Some of the industry's biggest technology
suppliers risk missing out on outsourcing contracts if they
cannot lift their lagging service management standards, according
to a group of IT managers.
At a panel discussion at the IT Service Management Forum
(itSMF) conference in Sydney this week, IT managers from the
public and private sector agreed there was a general lack of
compliance with service management standards by many vendors.
IT service management governs service delivery and support.
Certification standards such as the Information Technology
Infrastructure Library (ITIL) framework and ISO 20,000 are
increasingly being used as best practice benchmarks in the
"It's amazing how many of the vendor relationships are stifled
because of the lack of compliance with ITIL practices," said
Roger McPhee, acting director -- business and information
services, Queensland Transport.
Many of the vendors who weren't up to scratch were "multi-billion
dollar organisations", according to McPhee.
QLD Transport implemented the ITIL framework to make up for
vendors' failings in this area, he said.
"Some of our key services fall over and the first we hear of
it is when a customer calls.
"That was one of our key drivers for going down the ITIL
path," he said.
"Certainly the vendor relationships are proving to be
problematic. Not to say that they don't understand the concepts,
but I don't think it's part of their practice."
ITIL expertise was a key factor in
TransGrid's decision to award a multi-million dollar IT services
contract to Mincom this week.
The framework was "core" to service management at TransGrid, said chief
information officer Tony Meehan, and had contributed "a lot" to
reducing IT costs by more than 20 percent over the last three
Both ITIL skills and ISO 20,000, which is an international standard covering parts of the ITIL benchmark, were a requirement of TransGrid's request for tender.
"Our tender that we went out with earlier in the year asked
[vendors] to do a self-assessment, and tell us how they thought
they were going against [ISO] 20,000."
"We'll want to come back to that now with Mincom as the winner
and look at detail of that and target some areas where we might
agree on improvements," he said.
The Commonwealth Bank, however, was struggling to find vendors well-versed in ITIL.
The bank uses ITIL as part of its "blended sourcing" approach
to share and gain internal accountabilities and expertise with
Yet many vendors had not caught up with this approach,
according to John Talbot, general manager, operations management, at the bank.
"I think the large suppliers really quite struggle with it,"
"I think the dilemma for most outsourcers is a lot of their
revenues are consumption-based....Where's their incentive
for problem management?
"If I give a supplier 25 dollars every time I do call the help
desk, [for] major system outages, they sort of go 'yes, we've
made another million!'."
Deeper industry issues would have to be addressed before the
problem could be solved, according to Talbot.
"The industry I think in a lot of respects has themselves to
blame. Because we've put them in that position where we talk
about consumption-based services, so we need to rethink that
In government, moves were afoot at the federal level to have
service management requirements of vendors, according to Branko
Milenovic, ITSM project manager at Centrelink.
Currently, government suppliers had no ITIL compliance or
certification, he said.
"We do have to follow a government procurement process, which
I guess in simple terms means you have to be an endorsed
government supplier, but it doesn't necessarily mean that you
have to be ITSM compliant or ITIL compliant."