these materials can be reproduced only with gartner’s official approval. such approvals may be...
TRANSCRIPT
These materials can be reproduced only with Gartner’s official approval. Such approvals may be requested via e-mail -- [email protected].
Simon Mingay
Vice President, Gartner Research
The Benefits of IT Service Management Adoption
1. The Opportunity and the Risk
Copyright © 2003
Why Should You Care About IT Service Management ?
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Based on data from Gartner Measurement, organizations could achieve a reduction of some 48% in their annual Total Cost of Ownership by
adopting IT Service Management
….and that is before considering the non-IT related benefits, such as higher levels of external customer
satisfaction, will bring to the business
Mind the Gap
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Internal Service Providers
Service Recipients
Close the gap with best practice IT Service Management.But, it’s a moving target
Needs and
Expectations
Low High
High
Low
Understands Business
Requirements
Responsiveness
IT Doer•Just gets by• Does no more than requested
IT Value Adder • Understands business• Good rapport with senior
managers• Recognized contributor
of strategy and insight
IT Counsellor•Good listener, with big-picture understanding
• Good at proposing solutions but poor at implementing
IT Service Provider• Responsive internal vendor• Fulfils orders quickly, but does not innovate or anticipate
Does IS Service Match Client’s Expectations?
Where is your IS organization today? Where does it want to be and why?Where do clients think it is today? Where do they want it to be and why?
Are all these answers the same? If not, why not?
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The Internal Service Organization’s Traditional Monopoly Power is Eroding — Quickly. Become customer-centric and learn to
compete, or fall by the wayside.
Warning! Change Is Coming Fast — Don’t Get Caught in the Headlights!
2. The Driving Forces
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2003 IT Budgets Are Flat
IT Budget change from previous year (%)
Source: a) From IT survey 1998b) From IT survey 1999c) From IT survey 2000d) Gartner, 2001 IT spending and staffing survey results, Potter, Grigg, Gomolskie) 2002 EXP CIO Surveyf) 2003 EXP CIO Survey
Year-to-year change in 2003 IT budget and business operating budget (%)
Total IT budget, change from previous year (%)
Business operating budget, change from previous year (%)
0.00.26
10.1
1.30.0
15.015.9
9.7
1998(a)
1999(b)
2000(c)
2001(d)
2002(e)
2003(f)
Linear trend line
Source: Gartner EXP
Top Management Priorities: Provide Executive Leadership, Demonstrate Value
TOP TEN CIO MANAGEMENT PRIORITIES, 2003Ranking
2002 20012003Forecast
2006
Providing guidance for the board/executive 2 31 1
Demonstrating business value of IS/ITDemonstrating business value of IS/IT 3 52 2
Improving IT governance - -3 12
Reducing total IT Reducing total IT costscosts
5 114 6
Develop/enhancing IT architectures 8 65 8
Strategizing for IS/business linkage 1 16 3
Strengthening program/project prioritization and management 6 77 15
Managing benefits realization - -9 4
Tightening security/privacy safeguards 7 -10 9
Developing leadership in IS senior team 4 98 5
1 2 3 4 5 6 7 8 9 10Average weighted score (10 = max)
Selected change in ranking compared with 2002
Source: Gartner EXP
Top Technology Priorities: Secure and Integrated Technology
TOP-TEN TECHNOLOGY PRIORITIES, 2003
Security enhancement tools
Applications integration/middleware/ messaging
Enterprise portal deployment
Network infrastructure/management Network infrastructure/management toolstools
Internal e-enabling infrastructure
Web design, development and content management tools
Storage management (SAN, NAS) deployment
Customer Relationship Management (CRM)
Web services – internal or Web services – internal or externalexternal
Deploying XML based processes/ messaging
1 2 3 4 5 6 7 8 9 10Average weighted score (10 = max)
1
3
7
5
6
2
11
-
12
9
2002 2001
2
5
8
3
1
-
-
-
12
6
1
2
3
4
5
6
7
9
10
8
2003
Forecast 2006
Ranking
1
9
12
17
13
14
18
2
8
6
Selected change in ranking compared with 2002
EnhancementEnhancementUtilityUtility Frontier
Pricing andService Levels
Pricing andService Levels
Customer Satisfaction Customer
Satisfaction
Contracts andRelationships Contracts andRelationships
Vision andAlignmentVision andAlignment
What Matters Most in Perception of Value to Service Recipients?
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Service Delivery & Support
Service Delivery & Support
IS Organization Strategic Outlook to 2007
The strategic outlook for IS organizations is for major change in every aspect of their role and structure.
