Optimizing IT Service Delivery: Technology is the Answer
2015 AN EVEREST GROUP REPORT Optimizing IT Service Delivery: Technology is the Answer Harnessing the Power of Technology to Unlock Business Value in IT Services Jimit Arora, Vice President Yugal Joshi, Practice Director Copyright © 2015, Everest Global, Inc. All rights reserved. This report has been licensed for exclusive use and distribution by Tata Consultancy Services. research.everestgrp.com EGR-2015-4-R-1387 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER Executive Summary As technology disruption continues at an unprecedented pace, IT service delivery organizations are under significant pressure to respond to the rapidly changing environment and establish themselves as a strategic business enabler. IT organizations are expected to drive the adoption of next-generation IT, yet manage traditional systems with the utmost cost efficiency and agility. Therefore, they need to balance innovation with rigorous discipline. However, most IT organizations struggle to effectively meet these conflicting expectations, given the inherent inefficiencies in the traditional models of IT service delivery. Most enterprises erroneously equate IT service delivery with IT support and, therefore, are unable to achieve optimization across the entire value chain. This suboptimal IT services approach impacts the ability of the enterprises to respond to the market demands in a timely manner, and raises questions on their ability to remain nimble, competitive, and relevant. Everest Group research suggests that a large number of enterprises recognize this source of value erosion and are adopting remedial steps to optimize IT services. However, most efforts are piecemeal and, typically, focus on production support versus the entire Software Development Life Cycle (SDLC). These organizations continue to exhibit over reliance on human skills and “run by memory” in IT service delivery, which increases risks and compromises the user experience. To achieve an optimized IT service delivery, enterprises must focus their efforts across the entire SDLC. The complexity across SDLC processes requires enterprises to leverage technology-driven initiatives that are not disjointed “point solutions” but deliver “end-to-end” services for the application lifecycle. Enterprises need to automate, industrialize, and digitize their processes to make them measurable and aligned to industry best practices. Most discussions around IT service delivery optimization emphasize “cultural change” and “process overhaul” rather than pure technology. Our research suggests that though these are indeed important, they are difficult to implement and measure. Technology-driven IT service delivery optimization initiatives, on the other hand, are measurable and generate tangible results. However, these initiatives should not fundamentally disrupt ongoing IT service delivery. A strong focus on cross-team collaboration and reliance on technology versus scattered, fragmented, and inefficient processes residing in “team islands” will result in an optimized IT service delivery. This report analyzes existing challenges in IT service delivery and suggest mitigation strategies to enable its optimization. The key areas of focus are: Key challenges in existing practices for IT service delivery Value erosion from suboptimal IT service delivery Role of technology across the SDLC to optimize IT service delivery Value and key success factors – technology-led IT service delivery optimization This complimentary report was funded, in part by Tata Consultancy Services research.everestgrp.com EGR-2015-4-R-1387 2 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER The State of IT Service Delivery Enterprise IT is supposed to be everything to everyone. The IT services it delivers are expected to keep systems running efficiently, save costs, transform legacy platforms for future, and ensure innovation to drive business value. IT is expected to be agile and continuously evolving to meet business demand. Be it organically developed or acquired systems, age-old applications, modernization, end-user experience management, or next-generation digital initiatives, enterprise IT is expected to accommodate everyone. Requirements from the business are growing in volume and complexity. With the proliferation of next-generation services such as mobility, cloud, analytics, and maintenance/transformation of the legacy environment, the demand on delivering cost effective yet business-enabling IT service is creating further challenges. Agility Sustainability Business requirements Innovation Efficiency Still most enterprises are under an erroneous assumption that IT service implies IT support. Therefore, they are disproportionately focused on infrastructure operations. These organizations obsess over IT Service Management (ITSM) and ITIL (IT Infrastructure Library) frameworks. These principles though important, focus more on supporting existing systems than transforming, modernizing, and preparing systems for the future. Shrinking product life cycles, increasing adoption of agile methodologies, and DevOps strategies are pushing IT service delivery organizations to further optimize operations. Many optimization initiatives that were implemented earlier could not deliver meaningful value as these were largely focused on IT support. Enterprises now require integrated technology solutions spanning the entire application lifecycle that can truly optimize IT service delivery compared to the earlier piecemeal approach. research.everestgrp.com EGR-2015-4-R-1387 3 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER IT Service Delivery – Key Challenges The evolution of most enterprise IT organizations has, typically, been ad-hoc and reactive. As a result, IT service organizations rarely adopt a comprehensive end-to-end and