Case Study: Building a Service Catalogue and Service Cost

Model to demonstrate value

Presented by: Leanne SiveyerDirector ICT Governance & Service Strategy

Business Information & ServicesOffice of Environment and Heritage

Service Catalogue

Service Level Management

Service Asset and

Configuration Management

Event Management

Incident and Problem

Management

Program Management Office (PMO)

Service Reporting & Governance

Agenda

About OEHBIS OverviewWhy bother?Service Models4 Step Approach

Step 1 – ServicesStep 2 – CostsStep 3 – AllocationsStep 4 - Agreements

2

OEH Overview

• Working with the community, OEH cares for and protects NSW’s environment and heritage, which includes the natural environment, Aboriginal country, culture and heritage, and our built heritage.

• OEH also provides services to:

Royal Botanic Gardens and Domain Trust NSW Environmental Trust

Western Sydney Parkland Trust Parramatta Park Trust

Centennial Park and Moore Park Trust Historic Houses Trust

Taronga Conservation Society Australia Environment Protection Authority (EPA ).

3

OEH Overview

4

Corporate Services

Catalogue

Customer Experience Regional Operations Heritage

NPWS – National Parks and Wildlife Service

Science Policy Division

Legal

Corporate Services

• People & Culture

• Finance

• Business Information & Services

Business Information & Services

CIOChris Fechner

Engagement, Portfolio & ArchitectureGlenn Dogao

ICT OperationsDarren Morris

Information Management & Spatial

Krissie Auld

ICT DeliveryMathew Thomas

Governance & Service Strategy

Leanne Siveyer

Solutions Architect

Business Partners:Geoff Mullins

Tim PullenTracey Waters

Strategic Business Planner

ICT Hardware

Database and BASIS

Systems Administration

Information Delivery

Information Management

Spatial Delivery

Project Management Office

Business & Productivity Solutions

Enterprise Solutions

Customer Services

Business Analysis

ICT Procurementand Contract Management

Risk ManagementSecurityPolicyAudit

Service ManagementRelease MgmtProblem Mgmt

Service CatalogueService Costing

1 Division ● 5 Branches ● 111 Staff ● 4600 users 5

Previous state

We cant blame out customers for not valuing our services when then don’t know what they are

• Formal service agreements in place with two customers – EPA and Centennial Park

• No clarity exactly what these agreements cover – high level out of date descriptions

• No clarity around how the agreed levies were calculated and areas of the agreements they cover – combined levy for corporate services – how much for IT?

• No service reporting just regular charging of levy

• Result – credit card amnesia!

6

Define and communicate the value of our services

Establish service ownership and management

Move BIS to a more service based culture – ‘service thinking’ mindset

Understand what our services actually cost to deliver

Provide service and cost transparency

Provide a platform for service based as opposed to support based conversations

Facilitates benchmarking and service forecasting

Why bother?

Value ● Transparency ● Service Maturity ● Professionalism7

Bonus: Focus on data sources - completeness and accuracy

Service Catalogue Approach

• Step 1 - Define Services – Identify service bundles and components

– Define service owner, service inclusions, service exclusions, cost variations & performance measures

• Step 2 - Cost Analysis2a ) Total cost of services

Analysed all costs and allocate them appropriately across the service bundles

2b) Demand drivers

Analyse costs for each service and inform customers how they can influence the cost

2c) Unit rates

Based on the identified demand driver for each service, calculated the unit rate

(for the provision of each service per annum)

• Step 3 - Allocation Model– For each customer group with in OEH and across the portfolio the service cost has been calculated by

multiplying the demand driver unit by the unit cost.

• Step 4 - Service Level Agreements– Formal agreements regarding the provision of services, agreed cost and performance levels 8

Model Schmodel

Service ElementsElements that make up a Component Service may or may not be directly consumed by end customers.

Business CapabilitiesA combination of business process, people & technology elements that together produce outcomes for customers.

Category

Service Component OwnersProvide the building blocks, monitoring and support for customer facing Services

OEH CustomersThe general public and other public and private organisations who use OEH services.

Consumer

Service OwnersRely on component services to deliver end to end offerings to the business

Business OwnersRely on groupings of Component Service/s to deliver their outcomes and do their work

Structure of ‘services’

Business Owner

Service Owner

Service Comp-onentOwner

Service Element Owners

Owner

Business Service Bundle 1

Business Service Bundle 3

Business Service 2

‘Cu

sto

me

r’ F

acin

g ‘I

nte

rnal

’ Fac

ing

Component ServicesRecognisable service offerings consumed day-to-day by customerse.g. systems, processes, support.

