I recently read an article on the US website CIO about IT outsourcers offering themselves as service integrators – essentially having one supplier co-ordinating or managing all the others on behalf of the customer. It seems that large IT services companies, like Cap, Accenture and Infosys are trying to get a piece of this action.

Interestingly we too were asked by one of our current customers to help with the management of another supplier based in Ukraine. The cultural and geographical proximity of Poland and Ukraine, coupled with the limited level of English language skills at their other supplier, made this an attractive position to our customer.

I, on the other hand, have my doubts about the model. I feel that for companies without many outsourced suppliers it adds yet another layer to the communication chain. And I think it increases the level of ‘inter-supplier office politics.’ The firms being ‘managed’ by the service integrator are unlikely to be happy with the arrangement. They may well wonder why another company is deemed better than them. Does their unhappiness matter? Yes, if they are waiting or possibly hoping for the service integrator to trip up. Equally the service integrator may be ultimately trying to win business away from the suppliers it manages.

I am also unsure about the real benefit to the customer. This model makes more sense if the customer does not understand offshoring and has no-one to do it internally. But I doubt this scenario is really possible in companies pursuing a multi-sourcing strategy. Surely, these companies must know what outsourcing is all about as they have built their supplier network, probably over a long period of time. In most instances, I can’t see the real value of this model, I’m afraid.

However, rather than being a service integrator, I think software development outsourcers can offer more value as systems integrators– companies that deliver a business solution to a customer possibly may use various on and off-shore suppliers to deliver different parts of the solution. It means taking overall responsibility for a project and its business targets, but is nothing new.  The prime and subcontractor model has been around for years.