enterprise cloud operating model design

Enterprise Cloud Opera1ng Model Design

Service Offering Descrip1on Joseph Schwartz

12/17/13 © Copyright 2010-‐2011 Joseph Schwartz All Rights Reserved.

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Opera&ng Model Elements Processes – how we perform ac1vi1es that deliver predictable and repeatable business results through competent people using the right tools. Governance – how we make and sustain important decisions about IT. Sourcing – how we select and manage the sourcing of our IT products and services. Services – our porPolio of IT products and services. Measurement – how we measure and monitor our performance. Organiza&on – how we structure and organize our IT capabili1es?

12/17/13 3 © Copyright 2010-‐2011 Joseph Schwartz All Rights Reserved.

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Agenda

•  Major Assumptions

•  Operating Model Scope

•  Value Proposition

•  Design Approach

•  Level 0 Process Model with Level 1 ITIL V3 Mapping

•  The Model as a Business Planning Tool

•  Candidate Operational Flows

•  Next Steps

12/17/13 4 © Copyright 2010-2011 Joseph Schwartz All Rights Reserved.

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Major Assumptions •  The scope of managed services addressed by the model should be flexible

enough to support technical services, e.g., network, storage, compute and application infrastructure or middleware, needed to deliver service offerings to the SBUs as well as the business services needed to run IT, e.g., infrastructure management systems, service management systems

•  Best practice approaches should be leveraged wherever possible to deliver a Type 2 or 3 Service Provider Model (ITIL V3), e.g. managed and shared services

•  In the Target Operational Model headcounts and skill levels will be aligned to ‘market standards’ to allow for operational metrics and KPIs to be benchmarked against industry best practices, e.g. ratio of devices / admin, incident metrics, etc.

–  The best practice numbers will serve as a goal against which the target environment will be measured as it matures

•  Operational maturity and skill levels will be evaluated after a Due Diligence phase and organizational gap remediation steps taken to ensure that the saves promised by initiative (s) be realized.

•  The model must support E2E processes for all service management flows as they span Service Desk (e.g., incident, Support and Operations, e.g., config,. change, facilities mgmt., etc)

© Copyright 2010-2011 Joseph Schwartz All Rights Reserved.

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Agenda








•  Next Steps


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Process Model •  End-to-end operating processes •  Process triggers and interfaces

•  E.g., ITIL , eTOM, ISO 2000 •  Performance KPIs

People & Organization •  Roles & Responsibilities (RACI)

•  Process owners •  Escalations & interactions, etc. •  Performance KPIs and Metrics

Technology (IT Infrastructure, Tools & Automation)

•  Process automation •  Data models and repositories (e.g.,

CMDB) •  COTS, standards & simplification

Operating Model Goals are:

•  Operational Efficiency •  Customer Experience •  Revenue & Margin

Operating Model Scope


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Agenda








•  Next Steps


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Assumed Operating Model Savings Targets - Operations Value Metric Desired

Direction Value Metric Desired


Direction

Improved Audit Compliance

% of Applications Running on a Virtualized Infrastructure

Average cost per type of service request

Number of emergency changes due to non-compliance

Percentage Re-use and Redistribution of Under-utilized resources and assets

Percentage increase in the overall end-to-end availability of service

Number of unauthorized changes

Average cost per incident

Service unplanned downtime connected to change activities (hours / month)

Non-complaint assets identified as the cause of service failures

Mean-time between Failures (MTBF)

Percentage reduction in the costs and time associated with service provision

Time and cost to audit and remediate (audit cycle time)

% of Incidents closed by Level 1 Support

Change (all) to Admin (all) Ratio

% Cost of Compliance to Total IT Budget

Service downtime connected to rollout activities (hours / month)

Reduction in the number of failed changes


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Assumed Operating Model Savings Targets - Support Value Metric Desired



Direction

Percentage reduction in SLA targets missed

Reduction in number and percentage of major incidents

Time and cost to audit and remediate (audit cycle time)

