c o n n e c t i n g b u s i n e s s & t e c h n o l o g y it infrastructure library (itil) part...
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C O N N E C T I N G B U S I N E S S & T E C H N O L O G Y
IT Infrastructure Library (ITIL)IT Infrastructure Library (ITIL)
Part 5 – Service Delivery
Service Level Mgmt, It Financial Mgmt and Security
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Agenda
5-1 Service Delivery Model
5-2 Service Level Management
5-3 IT Financial Management
5-4 Security
C O N N E C T I N G B U S I N E S S & T E C H N O L O G Y
IT Infrastructure Library (ITIL)IT Infrastructure Library (ITIL)
5-1 – Service Delivery Model
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Service delivery process model
C O N N E C T I N G B U S I N E S S & T E C H N O L O G Y
IT Infrastructure Library (ITIL)IT Infrastructure Library (ITIL)
5-2 – Service Level ManagementThe process of defining, agreeing, documenting and managing the levels of customer IT service, that are required and cost justified.
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SLM – Overview
What is an SLA ?A written agreement between an A written agreement between an
IT Service provider and the IT IT Service provider and the IT Customer(s), defining the key Customer(s), defining the key service targets and service targets and responsibilities of both partiesresponsibilities of both parties
Goal The goal for SLM is to maintain and improve IT Service quality, through a constant cycle of
agreeing, monitoring and reporting upon IT Service achievements and instigation of actions to eradicate poor service - in line with business or Cost justification.
Scope All IT services And
- Contacts with Suppliers- Operationnal Level Agreements
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Service Level Management - process
DefineServices:Internal
& external
ServiceLevel
Requirements
Establishrequirements
ServiceSpec sheets
ServiceQuality
Plan
Contractnegotiations
Service-catalogue
ServiceLevel
Agreements
OperationalLevel
Agreements
Underpinningcontracts
Monitor:Service Levels
ServiceLevel
Achievements
Report/evaluate
ServiceImprovement
Program
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Service Level Management - Benefits
Benefits IT Services are designed to meet Service Level Requirements improved relationships with satisfied Customers both parties to the agreement have a clearer view of roles and responsibilities there are specific targets to aim for and against which service quality can be
measured, monitored and reported IT effort is focused on those areas that the business thinks are key IT and Customers have a clear and consistent expectation of the level of
service required (i.e. everyone understands and agrees what constitutes a ‘Priority One’ Incident, and everyone has a consistent understanding of what response and fix times are associated with something called 'Priority One')
service monitoring allows weak areas to be identified, so that remedial action can be taken (if there is a justifiable business case), thus improving future service quality
service monitoring also shows where Customer or User actions are causing the fault and so identify where working efficiency and/or training can be improved
SLM underpins supplier management (and vice versa) -
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SLM : implementing the process (1)
Produce a service catalogue A service is one or more IT systems wich enable a business process Define a hierarchy Separate services seen by the customer (business service) and services not
seen by the customer (infrastructure, system, network application services) A service could be defined as a CI (Configuration Item)
Customer Service Accounts Sales Marketing
Legal Production
Retail Warehouse
Transport
Design
Payroll System Accounts System Invoicing Customer D/Base Sales D/Base Stock Control Legal System Factory Production
Suppliers D/Base Ordering Logistics Postal Addresses CAD/CAM Intranet Internet Routemaster Office Suite E-mail
Exa
mple
of
a s
imple
Exa
mple
of
a s
imple
Serv
ice C
ata
logue
Serv
ice C
ata
logue
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SLM : implementing the process (2)
Expectation Management Satisfactin = Expectation – Perception SLA are just documents and themselves doesn’t improve the quality
level Support of business managers to to manager excessive or unrealistic
demands (costs…) SLA Structure
Service based : mailing service Customer based : finance department Multi-levels SLA : coprporate level + customer level + service level
Establish Service Level Requirements and Draft SLA Iteractive process based on a first outline draft (as a starting point) Negociate requirements vs charging
Wording of SLAs Clear and concise without ambiguity
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SLM : implementing the process (3)
Seek agreement With customer representatives Care about the current issues. Establish long term
requirements. Start with a pilot SLA if no previous experience Identify customer requirements at all levels (cost,
responsivenss, availability…) Consult IT provider representatives to be sure that targets are
realistic and achievable Take into account suppliers contractual implications
Establish monitoring capabilities All targets in the SLA must be monitored and measured. Monitoring must match the customer perception Links to the service desk
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SLM : implementing the process (4)
Review underpinning contracts and operationnal level agreements
