Service Providers Innovate in the New World of Multi-tenancy 2.0

Multi-tenancy 1.0

Multi-tenancy has long been the model of the outsourcing industry. Multi-tenancy is usually defined as using a single instance of an application to service multiple client organizations (or tenants) over a single, shared infrastructure.

The value of this approach increased when service providers discovered that comprehensive IT service management platforms (such as BMC Remedy™) could be re-architected to serve multiple clients if customer data could be kept segmented and secure. The same service—help desk, desktop management, IT asset management or other IT provisioning—could be pushed out to multiple clients.

Clients enjoyed all of the benefits typically associated with outsourcing: cost-savings, efficiency and the ability to focus resources on core business competencies rather than on IT. Outsourcers benefited from the ability to easily scale up to serve multiple clients without needing to purchase and support multiple instances of the same software. The model served outsourcers well for many years.
But 3 trends are making Multi-tenancy 1.0 obsolete:

1. The pressure to innovate.
   The outsourcing market is reasonably mature. While new players continue to enter the market, familiar faces often compete for the same business. This has placed more pressure on service providers to innovate and to demonstrate to clients that they understand their unique business requirements and offer the capacity for value-added solutions delivery.
2. Outsourced IT services have expanded well beyond traditional service desk functions.
   Instead of handling only problem resolution, outsourcers are now processing requests, handling approvals, coordinating fulfillment, and more.
3. Businesses are changing their thinking about IT. 
   It's a change being driven by the ways employees are using the IT services provided to them. When employees leave their physical workplace, they often continue working using laptops, tablets, smart phones and home computers. People have come to expect technology to be easy, engaging and empowering. They are increasingly frustrated by applications and services that don’t provide this experience.

These trends place new pressure on service providers.

Their business models are based on the ability to apply one software infrastructure across many clients. But those infrastructures weren’t originally envisioned to support a client-centric environment in which:

• Clients increasingly demand a uniquely tailored interactive experience;
• Employees want co-created self-service, self-help and self-provisioning; and
• Clients want end-to-end services that require integration with enterprise applications beyond IT, such as HR, facilities, and procurement.

Service providers have made multimillion-dollar investments in their software infrastructures. Few relish the prospect of abandoning these investments, but many are beginning to realize that Multi-tenancy 1.0, as described here, no longer allows them to keep up with changing client needs and marketplace conditions. Customization at the client level, which requires programming at the application level, will continue to be too expensive, time-consuming and risky. Changes or additions will continue to amplify risks. Customizations will be lost during upgrades and need to be redone, which again means more money, time, and risk. These problems will limit the service providers’ ability to scale.

Multi-tenancy 2.0

As back-office tools, IT service management platforms will continue to provide robust, stable, process-driven, and standards-based platforms for addressing incident and problem resolution, change management, service-level agreements, and configuration management databases.

But in front-end roles where there is a growing need to provide tailored and client-centric customer innovations—such as request management via self-service portals, service catalogs, approvals, fulfillment, visibility, interactivity, collaboration, and co-created services—most IT service management platforms are inadequate. In today’s outsourcing environment, forcing a back-office system to accommodate both back- and front-end roles is an increasingly untenable proposition.

Moving from Multi-tenancy 1.0 to 2.0 imposes 8 new demands on service providers:

1. Configurability at the client level that is swift to deploy, requires no programming, is persistent through upgrades, and is adaptable to a continually changing environment;
2. The ability to configure a secure, tailored experience for each client—whether at the user, department, group or enterprise level;
3. The capability for client innovation with low risk—meaning customizations for one client should have no impact on others;
4. Service item portability—new service items can be created in a test environment, zipped up, installed, and run in the production environment with no manual rework, and best-practice service items can be imported into different environments and run confidently;
5. The ability to accommodate today’s interactive and collaborative way of working whenever, wherever and from any device—company or personally owned;
6. The ability to integrate service items to enterprise applications for both simple and complex services
7. The ability to swiftly transition new clients to a service platform; and
8. Continual improvement and the ability to innovate.