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The Business Case for Configuration Management What are the Paybacks

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1 The Business Case for Configuration Management What are the Paybacks
The Business Case for Configuration Management What are the Paybacks? Oslo 12th October 2006 Roger Mallett ( ) Senior Architect, International Expertise Team & Global Openview SWAT Team Hewlett Packard

2 Introduction Roger Mallett – Senior Architect for Hewlett Packard
Expert in Asset Management Certified IT Asset Manager & ITIL certified Written 3 books on ITAM best practice with a fourth awaiting publication Is at the forefront - providing advice and guidance to some of the world’s largest enterprise companies

3 HP OpenView Building blocks to successful enterprise management
Business External Focus [This slide shows simplified axes and shows how the overall diagram maps to the axes. -- The image fades to help set up the next slide – because it is not about the diagram – it is about helping the customer meet their needs/objectives -- we will now use the structure shown to have great conversations with senior folk. Purely operations focus staff will not relate to the entire big picture – they will relate to a single vector] IT Process Focus IT Operations Focus Point Tools Consolidated / Integrated Service Perspective

4 HP OpenView enterprise management
Purpose: Introduce the larger HP OpenView portfolio message. Notes: These three interrelated vectors form the basis for our visualization of the HP OpenView portfolio First is BUSINESS ALIGNMENT – providing that external focus for IT – communicating outward to stakeholders on IT’s value and improvements and allowing IT to have a much more current understanding of how IT is actually meeting business requirements and at what level those business requirements are currently at. Second is IT PROCESS AUTOMATION –driving automation, consistency and reliability in IT staff activities. Providing the foundation for moving IT from a hero-based environment to a role-based environment. Saving valuable staff time so IT can actually address those new project they are expected to implements later. Third is Infrastructure Optimization – where end to end proactive management of all the network, hardware, OS and application elements are performed. <Transition> How does the ITSM solution fit within HP OpenView’s overall solution … Key Takeaway: HP OpenView has a broad portfolio to cover all three of the IT challenges raised earlier.

5 HP OpenView ITSM Solution Integrated Processes need Integrated Tools
Purpose: Connect ITSM with the larger HP OpenView portfolio message. Introduce the ITSM functional model. Presenter Tip: Rational for the ITSM functional model (the eye of ITSM) can be found after Key Takeaway Notes: ITSM spans the three vectors or layers It fits in the bottom half of Business Alignment because on the basic tenants of ITSM is to set and meet expectations of the business. It is how we prioritize what and how things are done. At the core of HP OpenView’s ITSM offering is the ability to automate key ITSM related tasks and processes to make the transition to repeatable standardized processes easier and lower the cost and errors associated with tasks that can and should be completely automated. Not all servers are equal in the IT environment from how they support the business. Even the IT infrastructure that is critical to support the business differs based on the business function it supports. We must optimize what is managed and how it is managed. This is a higher objective of this layer and why ITSM spans the top of it. Now let’s look at the solutions that comprise our ITSM solution in a more functional view <click> (the solutions morph into the ITSM functional model with ITSM in the middle) You can see that the supporting HP OpenView solutions from the Blue automate layer and the orange optimize layers have united into a ITSM functional model that will help describe the solution. The core processes within IT Service Management best practices are tightly integrated. In order to support these tightly integrated IT processes, HP OpenView’s solutions are also tightly integrated through a integration layer (gray circle). At the core or heart of this integration is the Configuration Management Database (Logical DB for now, will be Physical at beginning of 2007) where information about our IT environment is maintained and shared between all the surrounding solutions. <Click><Surrounding green and grey circle> So what happened with the connection to the Align or green layer? All of these component solutions provide vast amounts of data on the processes they support, but together provide a much higher level of insight to what is going on within IT, how IT is meeting the expectations of the business, and more importantly to provide consistent communication with end-user / customers so that their last call into IT with a problem is temper with all of the value IT is delivering to the business. There are two core values of HP OpenView that this model demonstrates: These solution components can be implemented in a stepwise fashion in order of your needs when you need them The open nature of the HP OpenView portfolio allows the integration with virtually any third party application that supports any of the component solutions or to work with any component solution you may have in place. <Transition> How exactly does HP OpenView’s tightly integrated ITSM solution support industry standard best practices? Key Takeaway: A tightly integrated ITSM solution that supports tightly integrated industry-standard best practices. Function diagram rational (the eye of ITSM): Pictorially represents tightly integrated ITSM solution and strategy as opposed to a list of products / capabilities Aligned with current and future CMDB strategy which is central to HP OV ITSM Aligned with A2O in both solution terminology and HP one-voice color shading Speaks to reasons for OV Acquisition strategy … Completing the ITSM story Perfect for up-sell / cross-sell opportunities of highlighting adjacent capabilities both for traditional HP and former Peregrine customers Helps demonstrate ITIL coverage – you will see later in deck Highlights integration proof point – you will see later in deck The CMDB in the middle Currently a logical CMDB with synchronization between the physical data stores in Config Mgmt, CSD and Asset Mgmt Active CMDB will make this a physical CMDB by the end of the year Asset Management Configuration Management Consolidated Service Desk Identity Management End To End Application Management Consolidated Event and Performance Management