BIS Service BundlesA logical grouping of Component Service/s based on demand, common usage & service level targets.

‘Pu

blic

’ Fac

ing

9

Step 1: Service Identification Across? Bottom Up?

Outcome based view – Customers view Technical view

Not based on organisational structure Based on organisational structure

Focus on value provided to customers Great for establishing OLA’s

‘What’ we deliver not how ‘How’ we deliver

Services extended across the Division Services are Branch based

Not everyone is visible…what about me? Yes there I am – that’s what I do.

CIO

Branch1

Team1

TS1

TS2

Team2

TS3

TS4

Branch2 Branch3 Branch4 Branch5

CIO

Branch1

Team1

Team2

Branch2 Branch3 Branch4 Branch5

Service Owners Service Owners

The bottom up approach often results in the services matching your org structure – high effort, low quality result 10

Step 1: Service Bundles

Productivity & Collaboration

•Provision of services that support engagement between staff

•PC’s + software, email, network access, telephony, IT support

Solution Delivery

• Project planning, management & execution for Enterprise, Business & Spatial systems

• Solutions development and delivery

Enterprise Application Services

•Provision of applications used by mandate, policy compliance or legislation

•SAP, Aurion, Ehub, Salesforce and the OEH external web site

Business Application Solutions

•Provision of applications used to support specific business activities

•Application availability, maintenance, administration, hosting

High Performance Compute

•Provision of the application environments used for Geospatial and Scientific functions

•Application availability, maintenance, administration, hosting

Mail, Records and Library Services

•Postage services, internal mail, records management, library services.

Information Management

•Information Governance, Data quality management

•Data warehousing and business intelligence

Planning and Governance

•Risk Management, compliance, enterprise architecture, planning,

•Service Strategy, service catalogue, service costing

Service Owner

Mathew Thomas

Mathew Thomas

Krissie Auld

Darren Morris

Glenn Dogao

Mathew Thomas

Krissie Auld

Krissie Auld

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12

Service

Bundle

Optional/

Mandatory

Service Components Cost

Type

Charge basis

(Demand

Driver)

KPI

Productivity

and

Collaboration

Service

Mandatory Workplace Service Fixed Head Count Incident/Request

Resolution

Software currency

Mobile workplace Service Variable Usage Incident/Request

Resolution

Workplace Enhancement

Service

Variable SOW % delivered within 5% of

SOW.

Customer SatisfactionWorkplace Establishment

Service

Variable SOW

Optional Products Variable SOW

Business

Application

Service

Optional Business Solution Service Fixed AMU System availability

Software currency

Business Incident and Request

Service

Fixed AMU Incident/Request

Resolution

Step 1: Service Components

8 Service Bundles27 Service Components

Service Catalogue Approach

• Step 1 - Define Services – Identify service bundles and components

– Define service owner, service inclusions, service exclusions, cost variations & performance measures

• Step 2 - Cost Analysis2a ) Total cost of services

Analysed all costs and allocate them appropriately across the service bundles

2b) Demand drivers

Analyse costs for each service and inform customers how they can influence the cost

2c) Unit rates

Based on the identified demand driver for each service, calculated the unit rate

(for the provision of each service per annum)

• Step 3 - Allocation Model– For each customer group with in OEH and across the portfolio the service cost has been calculated by

multiplying the demand driver unit by the unit cost.

• Step 4 – Service Agreements– Formal agreements regarding the provision of services, agreed cost and performance levels 13

Step2a: Establish Service Cost

Cost Item Service 1

Service 2

Service 3

Service 4

Service 5

Service 6

Service 7

Service 8

Total

Salary + Staff On Costs- Resource 1- Resource 2- Resource n

100%50% 50%

20% 20% 20% 20% 20%

100%100%100%

Operating Expenses e.g.- Licencing- Maintenance- Network

100%50%60%

50%20% 20%

100%100%100%

InfrastructureReplacement 100%

100%

Result – total cost of each service.14

Step 2a: Service Cost Analysis

BUSINESS SOLUTIONS SUPPORT SERVICE

4% ENTERPRISE SOLUTIONS SUPPORT

SERVICE10%

PRODUCTIVITY AND COLLABORATION

SERVICE53%

SOLUTIONS DELIVERY SERVICE

4%

GOVERNANCE, ARCHITECTURE AND PLANNING SERVICE

9%

MAIL, RECORDS AND LIBRARY

6%

GEO SPATIAL SERVICE6%

INFORMATION MANAGEMENT

SERVICE3%

CHARGEBACK via SOW5%

BIS Budget by Service

Result – Ability to analyse budget by service 15

Step 2b: Demand Driver Analysis

Result – Identify appropriate demand driver for each service

What predominately drives the costs of each service?What can the business do to influence this cost?