Contracts with external suppliers are mandatory Establish simple agreement with interanl groups
Contracts with external suppliers are mandatory
OLAs need to be simple but must include equivalent targets than SLA (response time, open hours…)
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SLM : implementing the process (5)
Define reporting and review procedures SLA reporting mechanisms must be defined and agreed with the
customers Frequency and format must be agreed Define period to review SLAs (annually for example)
Publicise the existence of SLAs Service Desk Support groups Suppliers Customers
=> Extract key targets
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SLM : ongoing process (1)
Monitoring and reporting Launch monitoring when SLA is agreed Produce Service achievement reports (with exception reports if
SLA is broken) Example of
SLAM chart (front report)
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SLM : ongoing process (2)
Service review meetings Periodic review meeting with customer representatives to
- analyse the last period- Preview any issues for the coming period
Actions must be minuted Service Improvement Program
To resolve issues impacting service quality In relation with problem management and availability management Driven by service review meetings
Maintenance of SLAs, contracts and OLAs Keep up to date To be reviewed annualy Align to business needs and strategy Verify services and targets
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SLM : SLA contents (1)
Introduction- parties to the agreement - title and brief description of the agreement - signatories - dates: start, end, review - scope of the agreement; what is covered and what is excluded - responsibilities of both the Service Provider and the Customer- a description of the Services covered.
Service hours- the hours that each service is normally required (e.g. 24x7, Monday to
Friday 08:00 - 18:00) - arrangement for requesting service extensions, including required notice
periods (e.g. request must be made to the Service Desk by 12 noon for an evening extension, by 12 noon on Thursday for a week-end extension)
- special Hours (e.g. public holidays) - service calendar.
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SLM : SLA contents (2)
Availability- Availability targets within agreed hours, normally expressed as
percentages - measurement period and method must be stipulated. This may be expressed for the overall service, underpinning services and critical components or all three. However, it is difficult to relate such simplistic percentage Availability figures to service quality, or to Customer business activities. It is therefore often better to try to measure service UnAvailability in terms of the Customer's inability to carry out its business activities. For example, 'sales are immediately affected by a failure of IT to provide an adequate POS support service'. This strong link between the IT Service and the Customer's Business processes is a sign of maturity in both the SLM and the Availability Management processes.
Reliability- usually expressed as the number of service breaks, or the Mean Time
Between Failures (MTBF) or Mean Time Between System Incidents (MTBSI).
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SLM : SLA contents (3)
Support- support hours (where these are not the same as Service hours) - arrangement for requesting support extensions, including required notice
periods - special hours (e.g. public holidays) - target time to respond, either physically or by other method (e.g. telephone
contact, e-mail), to Incidents - target time to resolve Incidents, within each Incident Priority - targets varies
depending upon Incident priorities. Throughput
• Indication of likely traffic volumes and throughput activity (e.g. the number of transactions to be processed, number of concurrent Users, amount of data to be transmitted over the network). This is important so that performance issues which have been caused by excessive throughput outside the terms of the agreement may be identified.
Transaction response timesTransaction response times target times for average, or maximum workstation response times (sometimes expressed target times for average, or maximum workstation response times (sometimes expressed
as a percentile - e.g. 95% within 2 seconds). as a percentile - e.g. 95% within 2 seconds).
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SLM : SLA contents (4)
Batch turnaround times times for delivery of input and the time and place for delivery of output.
Change• targets for approving, handling and implementing RFCs, usually based upon
the Category or Urgency/priority of the Change.
IT Service Continuity and Security a brief mention of IT Service Continuity Plans and how to invoke them, and
coverage of any security issues, particularly any responsibilities of the Customer (e.g. back-up of free-standing PCs, password Changes)
details of any diminished or amended service targets should a disaster situation occur (if no separate SLA exists for such a situation).
Charging details of the charging formula and periods (if charges are being made). If the
SLA covers an Ouitsourcing relationship, charges should be detailed in an Annex as they are often covered by commercial in confidence provisions.
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SLM : SLA contents (5)
Service reporting and reviewing- the content, frequency and distribution of service reports, and the
frequency of service review meetings.