6 IT challenges What’s keeping you up at night?
Demonstrate IT’s value to the business What’s keeping you up at night? Making IT a valued partner to the business, faster and more effectively [Present the overall IT challenges (CIO) and HP OpenView’s value proposition, enables the link to the HP OV solution message] The debate is no longer about defining the new role for IT moving forward, it's about how to get there. OpenView enterprise management can help to make IT a valued partner to the business, and do so faster and more smoothly than not only other enterprise management solutions, but than other approaches entirely. How does that work? Three ways: #1: Service continuity, keeping things up and running, minimal disruption, minimal performance degradation. And do all this in the midst of changes. Is acknowledged for delivering trusted and reliable services to the business, (Continuity) This addresses the number one expectation that a CEO has of a CIO – it just has to work. IT must maintain a credibility and reputation for being trustworthy and competently being able to manage the resources they care for and delivering rock solid services that the organization has come to depend upon #2: By helping the business better adapt to change. Every business requirement should be met by an immediate IT response. Smoothly and more predictably. Is better able to anticipate & respond quickly & safely to business change, (Better Manage Business Change) IT change is controlled within IT, business change requires that IT respond in a timely & professional manner, while still delivering on current requirements #3: Demonstrating IT's value to the business; Clarity of investment in IT and proven ROI. Contributes measurable improvements to business results, (Demonstrate Value) Demonstrate real, concrete and measurable value within the organization. Many CIO’s talk about enabling business growth, better connecting to business processes and being able to show real improvements in business results directly as a result of IT improvements and initiatives [Klick to animate slide] So, what does that concretely mean to your ITSM solution. What is that keeps you awake at night? We talked to many customer, and a few sample points give you an idea about what is that HP OV Active CMDB is after. [Walk through the questions] [Conclusion] A solid CMDB (Configuration Management Database) and its integration into the HP OpenView solution is a core requirement to address these challenges. This presentation shows how this will work with HP OpenView’s Active CMDB Strategy. TRANSITION: Now, let’s have a look at what HP OV Active CMDB is, how it tackles the challenges and what the resulting benefits are. Help the business better adapt to change Keep the right services up-and-running

7 The Primary Business Challenges
Improve productivity Improve the customer experience (faster, more accurate, personalised) Perpetual Change – maintain quality Cost reduction – seek ROI and payback Use of resources - do more with the same Minimise Risk to the company Protect the brand and reputation of the company Reduce manual operations with automation to remove error and increase speed of operation Earn more Sustained growth Provide value for money ASSET MANAGEMENT IS KEY TO BUSINESS SUCCESS

8 External Influences Worldwide Competition Costs vs Profit
Regulatory Compliance Industry compliance (oil, gas, telecoms) Financial compliance (basel II, SOX, etc) Software licence compliance (FAST, BSA) Audit Security (protect the intellectual property) Today Business is supported by IT and this means that solutions must fit business requirements. Business requires people, process, technology and knowledge to be successful. Success = the knowledge and ability to deliver the right application or service to the correct user at the right time

9 Key Challenges Faced by Customers
Regulatory Compliance Purpose: Set up the problem statement that the customer faces at a high level. It is multidimensional. Presenter Tip: You can swap this slide out with the Align Business with IT opening slide if you like the approach of opening with the high level benefit of HP OpenView, and it aligns with the CIO presentation. Notes: Keeping the right services up-and-running What do I have out there in my environment and what is critical to deliver my services? Help the business better adapt to change How do changes impact my service delivery and quality, and how do I control and automate change? Demonstrate IT’s value to the business How can I integrate my IT processes to guarantee service delivery according to business expectations? <click> The real challenge: Unfortunately IT organizations don’t have the luxury of focusing on any one particular area, but to be successful and more closely align with the business, all three are factors in success. <transition> Let’s look at this problem in a different way … Key Takeaway: IT faces demands in three areas at the same time. Any qualifying solution should comprehensively address these demands. Asset Management Configuration Management Service Management Infrastructure Optimization HP’s Proposal: How to succeed with all three

