Presentation on theme: "ITIL from a business perspective"— Presentation transcript:
1 ITIL from a business perspective What’s its value and what to focus on
2 Executive summary There is at least 25% savings and improvement potential in any IT organization ITIL is acknowledged as the global standard for the process design and running of IT delivery organizations. Although moving towards the domain of application development, its core value is in IT infrastructure (data center) servicesKey asset 1 Service catalog: design of services that are recognized by and have value to the “customer”. It breaks down in components that need to be managed, maintained and innovated by IT to deliver sustainable valueKey asset 2 Continual Service Improvement (Lean SixSigma): a structured approach for incremental improvement of both delivered value and cost effectiveness of the IT organizationAs a prerequisite to the above the following needs to be in place:Incident ManagementRequest fulfillmentChange ManagementProblem managementConfiguration Management, andA common Service Management tool (you can’t improve what you don’t measure)
3 Agenda Introduction Services Improvement Conclusions and recommendations
4 Quint Wellington Redwood Independent Management Consulting & Education GroupFounded in 1992> 200 consultants globallyServicing global & local clients operating in more than 49 countries and across all continentsFocusing on organizational IT-management challenges across 5 consulting practices and 1 education practiceExtensive knowledge and insight into the IT and Sourcing marketplace gained through continual market research and well-established relationships with partners (i.e. APMG, ISACA, IAOP) and service providers.Proven IP, methodologies and tools. Recognized ‘Thought Leader’ in the industry.4
5 Global Coverage Amsterdam Brussels Paris Milan New York Madrid Rome AthensTokyoSan DiegoMiamiRiyadhHong KongDubaiDelhiMumbaiBangaloreKuala LumpurSao Paulo
7 Quint Consulting Services Government & HealthcareFinanceTrade, Transport & IndustryRetail & ServicesUtilitiesTelcoBusiness Information MgtMarket OrientationStrategyDesignImprovementAuditArchitecture & InnovationStrategyAssessmentSecond opinionApplication rationalizationTransformation MgtSourcing & BenchmarkingStrategyDeal makingContractingMediationBenchmarkingSourcing & Transition MgtSourcing & IT GovernanceStrategyAssessmentDesignImprovementCo-sourcingIT Performance & Quality MgtStrategyAssessmentDesignImprovementIT AuditingLean
8 Our way of working: “Dare to challenge” Author: Menzo MeijerOur way of working: “Dare to challenge”
9 IT Service Management defined IT Service Management definition:“A set of specialized organizational capabilities for providing value to Customers in the form of Services” ( Service Design, p. 11)Another definition:“IT Service Management is the effective and efficient, process driven management of quality IT Services”A professional practice supported by knowledge, experience, and skills, focusing on a Service-oriented approachService Management is defined as “a set of specialized organizational capabilities for providing value to Customers in the form of Services". The capabilities take the form of functions and processes for managing Services over a Lifecycle, with specializations in strategy, design, transition, operation, and continual improvement. The capabilities represent a Service organization’s capacity, competency, and confidence for action. The act of transforming resources into valuable Services is at the core of Service Management. Without these capabilities, a Service organization is merely a bundle of resources that by itself has relatively low intrinsic value for Customers.Service Management however, is more than just a set of capabilities. It is also a professional practice supported by an extensive body of knowledge, experience and skills. A global community of individuals and organizations in the public and private sectors fosters its growth and maturity. Formal schemes exist for the education, training, and certification of practicing organizations and individuals influence its quality. Industry best practices, academic research, and formal standards contribute to its intellectual capital and draw from it.The origins of Service Management are in traditional Service Businesses such as airlines, banks, hotels, and phone companies. Its practice has grown with the adoption by IT organizations of a Service-oriented approach to managing IT applications, infrastructure, and processes. Solutions to Business problems and support for Business models, strategies, and operations are increasingly in the form of Services. The popularity of shared Services and outsourcing has contributed to the increase in the number of organizations who are Service providers, including internal organizational units. This in turn has strengthened the practice of Service Management and at the same time imposing greater challenges upon it.