consistent model for development and support. Multiple (often redundant) systems are developed to cater to specific business requirements, Mergers and Acquisitions (M&A) bring a plethora of systems, and a geographically-distributed structure, where teams collaborate across the globe, further adds to the complexity. In such an environment, Enterprise IT needs to manage challenges across three primary dimensions viz., people, process, and information as depicted in Exhibit 1. Overdependence on human effort, fragmented management of the application lifecycle, disparate information sources for systems, and poor adherence to enterprise-wide best practices are some of the key challenges in IT service delivery. EXHIBIT 1 Pr IT service delivery challenges lated Source: Everest Group Low value work, which consumes significant time d te s re Overdependence on manual effort es oc Peopl e delivery re la Key challenges in IT service Limited end-to-end application lifecycle management Poor adherence to process standards and benchmarks Inf te d orm ation rela Islands of information that inhibit inhibiting effective collaboration Poor information management that impacts impacting systems lifecycle People-related challenges IT service delivery is almost entirely “effort driven”. The cost, quality, and enduser experience vary significantly based on the skills of the people involved. This is in contrast to leveraging repeatable and automated processes that can consistently deliver business-aligned IT services. Further, sporadic industrialization and automation is unable to provide the needed IT service delivery optimization. IT resources spend significant amount of time on tasks such as test data generation, data masking, gathering information about applications, manually analyzing legacy applications, and fragmented project management, rather than focusing on creating consistently excellent IT service. research.everestgrp.com EGR-2015-4-R-1387 4 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER Process-related challenges Most organizations, fully or partially, follow ITSM processes to align IT service delivery with business objectives. However, little focus is given to data-driven analysis for adherence across the SDLC. For example, very few organizations deploy automated mechanisms to analyze adherence to best practices for code development (e.g., code reuse, prototyping) to minimize technical debt. Further, enterprises have fragmented governance processes to manage their IT service landscape from development to production support. They do not have access to “one view” of performance across internal and external service providers. Various IT projects create their own version of best practices without organization-wide validation. These create significant cost overheads and islands of scattered best practices with limited value. Information-related challenges Enterprise IT teams have vast pools of internal or “tribal” knowledge. However, most of it is hardwired rather than documented. The knowledge within teams is rarely disseminated, creating significant challenges in transformational initiatives. The meta-data related to IT inventory (e.g., legacy systems) is either unavailable or fragmented, and rarely stored in a central platform. Moreover, there is little cross-team collaboration and information exchange due to lack of an engaging platform. Information sources are scattered across multiple teams with little consolidation or centralized access. This creates significant duplicity of effort and poses challenges to develop a best in class IT service delivery experience. research.everestgrp.com EGR-2015-4-R-1387 5 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER Impact of Suboptimal IT Service Delivery It is stating the obvious that poor and suboptimal IT service delivery causes value erosion, produces poor business results, and increases the business-IT disconnect. In these times of technology-led differentiation and rapid innovation, suboptimal IT service delivery can limit the capability of a business to differentiate and grow. Moreover, as businesses drift further apart from IT-driven objectives, new funding for the IT service organization gets negatively impacted. This further exacerbates the challenges, as the agenda of the IT service organization becomes cost containment versus business enablement. Suboptimal IT service delivery results in budget overruns and poor quality of business offerings. The business misses growth opportunities due to delayed timelines. It not only results in reduced profitability for the business but also creates significant reputation risk as shown in Exhibit 2. EXHIBIT 2 Cost overruns Poor quality Business impact of a suboptimal IT service delivery Delayed timelines Result of suboptimal IT service delivery Business-IT disconnect Business impact Source: Everest Group Missed growth opportunities Diminished profitability Reputation risk Sustainability challenges Cost overrun Most IT service delivery resources are engaged in tasks that consume significant time, however, create limited business value. This increases the cost of IT service delivery as more resources are deployed than necessary. Senior leadership bandwidth is consumed in operational tasks for managing manual processes and their outcomes. Cost of communication and collaboration increases in the absence of a centralized platform. Everest Group research indicates that enterprises with suboptimal IT service delivery teams overspend by 25-35% in delivering the needed services. Organizations typically lack an end-to-end view of their IT service landscape that result in islands of costs. Most business critical projects (e.g., legacy application transformation) underestimate the cost drivers as they leverage inadequate tools that can comprehensively assist in this process. Delayed timelines A suboptimal