How to Get (and Keep) Your ITSM Initiative on Track Hank Marquis Director, ITSM Consulting Sr. Analyst, ITSM Automation Enterprise Management Associates Source: CA Service Portfolio Management is Business Service Management BSM is managing the service portfolio for distinctive performance in the IT commoditization perfect storm. Plummeting cost of acquisition Unclear and incorrect customer specifications What needs to happen 1st, 2nd, 3rd and so on? Opportunity Opportunity for for Service Service Strategy Strategy Moore’s Moore’s Law Law Tolerance Tolerance for for Variability Decreasing Variability Decreasing IT IT Budget Budget and Staffing and Staffing flat flat Complexity Complexity and and IT IT Workload Workload Increasing Increasing Slide 3 1990 1995 2000 2005 2010 Service Strategy (and ITIL v3) in a Nutshell Service Strategy shakes up the boat with some pretty provocative statements – which by the way, are all true, critically important and need to be both said and heard. • A Focus on Process Does Not Yield Success Often leads to unexpected (negative) consequences • Process is Only the Means to a Strategic End Think first. Then do. • BSM Requires A Competitive Mindset Low cost or high quality isn’t enough. Differentiated value is key to being “nonoptional.” It’s All About Value, but Value Isn't Enough Thinking outside of the IT box is what Service Strategy is all about (literally!) • Value is More Than Cost Controls Value is allocating efforts and resources in ways that matter most to the business • Differentiating IT Providers From Competitors Using customer proximity to be better than alternatives • Value is Only Visible In Enterprise Terms It’s more than “utility” and “warranty” True Value Only Visible at Enterprise Boundaries (Type I & II I.T. Providers) Customers and Users End-Customers and Users Products Product Offerings Enterprise Internal and External IT Systems Slide 6 Suppliers and Competitors © 2008 Enterprise Management Associates, Inc. ‘Type III’ I.T. Provider Boundaries Customers and Users End-Customers and Users Products Product Offerings Provider Enterprise Internal and External IT Systems Slide 7 Suppliers and Competitors © 2008 Enterprise Management Associates, Inc. Value Is Hard to Grasp Customers are not always right, and don’t always know what they want or need; our value is helping them understand what they need, not giving them what they want. • Value Is Not: Doing what you said or promised to do (warranty) Always being “up” and performing (utility) • Value Is In The Eye Of The Enterprise IT Customers & Users Exist to Service End-customers & End-users IT Must Enhance End-customers and End-Users Enterprise Experience Once Again, ITIL Isn't Enough ITIL always mentioned other frameworks, now, Service Strategy explicitly states that to succeed you must “integrate guidance” from other frameworks. • Service Strategy Calls Out: CMMI-SVC, COBIT, PMBOK, M_o_R, eSCM-SP, eTOM, Six Sigma ISO20000 and more • Fear Not! Pragmatic and situational selection Service Strategy Means Using These Frameworks in the Right Way How to Make IT a Strategic Asset Service Strategy is how to achieve BSM by thinking about and then managing IT as a portfolio of investments purchased to produce a business return. • BSM & BITA top 2008 Goals Leads quality improvement, managing complexity and cost reduction in surveys • Service Portfolio Management is BSM: Manage Complexity, Show Value, Control Costs and Balance Resources • But, Surveys Show A Disturbing Reality We All Want it, But We’re Heading for a Fall EMA Research Report, “What are your IT organization’s top three goals in 2008?” BSM improves quality, controls costs, balances resources and manages IT complexity – everybody wants BSM! (But few know BSM is what they want!) Slide 11 © 2007 Enterprise Management Associates, Inc. Service Portfolio Management Makes Service Strategy Actionable “…Service Portfolio, one of the most vital yet often missing constructs for driving service strategies and managing service investments.” – ITIL v3, Service Strategy, 5.3, Service Portfolio Management • How to Make Service Strategy Actionable: Define services and validate business case (Service Catalog Management) Analyze service value and prioritize to balance demand (Financial and Demand Management) Authorize