IT Operations Processes: Is IT Infrastructure Library the Answer

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IT Operations ProcessesIs IT Infrastructure
Library the Answer?

• Steve Bittinger

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Internal Providers Challenges
External Competition Customers
perceptuallybenchmark you against ESPs, creating
externalcompetition and outsourcing pressures.
Demand/Supply Management You are fundedas a
utility to provide lowest-common-denominator,one
size fits all service, with no ability to scale
resources to demand. Demand perpetually exceeds
supply.
Operational Effectiveness Historically, you
have been run as a cost center, with management
emphasis on sticking to the budget rather than
service quality, reliability and
cost-effectiveness. Now these things matter, and
traditional competencies are insufficient.
Unclear Value Proposition The value you
deliverto the business in relation to your costs
cant be demonstrated. Your customers assume the
worst.
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Key Issues

• 1. What value does the ITIL deliver?
• 2. Is the ITIL the only way to effect
  standardizedIS processes?
• 3. What best practices are needed to implement
  the ITIL?

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ISCo Model A Transformation Imperative
Market-focused Value-driven Differentiated Acts
like owner Prognosis Predator
ProfitCenter

Vendor N
Product-focused Integration-driven Demand
creator Prognosis Competitor
Vendor 2
ISCo ERP
ISCo CRM
ISCo Office
Vendor 1
Customer Focus
SharedServices
Service-focused Competitive pricing Supply
creator Acts like ESP Prognosis Survivor
IS Maturity Path
Business Recovery Services
App. Hosting Services
ISCo
Seat Mgmt. Services
Messaging Services
Change Mgmt.
Proactive, TCO-optimized Acts like cost
center Prognosis Short-term survivor
Process-Based
CostCenter
Asset Mgmt.
Application Development
IT Focus
Reactive, budget-driven Resource-constrained Acts
like a perpetual backlog Prognosis Doomed
Telecom
Data Center
Distrib- uted
App. Dev.
Silos
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ISCo A Business, Not a Cost Center
Svc. Fulfillment

• Process Outcomes and Improvement
• Organizational Structure
• Tooling and Automation
• Quality Assurance and Measurement
• Cost Accounting
• Service Levels, Products, Standards

How servicesare delivered Outcomes in relation
to expectations
Traditional IT
Sourcing

• Core Competencies, Capabilities, Skills
• Relationship Management
• Performance Management
• Cost Management
• Supply Management

Whos going to deliver? Why? How will they be
measured?
ISCo
BusinessDevelopment

• Service and Product Management
• Competitive Positioning
• Marketing, Sales, Relationship Management
• Demand Management
• Business Intelligence
• Pricing, Funding, Governance

What services, at what prices, to what customers?
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Service-Oriented Organizational Framework
Operations Management Capabilities
Relation-ship Mgmt.
Product Management
Quality Assurance
Delivery Management
Cust.No. 1
ProcessRed
Service AOutcome
Service A
Cust.No. 2
ProcessBlue
Service BOutcome
Service B
Cust.No. 3
ProcessGreen
Service COutcome
Service C
Product Development
Sales, etc.
Measurement
Process Engineering
Operations Execution Capabilities
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Indicators of Process Improvement?Loyalty Is
More Important Than Satisfaction
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Where Does IT Service ManagementSave You Money?

• Indirect
• Reduced peer support
• Standardization
• Consolidation
• Non-IT staff more productive
• Improved availability
• Managing appropriate expectations
• Improved efficiency of security and business
  continuity planning processes
• Targeted training of users
• Improved IT governance
• Drives continualimprovement

• Direct
• Reduced costof incident resolution
• Reduced self-inflicted incidents via
  integratedand reliable change
• Increased productivityof IT staff
• Improved asset utilization and life cycle
  management
• Reduced service cycle times
• End-to-end servicecost optimization
• Automation
• Improved risk management

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Which Process Improvement Model?
CMM capability maturity model COBIT Control
Objectives for Informationand Related
Technology ITIL IT information library TCO
total costof ownership BS15000 IT svc. mgmt.
standard ISO 9000 quality mgmt. standard
Specific
TCO
ITIL
CMM
BS15000
COBIT
IS/IT Relevance
People CMM
Six Sigma
ISO 9000
National Awards(e.g., Baldrige)
Holistic
Scorecards
Low
High
Level of Abstraction
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Service Management Certification?
Self-AssessmentWorkbook PD0015
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Capability Maturity Model

• Level 2 Repeatable
• Solve problems basedon experience
• Heroic efforts

• Level 3 Definable
• Focus on defined processes
• Problems viewed asunforeseen circumstances