11 … which is successful for various reasons ITIL embraces a practical approach to service by adapting a common framework of practices that unite all areas of IT service provision towards a single aim – that of delivering value to the business.Vendor-neutral ITIL service management practices are applicable in any IT organization because they are not based on any particular technology platform or industry type. ITIL is owned by UK government and is not tied to any commercial proprietary practice or solutionNon-prescriptive ITIL offers robust, mature and time-tested practices that have applicability to all types of service organizations. It continues to be useful and relevant in public and private sectors, internal and external service providers, small, medium and large enterprises, and within any technical environment.Best practice ITIL represents the learning experiences and though leadership of the world’s best-in-class service providersService Management is defined as “a set of specialized organizational capabilities for providing value to Customers in the form of Services". The capabilities take the form of functions and processes for managing Services over a Lifecycle, with specializations in strategy, design, transition, operation, and continual improvement. The capabilities represent a Service organization’s capacity, competency, and confidence for action. The act of transforming resources into valuable Services is at the core of Service Management. Without these capabilities, a Service organization is merely a bundle of resources that by itself has relatively low intrinsic value for Customers.Service Management however, is more than just a set of capabilities. It is also a professional practice supported by an extensive body of knowledge, experience and skills. A global community of individuals and organizations in the public and private sectors fosters its growth and maturity. Formal schemes exist for the education, training, and certification of practicing organizations and individuals influence its quality. Industry best practices, academic research, and formal standards contribute to its intellectual capital and draw from it.The origins of Service Management are in traditional Service Businesses such as airlines, banks, hotels, and phone companies. Its practice has grown with the adoption by IT organizations of a Service-oriented approach to managing IT applications, infrastructure, and processes. Solutions to Business problems and support for Business models, strategies, and operations are increasingly in the form of Services. The popularity of shared Services and outsourcing has contributed to the increase in the number of organizations who are Service providers, including internal organizational units. This in turn has strengthened the practice of Service Management and at the same time imposing greater challenges upon it.
12 ITIL v3 contains various processes and Functions IT Operations Mgmt(Function)From ITIL V2New in ITIL v3Applications Mgmt(Function)FunctionsKnowledge Mgmt.Supplier Mgmt.Technical Mgmt(Function)EvaluationService Catalog Mgmt.Request FulfillmentService Validationand TestingInfo Security Mgmt.Event ManagementTransition Planningand SupportStrategy GenerationIT Service Cont. Mgmt.Access ManagementRelease andDeployment Mgmt.Problem ManagementDemand Mgmt.Capacity Mgmt.Service PortfolioMgmt.Service Assetand Config. Mgmt.Availability Mgmt.Incident ManagementService Level Mgmt.Service Desk(Function)Financial Mgmt.Change Mgmt.ServiceStrategyServiceDesignServiceTransitionServiceOperationThe image presented above gives a quick overview of the processes and functions contained within ITIL. During this course, all of these will be discussed in further detail. Within ITIL, the processes are distributed over the five books. Each book describes in detail the goals, objectives, activities, roles, etc of the processes. If you work in an IT environment, you might be familiar with some of these processes, or might know them under a different name.Not all processes fit completely in the Lifecycle stage that the book describes, some processes cover the whole Lifecycle. This course is set up to discuss each Lifecycle and the processes described in each book.Service Strategy: Envisioning and conceptualizing the set of Services which help achieve Business goals.Service Design: Designing the Services with utility and warranty objectives in mind.Service Transition: Moving Services into the live production environment.Service Operation: Managing Services on an ongoing basis to ensure their utility and warranty objectives are achieved.Continual Service Improvement: Evaluating Services and identifying ways to improve their utility and warranty in support of Business objectives.Continual Service Improvement7-Step Improvement Process, Deming Cycle, CSI ModelService ReportingService Measurement
13 Agenda Introduction Services Improvement Conclusions and recommendations
14 An IT Service enables business services and consists of IT Assets and Resources Business Service ABusinessProcess 1Process 2Process 3IT Service XIT Service YIT Assets & ResourcesDefinition of a Service:“ Services are a means of delivering value to Customers by facilitating the outcomes Customers want to achieve without the ownership of specific costs and risks".IT is an enabler for Business processes and not a goal on its own. Therefore, IT must never forget that they primarily exist to support the Business Services, and that it is important to specify the Business outcomes when defining a Service. In this perspective, IT Services can be seen as a strategic asset that provide a basis for core competence, distinctive performance, durable advantage and qualifications to participate in Business opportunities.IT Services derive their potential from Assets (Capabilities and Resources), such as processes, people, infrastructure, etc. These assets are discussed in detail in the Service Strategy Module later in this course.Business managers challenge the IT organization to engage with them at the level of Business processes. They want assurance that applications and infrastructure will support new Business initiatives. However, there are coordination and cooperation problems between the two sides. Business managers may not understand the complexity and detail of creating the Business process with the realm of information, applications and infrastructure. IT managers may not have a clear understanding of exactly what Business managers are trying to accomplish. The problem gets worse with complexity, duplication and the absence of clear models for coordination and control.
