
issues are the same as those experienced by siloed service management, with the addition of:
●● No consistency of governance over suppliers, risking the requirements for corporate governance
●● Customer dissatisfaction even when all suppliers are achieving service levels due to no
multi-supplier management
●● Suppliers who have multiple contact points with the business have conflicting requirements
and priorities leading to increased costs and delivery failures.

Corporate services IT HR Marketing

management management management management

Telephone service Payroll Website

& Network service service service
Supplier A Supplier B Supplier C

Figure 5.2 Silos of supplier management

 An introduction to Service Integration and Management and ITIL® 19

6 Sourcing strategy for SIAM

Traditionally, many businesses have outsourced the provision of services to a single company who
provided service integration capabilities as part of their role as a prime contractor. These are often
referred to as System Integrators or SIs. These SIs typically also had responsibility for design and
operation of the end to end services, including systems integration, development and support. They
also appointed and had contracts with any subcontractors and sub-suppliers. It was often assumed,
sometimes incorrectly that the SIs had strong service integration capabilities. This single sourcing
approach has contributed to many of the current challenges around SIAM, as:
●● Each of the SIs used their own models for service integration
●● Models were often tailored for each customer
●● The SIs tended to provide the majority of the individual services, either with their own staff or
using subcontractors, with unclear boundaries between SIAM, systems integration and
service management.

The customer businesses became used to high-cost and long-term (typically 10 years) arrangements
with these SIs. Typical challenges experienced from some of these single-sourced arrangements include:
●● High costs and difficulties of making any changes to operating models
●● Limited flexibility to add/remove/change services and ways of working
●● Ineffective management of services provided by suppliers other than the SI or their subcontractors
●● Challenges in incentivising the SI to make continual improvements
●● Lack of trust in the SI, sometimes leading to the business retaining large numbers of staff to
manage the SI
●● Unclear and overlapping roles and responsibilities between the SI, the business organisation,
and the suppliers
●● Management overhead in the business organisation to manage the SI
●● Difficulties in achieving service reporting that reflected the user experience
●● Ineffective toolset integration between all suppliers, the SI, and the business organisation
●● Difficulties at end of contract to change from one SI to another.

Many businesses have also found that outsourcing service integration does not, and cannot, outsource
all of the risks, contrary to the claims from some SIs. Critically, the business always retains the risk to its
reputation from major service failures. This needs to be born in mind when determining the appropriate
SIAM sourcing strategy for a business.
Recognition of all of these experiences has challenged the traditional approach to outsourcing,
and with the development and availability of effective SIAM models, different sourcing approaches
are now possible.
Some of the different approaches for providing SIAM capability include:
1. Outsource to an external provider of SIAM services
2. Use internal resources only
3. Use internal resources supplemented by one or more external providers of SIAM services.
20 An introduction to Service Integration and Management and ITIL®

For option 1, the business should always have the capability to manage an outsourced provider of SIAM
services, as they cannot outsource overall accountability. Hence they will need the skills and resources
to manage the SIAM.
Options 2 and 3 are only valid where there is an existing internal capability or where it can be created
through training or recruitment.
It is worth noting that an outsourced external provider of SIAM services may also be a supplier of one
or more IT services to the same business. If this is the case, there must be clear separation of roles and
responsibilities in order to ensure that the SIAM retains independence and provides the same level of
governance over its own organisation as it does over other suppliers.
Selecting the best approach for providing SIAM capability requires careful consideration and clear
understanding of SIAM, the business organisation and potential providers of SIAM services.
For all of the options, the business should retain the rights over the overall SIAM process model and
associated tooling design and ownership. This will avoid any ‘lock in’ to any particular approach, service
supplier or SIAM provider.
The following table describes these example options:
Option Description
Option 1: Procure a single external SIAM provider to carry out
Outsourced SIAM required SIAM activities across all services.
Option 2: Build on existing capability and, if necessary, increase
Internal resources only staff numbers to provide additional capacity.
Option 3: Build on existing capability and if necessary increase
Internal resources supplemented with flexible co-source staff numbers to provide additional capacity and train to
increase capability.
Complement by co-sourcing with one or more external
SIAM providers working alongside the businesses
own staff to provide flexibility and support for specific
SIAM activities.
 An introduction to Service Integration and Management and ITIL® 21

The following table is provided as an example of an options analysis.