• Level 4 Manageable
• Metrics and monitoring
• Integrity of processesis audited

• Level 1 Ad Hoc
• Problems comefrom outside
• Change is the enemy

• Level 5 Optimal
• Processes are self-tuning
• Training replacementsis critical

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Process, Structure and Tooling
From Silos...
Network Technicians
Desktop Technicians
Help Desk
Production Control
Application Development
DBAs
Oops
Break
Missed
Kludge
Blame
to a Focus on End-to-End Service delivery
Multidisciplinary Team
Process
Step 1
Step 2
Step 3
Result
Reliability
Efficiency
Collaboration
Consistency
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Process Improvement and Culture Change at
General Electric
Six Sigma Quality
1995
Making Customers Into Winners GE Tool Kit-6
1994
Change Acceleration Process QMI, NPI,
productivity, globalization ...
1992
Process Improvement continuous improvement,
re-engineering
1991
Productivity/Best Practices looking outside
General Electric
1990
Work-Out /Town Meetings empowerment,
bureaucracy, busting action
1989
Source The Dance of Change, Peter Senge, 1999
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IT Management Process Maturity Model
Phase 4
Value
Phase 3

• IT and business metric linkage
• IT improvesbusiness process
• Real-timeinfrastructure
• Business planning

Service
Phase 2

• Define services,classes, pricing
• Understand costs
• Set quality goals
• Guarantee SLAs
• Monitor and report on services
• Capacityplanning

Proactive
Phase 1

• Monitor performance
• Analyze trends
• Set thresholds
• Predict problems
• Automation
• Mature problem,asset and changemgmt. processes

Reactive
Phase 0
Level 3

• Best effort
• Fight fires
• Inventory
• Initiate problem mgmt. process
• Alert and event mgmt.
• Monitoravailability(u/d)

Chaotic

• Ad hoc
• Undocumented
• Unpredictable
• Multiple help desks
• Minimal IToperations
• User call notification

Profit Mgmt.
Business Management
Svc. Delivery Process Engineering
Service and Account Management
Operational Process Engineering
Tool Leverage
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Transitioning to Process-Based Management,
Structures and Tooling
Year 1
Year 2
Year 3
Proactive example
Service example
Value example

• Change mgmt.
• Problem mgmt.
• Asset mgmt.

• SLAs
• Sales marketing
• Chargeback

• Budgeting
• Forecasting
• Funding

Process Redesign
Reorganize into consolidated service desk Create
QA org.
Create product mgmt., accounting and relationship
mgmt. organizations
Create office of IS CFO
Structure Redesign
Implement an integrated tool suite in the style
of Unicenter
Implement cost accounting and chargeback tools
Implement an invoicing and PL-based financial
reporting system
Tool Deploy
Measurement
Relationship management, sales and marketing
processes
Operational process engineering, integration and
management
Profit-oriented business management processes
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Magnitude of IT-Driven Change
Increasing Benefits and Increasing Complexity
to Achieve
Second-Order Magnitude
First-Order Magnitude
Third-Order Mag.


Structure/Culture Affected
People Affected
Tasks Affected
Technology
Technology
Culture
Culture
Technology
Culture
Structure People
Technology Tasks
Structure People
Technology Tasks
Structure People
Technology Tasks
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Why Change Fails
OrganizationalCompetencies Constraints
Common Failure Point Change Imperative Not
Proved
LeaderAttributes Actions
Dynamicsof Change
Common Failure Point Ineffective Executive
Sponsorship
Common Failure Point Underestimating
Magnitudeof Change
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Putting IT All Together
Year 1
Year 2
Year 3
Define Portfolio
Add Products
Add Prices, SLAs, Rpts
Service Portfolio
Acquire Prod Mgrs.
Self Serve Portal
Chargeback
Benchmark Services
Map to services
As is/to be
Repeat (svc. mgt. bus. processes)
Process
ITIL
Reorganize
Retool
Repeat
Segment market
Process Measurement
Relationship Mgt
Acquire RMs
Formal Sales Mgt., Service Mgt., Mktg.,
Communication
Change Management
Costs by service
Solidify PL
Full Chargeback
Pricing Funding
Market Price
Introduce PL to Biz
Introduce PL to Biz
Market Price
Preliminary PL
Pilot Pricing Chgbck.
Manage by PL
Outsource Weak
Improve Par
Market Core
Market Driven Sourcing
Sourcing Strategy
Implement/Refine
Research/Plan
Educate/Pilot
Implement/Refine
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Recommendations
Use ITIL as the basis for improving IT
operational processes, within the longer-term
scope of the ISCo service-delivery
transformation. Use a capability maturity model
approachto progressively improve process
competencyand the overall management
approach. Optimize processes by applying the
theoryof constraints fix the weakest link
in the(process) chain. More-mature enterprises
canapply Six Sigma techniques. Seek
opportunities to learn from and copy
bestpractice processes.
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IT Operations ProcessesIs IT Infrastructure
Library the Answer?

• Steve Bittinger

21
IT Operations ProcessesIs IT Infrastructure
Library the Answer?

• Steve Bittinger