Performance incentives/penalties- Details of any agreement regarding financial incentives or
penalties based upon performance against service levels. These are more likely to be included if the services are being provided by a third-party organisation. It should be noted that penalty clauses can create their own difficulties. They can prove a barrier to partnership if unfairly invoked on a technicality and can also make service provider staff unwilling to admit to mistakes for fear of penalties being imposed. This can, unless used properly, be a barrier to effective Problem solving.
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SLM : Key Performance Indicators and metrics
What number or percentage of Services are covered by SLAs? Are Underpinning contracts and OLAs in place for all SLAs
and for what percentage? Are SLAs being monitored and are regular reports being
produced? Are review meetings being held on time and correctly
minuted? What number or percentage of Services targets are being met
and what is the number and severity of service breaches? Are service level achievements improving ? Are Customer perception statistics improving? Are IT costs decreasing for services with stable (acceptable
but not improving) service level achievements?
C O N N E C T I N G B U S I N E S S & T E C H N O L O G Y
IT Infrastructure Library (ITIL)IT Infrastructure Library (ITIL)
5-3 – Financial Management for IT services
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Introduction (1)
Introduce formal finacial Management for IT Services, because IT costs grow faster than other costs : Increases in Users numbers New technologies, more complex New needs
Three main processes Budgeting (predicted costs) IT accounting (costs of resources usage) Charging (costs back to Business Unit)
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Introduction (2)
Relationship with other IT Service Management processes Service Level Management : SLA = customers expectations and IT
services obligations Capacity Management : estimate the costs of the desired capacity and
availability of the system Configuration Management : asset informations
Business vs IT
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Financial Management - process
Business ITRequirements
IT Operational plan(Budgeting)
Cost analysis(Accounting)
Charges(Charging)
Costing models
Charging policies
Feedback of proposed charges to business (Report)
Service Level Management Financial Management
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Financial Management - Financial model
PurchaseAnd
depreciation
Lease
Licences/maintenance
Salaries
Training
Expenses(travel,
meals ..)
Housingcost
Charges fromdepartments
Management/administration
EquipmentCost
(HW/SW)
Productcost
Product A
Product B
Product C
Product D
Product E
=Organisationcost
Overhead
Rates
Revenue
= Invoice/charging
Number of sales
BM 5-3-2002
Budgeting/cost accounting Products/charging
+
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Budgeting (1)
Budgeting process has a key influence on strategic and tactical plans
Periodic (e.g. annual) round of negotiations between the business departments and the IT organisation covering expenditure plans and agreed investment programmes
ExampleBudget Item Capital Purchase
CostAnnual Maintenance
SpendThis Year
BudgetNext Year
Notes AnnualisedCost
Hardware
UNIX Server Yes £80,000 £8,000 £8,000 £8,000 No changes £34,667
NT Server Yes £10,000 £1,000 £1,000 £1,000 No changes £4,333
ORACLE No £7,000 £7,000 £8,400
Marketing and Sales appl. No £3,000 £3,000 £3,600
MS Windows (50-User) No £2,500 £2,500 £3,000 Staff increase
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Budgeting (2)
Estimating the cost of budget items Arbitrage Expenditure trends Depreciation
Estimating the cost of workload dependent budget items Workload estimations Targets Forecasts
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IT Accounting (1)
Business Perspective Charge for IT services or not ?