IT service delivery impacts the agility of a business to respond to market demands. Timelines of projects are repeatedly missed due to erroneous effort estimation, incorrect requirements gathering, poor development activities, and multiple ad-hoc manual interventions. For example, in legacy application transformation this is visible in the limited understanding of old technologies, research.everestgrp.com EGR-2015-4-R-1387 6 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER disproportionate effort to achieve data quality, and scattered documentation. Consequently, enterprises spend 30-50% more time in delivering the required IT services due to disjointed service delivery practices. The business lacks agility and becomes “late to market” as critical initiatives are delayed. People responsible for differentiated IT services consume inordinate amount of time and resources due to lack of enabling tools. The business is unable to cater to rapidly changing market expectations, resulting in missed opportunities for growth. Poor quality Poor IT service delivery results in poor quality of the end product. A half-baked product or service can be detrimental to the brand image of an organization. As the overall IT service delivery is compromised at different junctures (e.g., incomplete requirements, poor coding practice, and incomplete QA), the quality suffers. Our research suggests that enterprises are unable to detect and address 30-50% of the functional and non-functional defects of the IT systems introduced during the requirements and design phase. These have significant quality and cost implications once discovered downstream (i.e., technical debt). These inferior products negatively impact the sustainability of the business. Moreover, as IT services become unreliable there are cascading challenges for the business to launch newer offerings or differentiate. Business-IT disconnect All of the outcomes of suboptimal IT service delivery cited above impact the relationship between business and IT. This disconnect severely impacts the funding for new initiatives as well as the credibility of the IT organization. Shadow IT functions within the business tap into alternate budget pools to enable functionalities that they require but do not trust enterprise IT to deliver. Consequently, IT is often viewed as a bottleneck in achieving business objectives making senior business leadership question the credibility and value of the IT organization beyond “keeping the lights on”. Many enterprises, such as Kodak and Borders, became extinct as the business could not evolve and respond adequately to the technology disruptions. We believe it is critically important for enterprises to embrace IT service delivery optimization. A suboptimal IT service delivery construct can hasten the irrelevance and extinction of an enterprise. research.everestgrp.com EGR-2015-4-R-1387 7 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER Leveraging Technology to Optimize IT Service Delivery “ Technology, through tools and other assets, is increasingly playing a critical role in nextgeneration IT service delivery eliminating waste, improving user experience, and aligning IT service delivery with overall business objectives. – Peter Bendor-Samuel, Founder and CEO, Everest Group Business-IT misalignment has been studied extensively and enterprises have adopted various strategies to bridge this gap. Despite a strong focus on ITSM processes, this disconnect is witnessed across enterprises – large and small, alike. Organizations end up managing and creating “blind process adherence” for inherently inefficient and suboptimal IT service delivery. Most enterprises, while undertaking initiatives to optimize IT service delivery, typically default to a “big bang” approach of business process transformation. Though the aspirations are commendable, real execution witnesses significant challenges. Therefore, the success rate of these initiatives is uncertain despite massive investments and risks to service disruption. Other initiatives to optimize IT service delivery typically include investing in the skills of resources and incentive realignment. These approaches have demonstrated mixed results with limited consistency across enterprises. “ The most surprising aspect across enterprises regarding their initiatives to optimize IT service delivery, is the lack of focus on leveraging technology solutions as analyzed in Exhibit 3. Everest Group’s analysis reveals a surprisingly low adoption of technology-driven initiatives to improve IT service delivery, despite the achievable impact on end-outcomes. EXHIBIT 3 Approaches to optimize IT Focus Process reengineering service delivery and their adoption IT skill development IT incentive alignment Source: Everest Group Technologydriven initiatives Organizational Risk of service Assurance of outcome resistance disruption Enterprises have a hard-wired assumption regarding the benefits of process reengineering and transformation Investing in skills and aligning IT incentives have displayed mixed and inconsistent results Technology-driven initiatives are surprisingly ignored, though they can have the maximum impact on optimizing IT service delivery Though enterprises deploy multiple fragmented tools to achieve modular tasks (e.g., smoke testing, code conversion, performance analysis, disaster recovery, and server patching), very few leverage technology consistently and holistically across the SDLC and post production support processes. Our research and experience causes us to contend that the challenges confronting modern IT organizations cannot be addressed meaningfully by traditional methods of process reengineering, skills development, and incentive realignment. With agile delivery becoming mainstream and traditional models still continuing strong, enterprises require technology-enabled