First Published in Feb 2015
In part III we explored the requirements for Pre-Sales activities, in Part IV we take a look at the people aspect.
ITIL, for good or bad, has framed the conversation for many years when it comes to the best way to deliver services. ITIL has told us that the Service Support & Service Delivery functions should be separate, then within those organizations there should be further specialization and lots of process to support that specialization.
Managed Hosting Providers exist because delivering similar services to many customers allows them to drive efficiency to a point where it is cheaper for customers to outsource than take that function in house. After all, the costs to support infrastructure 24*7 are non-trivial.
Roughly speaking to be able to deliver 1 Full Time Employees' (FTE's) worth of support (one network engineer for available around the clock for example) actually requires in excess of 5 actual 40 hour/week FTE's.
Employees are focused into very efficient silos, with narrow, but deep, skill sets. Some large hosting providers, (On the scale of AOL) are so specialized that it is almost impossible to hire their employees into a smaller company. For example, the System Engineers never touch storage, networks, or applications.
As Mr Haight (Gartner) said, efficiency is delivered through silos of specialization, a la ITIL. Now as he also said, DevOps is effective - Effectiveness is enhanced with greater knowledge of the customer, their business, products, processes.
Effectiveness also requires employees that can operate outside of a silo, or across functional boundaries, they need understand impacts of changes across multiple technologies and also be able to make recommendations for those types of changes.
Effectiveness is more "expensive" in raw people, intimacy simply takes more time and energy than efficiency. In addition, effectiveness also requires a different type of employee and hiring those people that can code, support systems and understand database's is a lot harder than those with narrower skill sets, leading to higher costs.
Since people are a huge % of the cost in delivering a service, the extra levels of effort, reduced efficiency and increased hiring challenges have to increase costs. Is it worth it ?
From a service provider perspective, extra intimacy and greater effectiveness will lead to stronger customer relationships, longer contracts and additional services. Since keeping customers is considerably cheaper than finding new ones, this reduction in churn is worth some extra investment.
From a customer perspective, the extra intimacy and increased effectiveness of the relationship will speed their time to market, and increase the ROI of their investments.
In part V we will take a look at process.
Photo by Dylan Gillis on Unsplash