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Enabling Business Value ThroughEffective Service ManagementTRANSCRIPT
Enabling Business Value Through Effective Service Management
Sandeep GondhalekarDirector Consulting
Quint Wellington Redwood
Introduction: Quint Wellington Redwood
Founded in 1992 in The Netherlands18 years of ITSM experience18 years of ITSM experienceWorld‐wide presence – 22 countries supporting 44 countriesCore business: improvement of ICT organizationsp gIntroduced ITSM in India in 1999.In India Since 1999 (Offices in New Delhi, Bangalore, Hyderabad & Pune)
•Benelux
•Finland
•Spain
•France •Germany
•Italy
•Mexico
•USA
•India
•Japan
•Brazil
•Malaysia
Brazil
•Australia
Quint’s PortfolioTraining Benchmarking and ConsultingTraining, Benchmarking and Consulting,
IT Service ManagementTraining and awarenessgAssessment – ITSM/ ISO 20000Process ImplementationService Management Tool SelectionService Management Tool SelectionBenchmarking and Performance Enhancement
Sourcing strategy, selection & contractingHelping organisations to out or in sourceHelping organisations to out‐ or in‐source Evaluating Existing Outsourcing Relationships and adding value to improve the services out of the outsourcing relationship.Supplier IT Alignment and Integration with the Business DriversSupplier IT Alignment and Integration with the Business Drivers
Contract managementManaging outsourcing deals
kSourcing Governance FrameworkIT Strategy / IT Governance
Assessment based on Cobit 4.1 Balance Score card
“Demonstrate Business Value”
Top CIO Priorities
Finding IT’s Business Value
“In a recent Forrester survey only 15% of IT leaders declared themselves aligned with the business. What that tells us is that IT-business alignment isn’t just a problem it’s bigger andalignment isn t just a problem – it s bigger and persistent.”
CIO and Business agenda topics
“How can my IT Organization improve its Performance “How do I get the most outimprove its Performance towards the Business?”
How do I get the most out of my current IT organization?”
“How do I get my IT Organizationto be customer focused?”
“My customers do not recognize the added value of my IT Organization”
“My customers think the Time-to-Market of new servicesis too long”
“Does my IT organization have
is too long
“What is the added value of using a Service Management Does my IT organization have
the right size/cost level?”g g
standard?”
Effective Service Management can answer these questions
IT has changed the way business is run
of mission critical business processes are automated by enterprise applications90% Yankee Group
of IT projects are delivered over budgetof IT projects are delivered over budget50%Gartner
of IT projects fail to meet objectives50%Gartner
This brings an opportunity to change the way IT is run
How IT contributes to Business Value?
Stable Service Agile ServiceInnovation
PredictableReliableService
TimelyImprovements
Changes
New Features
EffectivenessService ChangesEffectivenessEfficiencies
The Customer perspective !
CompetitorsCost DriversCustomers
CompetitorsCost Drivers
MarketReliable Service Improvements
New / Changed BusinessNo Service Outages New / Changed Services
ITNo IT OutagesQuick
Time to Market New Use of ITInnovations of ChangesInnovations
Measurement FocusWhy, What and Howy,
WhWhyWe require measurement so as to know where we standstandWe require measurement so as to know are we improvingimproving
WhatValue to ITValue to ITValue to Business
HowHowPerformance Indicators – Lead indicatorsGoal Indicators Lag IndicatorsGoal Indicators – Lag Indicators
The KPI’s and Value drivers
Content KPIsStrategic Value
Execution KPIsAbility toAbility to Strategic Value
KPIsInternal Efficiency
KPIsIT Operation KPIS
Value Drivers of ITAbility to define the right thing
Ability to Execute the right thing
IT Operation KPIS
Tactical KPIsPROC
Process Output
Indicators
CESS ProcessOperational KPIsSES
Process activity
indicators
IT Goals and Value Drivers
QuickNo IT Outages
Quick Time to Market
of ChangesNew Use of IT
“Maintain current functionality”
“Provide new functionality”
“Give advice on current and new functionality”
1. Lost Production Hours1. Lost Production Hours 2. Time to Market of Changes3. Effectiveness of Changes4. Quality of Plans5 N b f P ti Ch5. Number of Proactive Changes
Value drivers and their desired trends
TrendValue Driver
Time to Market of Changes
Lost Production Hours
Effectiveness of Changes
Time to Market of Changes
Quality of Plans
Number of Proactive Changes
Identify and Manage Value
More revenue€ Information is (part of the) the product
Increase revenue at the same cost level Better Service or
Higher Quality
€
€The Delivery channel
is IT based
of the) the product
Decrease Costs
g y
€ IT is a
Ability of business to define revenue generating opportunities