transformational initiatives to optimize IT service delivery. research.everestgrp.com EGR-2015-4-R-1387 8 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER Adopting Technology Solutions Across the SDLC Most enterprises invest a fortune in improving IT service delivery. There are numerous commercial software available that focus on streamlining and optimizing “sub processes” within the SDLC. However, most of these disjointed tools serve a specific function and operate in their own silos. These silos prevent traceability across design, development, QA, and support processes, which in turn impact the cost of operations, project timelines, and accountability. Everest Group’s research reveals that enterprises do recognize the value of technology-led IT service delivery optimization initiatives. However, they erroneously believe that investing in point solutions and focusing on specific tasks can optimize IT services. Exhibit 4 depicts that to fundamentally optimize IT service delivery, enterprises must necessarily invest in technology-driven initiatives across the SDLC processes and post production support. EXHIBIT 4 Service level assurance Adherence to industry frameworks (e.g., ITIL) service delivery optimization Source: Everest Group “Code once” deploy anywhere Role of technology solutions across SDLC Implement and maintain “Zero” day transition and knowledge digitization Adopting technology-led IT Prototyping and “codeless” development Faster development and support for Test and validate agile delivery Build and design Enable test data creation and management Continuous integration and testing Requirements and design Accountability by event tracing Centralized storage and management of requirements Analyze and plan Detect gaps early and integrate with other tools Enhance cross-team collaboration Application lifecycle For example, code reuse can save 25-35% of effort of developers. Further, a strong focus on code quality during “build and design” leveraging code diagnostic tools, can reduce approximately 30% of application tickets during production1. Collectively, these initiatives result in over 20% productivity improvements in activities such as application maintenance whenever tools are holistically leveraged across the SDLC. For enterprises to realize the full value of IT service delivery optimization initiatives, these technology solutions need to enable the following changes that are meaningful yet manageable: 1 In search of ADM productivity – You have Got to Start Somewhere research.everestgrp.com EGR-2015-4-R-1387 9 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER Process digitization and automation Enterprises need to move away from over reliance on human intervention and skills of individuals. Significant process documentation, team knowledge, configuration parameters, and related IT service delivery aspects are leveraged by “memory”, rather than through a structured approach. A technology-driven IT service delivery paradigm must digitize as many processes as possible, to limit human intervention and error. Different tasks need to be broken down into modules that can be industrialized, automated, and integrated to perform operations. For example, tasks such as test data generation, data masking, and collating events from multiple repositories, should require minimum human intervention. The platform should enable capturing and benchmarking of requirements. It should also automate correlation of events and standardization of processes. There must be defined process flows to adhere to for delivering optimized IT services. Data and analytics Enterprises have amassed colossal amounts of data across their IT environments. All the way from configuration data, application logs, events, incidents, defects, embedded business rules, and process flows, enterprises have vast repositories of data. Moreover, legacy systems accumulate precious data that can be effectively leveraged for transformational objectives. Any technology-driven IT service delivery optimization initiative must encompass fact-based data-driven analysis of applications and infrastructure. The solution must ensure data relevancy, consistency, and accuracy for business. This data must provide complete insights into the application and infrastructure landscape for the best decision making. The fundamental metadata across systems must be collated and enhanced. For example, rather than relying on extensive human effort during an application rationalization or consolidation exercise, technology-driven initiatives must automatically extract and gather relevant application metrics (e.g., configuration, business rules). Collaboration and process adherence Enterprises have a plethora of stand-alone and siloed tools for tasks such as project management and service governance. However, maximum focus is on production support and IT operations. There is limited support for different SDLC activities, resulting in poor process adherence. IT support is generally centralized, whereas new projects reside with business and, therefore, are scattered. There is little collaboration to improve IT services right at the inception. Technology-driven IT service delivery optimization should embed intelligence beyond post production support and encompass the entire SDLC value-chain (e.g., design, development, QA, and service transition). It should provide research.everestgrp.com EGR-2015-4-R-1387 10 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER reusable components and modules to improve productivity and ensure consistent practices in code development and QA. Collaboration must be digitized to enable dissemination of best practices and seamless communication between developers, QA, sponsors, and project managers. Global system repositories Technology platforms need to aggregate the fragmented system information across the