15 Service Value can be defined by Utility and Warranty Service Value = Utility + WarrantyPerformance supported?Fit for purpose?UtilityConstraints removed?ValueAvailable enough?Service Value = Service Warranty + Service UtilityService Utility defines the functionality of an IT Service from the Customer’s perspective (i.e.: what the Service does) and in terms of the increase in possible gains from the performance of the Customers assets. It is perceived by the Customer from the attributes of the Service that have a positive effect on the performance of tasks associated with desired Business outcomes. This means that the Service is fit for purpose.Service Warranty for a Service provides the Customer a level of reassurance and guarantee to meet agreed requirements. It is the decrease in possible losses for the Customer from variations in performance. Example attributes: availability, capacity, continuity, security etc. It is derived from the positive effect being available when needed in sufficient capacity, and being dependable in terms of continuity and security. This means that the Service is fit for use.It is normal for Customers to be skeptical about the potential value to be realized from Services when there is uncertainty surrounding the Service output. This is remedied by backing up the utility of a Service with a warranty.If there is little or no difference regarding the warranty on the market, then IT organization should use the utility criteria to differentiate itself. Utility is necessary but not sufficient: Utility is backed up by warranty so that Customers do not worry about possible losses due to poor performance or performance variations.Capacity enough?WarrantyContinuous enough?Fit for use?Secure enough?
16 Service Catalog Management The Service CatalogueBusinessProcess1BusinessProcess2BusinessProcess3Business Service CatalogueService AService BService CService DService EThe Service Catalogue Management process produces and maintains the Service Catalogue ensuring that a central, accurate and consistent source of data is provided, recording the status of all operational services or Services being transitioned to the live environment together with appropriate details of each Service.When initially completed, the Service Catalogue may consist of a matrix, table or spreadsheet. Many organizations integrate and maintain their Portfolio and Catalogue as part of their Configuration Management System.The Service Catalogue is useful in developing suitable solutions for customers from one or more Services. Items in the Catalogue can be configured and suitably priced to fulfill a particular need.Changes within the Service Portfolio and Service Catalogue are subject to the Change Management process. Once a Service is ‘chartered’ (being developed for use by customers), Service Design produces the specifications for the Service and it is at this point the Service should be added to the Service Catalogue. It can also be used for other Service Management purposes (e.g., for performing a Business Impact Analysis (BIA) as part of IT Service Continuity Planning, or as a starting place for re-distributing workloads, as part of Capacity Management).The Service Catalogue has two aspects:The Business Service Catalogue: containing details of all of the IT Services delivered to the customer, together with relationship's to the business units and the business process that rely upon the IT Services. This is the customer view of the Service CatalogueThe Technical Service Catalogue: containing details of all of the IT Services delivered to the customer, together with relationship's to the supporting Services, shared Services, components and CI’s necessary to support the provision of the Service to the business. This underpins the Business Service Catalogue and does not form part of the customer viewTechnical Service CatalogueSupportServicesHardwareSoftwareApplicationsData
17 Service Level Management CustomerService Level RequirementsService Level AgreementSLRSLAIT OrganizationOperational Level AgreementUnderpinning ContractTo reach Service Level Management objectives, some concepts must be taken in consideration:Service Level Requirements (SLR): Is a set of targets and responsibilities documented and agreed within an SLR for each proposed new or changed Service. SLR’s are based on Business Objectives and are used to negotiate agreed Service Level Targets.Service Level Agreement (SLA): Is a written agreement between an IT Service provider and the IT customer, defining the key Service targets and responsibilities of both parties. The emphasis must be on agreement and SLA’s should not be used as away of holding one side or the other to ransom. A true partnership should be developed between the IT Service provider and the customer, so that a mutually beneficial agreement is reached.Although the IT organization itself has access to certain resources, it can also acquire resources and/or Services from internal providers (like the network department, mainframe department) or external providers (like a telecommunication company). To be able to manage the performance of these hired resources and Services, the IT organization needs agreements with these providers. These are called Operational Level Agreements for Internal Providers and Underpinning Contracts for External Providers.Operational Level Agreement (OLA): Is an agreement between an IT Service provider and another part of the same organization that assists with the provision of Services, for instance a facilities department that maintains the air conditioning, or network support team that supports the network Service. An OLA should contain targets that underpin those within an SLA that to ensure that targets will not be breached by failure of the supporting activity.Underpinning Contract (UC): Is a contract between an IT Service provider and an external supplier covering delivery of Services that support the IT organization in their delivery of Services. In ITIL Version 3 the Supplier Management process is responsible for negotiating these UC’s with external suppliers and making sure that they aligned with the needs of the business.UCOLAExternal Providers (Suppliers)Internal Providers (Departments)
18 Prerequisites for implementing Service Catalog Operational processesIncident managementService Request ManagementChange ManagementProblem ManagementConfiguration ManagementToolingCommon Service Management toolingSystems management tooling (preferably)Goal: To restore normal Service Operation as quickly as possible and minimize the adverse impact on Business operations, thus ensuring that the best possible levels of Service quality and availability are maintained.Incident Management is the process for dealing with all Incidents; this can include failures, questions or queries reported by the Users (usually via a telephone call to the Service Desk), by technical staff, or automatically detected and reported by Event monitoring tools.The main objectives of Incident Management are to:Resolve the Service disruption as quickly as possible; at least within the targeted time as documented in the Service Level Agreement. Normal Service Operation is defined as “Service Operation within Service Level Agreement (SLA) limits.”Maintain a constant stream of communication between the IT organization and their Customer, concerning the status in relation to a Service disruption (e.g., escalation, estimated time until solved, etc).Evaluate an Incident to determine whether it is likely to reoccur and/or if it is the symptom of a chronic problem. If so, inform Problem Management about the Incident.
19 IPW Red – Production time in the business Quint Wellington Redwood – PBSM Internal training M08 – Sales and Project proposalIPWRed – Production time in the businessLight Green – Changes and projectsYellow – Proactive ITDark Green –Financial PerformanceDark Blue – IT ContinuityICT DomainCommercialPolicyHRMStrategyArchitectureFinanceRelationship ManagementService Level ManagementService PlanningServiceDevelopmentFinancialMgnt.SecurityBuild &TestDesignCapacityAvailabilityContinuityChangeIncidentProblemConfigurationOperationsReleaseService deskBITAInformationICTValueDemandBusinessSupportApplicationFunctionalStrategicSourcingSupplierPortfolio Mgnt.SupplyContractPurchaseSITAsupplierprocessesbusinessplanningoperationsSupplier DomainBusiness DomainRome, 3-5 June 2009
20 Agenda Introduction Services Improvement Conclusions and recommendations
21 IT Management Agenda Topics “How do I get the most outof my current IT organization?”“How can my IT Organizationimprove its Performancetowards the Business?”“My customers do not recognizethe added value of my ITOrganization”“How do I get my IT Organizationto be customer focused?”“My customers think theTime-to-Market of new servicesis too long”Complex organizations, processes, applications and infrastructure make it difficult for business decision makers to understand when and how to respond to market opportunities, competitors’ moves and regulatory changes.Top 10 Concerns that keep CIO’s Awake at Night*:IT and Business AlignmentRetaining IT ProfessionalsSecurity and PrivacyIT and Strategic PlanningSpeed and AgilityGovernment RegulationComplexity ReductionIT GovernanceInformation ArchitectureBusiness Process Reengineering* As identified in a CIO Magazine survey“Does my IT organization havethe right size/cost level?”“What is the added value ofcompliancy?”
22 The “traditional” ITIL implementation Process-based Implementation Key Unit of planning: Process MaturityKey Success Indicator: Maturity improvementBest suits organizations that:Are geographically widespreadDo not have a (basic) common toolHave diverse backgrounds (unconsolidated M&A’s)Have been given enough time to sort out the problemsPotential pitfalls:Non optimized performanceParochial: not customer focusedFocus on individual processes with a lack of integral overviewNo link between processes and functionsToo many KPIsNo clear goalsProcesses compliant but customers still not satisfiedA traditional response to an issue is to kick off a process based project that focusses on process design and implementation. Process maturity is the target of such an intervention but an efficient process does not always mean that for example incidents are closed timeouslyThis means that an efficient process may indeed result in lost production hours but still appear to the organisation to be working well.These projects can often create too many, or ambiguous, KPI’s for IT to effectively manage their delivery to business.(Note to presenter: Is the business audience concerned that their IT Incident process is at a maturity level of 3.6? Or are they concerned about the number of service outages?)