% of Incidents reported by End Users and customers vs IT Operations

% of emergency changes due to non-compliance

Number of changes implemented to services which met the customers agreed requirements, e.g. quality/ cost/time

Time and cost to audit and remediate (Audit cycle time)

Percentage increase in customer perception and satisfaction of SLA achievements


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Assumed Operating Model Savings Targets - SBUs Value Metric Desired



Direction

% Increase in Customer Satisfaction of SLA’s

Improved Audit Compliance (# of audit tests passed versus total)

Percentage reduction in costs associated with service provision

% of IT Projects that Align with Corporate Objectives

Cost of Unplanned Business Interruptions

Number of changes implemented to services which met the customers agreed requirements, e.g. quality/ cost/time

% of Budget Focused on Operations, Labor, Investments

Actual spend versus budgeted spend


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Agenda








•  Next Steps


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Design Approach: Blending Industry Best Practices

Isn’t ITIL Enough? •  ITIL V3 covers 100%+ of Day 1 capabilities •  From a pure end-state design perspective,

ITIL is Internally focused – experience shows that once transparency is achieved for the business, comparative valuation occurs – eTOM offer management and campaign processes could address an important gap in the end state

•  ITIL does not link solutions and training to a design process (it is part of release)

•  The use of eTOM simply ensures that the end state design provides full coverage in the event the client needs to access additional capabilities as it matures

Integrate with client

requirements

End-to-end operating processes


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Agenda








•  Next Steps


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Strategy & Service

Operations and Support

High Level-Process Model

Service Lifecycle Management

Business Strategy,

Architecture & Planning

Service Management

and Operations

Service Fulfillment

Service Assurance

Customer Service

Service Configuration & Activation

Service Quality Management

Service Development & Management

Resource Development & Management

Supplier Development & Management

•  The Operating Model shows seven vertical process groupings that are the end-to-end processes that are required to support customers and to manage operations

•  The operating model also includes views of functionality as they span horizontally across the clients’s internal organization

•  The horizontal functional process groupings distinguish functional operations processes and other types of business functional processes, e.g., Service Development versus Service Activation & Configuration, etc.


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Operating Model E2E Processes

•  Built on industry best practice business and IT process models

•  Addresses all of end-to-end processes needed to deliver Managed Services to customers - Includes –  Strategy and Service: “Enabling” processes of Business

Strategy, Architecture & Planning, including •  Service Lifecycle Management and Service Development &

Management –  Operations and Support: “Lights on,” or core operations

processes of Customer Service, Service Management and Operations, including •  Operations Support, Billing/Chargeback, Service Desk,

Service Development and Management •  Service Configuration & Activation, Service Quality

Management, Facilities and Operations


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Strategy & Service

Operations and Support

ITIL V3 Mapping

Service Lifecycle Management

Business Strategy,

Architecture & Planning

Service Management

and Operations

Service Fulfillment

Service Assurance

Serv

ice

Port

folio

Man

agem

ent

Serv

ice

Cat

alog

Man

agem

ent

Ris

k M

anag

emen

t

Com

plia

nce

Man

agem

ent

Arc

hite

ctur

e M

anag

emen

t

Supp

lier M

anag

emen

t

Dem

and

Man

agem

ent

Fina

ncia

l Man

agem

ent

Secu

rity

Man

agem

ent

Cap

acity

Man

agem

ent

Chargeback M

anagement

Release &

Deploym

ent Mgm

t.