enterprise. These platforms should provide an easy mechanism to store, retrieve, and update system-related data. Scattered information prohibits transformation of legacy systems, hinders business agility, and increases cost of operations. Optimized IT service delivery must rely on a consistent global repository of meta-data related to different applications and systems that augments the Configuration Management Database (CMDB). This repository should be easily accessible for developers and support engineers to quickly meet changing business requirements. Moreover, the technology solution should enable consistent view and updated system documentation to deliver optimized IT services (e.g., migration, effort estimation, and continuous improvement). Value and Key Success Factors – Technology-led IT Service Delivery Optimization “ CIO’s are increasingly looking to simplify their IT portfolio and increase the return on investment for their technology decisions. Key to making this happen is innovation so that the service delivery process is standardized, helping reduce customer costs while delivering a high quality service. – Allen Brown, CEO and President, The Open Group “ research.everestgrp.com EGR-2015-4-R-1387 As enterprises seek to technology-led optimization of IT service delivery they need to focus on tangible benefits from these initiatives. Everest Group’s research indicates that technology solutions can optimize various processes within the SDLC. End-to-end integrated technology solutions can significantly enhance quality of business offerings. These solutions can detect problems at an early stage, reducing the downstream cost of rework. Moreover, they automate and digitize manual processes improving productivity and time to market. Exhibit 5 summarizes the impact of technology solutions on driving IT service delivery optimization initiatives and the resultant business value generated. Technology-led IT service delivery optimization inculcates and encourages a culture of collaboration and data-driven IT services. The focus shifts from standalone KPI management to application-centric service delivery that maps to business outcomes. The technology solutions enable integrated SLA governance and an enterprise-wide view of IT services. 11 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER EXHIBIT 5 Business value from optimizing IT service delivery Source: Everest Group Impact of technology Design and development Management and support Implementation Transformation Reusable Knowledge Integrated Data-driven components Enable “low skill” development Optimized testing management and transition Automated deployments System data stores and mappings governance and collaboration Data management Factual application Program management transformation and systems analysis Quick turnaround and transition Business value Responsiveness to market demand Improved operational efficiency Enhanced customer experience New avenues for growth However, for this to succeed, organizations need a plan of action that does not introduce overwhelming changes to the overall environment. These initiatives should not be perceived as unmanageable by the stakeholders. Enterprises deploying technology solutions to optimize IT service delivery need to incorporate the vision of “simplification” at the core of their strategy. Though the idea of process reengineering is attractive, it is not always the best suited mechanism to optimize IT service delivery. Optimization initiatives should ideally be run in the “background” without requiring significant change management. In our experience, most well intentioned “big bang” optimization initiatives introduce unmanageable and unwarranted changes that result in failure. We believe that most business value resides in automating and digitizing manual processes, rather than in defaulting on process reengineering. The success of technology-led IT service delivery optimization initiatives rests on five major pillars as summarized in Exhibit 6. 6 Key success factors in optimizing Put “IT simplification” as the core focus of optimization initiatives Avoid overwhelming and unwarranted changes IT service delivery Ensure coverage across SDLC processes Source: Everest Group Get executive and line manager buy-in Plan and mitigate potential IT service disruption Key success factors for optimizing IT service delivery leveraging technology EXHIBIT Most IT-related initiatives require executive championship and commitment. However, optimizing IT service delivery is successful only when these initiatives also have the support of and buy-in from the line managers. Thrusting an initiative on them due to “organizational mandate” is unlikely to deliver intended outcomes. research.everestgrp.com EGR-2015-4-R-1387 12 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER Case Study: Woolworths Limited Client overview Founded in 1924, Woolworths is the largest supermarket and grocery chain in Australia, with over 198,000 employees, serving more than 28 million customers, and generating ~US$54 billion in revenue. Woolworths has more than 3,000 stores across Australia and New Zealand spanning food, petrol, liquor, general merchandise, and home improvement products. Context and background Technology plays a key role in Woolworths’ business given its scale and the nature of the retail industry. Woolworths’ Quality Assurance (QA) environment consists of multiple applications being tested by over 200 professionals (internal and service providers). At any given instance, the QA organization runs ~50 projects of different sizes across functional, performance, security, and integration testing. Woolworths has been working with Tata Consultancy Services (TCS) for over ten years and TCS is considered as a strategic partner by Woolworths, especially in the QA domain. The challenges Lack of process standardization, focus