Good Relationships are a Key Asset

The telephone rings. Thomas Rippe has been waiting for this call. He picks up the receiver right away. There’s a short conversation with the caller, then Rippe replaces the receiver, relaxes back into his chair and says: “Problem solved.” Thomas Rippe is the Technical Manager for SAP Support at YXLON International, a worldwide midmarket X-ray systems provider with around 260 employees, specializing in quality assurance and material tests in industrial production. As well as its headquarters in Hamburg, the company has branches in the USA, Denmark, China and Japan. YXLON uses SAP R/3 Release 4.6 C and has outsourced the entire SAP system operation to SAP Business Partner itelligence. This means YXLON is one of the 38 percent of the midmarket companies in Germany with fewer than 500 employees that have outsourced their IT operations to an external service provider, according to a Lünendonk/Techconsult study.

Successful communication

“Communication with the data center runs smoothly – and in both directions too”, Rippe insists. “If we have a problem in day-to-day operations, such as connection issues or bugs in the SAP system, we call the Helpdesk, give them a report and receive an e-mail as confirmation.” Rippe says the company then receives a second e-mail after a short while if the problem has been resolved or a call back from the data center if there are follow-up queries, which are then resolved in the telephone call. This makes YXLON stand out positively against a trend in IT outsourcing, recently observed by Gartner analysts, where IT customers and service providers communicate with each other too little and – when they do – in insufficient depth.
Rippe is the main contact at YXLON in SAP Support matters for the itelligence data center. So it is important for him to get prompt feedback from the data center in the event of a malfunction suddenly occurring. “This rapid availability has to be guaranteed as we need to be sure our problem is given priority” states Rippe, underlining his key requirement of an IT service provider. It is also important for the technical manager of SAP Support to have contacts who know “his system”. “In this way we reach a real time solution to a problem without getting caught up in the problem’s history.” As Rippe is in effect the only employee who communicates with the data center, YXLON has designated stand-ins for vacations and sickness to ensure that communication with the IT service provider continues to run smoothly even in his absence. The X ray service provider records every contact with the data center. However, for difficult situations, technical boss Rippe can also be contacted on vacation “because it is always better to solve certain matters in real time. Otherwise, an error may become more serious and turn into a real problem.”

Developing a relationship

Relationship management in outsourcing cannot run itself; it has to be carefully nurtured. The example of YXLON shows how communications processes in outsourcing scenarios are formulated and defined. In general it is possible to distinguish a “personal” and a “technical” level of relationship management.
At the personal level, companies and IT service providers designate the individuals who will define the communications parameters, processes and procedural rules in order to continually improve interaction between the future partners. The future partners define the general framework for relationship management and the possible changes. This requires constant dialog, as the company’s IT operations are subject to economically driven changes that have to be factored into the equation. In addition, it is important that each customer, on concluding a contract, be allocated a dedicated contact who is familiar with all the system features in the outsourcing life cycle.
The technical level is concerned with IT service provider itelligence’s largely formalized procedures and tools for supporting relationship management. Requirements, tasks and problem reports are recorded by telephone, fax or e-mail, processed in a service tool, assigned a priority status and processed. First level support is provided at the Helpdesk, as a reported problem can often be solved directly. If not, the report is forwarded to second level support. If no solution is found at this level either, the problem has to be reported to the appropriate manufacturer (software, hardware, etc…). The report is then given a processing status and remains open until it is fully dealt with.
It is important to organize these procedures so they are transparent for the customer. For instance, in this way he can track his report with its relevant processing status via a Web front-end. Via a further Web front-end, customers should also be able at any time to access analyses of their current system status, such as user logins, processor load, utilization level of the database or error messages. Content and presentation can also be customized if desired.
Customers and IT service providers need to remain in constant contact to monitor work and agreed goals and to discuss innovations. At itelligence this is done by the Service Control Board which comprises the customer’s representatives and itelligence staff. How often the parties meet is agreed on a case-by-case basis with the customer. Customers can decide for themselves on the depth of the relationship. They can either use the full range of services or only certain, selected areas such as the telephone or e-mail.

New processes – changes in communication

However, customer processes change too, for example when a new application is integrated or there is a new SAP release. In this event, formalized procedures must be left aside so that pending changes can be implemented through dialog with everyone involved. So far, so good, but going back to formalized communication is hard for some. If customers continue to use “service short cuts” following completion of a project that required personal support, this may lead to difficulties for several reasons. If customers cannot get hold of their contacts (owing to vacations, illness, shift changes, etc…), their requests may not be processed and – worse still – their problems may not be solved.
The opposite is also possible. Take a customer who gets through to his contact in the data center but his problem is resolved only after the third time of asking. If an administrator “forgets” to document this sequence of events, data center management will assume from his incomplete Helpdesk analyses that there were no inquiries or complications. It is then all the more surprising when a customer cancels his agreement and changes over to another operator. So we have to deal with a whole array of communication requirements and use appropriate communication instruments for the sector in question. Where standardized processes are used, standardized and formalized communication channels must also be followed to ensure rapid response to inquiries.

Regulating the termination process is important too

The cases described show just how vital the human aspect is, even in IT outsourcing. Hardly surprising therefore that – according to the META Group – users outsourcing their operations are now putting soft factors and attributes such as “personal, reliable contact with the service provider” well up their wish lists.
Another important aspect is the need to draft contractual provisions right from the outset, clearly regulating a potential termination of the outsourcing relationship such as in cases of unforeseen insolvency or sale of the business. The Lünendonk/Techconsult study referred to earlier shows that only 29 percent of midmarket organizations (up to 499 employees) regulated how their outsourcing contracts would be wound up – an area which, in the words of Lünendonk CEO Hartmut Lüerssen, “is one of the essential parts of an outsourcing agreement.” After all, there are not only issues concerning finance and proprietary rights that need to be dealt with, but also those relating to the transfer process. This in itself underlines the importance of clearly regulating (potential) termination of an agreement right from the start.

Klaus Meyer
Klaus Meyer