Option Example benefits Example risks and issues
Option 1: • Attractive to large SIAM providers • Dependent on maturity of businesses current
Outsourced • Lowest increase to business organisations models, but can be 6 to 12 months to
SIAM headcount implement after appointment
• Uses established capability in • High costs to tailor suppliers model for
SIAM provider specific service requirements, for example,
• Uses established SIAM model an IaaS service
• Can minimise impact to the business if a • Potentially inflexible for future changes
good fit to current business model • Risk of high costs for future change
• Supports use of commercial levers for • Cost of tailoring model to fit with business
SIAM performance organisations ways of working
• SIAM may already have model integrated • Challenges with managing any in-house
with external suppliers suppliers through outsourced provision
• Potentially easier to implement if a good • Tension between quality and profit
for to current business model. • Only recently maturing market for
SIAM providers
• Few effective and mature models for managing
SIAM providers’ performance
• Risk of ‘lock in’ to SIAM provider with high costs
of change.
Option 2: • Potentially lowest cost • Highest increase in business
Internal • Builds on existing capability and capacity organisations headcount
resources only • Flexible for future changes • If limited existing capability, greatest change to
• Facilitates tailoring for specific the business
service requirements, for example, • If limited existing capability, highest risk to
an IaaS service the business
• Quality driven by commitment, not profit • Limited capability to meet changes in demand
• Lowest cost for future change. • Constrained availability of skills
• Requires a well defined process model
• No commercial levers for SIAM performance.
Option 3: • Potentially lowest cost • Constrained availability of skills
Internal • Builds on existing capability and capacity • Only recently maturing market for
resources • Flexible for future changes SIAM providers
• Facilitates tailoring for specific • If limited existing capability, significant change
supplemented
service requirements, for example, to the business
with flexible an IaaS service • Limited commercial levers for SIAM performance
co-source • Quality driven by commitment, not profit • Requires a well-defined process model.
• Can flex to meet changes in demand • Some commercial levers for elements of
• Low cost for future change SIAM performance.
• Provides access to proven SIAM partners
to assist in transfer of skills/knowledge
• Supports use of smaller SIAM providers
• Potentially easier to implement.
22 An introduction to Service Integration and Management and ITIL®

7 Governance of SIAM
Arrangements for the governance of SIAM must be established irrespective of how the SIAM capability is
sourced. These should include the following aspects:

7.1 EVALUATE
The selection of a SIAM provider is a significant undertaking for any business. A robust approach should
be used for evaluating the capability of potential SIAM providers against the specific requirements for
the business. These can be established using the information in this White Paper as the basis, adapted
for the specific service and business landscape.

7.2 DIRECT
The responsibilities of the SIAM and of the business and the expected outcomes must be clearly defined
and formally agreed between both parties. These should define the level of SIAM autonomy, where
they act as an agent of the business. They must include agreed measures of SIAM effectiveness and
performance. A formal governance structure should be established with a nominated role in the business
with accountability for directing the SIAM. The precise nature of the direction must be allowed for in the
documented responsibilities.

7.3 MONITOR
The effectiveness and performance of the SIAM must be measured, reported, and reviewed at regular
planned intervals with the business. The review should also include ensuring that all of the documented
outcomes are being met. The measures must be directly related to the performance of the SIAM against
the agreed responsibilities. Then, unless the SIAM has the authority to enforce a supplier to meet
their service level targets, for example, by making any necessary supplier process improvements, the
effectiveness of the SIAM cannot be measured using the service level achievement of that supplier.

8 Transition to new SIAM operating models

Adapting to a SIAM model is not a trivial exercise. As for any major change, this must be treated as
a business change, using the appropriate techniques for managing organisational change. Strong and
visible executive sponsorship is essential.