10 What are CEOs looking for in Software Tools?
Tools that will do the job effectively and efficiently Best in class products – part of a family of products Ease of integration Use a company with impeccable implementation capabilities Progressive Roadmap – ensure future of product Automation – remove complexity and manual error Data accuracy - automated discovery software Shared data Proactive asset management Active CMDB

11 Configuration Management Addresses Operational Details ITAM Affects The Entire Cycle
Receive Procure Stock Request Deploy Financial Mgmt Configuration Management is not the complete asset management solution. You need to be able to incorporate the other points as well. Request Management – This event starts with a plan to bring something into the organization. Managing this request process, managing the quotes that come in and getting the best price for what you request. Once the request is made, you need to Procure the item. Managing the ordering, incorporating the quote from the request of the product. Then from the procurement of the item you need to receive the product into the organization. Here is where the procurement stops and the real asset management kicks in. It all starts at the loading dock. You receive the item into stock. In managing the stock inventory you are able to fulfill the needs of the organization. Deployment, monitoring of the equipment, support of the equipment then managing moves, adds and changes in an organization or what we know as the supporting arm of the company. It does not stop here. You have reuse/redeployment or disposal of the asset. If it is software that is currently maintained – you may wish to redeploy it. If it is a piece of hardware that is from a person that has left the company while a new hire is coming in – you may want to reuse the asset. If the equipment is out of date or the lease is up on the asset, disposal PROPER DISPOSAL is needed. ITAM covers the complete cycle Monitor Support Dispose IMAC Configuration Management

12 It Is Important To Note That “ITAM Is Much More Than Inventory and Configuration Management”
Inventory management is about capturing the basics: what/where/who, accurate view of the “actual state” of your assets Configuration management adds to it the relationships between the configuration items and the processes (planning, identifying, control, status, audit) as defined by ITIL IT asset management is a much broader discipline Several dimensions of management Involves much more stakeholders It introduces the financial and contractual aspects of assets It manages the full lifecycle of the assets, from their acquisition to their disposal Asset management can also go beyond IT assets and address the whole infrastructure Asset Management is about managing the complete lifecycle of anything deemed materially significant to the organization.  Material can refer to financially material or security material.  ITAM makes sure that IT always knows where its assets are located, it’s contractual status, and its ongoing costs to the organization.  Inventory management is concerned with finding and identifying assets while configuration management is focused on maintaining the details of configuration items that are in operation.

13 Configuration Operational Information Understand the build
Relationships Services

14 Configuration Management and the CMDB is NOT a pure technology play
The best technical solution adds no value without the supporting business practices and resources Processes Standards Disciplines Culture An inaccurate CMDB is more dangerous than no CMDB at all A CMDB must not require customers to migrate all configuration data to a central repository Detailed CI data, such as application data, will likely reside in its original data source, where customers have built processes that use it CMDB APIs provide data to consumers of CMDB data “on demand” CMDB service must guarantee accuracy and consistency Service model must be based on federation of multiple sources and common schema Position supported by multiple authorties Analysts such as Gartner expect multiple data sources to continue ITIL and other frameworks support this and do not actually specify how the CMDB should be implemented Configuration management provides essential information and auditing support for more than 50% of critical IT operational processes. Source: Meta Group

15 Asset Management

16 Questions Answered by ITAM
“How do I establish a centralized configuration management process for all service management processes?” “How do I create a catalog of goods and services that exposes what IT can offer and at what price? How do I close the loop from catalog requests through procurement and fulfillment?” “How do I provide visibility into the assets I own, where they are located, who has access to them, and how much they are costing me?” “How do I mitigate the risks associated with failing a SW audit? i.e., fines, public embarrassment, negative stock impact...?” “How do I control growth in SW spend while ensuring I satisfy contractual and regulatory compliance requirements?” “How do I establish compliance with things like HIPAA, SOX, CFR section 21?” “How do I articulate what IT does for the rest of the business?”