Increase the Value of IT
Decrease costs at the same
revenue level
Decrease Costs
Increased speed, predictability,
€ €
€ production factor
IT is a coordination p y
reliability, flexibility mechanism
Ability of business to define efficiency improvements
Decrease (TCO)
Increase the return on the IT assets Increased tili ation€
€ IT is a Cost Unit
IT is the Informationon the IT assets Increased utilization, technical performance
€ IT is the Information TransportationInfrastructure
Ability of IT to identify and define cost reduction opportunities
Value Drivers 1, 2: Translation to $“An example”An example
A.No. of incidents and resolution
times
B.Hours that
incidents are open
C.Hours that IT
customers cannot work
D.Excess cost
and lost revenue
∝ ∝ ∝
I id t P i it C iti l Hi h M di L T t lIncident Priority Critical High Medium Low Total
Number of incidents 29 43 166 2440 2678
Total time to repair (hours) 197 1100 4354 70125 75776
Influence factor 1000 100 10 1Influence factor 1000 100 10 1
Total loss hours in business 197000 110000 43540 70125 420665
Dependency factor 33 33 33 33
Adjusted time lost 65010 36300 14368 23141 138819Adjusted time lost 65010 36300 14368 23141 138819
Cost per hour 50 50 50 50Total cost to the business of lost productive hours 3250500 1815000 718410 1157063 6940973
∞ = proportional
Service Management – Traditional Process based ImplementationProcess‐based Implementation
Key Unit of planning: Process MaturityK S I di M i iKey Success Indicator: Maturity improvementBest suits organizations that:
Are geographically widespreadDo not have a (basic) common toolHave diverse backgrounds (unconsolidated M&A’s) Have been given enough time to sort out the problemsHave been given enough time to sort out the problems
Pitfalls:Non optimized performanceMay not be focused on the customerMay not be focused on the customerFocus on individual processes with a lack of integral overviewToo many KPIsN l lNo clear goalsProcesses compliant but customers still not satisfied
Service Management – Emerging TrendPerformance based ImplementationPerformance‐based Implementation
Key Unit of planning: Value Drivers [Business Focus]Key Success Indicator: Measured value driver improvementBest suits organizations that require rapid results in:
d l d h dReducing lost production hours due to ITImproving Time to MarketImproving relationship between Business and ITImproving relationship between Business and ITBetter anticipate future developments
Have a (basic) common tool (required)Have basic processes already implemented (required)Customer is willing to participate and learn (required)
Performance Based Service Management
Measurable, fact based, result‐ oriented way of improving IT services delivery, aligned with business objectivesy, g j
Steps beyond Process driven approach by limiting the number of business focused IT KPIs called the IT Value Driversbusiness‐focused IT KPIs, called the IT Value Drivers
Radically improves IT Organization capabilities in a short time with l d b bl leasily and unambiguous measurable results
It is a repetitive method building on previous achievements to p g pimprove step by step – a defined evolutionary approach
PBSM is a 'fit for purpose' use of industry recognised best practicesPBSM is a fit for purpose use of industry recognised best practices (ITIL, ISO20K, PRINCE2, Lean Six Sigma)
U il blUses available resources
Typical Project Activity
Stage 1 Stage 2 Stage 4
Stage 3 Act
Stage 1Prepare
Stage 2Focus
Stage 4Maintain
Step 1 Measure: Prepare the Value Driver report;report;Step 2 Analyze: Determine areas of performance weakness using team members observations in combination with the Value Driver measurements;Step 3 Plan Activities: Determine the course of action to resolve the performance weakness and assign actions to the members of the Improvement Team;Step 4 Communicate: Explain the findings and the way forward;Step 5 Execute: Implement the changes proposed in step 3. Performance on Value D i i bli i d d di d klDrivers is publicized and discussed weekly
Identify and measure KPI’s
Metrics and Present the
Implement corrective actions
ObjectivesAnalyze theinformation
conclusions
Generate the data
Process the data
Define the
Define availablemetrics
Define the necessary metrics
Set up a Performance Based DashboardDashboard
Non Standard Changes delivered within agreed date, (operations target: > 70% by 31-1-2008, >95% by 31-03-2008)
80%
100%
% open Std Changes older than 30 days, (operations target: less than 5% > 30 days)
50%
60%4
0%
20%
40%
60% Within agreed datetarget %
Within agreed date 68% 62% 58% 47% 60% 63% 36% 55%
target % 70% 70% 70% 70% 70% 70% 70% 95%
2007-11 2007-12 2008-01 2008-3 W10 W11 W12 W130%
10%
20%
30%
40%Target <30 d> 30 Days
Target <30 d 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%