23 The “performance based” ITIL implementation Value driven Implementation Key Unit of planning: Value DriversKey Success Indicator: Measured improvementBest suits organizations that require rapid results in:Reducing lost production hours due to ITImproving Time to MarketImproving relationship between Business and ITBetter anticipate future developmentsHave a (basic) common tool (required)Have basic processes already implemented (required)
25 IT Services and Value Drivers The business value drivers translate into a number of measurable IT value drivers.As an example, a reduction in the time to close an incident will result in a directly proportional increase in available business production hours.IT managers need to realise the environment in which they operate and continually deliver service on a cost effective basis, the value drivers on which they operate must recognize this.A key factor in this approach is a sustained relationship with the customer to understand his real needs and to inform him of any improvements IT will be making to meet those needs.
26 Manage Execution Value Driver Trend Lost Production Hours Time to Market of ChangesEffectiveness of ChangesQuality of PlansNumber of Proactive ChangesThese are the key components of IT work:Execution (HOW) – Doing things rightContent (WHAT) - Doing the right thingExecution… is about doing the work in the right way… should be managed with simple KPIs… must make clear that IT employees are carrying out the IT strategy and contributing to the business strategy… is governed by the “way we work” policiesManagement Imperative:Communication with the (IT) Customer
27 “Maintain current functionality” Basic IT ServicesNo IT OutagesNew Use of ITQuickTime to MarketOf Changes“Maintain current functionality”Lost Production Hours27
28 How does this relate to ITIL and in particular to Incident Management? What is an Incident?Any event not part of the standard operation of a service which (may) cause an interruption to, or a reduction in, the quality of that serviceGoals of Incident Management process:Restore normal service operation as quickly as possibleMinimize the adverse impact on the business operationsEnsuring that the best possible levels of service quality and availability are maintained according to SLAsLike other IT governance or service management, ITIL defines the terminology and outlines the key steps in the process of delivering, supporting and managing IT operations. When done right, ITIL helps an IT department improve its quality of service. How? By (among other things) providing faster problem resolution, thus increasing system uptime and security as the root causes of problems are discovered and corrected faster than the patchwork of ad hoc methods many IT departments use.Having defined Incidents, it’s worth stating the goal of Incident Management: to restore services as quickly as possible to users, thereby reducing the impact of Incidents upon the organisation. This is not to say that is all we do: there are quite a lot more tasks involved, but this is the ‘output’ or primary goal of the Incident Management process (remember that a general goal of IT Service Management is to stop Incident happening in the first place).
29 Incident Management Process Incident DetectionAnd RecordingClassification andInitial SupportTrackingServiceRequest?YesServiceRequestProcedureCommunicationOwnershipNoInvestigationAndDiagnosisMonitoringResolutionAndRecoveryIncidentClosure
30 Lost Production Hours IT Downtime can be an expensive business No. of incidents and resolution timesB.Time that incidents are openC.Time that IT customers cannot workD.Excess cost and lost revenue30
33 Management dashboards Weekly KPIDashboardM4 Management LevelLost Production HoursStandardization RateWorkload KPIs…Weekly TeamDashboardM5 Management LevelLost Production HoursAverage Case TurnaroundSLA Cases by TeamWorkload…Daily TeamDashboardM6 Management LevelLost Production HoursActual WorkloadResolved CasesSLA per Customer…
37 PBSM ROI Study (based on client data) In this example of a Quint PBSM project, these figures depict real client data. The important business metric of lost production hours was adopted by the IT organisation as a value driver and in the duration of the project, in 2 week cycles, workers adapted their process and ways of working that reduced the number of lost production hours significantly.It is important to note that the results of the project activity continue to show true for a long period after the project, proving that the organisation had learned from the project and changed behavior accordingly.Another interesting note is the direct relationship shown between the business metric of lost production hours and the SLA performance.
38 Agenda Introduction Services Improvement Conclusions and recommendations
39 Conclusions and recommendations Establish a baseline for process maturity and performanceFortify operational processes and Service Management Tooling where neededImplement Service Catalog and Service Level ManagementDevelop a leadership team to drive CSI through the organizationInitiate CSI programs