17 IT services to the business
Asset Management Is Directly Improving The Financial Management Process IT services to the business Configuration, Release, and Change Management Pre-approved processes Financial Management [Transition slide] Improving your IT processes, especially in sync with ITIL, has a strong relationship to asset management. Financial management is the predominant ITIL category, but asset management crosses over into configuration management and software asset management. What's most important is that the IT organization understands and controls the true cost of delivering services. You must know and manage what assets you have, where they are located, who has access to them and what costs are associated with them. Specific to software, you have the added challenge of maintaining software compliance and making the most – financially -- of your license agreements. Lastly, most times any form of change/configuration is requested, assets are impacted. Having fundamental asset information and asset tracking processes are essential. TRANSITION Here’s what I’d like to tell you about HP OpenView Asset Management. First, what kind of visibility we can provide. Second, how that information can be used in meaningful ways. And lastly, how that specifically benefits your Service Desk operation. Makes IT a valued partner to business Moves the business from reactive to proactive Improves service desk productivity & effectiveness

18 Asset Management Best Practice
Inventory What do we own? Who has them? Where are they? How do we keep this up to date? Software Management Are we compliant? Have we over-purchased? Managing Change Should we upgrade? Redeployment strategies? Retirement time? Cascade? Theft problem? Minimizing risk Procurement What should we own? Standards and support? Should we buy or lease? Which is the most cost- effective configuration? Vendor management Volume Purchase Agreements Stock optimization Financial Planning Forecasting Budget administration Charge-backs Tracking & managing costs Disaster recovery Minimizing tax Enabling accurate reporting Contract Management Is it under maintenance? What are the SLA’s? Can we negotiate? Are we insured?

19 Benefits of IT Asset Management The Payback

20 IT Management

21 ITAM: Lifecycle Costs

22 IDC Say: IDC Quote: “HP Thanks to HP’s acquisition of Peregrine Systems in 2005, HP now leads the IT asset management software market. The revenue comes from sales of Peregrine’s AssetCenter solution combined with the asset management portion of HP’s OpenView Radia solution. HP is distinguished by being the largest vendor that has almost entirely distributed systems-based revenue (i.e., mostly Unix-, Windows-, and Linux-based revenue) in this market. Over the past two years, HP OpenView has significantly increased its revenue and market share, principally through a series of acquisitions and a more aggressive sales focus. The recently announced agreement to acquire Mercury Interactive will accelerate this trend for HP. For more information, please see HP Announces Agreement to Acquire Peregrine (IDC #34108, September 2005) and HP Doubles Down in Software: Acquires Mercury Interactive for $4.5 Billion (IDC #202869, July 2006).” Frederick W. Broussard

23 Service Management

24 Consideration: ITSM is People, Process and Technology
Technology - Infrastructure and management tools Processes - Activity flows, predictable and measurable outcomes, continuous Improvement People - Roles & Responsibilities, Management, Skills Development & Discipline, Organizational Structure, Culture

25 A comprehensive offering for your ITSM journey
Leverage HP expertise and best practices to analyze your current environment, design the optimal approach, then execute and evolve into the future, including support and outsourcing Services Far beyond a technology-only solution, the IT transformation requires a well-balanced combination of software, hardware, best practices, processes, consulting and training Once you know on which path you would like to move forward, we will help you execute it in a way that will show a superior impact to you and your business, no matter if you choose to build processes, train people, implement software or buy services – or a well-integrated combination of all. ITSM Align IT with the business, and automate IT processes across technology domains and service providers Software For CIOs, IT managers, IT project managers, IT employees, OpenView users, ITSM consultants, ITSM project managers Training

26 Enterprise Solution You Need: Knowledge Technology People Process
Automated Discovery (ED) People Process

27 HP’s IT Service Management Reference Model
An approach to transform IT organizations to being business-driven, focusing on continuous business-IT alignment, and delivering IT services at agreed-upon service levels, quality, agility, and cost targets Provides IT strategies and defines service portfolios to increase the value IT brings to the business Provides daily monitored services and handles customer service requests to meet agreed service levels and increase customer satisfaction Provides detailed services specifications to balance service quality with service cost Provides project-based, tested service releases to minimize service activation risks and reduce implementation costs Provides service agreements, information, and coordination to execute against service commitments

28 ITSM is Not Just a Collection of Best Practices
ITSM is a System of Best Practices to Achieve World Class Results ITSM is Not Just a Collection of Best Practices Service planning IT business assessment IT strategy and architecture planning Customer management Service build and test Release to production Availability management Continuity management Security management Capacity management Financial management Service-level management Change management Configuration management Operations management Problem management Incident and service request management Service planning Service-level management Problem management IT strategy and architecture planning Incident and service request management Customer management IT business assessment Operations management Security management Service build and test Change management Continuity management Release to production Availability management Capacity management Configuration management Financial management