Continued Consolidation, driving
governance and alignment challenges
Processes will need to integrate across
boundaries - ESPs, Suppliers, Partners,
Customers
Increased emphasis on quality, process
excellence and infrastructure optimization.
Focus on strategy less on IT delivery; more business/ behavior competencies, less
technology.
ESP use grows; strategic sourcing and
supply / demand alignment are critical
processes.
Service management excellence sets the
foundation for delivering greater
value
External CompetitionExternal Competition – – Customers perceptually Customers perceptually benchmark you against ESPs, creating external competition benchmark you against ESPs, creating external competition and outsourcing pressures.and outsourcing pressures.
.
Operational EffectivenessOperational Effectiveness – You have historically been – You have historically been run as a cost center with management emphasis on sticking to run as a cost center with management emphasis on sticking to budget, rather than service quality, reliability and cost budget, rather than service quality, reliability and cost effectiveness. Now these things matter, and traditional effectiveness. Now these things matter, and traditional competencies are insufficient.competencies are insufficient.
Demand/Supply ManagementDemand/Supply Management – – You are funded as a You are funded as a utility to provide lowest-common-denominator, “one size fits utility to provide lowest-common-denominator, “one size fits all” service. No ability to scale resources to demand. Demand all” service. No ability to scale resources to demand. Demand perpetually exceeds supply.perpetually exceeds supply.
PP
SS
DD
Unclear Value PropositionUnclear Value Proposition – If t– If the value you deliver he value you deliver to the business in relation to your costs cannot be to the business in relation to your costs cannot be demonstrated. Your customers assume the worst.demonstrated. Your customers assume the worst.
You’re In Competition — Accept It. Deal With It.
ResultProcess Step 1 Step 2 Step 3
To Service Driven
Application Development DBAs
Network Technicians
Production Control
Desktop Technicians
Help Desk
From Silo’s
Oops! Break! Missed! Kluge! Blame!
Collaboration Consistency Reliability Efficiency
Multidisciplinary Team
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It’s Integration That Counts- functional silos, processes and the automation
Automation
There Is No Service ManagementInside a Glass House
EnterpriseConsumers
Partners
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Oh, and that’s another thing...
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• Availability requirements will get more demanding.• Cost of downtime will get higher.• ITSM Corporate certification will come.• Business demands external and peer comparison
(BS15000, CobiT, Benchmarking).• Shared service model mandates service
excellence.• Accelerating adoption of ITSM globally
IT Credibility CurvePotentialEconomic Value
IT Mgt.ToolboxCommunicationConsistencyReliabilityPerformanceRecruitmentPerception Pts.InformationProblem Mgt.Policies
IT Mgt.ToolboxBudgetsOperationsStaffingPerception Pts.ResponseReliability
Level 1Uncertainty
Level 2 Skepticism
IT Mgt.ToolboxSvce. PortfolioSkill AssessmtRelationship & Project Mgt.
OutsourcingSvce. RecoveryStaff Develpmt.Perception Pts.CompetencyBusiness SavvySLAsPriorities
IT Mgt.ToolboxShared Svces.ArchitectureProject OfficeResource Mgt.Process DesignCompetenciesCultureMeasurementPerception Pts.LeadershipRelationship Mgt.
Sourcing Service Pricing
Level 5 Respect
IT Mgt.ToolboxGovernanceFunding Models
Portfolio Mgt.CoordinationFinanceCareer PathingProgram Mgt.Workplace Innovation
Strategic Sourcing
SuccessionPerception Pts.AlliancesPartnerships ConsultationInnovation
Level 3 Acceptance
Level 4Trust
The IT Credibility Curve: From Cost Center to Business Center
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3. The Benefits of ITSM
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Key element overview based in ITIL
ITSM Key elements - Best Practices
Service Support Service Delivery
– Service Desk– Incident management– Problem Management– Configuration
Management– Change Management– Release management
– Service Level Management
– Cost Management for IT Services
– Financial management
– Capacity Management
– IT service continuity management
– Availability Management
Source: ITIL
HP IT Service Management Reference Model
• document and track service infrastructure information• document infrastructure attributes and relationships• evaluate and control changes
• interface with customers• understand business and customer requirements• formulate an IT strategy that optimizes IT added-value
• develop and test services• deploy services according to service design
business - IT alignment
service development & deploymentservice design & management
• manage customer satisfaction• run services• monitor and maintain the service infrastructure • resolve incidents and disseminate information• proactive problem prevention
service operations
• translate IT strategy into planned IT services• create detailed service design specifications• define and manage service levels within cost constraints (and service budget) via SLAs• provide security for infrastructure and data
service deliveryassurance
Source: HP
Even Microsoft Acknowledge It’s People and Process as well as Technology
Source: Microsoft, The MOF Process Model
Microsoft Operations Framework
The Benefits
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Improved customer satisfaction.
