Interview with Richard Thoben, COO AppsTwo The Netherlands
The unique thing about Application Lifecycle Services from Capgemini is the standardized form in which the services are provided.
This produces significant savings on operational costs and an improvement in quality. That has been proven. But really realizing this does require a ‘mind shift’ in the client and perfect cooperation between the two parties. Richard Thoben, Delivery Director Application Services & Application Outsourcing, explains how Capgemini sets up this cooperation together with the client, thus ensuring a successful, controlled transition. “Managing the application landscapes often takes place via the ‘you ask and we run it’ principle,” says Richard. “It seems very client-friendly, but it is anything but. There is no management on the basis of the advantages that outsourcing is supposed to deliver, for instance. We do indeed do that with Application Lifecycle Services however. That’s a big difference. But the client must also realize that in doing so he is conforming to our standard solution. We ensure perfect application management, but it does have to be done our way. That sounds a bit harsh, but we are talking about best practice solutions that have already proven themselves for years. Nonetheless it is good that clients are aware of this and we point this out in the procurement process already.
The ownership of the applications must also be entirely clear for a conclusive agreements and procedures file. We often talk with IT about outsourcing the applications, but the owners of the applications are often at the business. That is a potential pitfall that we avoid. We often do that via an ASE session (Accelerated Solution Environment) in which together with the client we very carefully go through all aspects of the outsourcing, explain how we do it and why we do it this way.
At the same time we also make it clear that Application Lifecycle Services can indeed be flexible. It has to be, since a client’s application landscape is always very diverse. For instance, an HR application that requires little maintenance and is seldom changed can be managed very well in a strict regime at low costs. But for Marketing, flexibility is a requirement. So those applications are given a different, more flexible approach at naturally somewhat higher costs.We weigh things up with the client and assign every application to one of the industrial models that we have developed.
Understanding each other’s interests
Once that is done and the contract is signed, many service providers get right to work. Not us, not quite yet. Because the people who must achieve the change in the operation have not all been involved in the preliminary procedure. So we first make sure that all the employees involved at the client become well acquainted with Capgemini. A crucial part of this is that all the people involved visit the client. We let the client talk about his business and the importance of IT. So that every employee has a very good understanding of what the client is concerned about. Then the contract managers from both parties go through the contract thoroughly once again to prevent any kind of misinterpretation. This is important for a good start as well; after all, they might not always have been entirely involved in the talks between procurement and sales. They have to understand each other and each other’s interests well. And in order to prevent stress, a steering committee is put together in advance for situations in which potential conflicts could arise. A kind of overpressure valve. If the contract managers cannot reach agreement, there is no need for escalation, but the steering committee comes into action. That takes the pressure off the contract managers so that they can focus on the setup and the day-to-day course of affairs.
On Time and Above Customer Expectations (OTACE)
Another thing we set out very clearly are the KPIs. We do that both objectively and subjectively. And the latter is important, because even if you achieve the objective, hard criteria, the client may still feel unhappy about the relationship. And that relationship is ultimately crucial for success. For the objective measurement, Capgemini has been using the OTACE score (On Time and Above Customer Expectations) for years; this allows the client itself to determine which five criteria it feels are important to achieve, for example a cost reduction, a shorter lead time for changes or fewer errors upon delivery. We also ask them to rate their satisfaction with us on a scale of 1 to 10 and indicate whether they would recommend us to a good friend. We do this kind of measurement at least twice a year. For the rest, many service providers often manage on the basis of incorrect, traditional KPIs. The KPI of ‘response time’ crops up a lot, for instance. But what good is a quick response time if things still go wrong? What matters are things like fix time, first time right and time to market, of course. You have to look at the impact on the business and also take into account the business peaks throughout the year. An ice cream wholesaler is less inconvenienced by IT breakdowns in January than in July and a garden center must have its registers working overtime on the Easter weekend because that’s when it has its peak sales. Smart KPIs or Business KPIs are therefore much more effective than the traditional IT KPIs.
Once all the issues above have been properly arranged and there is complete transparency therefore about the goals and expectations, only then do we start on the real transition. And even as part of that we make agreements to guarantee that we continue to understand each other correctly. We meet often, for instance, and use email not to conduct discussions, but only to document the agreements made. You would think that all of this goes without saying, but practice indicates otherwise. Immediately after the transition we ensure that the service provision is under control and we proactively start on continuous improvement. Applications are automatically analyzed to determine the condition of their quality. If the quality is not up to scratch, they will often cause problems. In that case we intervene before being asked to do so by the client.
Outsourcing the application landscape is a big deal, we understand that. That is why we put so much emphasis on this preparation and on unequivocal governance. It is a condition in order to be able to make standardized service provision a success. And we see that it works. Year after year we have managed to improve our client satisfaction. Simply because everyone knows what has been agreed, what is expected and what the procedures are. We show for instance that we really have an application landscape fully under control. And we do.
This article was written by Co Van Leeuwen from CapGemini: Capping IT Off and was legally licensed through the NewsCred publisher network.