Change M

anagement

Configuration M

anagement

Facilities Managem

ent

Solution Managem

ent

Availability Managem

ent

Service Continuity M

anagement

Service Desk

Incident/Fault Managem

ent Problem

Managem

ent

Request Fulfillm

ent

Event Managem

ent A

ccess Managem

ent

Service Validation & Testing

Operations M

anagement

Service-Level Managem

ent

Know

ledge Managem

ent

Continuous Service Im

provement


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Operating Model REFERENCE MODEL

TEC

HN

OLO

GY

P

RO

CES

S

PEO

PLE


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•  Strategy & Service covers the processes involved in forming and deciding Service Strategy and gaining commitment from the business for this

•  Service Lifecycle Management covers the services themselves – note that the model distinguishes Service, used by the client to represent the “technical” part of the product, and Resource (physical and non-physical components used to support Service)

•  The vertical functional groupings in are mapped from ITIL V3, Service Strategy and Design

Business Strategy, Architecture & Planning Processes


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Level 0 Operations & Support Processes

•  Operations & Support (O&S) provide the core of lights-on Operations and first- and second-line support

•  The vertical processes in O&S represent a view of flow-through of activity, and map to ITIL V3 processes where there is functionally-related activity, e.g., Service Transition, Operation and CSI


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Resource Model

Result

Schedule of Decremented initiative Ops Roles / Process/Task Headcount Schedule for Incremented Ops Roles / Process/Task Headcount

Apply

Industry Benchmarks for Operational Metrics for Mature, Automated Processes, Roles Tasks

Map To

End State Roles / Process / Task Headcount Device Retirement Schedule New Device Deployments schedule Role/Process/Task Headcount

Inputs

Cient Org. Roles / Process/Task Headcount

Incremental Roles / Process/Task Headcount

needed for SVMA Pre-program Device Count Day 1 Device Count

Baseline Operational Metrics, e.g., Device to

Admin Ratio


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Resource Model at a Glance Process

Grouping

ITIL V3 Processes

Key Baseline Metrics

Industry Benchmark

Metrics

ITIL Roles

Headcount Forecast

Demand Forecast


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Agenda








•  Next Steps


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The Target Model as a Business Planning Tool •  Roles (ITIL V3)

•  Processes (ITIL V3)

•  Skills (SFIA)

•  KPIs / Metrics (Role Based / Processes Based) –  Baseline and improvement

•  Allows us to dial up and down to see ROI


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Anticipated Trends Forecast (sample)

Aurora Planning Timeline

BAU Headcounts

BAU + Incremental Initiative Headcounts

Infrastructure Capacity, Efficiency,

Scale and Ability Cope with Change


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Key Planning Metrics

•  Key Operations Metrics

•  Mean Time to Repair (time required to diagnose and resolve problems)

•  Incident to Change Ratio

•  % of Incidents Reported by End Users

•  % of Outages Traced to Mis-configurations

•  % of Changes Completed within change Windows

•  % of Changes Automated versus Manual •  Device to Admin Ratio

•  Service roll-out cycle time (MTTD - mean time to deploy)

•  Changes per Admin

•  $ Unit per Device Managed

•  Time and cost to Audit and Remediate (Audit cycle time)

•  Time and cost to Grant and Revoke Administrative Access

•  Downtime traced to compliance violations

•  % of configuration audits passed •  $ Operation per Device Managed

•  Key Support Metrics

•  Ratio of L1 to L2 to L3 support staff

•  First call resolution rate

•  Percentage of escalations to L2 and L3 support

•  Time to plan a change •  Time to approve a change

•  Backlog of changes

•  # of change collisions

•  % of changes rolled back

•  # of calls resolved via self-service requests (call avoidance)

•  MTBF for business availability •  Ratio of planned to unplanned changes

•  Average cost per incident

•  Average cost per type of service request

•  % of incidents closed by L1 support

•  # of Incidents •  Ratio of L1 to L2 to L3 incidents

Low Hanging Fruit?


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Candidate Operational Flows

•  Start the dialog

•  Guide POV / POC activities

•  Tied to KPIs / Metrics can help determine direct value opportunity


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Agenda








•  Next Steps


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1. New Service Request/Service Provisioning


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2. New Service Request Development Environment


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3. New Service Request Development Application


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4. Application Promotion


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5. Closed Loop Compliance


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6. Proactive Incident Management


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Agenda








•  Next Steps


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Call to action

•  Gather data to complete Resource Model spreadsheet

•  Cross-org. process “innovation workshop” –  Gain consensus and buy-in on high priority operational process

improvement targets, KPIs, phasing, etc.