on “testing” than QA, and business frustration due to long testing cycles were the key challenges. Woolworths QA processes, though efficient, suffered from lack of standardization and integrated workflows. Woolworths realized that despite its process efficiencies, broader QA management had room for improvements. For example, on various occasions, the provisioned test environment differed from requirements and the QA team began every project “new” with limited leverage from earlier efforts. The QA organization was more focused on testing than on end-to-end quality assurance. This resulted in delays in service delivery to the business, prolonged time-to-market, and significant demands on time and resources during QA. The solution Woolworths earlier relied on an industry point solution for managing its QA processes. However, it realized the value of a platform integrated with broader IT services and replaced the point solution with TCS MasterCraft Application Lifecycle Manager (ALM). TCS MasterCraft portfolio consists of 30 technology products across eight suites, focusing on software automation tools and platforms to optimize and research.everestgrp.com EGR-2015-4-R-1387 13 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER enhance different SDLC processes such as application development, testing, data management, legacy transformation, and IT service management. The results TCS led the change management, in close collaboration with Woolworths’ QA organization, for deploying TCS MasterCraft Application Lifecycle Manager. The solution was deployed in a Software-as-a-Service (SaaS) model with TCS hosting it. A rigorous functional, performance, and integration testing of the platform (e.g., data exchange with on-premise systems, security concerns, and feature richness) provided comfort to Woolworths regarding the suitability of the SaaS solution. Further, the SaaS model allowed Woolworths to focus on business issues versus managing the underlying infrastructure. “ TCS MasterCraft ALM has good reporting functions, enhanced feature sets, and integrated workflows that help us in optimizing QA activities. – Richard Lewis, QA Manager, Woolworths Limited Given that the QA management platform is the “nerve center” for the entire QA organization, the deployment was performed in phases where dedicated TCS engineers provided live demo, deployment, customization, and support to Woolworths. Woolworths unlocked value in its QA process by deploying the TCS MasterCraft Application Lifecycle Manager. Apart from the fact that it is SaaS delivered, resulting in cost savings on infrastructure and support, the solution offered useful feature sets and workflows. Some of the key benefits derived till date include: “ a) Improved time-to-market: In the legacy environment, Woolworths witnessed challenges in accessing and managing defects. This resulted in business frustration and longer time-to-market. Post transition, Woolworths received feature rich capabilities for effective QA management, resulting in quicker and streamlined services delivered to the business b) Reduced governance overheads: Woolworths believe that TCS MasterCraft ALM offers improved and integrated workflows for QA resources to create and access QA-related data and information. These workflows assist in assigning and tracking QA-related responsibilities resulting in efficient operations, limited downtime, and reduced governance efforts and costs c) Unified QA view due to improved reporting: Woolworths leverages the improved reporting functionality of the platform that assists in making correct decisions aligned to the business objectives. This has increased QA productivity, created a unified view, and reduced costs d) Comprehensive QA assuring business satisfaction: Unlike in the legacy environment, QA resources do not spend an inordinate amount of time in ensuring scope adherence, as the platform readily provides needed information. Moreover, various aspects of QA processes are well captured research.everestgrp.com EGR-2015-4-R-1387 14 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER and accountability is transparent. This assists in increasing focus on core QA tasks, expanding coverage, and ensuring better quality of service delivered to the business Lessons learned Some of the key lessons learnt by Woolworths were: a) Have a plan: Woolworths realized that any critical platform that is deployed for the long term needs to undergo structured implementation. Woolworths and TCS jointly developed an action plan for the entire adoption journey. This ensured that the platform did not disrupt QA operations and was incorporated with limited hindrances b) Do not disrupt operations: Woolworths and TCS collaborated to ensure that there was minimal process transformation required. This is imperative to avoid large scale change management and QA disruption. Any process change, if required, was preceded by a detailed analysis and a strategy for subsequent change management c) Make users aware: Woolworths realized that simply deploying a different QA management platform will not create business value unless the end-users are made aware of its benefits. A structured program was devised to ensure that users are systematically made aware of TCS MasterCraft to extract maximum value from the platform d) “Right skill” the resources: The QA resources were trained on the additional features of TCS MasterCraft. This “upskilling” was required to derive the best value out of a new platform. Unless the end-users were skilled enough to work on the available enhanced functionality they could not add business value e) Value of platform enhanced by IT services: QA platforms can provide enhanced business value when augmented with IT services. Though not a prerequisite, platform providers need to offer IT services beyond typical deployments. There needs