and allocate resources (Configuration, Change, SLAs, OLAs etc.) Measure quality (CSI, Service Level Management, Supplier Management) What percentage of your IT services are covered by documented and measured Service Level Agreements (SLAs)? Services ought not to exist unless covered by an SLA. Otherwise, there is no evidence that they are required for the business. This is the measure of the span of control of the SLA process. If a large number of services do not have SLA's agreed, then Service Level Management does not have control over the level of delivery. Slide 13 © 2007 Enterprise Management Associates, Inc. What percentage of your IT services are covered by documented workflow and procedures to ensure consistency of delivery (also known as Operating Level Agreements, or OLAs)? OLA’s and Underpinning Contracts grow as SLM is extended to suppliers. No OLAs, no control over service delivery. The results mirror the SLA numbers from the previous slide. Slide 14 © 2007 Enterprise Management Associates, Inc. Selective Improvement = Differentiated Value We need Service Strategy to organize ITIL processes and operational activities. Without focused strategy you get non-value added effort, and fail more often than not (unexpected negative consequences.) Which Process? Why? In What Manner? How? In What Order? When? When do We Stop? Warranty Low impact on business outcomes with high certainty e n Zo B f o e c n a l a High impact on business outcomes with low certainty Lo 2nd, 3rd and so on? Hi • What do we do 1st, Lo Utility Hi Simplified Guide to BSM To realize the benefits of Service Strategy we need to integrate new tools and thinking into our daily activities. • Don’t Start with Process! Start with Analysis: 1. Define Services – eTOM & SID are best here 2. Value Services – M_o_R, CRAMM are best for this 3. Measure Services – SERVQUAL (external) and CMMI (internal), Six Sigma 4. Choose Service improvement projects (PMBOK, PRINCE2, Project+) • Once You Have a Project Identified 5. Use ITIL, Buy Software, (Re)Allocate Resources etc. BSM Step #1 - Define Services Customers and Users Customer Facing Service Enterprise Boundary End-Customers and End-Users Enterprise Products ITIL Service Catalog, eTOM/SID Customer Assets Slide 17 Resource Resource Facing Facing Services Services IT Resources © 2008 Enterprise Management Associates, Inc. BSM Step #2 - Value Services ITIL Financial/Demand, M_o_R, CRAMM Value services based on risk to the business. Risk is the most accurate measure of value – and something the business understands. Work with customers to give each service a risk score – its value. • Primary Concern is Risk to Performance of Customer Assets: Replacement Costs Outage Costs, Business Impact & Revenue Environmental and Image Competitive and Industry Customer Churn x Cost of Customer Acquisition Fees, Fines, Taxes, Human Resources, Liability Costs Etc. BSM Step #3 - Measure Services ITIL CSI, SERVQUAL, CMMI, Six Sigma SERVQUAL is service industry best-practice for measuring service quality. Gaps indicate (IT) process failures. After identifying gaps, use CMMISVC to trace what isn’t getting done. Use Six Sigma to isolate variation – these are your ITIL improvement opportunities. BSM Step #4 – Commission Improvement Projects Project+, PMBOK, PRINCE2 Knowing when to stop is as important as knowing what to do. Every successful IT endeavor is a successful project – because projects have a defined charter, beginning and end. • Beware Scope Creep Golden Pony Story • Follow Best Practices Focus on Scope, Charter, Stakeholders, Team and Metrics • Repeat Until Good Enough & Time to Stop Remember, “Good Enough is Perfect” Change Your Perspective! BSM, ITIL/ITSM Are About Business & Performance of Customer Assets Service Strategy has many tools, techniques, models, examples and samples. Study them, pick and choose what works for your unique situation. • Service Strategy is an Intellectual Exercise • Make Strategy Real with Service Portfolio Management • Service Catalog makes SPM actionable Thank You for Attending Today’s Presentation. For more information on EMA, please contact: Bruce Lehman at 303.543.9500 x112 or [email protected] April 29, 2008 © 2008 Enterprise Management Associates, Inc.
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