There’s a lot of discussion about how the Internal IT department moves from being the gate-keeper to all things IT and to a position where they become a Service Provider with Business units given OpEx budgets to purchase service from either the Internal Service Provider or from an External Service Provider.
There is certainly a lot of logic surrounding this but there is also a two way dynamic which also needs to be addressed.
If we move the Internal IT department to service provider status, a few things may need to happen to level the playing field.
i) The Internal IT Department needs the right to ‘no bid’ a service i.e we are not interested in doing that.
ii) The Internal IT Department in the event of finding a workload shortfall should have the right to bid for external contracts.
iii) There needs to be solid agreed SLAs/contracts between the Business and the Internal Service Provider. SLAs cut both ways; if you change your mind half-way through a project, change direction etc; you take the hit, not the service provider.
And there we hit the crux of the problem; if you want to move to a service provision model, it’s not entirely one way traffic. You cannot just expect the IT department to do the shit which no-one else wants to do; the IT department should not just be the provider of last resort.
The Service Provider Dynamic is a two-way thing!
I think your statement “The IT department should not just be the provider of last resort” is a very powerful one, it really gets to the crux of the matter.
There’s a whole range of issues around internal service providers which I’ve not seen addressed (though I’m sure people have done), like how to handle what a normal SP would call “Pre-sales support” and indeed Sales and Marketing. Do you need to build out an sales function, and the other teams that a service provider would normally have?
If your internal SP has just a technical delivery team, they’re likely to only ever receive finalised “request for quote” documents which have already been shaped into what the external service provider is offering – something that is the perfect position for the external bidder.
One of the smartest IT managers I know actually has used some of his budget to employ a marketing/PR person for his department. Guess which department gets the easiest ride and the most funding?
I love the idea of the IT dept no- bidding on an internal request The reverse holds true. An internal dept bypassing IT and going outside.