Different organisations Accounting Centre (costing inputs) Recovery Centre (costing outputs / services) Profit Centre (separate business entity)
- Sufficient autonomy- Outsourcing- Risk : the Customer becoming aware that the IT organisation is 'making a profit' from them
Building the cost models To calculate the costs of IT Service provision, it is necessary to design a framework in which all known costs can be recorded and allocated to
specific Customers, activities or other Category. This is called a Cost Model
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IT Accounting (2)
Costs types hardware costs software costs people costs accommodation costs External Service costs Transfer costs
Direct or indirect costs
Major type Cost Elements
Hardware Central processing units, LANS, disk storage, peripherals, wide area network, PCs, portables, local servers
Software Operating systems, scheduling tools, applications, databases, personal productivity tools, monitoring tools, analysis packages
People Payroll costs, benefit cars, re-location costs, expenses, overtime, consultancy
Accommodation
Offices, storage, secure areas, utilities
External Service
Security services, Disaster Recovery services, Outsourcing services, HR overhead
Transfer Internal charges from other cost centres within the organisation
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IT Accounting (3)
Cost Model
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IT Accounting (4)
Classification of Cost Elements Capital
- computer equipment - building and plant - software packages
Operational- staff costs - maintenance of computer hardware and software - consultancy services, rental fees for equipment - software licence fees - accommodation costs - administration expenditures - electricity, water, gas, rates - disaster recovery - Consumables
Direct or Indirect Cost Centre Fixed or variable
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IT Accounting (5)
Depreciation pre-determined, as in the case of a lease dependent on its physical deterioration through use or passage of time reduced by economic or technological obsolescence
Apportioning the IT Services costs
Capital
Annual Cost
Direct Apportionment Method
Customer
Marketing and Sales
Manufacturing Finance
Hardware UNIX Server Yes £34,667 No 50/50 split £17,333 £17,333
NT Server Yes £4,333 Yes £4,333
Netware Server Yes £1,300 No Infrastructure
PCs (50) Yes £26,000 No By PC £5,200 £19,240 £1,560
Routers (5) Yes £1,300 No Infrastructure
LAN Cabling Yes £17,333 No Infrastructure
Software
General Ledgers
No £20,000 Yes £20,000
ORACLE No £7,000 Yes £7,000
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IT Accounting (6)
Calculating the Cost-by-service
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IT Accounting (7)
Calculating the costs of Cost Units PC, Operator hour
Changes affecting costs Disks
Investment appraisal being clear about objectives thinking about different ways of meeting them estimating and presenting the costs and benefits of each
potentially worthwhile option ROI (Return on Investment )= average increase in
profits(average taken over an agreed number of years) / Investment
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IT Accounting (8)
Total Cost of Ownership The Gartner Group pioneered a method of calculating the costs of a
product or service with the title of 'Total Cost of Ownership' (TCO). The most widely known example was that for Personal Computers. In an
era where the price of a PC on a desk had fallen to $2,000, Gartner demonstrated that the 5-year cost of a PC, when taking into account purchasing overheads, upgrades, maintenance, a proportion of support staff and Service Desk costs, disposal etc. was closer to $35,000
Budgeting, IT Accounting and Charging cycles
Budgeting IT Accounting Charging
Planning (annual)
Agree overall expenditures
Establish standard Unit costs for each IT resource
Establish pricing policyPublish price list
Operational (monthly)
Take actions to manage budget exceptions or changed costs
Monitor expenditure by cost-centre
Compile and issue bills
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Charging (1)
Goals forcing the business divisions to control their own Users' demands reducing overall costs and highlighting areas of service provision which
are not Cost effective allowing the organisation to match service to justifiable business need,
through direct funding
Chargeable items Chargeable Items should be understandable and controllable by the
Customer Relate to the organisation's business
Variable costs and charges estimate of the likely charges and possible upper and lower limits variable costs do not decrease with decreasing usage
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Charging (2)
Pricing the determination of a pricing objective understanding the true (not perceived) demand for the service accurate determination of Direct and Indirect costs the level of control of the internal market understanding the services available externally if Customers have a
choice legal, regulatory and tax issues
Internal market Tied customers / Untied customers
Differential charging For example, during peak daytime
Pricing flexibility Billing
Bills Charging information is passed to Customers to make them aware of the cost of the resources used by their business
to manage cash flow => Billing cycle
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Charging (3)
Case Study : Discouraging use of services A company provided its Users with a dedicated, outsourced Service Desk facility.
The vendor charged the company on a per-call basis. The charging policy was to recharge all IT spending to the business on the basis of true cost.
Once the Service Desk was in place, Customers realised that they could reduce their costs by not placing Service Desk calls. Some business managers instructed their Users not to use the Service Desk, or to route all issues through a single, local support person.
Decreasing the total number of calls decreased the calculated charges to the Customer but did not reduce overall price of the service by the same amount. It also resulted in:
- increased wasted time for Users - reduced effectiveness of IT systems - poor perception of the IT Services and the IT organisation - additional work for the IT organisation to discover problems - reduced leverage in negotiating service costs with the outsourcing vendor.
Resolution- The charging method was changed to one in which a fixed fee per User was
negotiated, based upon an estimated call rate taken from previous years' volumes and business predictions. This charge was reviewed quarterly to check that call levels were within agreed thresholds.
C O N N E C T I N G B U S I N E S S & T E C H N O L O G Y
IT Infrastructure Library (ITIL)IT Infrastructure Library (ITIL)
5-4 – Security
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Security management - essence
Security Management is responsible for continually delivering the Service on an agreed security area with the customer agreement
Security Management focuses on the integrity of data and the unauthorized use of it. It’s goals is to keep information reliable, secure and available, and prevent unauthorised use.