to be a “handholding” process and downstream support where clients are provided all the enabling services Woolworths is contemplating extending and adding similar functionality to different parts of the IT organization, beyond the QA function. The company has achieved success in deploying a large-scale platform at a fairly comfortable pace with limited downtime and business disruption. It would like to leverage this experience further in deploying other platforms and products. This exercise has provided Woolworths with significant “best practices” in platform selection, end-user awareness, and making the overall program a success. These are valuable lessons and will offer great help in the future across other programs research.everestgrp.com EGR-2015-4-R-1387 15 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER Conclusion The rapid disruption in technology, importance of maintaining & transforming existing systems, and aligning IT to business objectives requires enterprises to reinvent their IT service delivery. We believe right technology solutions deployed and integrated across different sub-processes across the SDLC can deliver significant value. However, these technology solutions need to be augmented with long term changes across different dimensions as shown in the Exhibit 7 below. EXHIBIT 7 IT service delivery optimization Level 1: Ad-hoc Delivery model continuum Level 2: Reactive Level 3: Optimized Over reliant on manual effort and ad-hoc interventions Limited collaboration even within teams IT service delivery focused on surviving the day Sporadic industrialization and automation Little cross-team collaboration and knowledge dissemination Reactive and over focused on IT support with misaligned practices Limited understanding and adoption of tools No clear tool strategy or vision Little tangible business impact Fragmented and expensive tool ecosystem Tools leveraged in “team island” Limited focus on estimating business ROI Source: Everest Group Technology solution Metrics and SLAs Organization design Digitization, industrialization, and automation are the core focus Strong cross-team collaboration and knowledge management End-to-end application lifecycle management aligned to industry best practices Integrated and cost effective tools strategy Tools deployed across SDLC Well-defined business case and outcome linked to tools adoption Project-based metrics Tower-focused SLAs with Application-centric with limited portfolio limited business delivery perspective alignment Business-aligned SLAs Incomplete and Unstructured IT-aligned Metrics focused on Total inconsistent definition and metrics and measurement Cost of Ownership (TCO) assessment Limited overarching design Poor accountability across technology and processes Segmented by complexity and business process Decentralized with multiple vendors and shared services End-to-end ownership of technology and business process Seamless internal and third-party vendor management Technology solutions can indeed play a significant part in optimizing IT service delivery. These solutions can assist in the industrialization, digitization, and automation of various processes. These automated processes are modular and can adhere to best practices and industry frameworks, creating greater accountability and transparency while improving business reliance and confidence of the business on the IT organization. These technology solutions should provide measurable and quantifiable Return on Investments (ROI) and can be supported by other long term initiatives (e.g., cultural change, delivery organization design, metrics strategy, and IT-business KPI mapping). Moreover, they can also expose the gaps across IT service delivery processes and help enterprises address these adequately in a timely manner. However, for this to happen, enterprises need to rethink their tools strategy, refocusing across SDLC, rather than only on point support. They need to inculcate a culture of assessing the entire application lifecycle end-to-end, research.everestgrp.com EGR-2015-4-R-1387 16 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER rather than in the silos. The focus needs to shift away from IT-aligned KPIs to business outcomes. This will be possible when these tools can assist in an application-centric IT service delivery that can support business objectives. Leveraged correctly, technology can make IT service delivery optimization a reality. The upside is too big to ignore, and the downside, well, it is outright scary! research.everestgrp.com EGR-2015-4-R-1387 17 OPTIMIZING IT SERVICE DELIVERY: TECHNOLOGY IS THE ANSWER About Everest Group Everest Group is an advisor to business leaders on next generation global services with a worldwide reputation for helping Global 1000 firms dramatically improve their performance by optimizing their back- and middle-office business services. With a fact-based approach driving outcomes, Everest Group counsels organizations with complex challenges related to the use and delivery of global services in their pursuits to balance short-term needs with long-term goals. Through its practical consulting, original research and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies and management approaches. Established in 1991, Everest Group serves users of global services, providers of services, country organizations, and private equity firms, in six continents across all industry categories. For more information, please visit www.everestgrp.com and research.everestgrp.com. For more information about Everest Group, please contact: +1-214-451-3110 [email protected] For more information about this topic please contact the author(s): Jimit Arora, Vice President [email protected] Yugal Joshi, Practice Director [email protected] research.everestgrp.com EGR-2015-4-R-1387 18
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