Managing the move to SMIHow EY helps clients get the most from a multisourced environment

Service management integration (SMI)

| Managing the move to SMI1

1 Contract compliance without value

2 Poor performance visibility

3 Impotent governance

4 Lack of data/information access

5 Poor architectural integration

6 Convoluted and labor-intensive reporting and analytics

7 Unclear delineation of responsibilities and accountability

8 Insufficient collaboration across suppliers

9 Ineffective and tactical contract terms/SLAs

10 Incompatible delivery culture

10 challenges facing the multisourced technology environmentOutsourcing has its own set of issues, but effectively managing an increasingly complex and specialized supplier landscape is fraught with challenges. Many of these apply to both the suppliers and the retained organization. Without effective control of these areas, delivery costs can spiral out of control.

Lack of direction

and innovation

Industry trends for outsourcing are evolving, and it’s more important than ever to manage benefits realization and supplier performance.

High-profile service outages

Out-of- control costs

Low customer

satisfaction

Damage to brand

reputation

Business implications

2Managing the move to SMI |

Covering the bases — SMI’s core focus areasAvoiding the pitfalls of a multi-vendor sourcing model requires discipline well beyond the stewardship of individual contracts and commitments. Cross-discipline and cross-functional coordination of the multisourced environment is imperative, or benefits will not be realized.

EY has a long history of maximizing benefits and minimizing risks for our clients. Our model for SMI planning, transition and steady-state operations is strategic and effective, and it manages the convergence of five core focus areas for the business:

1. Demand and value management2. Financial management and analytics3. Application management and cloud convergence4. Supplier management and oversight5. Service delivery and support convergence

Approaching SMI in this fashion confirms that performance management is measured against defined business value and not just SLA conformance.

EYSMI

1

2

34

5 Dem

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and

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Servicecatalog

Service management integration (SMI) moves beyond SLAs and simple contract compliance into a value-sharing model that drives business value.

| Managing the move to SMI3

EY’s SMI model applies the focus areas to drive business results that span the service life cycleEY’s SMI model provides a robust interface for service integration and accountability, spanning the breadth of the service experience from demand through delivery/consumption. Effective application of this model, along with effective oversight of the five focus areas mentioned earlier, allows organizations to optimize the source of supply, increase transparency, lower costs, simplify accountability and minimize delivery risk.

Service bus architecture

HR

IT

Procurement

Finance

Supply chain

Operations

Business units

Legal

BPO

SaaS

PaaS

IaaS

Managedservices

Internalfunction

Service management integration (SMI)

Servicesupply

Serviceconsumption

SupplierA

SupplierB

SupplierC

SupplierD

SupplierE

SupplierF

Change management

Retained organization

TCOmeasurement

Customersatisfaction

Suppliersatisfaction

Innovationmeasurement

Processcompliance

SLAmeasurement

Financialmeasurement

Delivery Workflow Performance Management

Integrateddemand

Individualizedservice

Integrateddelivery

Individualizeddemand

Dem

and

inte

rfac

e Value interface

Performance interface

Value and risk managementPortfolio managementProject management

Continualservice

improvement

EY’s service management integration (SMI) model provides consolidated management of demand, performance and value interfaces for the complex, multisourced technology environment.

4Managing the move to SMI |

Time is of the essenceCloud services are estimated to be outstripping internal service delivery by a factor of 5 to 1. Additional investments by businesses in mobile, social media and digital transformation are increasing the complexity of the business technology landscape. These trends make it easier than ever for businesses to swiftly procure services that were once the hallmark of the internal technology (IT) provider.

EY predicts that the sourcing environment will become exponentially more complex as businesses seek to consume services from an increasingly specialized market. Establishing scalable mechanisms to govern cross-functional delivery performance is vital if the business value of such relationships is to be realized.

Benefits of getting it rightCompanies that take a holistic approach to service management are able to more effectively prioritize resources and investments on the services that matter the most to the business. Effective SMI has been shown to:

Reduce service delivery costs by as much as 30%

Reduce the service management application footprint by as much as 33%

Drive consistency, efficiency and scalability in the delivery of technology and business services

Establish realistic and repeatable performance criteria, simplifying SLA management

Companies that take a strategic and service-focused approach to service management can reduce delivery costs by as much as 30% and the application footprint for service management by as much as 33%.

| Managing the move to SMI5

Establishing a unified service-bus architecture allows for extensibility in the SMI environment while providing a rationalized technology and data landscape.