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Security Management - definitions
Security Management is part of Information Security (BS 7799) and aims to ensure the safety of information
Terms used: Safety : refers to
not being vulnerable to known risks, avoiding unknown risks where possible
The tool to provide this is Security : which aim is to protect the value of information.
This is done by: Confidentiality : protecting information against unauthorised access and use, Integrity : accuracy, completeness and timelines of information, Availability : the information should be accessible at any agreed time.
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Security Management - justification
• Internal : an organization can only function properly if she has the disposal of the right and complete information
• External : The processes of an organization deliver products and services which are made for a certain goal (competitive advantage). Security is an important condition to an adequate information flow to realise these processes.
Good security ads value to the continuity of the business
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Security Management - relations
Strategic
Tactical
Operational
Managers Set
Service Delivery Set
Service Support Set
ITIL Security Management
Securitymanagement
IT servicesorganisation
Service level management
Availability management
Perf. & capacitymanagement
Business Continuity Planning
Incident management Problem
management
Change management
Release management
Configurationmanagement
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Security Management - process
PLANMAINTAIN
EVALUATE IMPLEMENT
CONTROL
REPORTING SLA Security Chapter
Customer defines business requirements
C O N N E C T I N G B U S I N E S S & T E C H N O L O G Y
IT Infrastructure Library (ITIL)IT Infrastructure Library (ITIL)
5-5 – Annexes
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Acronyms (1)
AMDB : Availability Management Database AST: Agreed Service Time ATM: Auto Teller Machine BCM: Business Continuity Management BIA: Business Impact Analysis BRM: Business Relationship Management CAB: Change Advisory Board CDB: Capacity Database CFIA: Component Failure Impact Analysis CI: Configuration Item CIA: Confidentiality, Integrity and Availability CMDB : Configuration Management Database CSBC : Computer Services Business Code CSS : Customer Satisfaction Survey DT : Down Time EFQM : European Foundation for Quality Management EUA : End User Availability
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Acronyms (2)
EUDT : End User Down Time EUPT : End User Processing Time FTA : Fault Tree Analysis ICT : Information and Communication Technology(ies) ISP : Internet Service Provider ITAMM : IT Availability Metrics Model ITIL: Information Technology Infrastructure Library ITSC : IT Service Continuity ITSCM : IT Service Continuity Management ItSMF : IT Service Management Forum IVR : Interactive Voice Response KPI : Key Performance Indicator LAN : Local Area Network MBNQA : Malcolm Baldrige National Quality Award MIM : Major Incident Management MTBF : Mean Time Between Failures MTBSI : Mean Time Between System Incidents
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Acronyms (3)
MTTR : Mean Time To Repair OGC : Office of Governnment Commerce OLA : Operational Level Agreement OLTP : On-line Transaction Processing PAD : Package Assembly/Disassembly device PKI : Public Key Infrastructure PRINCE : Projects IN Controlled Environments QA : Quality Assurance RAG : Red-Amber-Green RAID : Redundant Array of Inexpensive Disks RFC : Request For Charge ROCE : Return On Capital Employed ROI : Return On Investment RWO : Real World Object SIP : Service Improvement Programme
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Acronyms (4)
SLA : Service Level Agreement SLAM :SLA Monitoring SLM : Service Level Management SLR : Service Level Requirement SMO : Service Maintenance Objectives SOA : System Outage Analysis SPOF : Single Point of Failure TCO : Total Cost of Ownership TOP : Technical Observation Post TOR : Terms Of Reference TQM : Total Quality Management UPS : Uninterruptible Power Supply VBF : Vital Business Function VSI : Virtual Storage Interrupt WAN : Wide Area Network
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Contacts
CONTACT
Jean-Marc [email protected] +33 1 69 85 78 25Fax +33 1 69 85 78 7615 av du Cap Horn 91 400 Les UlisFrance
www.apogee-om.frwww.devoteam.com
DEVOTEAM Group locations France
Denmark United Kingdom
Germany Austria
The Netherlands Belgium
Spain
© DEVOTEAMThis document has been prepared
by DEVOTEAM. It is not to be copied or reproduced in any way without Devoteam
express permission. Copies of this document must be accompanied by title, date and this
copyright notice.
File Info
Date of release
Authors Jean-Marc Chevereau
10082004ITIL-Part2-IntroductionServiceSupport