Improved employee satisfaction.
Less fire fighting. Improved value of IT. Improved Morale of
Service delivery and recipient staff.
Reduced staff turnover.Consistent training and
professional certification.
Improved systems/apps availability.
Improved IT employee productivity.
Reduced cost/incident.Reduced hidden costs that
traditionally increases substantially the TCO.
Better asset utilisation.Builds Trust.
Where does it save your money
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Direct• Reduced cost of incident resolution.
• Reduced self-inflicted incidents through integrated and reliable change.
• Increased productivity of IT staff.
• Improved asset utilisation and lifecycle management.
• Reduced service cycle times.
• End-end service cost optimization.
• Automation.
• Improved risk management.
Indirect• Reduced peer support.
• Standardization.
• Consolidation.
• Increased productivity non-IT.
• Improved availability.
• Managing appropriate expectations.
• Improved efficiency of security and business continuity planning processes.
• Targeted training of users.
• Improved IT governance.
• Drives continual improvement.
The Challenges
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It is about behavioural change.
It is not just the IS group that has to change.
It does change power bases.
Some people will choose to leave.
Preventing service levels dropping during transition.
Building a bureaucracyThe organization structure
must change as well. You have to invest to save. Transition will take 2 to 3
years.
4. Where to Start
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Service Definition
Structure ToolsPeople Process
The Service Management Universe
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Integrated Process TeamsServer Admin.
Network Mgmt.
Security Admin.
Help Desk
Desktop Support
Process Automation
Service Fulfillment: Process,People, Structure and Tools
Sample Processes: user ID/account maintenance; PC config., install, maintenance; trouble shooting, first-level/just-in-time help
Service: Workplace Support
Service: Application Hosting
Sample Processes: firewall mgmt., database mgmt., production control, data center mgmt.
Where are you feeling the pain ?
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•Change Management•Configuration & Asset Management•Problem Management•Incident Management•Service Level Management
Service Service Mgr. AMgr. A
Service Service Mgr. BMgr. B
Service Service Mgr. CMgr. C
Integrated Integrated Process Team Process Team
“Red”“Red”
Integrated Integrated Process Team Process Team
“Blue”“Blue”
Integrated Integrated Process Team Process Team
“Green”“Green”
AECust. 1
AECust. 1
AECust. 2
AECust. 2
AECust. 3
AECust. 3
Service A Service A AuditorAuditor
Service B Service B AuditorAuditor
Service C Service C AuditorAuditor
ProcessOwner “Blue”
ProcessOwner “Blue”
ProcessOwner
“Green”
ProcessOwner
“Green”
ProcessOwner “Red”
ProcessOwner “Red”
Relation-Relation-ship ship
Mgmt.Mgmt.
Product Product Mgmt.Mgmt.
Delivery Delivery Mgmt.Mgmt.
Quality Quality Mgmt.Mgmt.
Senior ManagerSenior Manager
Service-BasedOrganizational Design
Take a Service Management Health Check
Check your enterprise’s IT Service Management with this simple test
1 2 4 53
1 53
1 4 5
1 2 4 53
1 2 4 53
2 4
32
External focus shapes ITSM Strategy
Internal silos shapes ITSM strategy
Behavioural change & continual improvement
Managed as tool implementation
Value + alignment built round < 15 Services
Processes at maturity level 0 or 1
Service quality measured end to end(automated, integrated)
Service quality measured at points
>17 poor value scoregood value score <10 score 10 to 17needs work
Service list is technology focussed
Processes at maturity level 5
Recommendations
First define your goals, then define your services.
ITSM excellence will be a prerequisite for demonstrating business value and driving out inefficiency. But you don’t have much time.
ITSM excellence is a constantly moving target - get it working internally. But the ends in “end-to-end” are moving.
ITSM is about cultural and behavioural change - don’t lose sight of that.
There are big savings available. Set your sights high !The IT Industry is maturing - ITSM Excellence will be a prerequisite
These materials can be reproduced only with Gartner’s official approval. Such approvals may be requested via e-mail -- [email protected].
Simon Mingay
Vice President, Gartner Research
The Benefits of IT Service Management Adoption