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) services
Key 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 value
Key asset 2 Continual Service Improvement (Lean SixSigma): a structured approach for incremental improvement of both delivered value and cost effectiveness of the IT organization
As a prerequisite to the above the following needs to be in place:
Incident Management
Request fulfillment
Change Management
Problem management
Configuration Management, and
A 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 Group
Founded in 1992
> 200 consultants globally
Servicing global & local clients operating in more than 49 countries and across all continents
Focusing on organizational IT-management challenges across 5 consulting practices and 1 education practice
Extensive 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
Athens
Tokyo
San Diego
Miami
Riyadh
Hong Kong
Dubai
Delhi
Mumbai
Bangalore
Kuala Lumpur
Sao Paulo

6. Client Examples – Cross Industries

7. Quint Consulting Services
Government & Healthcare
Finance
Trade, Transport & Industry
Retail & Services
Utilities
Telco
Business Information Mgt
Market Orientation
Strategy
Design
Improvement
Audit
Architecture & Innovation
Strategy
Assessment
Second opinion
Application rationalization
Transformation Mgt
Sourcing & Benchmarking
Strategy
Deal making
Contracting
Mediation
Benchmarking
Sourcing & Transition Mgt
Sourcing & IT Governance
Strategy
Assessment
Design
Improvement
Co-sourcing
IT Performance & Quality Mgt
Strategy
Assessment
Design
Improvement
IT Auditing
Lean

8. Our way of working: “Dare to challenge”
Author: Menzo Meijer
Our 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 approach
Service 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.

10. The ITILv3 Service Lifecycle encompasses all processes for successful service delivery…
The ITIL Library is the set of publications officially endorsed by OGC as the ITIL Best Practice. It has the following components:
The ITIL Core: Best practice guidance applicable to all types of organizations who provide Services to a Business. It consists of five books, of which this training gives you a basic overview plus an introduction book to the ITIL Service Lifecycle. These books are:
Service Strategy
Service Design
Service Transition
Service Operation
Continual Service Improvement
The Introduction to the ITIL Service Lifecycle
Complementary Guidance: a complementary set of publications with guidance specific to industry sectors, organization types, operating models, and technology architectures
ITIL Live: Web support Services that provide additional knowledge on ITIL
The guidance in ITIL can be adapted for use in various Business environments and organizational strategies. The Complementary Guidance provides flexibility to implement the Core across a diverse range of environments. Practitioners can select Complementary Guidance as needed to provide traction for the Core in a given Business context, much like tires are selected based on the type of automobile, purpose, and road conditions. This is to increase the durability and portability of knowledge assets and to protect investments in Service Management capabilities.
©OGC

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 solution
Non-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 providers
Service 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 V2
New in ITIL v3
Applications Mgmt
(Function)
Functions
Knowledge Mgmt.
Supplier Mgmt.
Technical Mgmt
(Function)
Evaluation
Service Catalog Mgmt.
Request Fulfillment
Service Validation
and Testing
Info Security Mgmt.
Event Management
Transition Planning
and Support
Strategy Generation
IT Service Cont. Mgmt.
Access Management
Release and
Deployment Mgmt.
Problem Management
Demand Mgmt.
Capacity Mgmt.
Service Portfolio
Mgmt.
Service Asset
and Config. Mgmt.
Availability Mgmt.
Incident Management
Service Level Mgmt.
Service Desk
(Function)
Financial Mgmt.
Change Mgmt.
Service
Strategy
Service
Design
Service
Transition
Service
Operation
The 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 Improvement
7-Step Improvement Process, Deming Cycle, CSI Model
Service Reporting
Service 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 A
Business
Process 1
Process 2
Process 3
IT Service X
IT Service Y
IT Assets & Resources
Definition 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 + Warranty
Performance supported?
Fit for purpose?
Utility
Constraints removed?
Value
Available enough?
Service Value = Service Warranty + Service Utility
Service 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?
Warranty
Continuous enough?
Fit for use?
Secure enough?