e.g. 1 Productivity and Collaboration Service The highest cost elements are:- licensing (predominantly MS)- Connectivity costs- Resourcing

Demand Driver = headcount

E.g. 2 Business Solutions- Costs are based on resourcing for support and

Development

Demand Driver - # applications and application complexity = AMU’s

Demand Drivers

Headcount

AMU

Division/Agency

# Licences

SOW (Scope of Work)

16

17

Application Measurement Unit (AMU)

AMU Ratings• Size of User Base• Architectural Alignment• Supportability• Business Importance• Frequency of Use• Level of Integration• Infrastructure Utilisation

Source: BIS Application Register

AMU’sEPA 4802ROG & HD 3350NPWS 2675RBGDT 1820Science 1285BIS 712FPPS 210CPMT 175Legal 140Office of the CE

70

CED 0P&C 0Policy 0

15239 Rates application complexity and supportability

Step 2c: Calculate Unit Rates

Service Bundle Demand Driver Unit Rate Productivity & Collaboration Headcount

Enterprise Application Services Headcount

Records & Library Headcount

Mail (CBD and Hurstville) Headcount

Business SolutionsApplication Measurement Unit(min 70 $5110)

Solutions Delivery Headcount

Spatial and High Performance Compute

ESRI Licences

Governance & Planning Division/Agency

Information Management Service Division/Agency

Divide the total service cost by the total demand unitse.g. P&C $xM / 4586 (total headcount) = unit rate

Headcount includes – permanent, contract and volunteers 18

Service Catalogue Approach

• Step 1 - Define Services– Identify service bundles and components

– Define service owner, service inclusions, service exclusions, cost variations & performance measures

• Step 2 - Cost Analysis2a ) Total cost of services

Analysed all costs and allocate them appropriately across the service bundles

2b) Demand drivers

Analyse costs for each service and inform customers how they can influence the cost

2c) Unit rates

Based on the identified demand driver for each service, calculated the unit rate

(for the provision of each service per annum)

• Step 3 - Allocation Model– For each customer group with in OEH and across the portfolio the service cost has been calculated by

multiplying the demand driver unit by the unit cost.

• Step 4 - Service Agreements– Formal agreements regarding the provision of services, agreed cost and performance levels 19

Step 3: Service Cost Allocation- Proposed Charges

Proposed Charges Office of Environment and Heritage Portfolio

Demand Driver

Office Chief Exec

People &

CultureFinance Policy NPWS CED

Regional Ops

BIS Science LegalRBG& DT

CP&

MPTEPA

Productivity & Collaboration

Headcount

Enterprise Application Services

Headcount

Mail, Records & Library Headcount

Business Solutions AMU's

Solutions Delivery Headcount

Geospatial & Scientific Services

% Application accounts

Governance, Enterprise Architecture & Planning

Agency/Division

Information Management

Agency/Division

ChargebackAgency/Division

Total

Transparency has been key to successful service catalogue discussions. Allows customers to assess fairness and equity.

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Step 3: Service Cost Allocation

NPWS, 35%

Regional Ops, 14%

EPA, 12%

CED, 9%

RBG& DT, 7%

Science, 6%

SOW, 5%

Office Chief Executive, 3%

BIS, 2%

CP&

MPT, 2%

People & Culture, 2%Policy, 1%Legal,

1%

Finance, Proc, Perf

& Services, 1%

NPWS

Regional Ops

EPA

CED

RBG& DT

Science

SOW

Office Chief Executive

BIS

CP&MPTPeople & Culture

Policy

Legal

Finance, Proc, Perf& Services

The ability to compare costs is very important to customers 21

Service Catalogue Approach

• Step 1 - Define Services– Identify service bundles and components

– Define service owner, service inclusions, service exclusions, cost variations & performance measures

• Step 2 - Cost Analysis2a ) Total cost of services

Analysed all costs and allocate them appropriately across the service bundles

2b) Demand drivers

Analyse costs for each service and inform customers how they can influence the cost

2c) Unit rates

Based on the identified demand driver for each service, calculated the unit rate

(for the provision of each service per annum)

• Step 3 - Allocation Model– For each customer group with in OEH and across the portfolio the service cost has been calculated by

multiplying the demand driver unit by the unit cost.