•  Organization skills assessment, remediation recommendations

•  Interface mapping across upstream and downstream systems (dependency mapping between SM, CRM, MIS, etc.)

•  Implement operational flows in POV using defined alternatives

•  Gain understanding of E2E optimization choices, e.g., replacement vs. migration


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Operating Model Focus Group Plan Milestones

Day One – Operations Transition Readiness

Phase One - Strategic Target Operating Model Design

Phase 2 - Skills Assessment and Remediation Plan


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High Level Roadmap

Day One

Q4 Q2 Q1 Q3 Q4 Q2 Q1

Day One Operations Transition Readiness

Stakeholder Process Transition Team and Infrastructure in place

Phase 1

Phase 2

Dedicated Resources Assigned (see Resource Model)

Governance Process Business-line Application Team Engagement

Complete Resource Model

Strategic Target OM Design

Develop Approach Gain consensus on priority

Identify Process Owners

Develop and roadmap Sync with program priorities

Skills Assessment & Remediation Plan

Develop Approach Gain consensus on approach

Identify Functions / Skills Roles

Execute assessment, identify gaps, develop remediation plan Align plan to roadmap


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Day 1 – Operations Transition Readiness Q4 Q2 Q1 Q3 Q4 Q2 Q1

Deliverables •  Operations transition team in place, transition processes documented and ready to support Day One

operations and activities •  Stakeholder process •  Resource Model Delivered •  Governance Process

o  Major dependencies – Dedicated resources and infrastructure (see Day One Resource requirements), Stakeholder engagement, commitment by management to Governance Process

Dependencies •  Existence of quality metric data •  Availability of Transition Team resources

Day 1 Stakeholder Process Transition Team and Infrastructure in place

Qualified, Dedicated Resources Assigned (see Resource Required)

Governance Process SBU Application Team Engagement

Complete Resource Model - deliver to WG5

Day One Operational Transition Readiness


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Phase 1 – Strategic Target Operating Model Design Q4 Q2 Q1 Q3 Q4 Q2 Q1

Deliverables •  Process Owners identified and committed – engagement with WG4 •  Process Models / Roadmap delivered •  Prioritization Model / Approach / KPIs delivered

o  Major dependencies – Dedicated resources and infrastructure (see Day One Resource requirements), Process Owner participation (from Technical Operations), dedicated process design resources (see Day One Resource requirements)

Dependencies •  Availability of dedicated resources (Budget) •  Availability and commitment of Process Owners

Phase 2

Strategic Target OM Design

Develop Approach Gain consensus on priority

Identify Process Owners

Develop and roadmap Sync with Aurora priorities


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Phase 2 – Skills Assessment and Remediation Plan Q4 2009 Q2 2010 Q1 2010 Q3 2009 Q4 2010 Q2 2011 Q1 2011

Deliverables •  Skills Assessment Framework •  Function / skills / role profiles •  Gap / remediation plan (e.g., Training / HR Plan)

o  Major dependencies – Dedicated resources and infrastructure (see Day One Resource requirements), Process Owner participation, dedicated HR / training resources

Dependencies (items still to be resolved – if any, and who might be the person / group to ask) •  Assessment framework (Budget) •  Availability of Process Owners •  Dedicated HR / Training planners (Budget) •  Training Resources (Budget)

Phase 2

Skills Assessment & Remediation Plan

Develop Approach Gain consensus on approach

Identify Functions / Skills Roles

Execute assessment, identify gaps, develop remediation plan Align plan to roadmap


enterprise cloud operating model design

Technology

hours month

process owner

approach execute

kpis metrics

customers

audit cycle

operational

metric desired