>30Days 44% 52% 52% 45% 34% 34% 30% 20% 19% 22%
November December W1 W2 W3 W4 W5 W9 W10 W12
Dashboard
Count of Change Ref.ANCR Region TotalAPAC 68EMEA 616NASA 124#N/A 36G d T t l 844
g
95% of all standard changes delivered within agreed (contracted) delivery dateProposal on request within 8 days95% of all non-standard changes delivered as agreed upon
> 30 Days 44% 52% 52% 45% 34% 34% 30% 20% 19% 22%
TargetsGenerator
3Grand Total 844
Count of Change Ref. ANCR RegionOpen Week APAC EMEA NASA #N/A Grand Total
200632 1 1 2200639 1 1200642 1 1200645 1 1200650 1 1200652 2 2200653 1 1200702 3 3200703 2 1 1 4200705 1 1 1 3200706 1 1200708 1 1 2200710 1 1200713 1 1200714 2 3 5200715 2 2200716 4 4
95% of all incidents solved within agreed delivery dateless than 5 % of all incidents open longer than 30 days
Less than 5% of all standard changes open longer than 30 daysLess than 5% of all non-standard changes open longer than 30 days
CSVOr
Excel Extract
CSVOr
Excel Extract
Extraction
2
Information from registration tools
Extract Extract
1
IncidentsInformation from registration tools Changes
Roadmap Model
ACTION CYCLECONTENTEXECUTION
Service Strategy
G l & R ltQUARTERLY
Dedicateresources
Goals & Results
R d l t d ti
Make BenchmarkAnd Business Case
Reduce lost production hours due to IT
Improve Time to Market
Driv
ers
nt o
f Cha
nge
mm
unic
atio
n
Improve relationship Business and IT
Improve anticipation offuture developments
Valu
e
Man
agem
e
Inte
rnal
Co
BI-WEEKLY
Week 1 to n......
ACT
Realized Goals & Results Dashboard BI-WEEKLY
Maintain
Communication with stakeholders BI-WEEKLY
Maintain
Roadmap MilestonesAn example of PBSM implementationAn example of PBSM implementation
6-9 months 6-9 months 3-6 months 3-6 months
Reduce lostproduction
hours due to IT
ImproveTime to Market
Improve Relationship Business and
IT
Better anticipate
future developments
Incident/Request/Event Mng. Change Management Service Level Mng. Service Continuity Mng.Problem Management Release & Deployment Mng. Service Catalogue Mng. Capacity Managementg p y g g g p y gAvailability Configuration Management Service Evaluation Security ManagementService Desk Service Desk Service Desk Financial Management
R lt •Results:• Improved effectiveness of IT service delivery• Increase in cost control
•Results:• Customer expectations are managed (Catalogue, SLA and reports)
Results:• Implemented guiding coalition •Increase in customer satisfaction •Implemented common
•Results:• Changes implemented in time and without causing disruptions• Alignment between controlp )
• Customers needs are managed (aligning with business requirements)
Implemented common tooling solution• Outages repaired within agreed time• Recurring incidents are investigated and removed
Alignment between Software Development and Control & Distribution• Cost reduction• Increase in customer satisfactionremoved satisfaction
Case Study I
“Quint has achieved a tremendous result in training our people in IT Service Management. Our IT team now operates as a unit. What’s more, we now have fewer incidents and, when we do have them, they’re resolved more quickly!”
David Redpath, Group ICT Manager with Hertel
ChallengeStandardizing the way we work over the different countries• Professionalize the IT OrganizationChallengeChallenge Professionalize the IT Organization• Prevent unplanned outages by improving the processes
• Implementing Performance Based Service Management
g
Solution
A well functioning Service management organization within one
• Implementing Performance Based Service ManagementSolution
Results quarter:• 50% reduction of the number of critical incidents• 40% reduction of the ticket backlog• 25% reduction of incidents resolved outside of the SLA
Results
Case Study II
“Quint’s advisers have the know how of the best practices in this area and aren’t afraid to get their hands dirty. We now score an 8 or higher in terms of customer satisfaction and we have Quint to thankhigher in terms of customer satisfaction and we have Quint to thank for that!”
Eugène Boon, manager unit ICT, Zaans Medisch Centrum
ChallengeHelping IT organization to become a reliable partner for the business• Implementing service management processes in accordance with ITILChallengeg p g g p• Reduce lost production hours caused by poor IT
• Performance Based Service ManagementSolution
A well functioning Service management organizationResults• Reduced lost production hours by over 90%• Cost of IT disruptions reduced by 95%• Improved service level performance to over 90% of calls resolved with
reduced timeframe
Results
• Customer satisfaction increased from 7 to 8,5
To summarize…
KISS principleKISS principle
Iterative cycles than long haul
Incremental Improvements
Focus on values and outcomes
☺Thank you for your time ☺☺Thank you for your time ☺Sandeep GondhalekarDirector Consulting