Establishing the platform for service integration and deliveryTo maximize the efficacy of the SMI model, ultimately a unified service-bus architecture should be implemented to the maximum extent possible. Operationally, SMI capabilities can be established without it; however, the unified service-bus leverages a common delivery platform that can drive core SMI and IT service management (ITSM) functions and be extended beyond these areas into customized business solutions and applications. These solutions augment the broader technical environment (SAP, CRM systems, etc.) and provide business-service interfaces that integrate seamlessly with service management for easier workflow management, analytics and delivery performance oversight. The diagram below provides a high-level illustration of this concept, with core SMI and ITSM services and business solutions being developed on a common delivery platform.

Future business service

HR Legal

Finance CustomerProvider interface

Procure

Core SMI and ITSM

Case management

FAQs

Workflow Portal

Contract Repository

Vendors Request

Tickets Fulfillment

Knowledge Portal

Contracts Budget

Approvals Forecast

Purchase

Request

Vendor

Contract workflow

Workflow Forms KPIs Approvals

Data Security SLAs Access

6Managing the move to SMI |

Key business relationshipsEffective SMI requires technology solutions that are able to flex and scale with the needs of the business, as well as enhance the overall maturity and capability of delivery environment. EY works closely with key solution providers to establish a robust service-bus architecture and corresponding SMI framework that is able to bring significant value to our clients.

A key relationship for EY, Fruition Partners brings years of ServiceNow technical and custom configuration experience to the SMI model. Together with EY, Fruition Partners is investing heavily in the development of business-centric solutions/applications that leverage a common service-bus architecture to provide a robust delivery platform for business services. Additionally, as a master certified service partner with ServiceNow, Fruition Partners works closely with EY to streamline the platform workflow required to integrate all aspects of supplier management.

ServiceNow is a significant part of the EY SMI model. The cloud-based platform it provides is considered by EY to be a backbone technology for SMI and custom solutions development due to its flexibility, extensibility, scalability and, more importantly, its ease of use.

Whether using ServiceNow to integrate data from various service providers, or exploiting the full-scope platform as a service (PaaS) and application functionality of this robust platform, ServiceNow enables rapid time-to-value and unparalleled integration.

Transparency and information access are of paramount importance in today’s business environment. Apptio provides a technology business management (TBM) suite that facilitates this transparency and allows technology managers to have business-centric conversations that streamline planning, rationalize costs and improve service delivery performance. Apptio easily correlates data from disparate sources, making the technology an integral part of the EY SMI model.

Effective SMI requires a breadth and depth of technical knowledge, and EY is committed to providing strategic solutions that meet these demanding needs.

EY has market-leading experience in the areas of business service optimization, targeted solution development, risk mitigation/management and performance improvement. As trusted advisors for our clients, EY is able to drive long-standing and far-reaching maturity improvements across the enterprise.

Leveraging the technology solutions provided by the above strategic relationships allows EY to augment our capabilities and provide end-to-end solutions that drive measurable business value. This in turn helps our customers rapidly transform the way they do business.

EY provides the business process, governance, operational improvements and oversight necessary to realize the full potential of these technology solutions. Fruition Partners, in conjunction with EY, develops the custom solutions necessary to provide the service; ServiceNow provides the platform that allows the service-bus architecture to function; and Apptio allows EY clients to measure, manage and promote performance gains.

Make the move to better service managementImprove the health of your multisourced environment today by teaming with EY for success on all of your service management integration needs. Whether you are looking for strategy and assessment support, a provider to help you stand up SMI capabilities internally, or someone to work with on an ongoing basis for SMI operations, EY’s passionate team of professionals are committed to helping you succeed.

Continuous

improvement

Outsource

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operations

Implemen-tation

support

Capability development

Strategy and

planning

Health check

Ernst & Young LLP contactsSean Harapko Principal, Advisory ServicesMcLean, Virginia+1 703 747 1052 [office]+1 703 505 2246 [mobile]sean.harapko@ey.com

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