• Step 4 - Service Agreements– Formal agreements regarding the provision of services, agreed cost and performance levels 22

23

Service

Bundle

Optional/

Mandatory

Service Components Cost Type Charge basis

(Demand

Driver)

KPI

Planning and

Governance

Mandatory Enterprise Architecture Service Fixed Division/Agency % aligned with target architecture

Solution Architecture Service Variable SOW % delivered within 5% of SOW.Customer Satisfaction

Business Partner Service Fixed Division/Agency Customer Satisfaction

ICT Planning Service Fixed Division/Agency % of projects captured within ICT

Strategic Plan

ICT Governance Service Fixed Division/Agency # outstanding high risk audit items

ICT Procurement Service Fixed Division/Agency Request Response time – speed of

order placement

Productivity and

Collaboration

Service

Mandatory Workplace Service Fixed Head Count Incident/Request Resolution

Software currency

Mobile workplace Service Variable Usage Incident/Request Resolution

Workplace Enhancement Service Variable SOW % delivered within 5% of SOW.

Customer SatisfactionWorkplace Establishment Service Variable SOW

Optional Products Variable SOW

Enterprise

Application Service

Mandatory Enterprise Solution Service Fixed Headcount System availability

Software currency

Enterprise Incident and Request Service Fixed Headcount Incident/Request Resolution

Business,

Application Service

Optional Business Solution Service Fixed AMU System availability

Software currency

Business Incident and Request Service Fixed AMU Incident/Request Resolution

Spatial and High

Performance

Compute

Optional.Note:

Mandatory

commitment (for 5

years from 2014)

Spatial Service Variable % Application accounts System availability

Software currency

High Performance Compute Service Fixed % Application accounts System availability

BIS Service Details

Service

Bundle

Optional/

Mandatory

Service Components Cost Type Charge basis

(Demand Driver

KPI

Solutions Delivery

Service

Optional Project Management Office Service Fixed Headcount % Projects delivered – on

time on budgetProject Management Service Variable SOW

Business Analysis Service Variable SOW

Organisational Change Management

Service

Variable SOW

Enterprise Systems Delivery and

Enhancement Service

Variable SOW

Business Systems Delivery and

Enhancement Service

Variable SOW

Spatial Systems Delivery and Enhancement

Service

Variable SOW

Information Delivery and Enhancement

Service

Variable SOW

Mail, Records, and

Library Service

Mandatory Mail Service Variable Headcount (Hurstville and

Goulburn St)

Service AvailabilityService UtilisationCustomer Satisfaction

Library Service Fixed Headcount

Electronic Records Fixed Headcount

Physical Records Variable Headcount

Information

Management

Service

Mandatory Information Governance Service Fixed Division/Agency % of data managed under

the Info Mgt Framework

Data Quality Service Variable SOW % of data with meta data

defined

Information Brokerage and Publishing

Service

Fixed Division/Agency % of datasets under

Creative Commons

BIS Service Details cont.

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Step 4: Service Agreements

• Draft Service Agreements developed

• Consultation and socialisation

• Ghost charging in place for 12 months– Allows customers to influence demand e.g. reduce redundant and

costly applications

– Allows BIS to refine and improve data sources and reporting

– Official Service Agreements and full charging will be activated July 2016

May2015

July Sept Nov Jan2016

Mar May July Sept Nov Jan2017

Mar

Existing service agreement runs until EFY 15/16

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Final Notes

OEH has developed service catalogues for HR and Finance as well

The same methodology has been used however…

BIS had a head start due to:- Senior management having a service mindset- Understanding of ITIL principles and the concept of services- Disciplined use of a Service Management toolset- Defined engagement model- Maintaining an Application Register- Large percentage of costs that are non-resource based- Strong IT Financial Management

Don’t overthink it!Kept it simple to start withFocus on CSI – don’t get stuck

Service Catalogue

Service Level Management

Service Asset and

Configuration Management

Event Management

Incident and Problem

Management

Program Management Office (PMO)

Service Reporting & Governance

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Questions?

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