16. Service Catalog Management
The Service Catalogue
Business
Process1
Business
Process2
Business
Process3
Business Service Catalogue
Service A
Service B
Service C
Service D
Service E
The 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 Catalogue
The 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 view
Technical Service Catalogue
Support
Services
Hardware
Software
Applications
Data

17. Service Level Management
Customer
Service Level Requirements
Service Level Agreement
SLR
SLA
IT Organization
Operational Level Agreement
Underpinning Contract
To 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. UC
OLA
External Providers (Suppliers)
Internal Providers (Departments)

18. Prerequisites for implementing Service Catalog
Operational processes
Incident management
Service Request Management
Change Management
Problem Management
Configuration Management
Tooling
Common Service Management tooling
Systems 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 proposal
IPW
Red – Production time in the business
Light Green – Changes and projects
Yellow – Proactive IT
Dark Green –Financial Performance
Dark Blue – IT Continuity
ICT Domain
Commercial
Policy
HRM
Strategy
Architecture
Finance
Relationship Management
Service Level Management
Service Planning
Service
Development
Financial
Mgnt.
Security
Build &
Test
Design
Capacity
Availability
Continuity
Change
Incident
Problem
Configuration
Operations
Release
Service desk
BITA
Information
ICT
Value
Demand
Business
Support
Application
Functional
Strategic
Sourcing
Supplier
Portfolio Mgnt.
Supply
Contract
Purchase
SITA
supplier
processes
business
planning
operations
Supplier Domain
Business Domain
Rome, 3-5 June 2009

20. Agenda Introduction Services Improvement
Conclusions and recommendations

21. IT Management Agenda Topics
“How do I get the most out
of my current IT organization?”
“How can my IT Organization
improve its Performance
towards the Business?”
“My customers do not recognize
the added value of my IT
Organization”
“How do I get my IT Organization
to be customer focused?”
“My customers think the
Time-to-Market of new services
is 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 Alignment
Retaining IT Professionals
Security and Privacy
IT and Strategic Planning
Speed and Agility
Government Regulation
Complexity Reduction
IT Governance
Information Architecture
Business Process Reengineering
* As identified in a CIO Magazine survey
“Does my IT organization have
the right size/cost level?”
“What is the added value of
compliancy?”

22. The “traditional” ITIL implementation Process-based Implementation
Key Unit of planning: Process Maturity
Key Success Indicator: Maturity improvement
Best suits organizations that:
Are geographically widespread
Do not have a (basic) common tool
Have diverse backgrounds (unconsolidated M&A’s)
Have been given enough time to sort out the problems
Potential pitfalls:
Non optimized performance
Parochial: not customer focused
Focus on individual processes with a lack of integral overview
No link between processes and functions
Too many KPIs
No clear goals
Processes compliant but customers still not satisfied
A 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 timeously
This 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 Drivers
Key Success Indicator: Measured improvement
Best suits organizations that require rapid results in:
Reducing lost production hours due to IT
Improving Time to Market
Improving relationship between Business and IT
Better anticipate future developments
Have a (basic) common tool (required)
Have basic processes already implemented (required)

24. Principles of serving our IT customers24

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 Changes
Effectiveness of Changes
Quality of Plans
Number of Proactive Changes
These are the key components of IT work:
Execution (HOW) – Doing things right
Content (WHAT) - Doing the right thing
Execution
… 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” policies
Management Imperative:
Communication with the (IT) Customer

27. “Maintain current functionality”
Basic IT Services
No IT Outages
New Use of IT
Quick
Time to Market
Of Changes
“Maintain current functionality”
Lost Production Hours 27

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 service
Goals of Incident Management process:
Restore normal service operation as quickly as possible
Minimize the adverse impact on the business operations
Ensuring that the best possible levels of service quality and availability are maintained according to SLAs
Like 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 Detection
And Recording
Classification and
Initial Support
Tracking
Service
Request?
Yes
Service
Request
Procedure
Communication
Ownership No
Investigation
And
Diagnosis
Monitoring
Resolution
And
Recovery
Incident
Closure

30. Lost Production Hours IT Downtime can be an expensive business
No. of incidents and resolution times B.
Time that incidents are open C.
Time that IT customers cannot work D.
Excess cost and lost revenue    30

31. Earning and burning capacity

32. Performance Based Implementation

33. Management dashboards
Weekly KPI
Dashboard
M4 Management Level
Lost Production Hours
Standardization Rate
Workload KPIs …
Weekly Team
Dashboard
M5 Management Level
Lost Production Hours
Average Case Turnaround
SLA Cases by Team
Workload …
Daily Team
Dashboard
M6 Management Level
Lost Production Hours
Actual Workload
Resolved Cases
SLA per Customer …

34. Lean IT Principles

35. Consistency triangle

36. Implementation focussed on performance Improvement Bi-weekly Action Cycle
Improvement cycles
Coaching
MOC interventions
Dashboard reporting 36

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 performance
Fortify operational processes and Service Management Tooling where needed
Implement Service Catalog and Service Level Management
Develop a leadership team to drive CSI through the organization
Initiate CSI programs