8.1 TRANSITION APPROACH

The following high-level sequenced approach is an example for how to move to a SIAM model:
●● Review and fully understand potential detailed SIAM models
●● Assess any gaps in the models for the specific business organisation and adapt the model accordingly
●● Document the current service landscape into a service portfolio and service catalogue
(see the ITIL publication on Service Design for advice on how to approach this)
●● Ensure a full understanding of the characteristics of each service and the dependencies
between each service
●● Conduct an assessment to understand the current process and resource capabilities,
process maturity, governance and controls, tooling, capacity in the business organisation
against each of the component SIAM service areas, and identify and quantify any gaps
●● Conduct an assessment to understand the current process maturity, capability, controls and
tooling of each supplier, internal and external, and identify and quantify any gaps
●● Assess the ability to grow the in-house capability and capacity in the SIAM component services
(see the ITIL publication on Service Strategy for advice on how to approach this)
 An introduction to Service Integration and Management and ITIL® 23

●● Determine the sourcing strategy for SIAM services, one component SIAM service at a time:
●● Fully in-house
●● Outsource
●● In-house with co-sourced support
●● Procure additional internal/external resources as required
●● Establish the necessary SIAM capabilities, including any necessary functions and techniques
●● Use a phased approach to transition services to come under the SIAM operating model,
either one at a time, or in logical groups of services (see the ITIL publication on Service Transition
for advice on how to approach this)
●● Review and if necessary amend the SIAM model, under change control, in line with continual
service improvement (see the ITIL publication on Continual Service Improvement for advice on
how to approach this).

8.2 IMPACT TO EXISTING WAYS OF WORKING

The impact to existing ways of working when adapting to a SIAM model differ by role and by the SIAM
sourcing approach. There will always be some impact, the amount and nature is dependent on several
factors, including:
●● The extent and maturity of existing service management capability and processes in the
organisation that will be the SIAM
●● The extent and maturity of existing service management capability and processes in the
parts of the business that will be the internal suppliers
●● The level of commonality already in place between processes used by internal suppliers
●● The extent and maturity of existing service management capability and processes in
the external suppliers
●● The willingness and capability of external suppliers to change their processes to interface
with the SIAM and with other suppliers.

8.2.1 Impact on an external supplier

The core service management processes used by these suppliers are likely to remain the same, as they
will still be required to operate them. They will require adaptation and associated training to provide the
necessary interfaces to the SIAM and to comply with any necessary policies and templates.

8.2.2 Impact on an internal supplier

These are likely to see a major change, as the SIAM will take over responsibility for operating any
service management processes previously done within any siloed function. Service management staff
may transfer into the SIAM.
Where an internal supplier is adapting to be an internal SIAM, the staff will require re-training on the
adaptations to the processes necessary for effective SIAM. This should not be a challenge, as they are
based on ITIL.

8.2.3 Impact on the business

Business functions may see a significant change as they pass over responsibilities for supplier
management and any service management to the SIAM. They will also need to establish resources and
processes on providing governance over the SIAM.
The related White Paper, ‘An example model for effective Service Integration and Management’, provides
examples of possible impacts to ways of working.
24 An introduction to Service Integration and Management and ITIL®

About the author

Kevin Holland is an experienced service management practitioner with a reputation for practical advice
that extends the theory. For the last 10 years, he has been actively involved in designing, implementing,
improving, and advising on Service Integration and Management for a wide range of organisations in the
public and private sectors. He is also active in developing service management qualifications.

About AXELOS
AXELOS are a joint venture company, created by the Cabinet Office on behalf of Her Majesty’s
Government in the United Kingdom and Capita plc to run the global best practice portfolio, including the
ITIL® and PRINCE2® professional standards.
The goals of AXELOS are many and varied, each one aimed at helping businesses and individuals reach
success, empowering them to truly stand out in a competitive market:
●● We continually promote and advocate quality training
●● We strive to encourage growth, development and progress
●● We always look for innovative new solutions to improve best practice standards and
processes across the board.

The result is improved skills that are relevant to the industry as a whole and enhanced employability
for all, benefiting the global economy. The benefit to you and your business in particular: better trained
employees, streamlined operations, and the peace of mind of knowing that you are working with an
industry-leading organisation, which provides products and services with a long-standing reputation for
setting the industry benchmark.

Acknowledgements
Dave Armes, Ivor Macfarlane, Daniel Breston, Steve Tuppen, Niklas Engelhart, Peter McKenzie, James
Finister, David Johnston

Trade marks and statements

The AXELOS logo is a trade mark of AXELOS Limited.
The AXELOS swirl logo is a trade mark of AXELOS Limited.
ITIL® is a registered trade mark of AXELOS Limited.
PRINCE2® is a registered trade mark of AXELOS Limited.