29 IT Service Management Both Broad and Deep
Governance, Enterprise Arch, and ITSM Assessments Business case development Support, benchmark, Assessments certification Program & project management setup Operational ITSM – evolve & continually improve Present Clockwise Emphasize the major HP groups contributing deep value to our overall IT Governance/ITSM Solutions Emphasize value to the customer of the breadth and depth of comprehensive solutions Emphasize how breadth and depth enables us to provide a more complete solution for the customer and sets us apart from the competition Process & organizational design Education & communication Develop transition plan Management architecture design

30 Service Management Portfolio
IT Service Management IT Business Management Service Management Application & Infrastructure Management IT Transformation - Assessment & Planning - Implementation Services (ITT,ITSM) - IT Organizational Design - Management of Chance ITSM Reference Model Services - Assessments - Process Design -Implementation - Deployment Infrastructure & Application Monitoring and Control - Health Monitoring - Event Management - Job Scheduling & Control Key off initial Overview slide for a very brief high level overview emphasizing the value of the depth of our offerings and the need to work with specialists Another example of the depth of our Service Portfolio IT Governance - Best Practice Workshop - Implementation Services - IT Performance & Measurement Service Driven Operations - Service-oriented Monitoring - SLA-driven Operations Mgmt - Service Modelling - Service Reporting/Dashboards Software and Configuration Provisioning - Discovery and Mapping - Software Distribution - Core Configuration (IMAC) - Deployment Automation (workflow) - Policy Based Mgmt IT Asset and Financial Mgmt - Asset Tracking, Retirement and Disposal - Asset Cost , Contract & Lease Mgmt - Budgeting and Chargeback - Procurement & Inventory Mgmt Consolidated Service Desk - ITIL Service Support Processes - Knowledge and Escalation Mgmt - CMDB design and implementation - Automation technology Performance and Capacity Monitoring - Performance & Capacity Monitoring - Application Response Monitoring (E2E) - Performance & Capacity Reporting Business Process Monitoring Service Life-cycle Management - Service Planning and Catalogue - Shared Services Delivery Mgmt - Service Request Management (Portal) - Service Fulfilment - Service Tracking and Reporting - Service costing/pricing Storage Management

31 Summary

32 Bottom Line - ITAM Repeatable, documented processes are essential to improving IT service delivery and management. The ITIL framework provides an effective foundation for quality IT service management. Quality Predictability Consistency

33 Summary: Manage ITAM Proactively
This Means: Discovery Asset tracking Asset repository (CMDB) Financial management of assets – costs, budget, TCO, chargeback Proactively manage software licence compliance, entitlement, and utilization Contract management Cable & circuit management Management of service relationships Manage current state Simple, standardized and managed Software licence definition and reconciliation Entitlement and utilization management REDUCE RISK! AssetCenter Software Asset Management is a simple, standardized, and proactive way to manage software license compliance. Using a central repository of existing contracts, Software Asset Management associates software purchase invoices with each software license agreement. Contractual and expense data are also collected to provide reconciliation reports from the physical inventory stored in AssetCenter Portfolio. Software Asset Management also manages entitlement to help control software usage costs.

34 The Paybacks: ITAM Business Benefits Improve Financial Performance
Reduce cost Supply Critical information to IT projects that improve asset use and reduce costs Management and control of IT asset costs and services as a result of standardizing assets in inventory Improve IT productivity and service levels Improve ability to deploy and manage IT assets to support business unit objectives Communicate total cost of ownership and ramifications of IT needs/requests to business units Mitigate risks Reduced risk from exposure to SW license compliance issues, asset failure rates, and overspending that results from poor contract and purchasing management Support financial disclosures under requirements by Sarbanes Oxley, IFRC in the EU, etc. Reduced legal exposure as a result of improved contract management Reduced security breaches created by violations to corporate policy associated with rogue hardware and software. IT Transparency Make IT spend transparent to the businesses they support (i.e be able to explain why costs are what they are and how the services drive business events). All these challenges and pains are very significant. However, the flip side is that when addressing them with appropriate tools and priorities, the opportunities are huge. Cost reduction – for example: By optimizing software licenses IT productivity improvements – for example: by automating procurement processes Risk mitigation – For example: by managing software licenses

35 Why HP? World Class products Flexibility Scalability Connectivity
Best practice Delivery Team / Methodology Best practices - Value Path Enable Regulatory Compliance Business Risk Reduction Asset and Service Management experts Product ‘Roadmap’ Worldwide support organisation Expert training organisation

36 Thank you Any Questions?
Roger Mallett

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