The New Model for IT Service Delivery

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1 CEB CIO Executive Board The New Model for IT Service Delivery Volume II: Skills, Deployment, and Integration All Rights Reserved.

2 VOLuME II: SKILLS, DEPLOyMENT, AND INTEGRATION Study roadmap 4 Service roles and Skills 5 Service Deployment Prioritization 6 integrating it and Business Services CIO Questions What roles do we need to create and hire for? What skills will become more important over time? How do we scope roles to enable clear decision making? What type of deployment plan will be most successful? How do we determine the sequence in which we should deploy services? How can we increase the integration between services from IT and other corporate functions? How can we measure and improve the service delivery collaboration between IT and other functions? Key insights appoint dedicated service managers who have service management, product marketing, and architecture skills. Formalize the relationships between end-to-end it services managers and key supporting roles. test how changes to governance processes will impact key roles. deploy end-to-end it services incrementally rather than all at once. use clear, consistent principles to determine the sequence in which services are deployed. Make organizational and staff changes in it incrementally and in sync with service deployment. align it and business service managers roadmaps and planning activities. replace service managers individual performance metrics with collaborationbased objectives. Examples Service Roles and Skills 17

3 The New Model for IT Service Delivery: Volume II 18 Supporting end-to-end IT services demands new service management roles and significantly changes which skills will be most important to the organization. End-TO-End IT Services Require Changes to Roles and Skills Performance Challenges Facing of End-to-End Services Insufficient Time Authority, Not Influence Skills Gaps Responsibility Overload Challenges Part-time service managers lack the time and focus to perform the role effectively. Influence alone will not secure the resources required to launch new services or fix delivery problems. Service managers require skills rarely found in IT. Service manager roles have many responsibilities they need executed. Solutions Create dedicated service manager positions. Give service managers authority for resource allocation. Help service managers build skills in finance, communications, and stakeholder management. Hire a service architect and service performance manager to support service managers.

4 Managing end-to-end IT services demands new responsibilities and significant coordination of IT and business stakeholders; this cannot be done effectively without dedicated roles. Having dedicated roles for IT service management results in improvements to service delivery outcomes five times larger than any gained by having a part-time role. Organization with parttime roles for service management have reported low economic benefits. The Rewards of Dedication Performance Benefit of Dedicated Service Management Staff 1 Effectiveness Performance Improvement, Indexed 100 No Service 108 Part-Time Service Dedicated Service Economic Impact of Dedicated Service Management Staff Operating Cost Gains from Effectiveness Improvement Moving from part-time to dedicated service management $1.5 M roles has the greatest economic reward. 153 Dedicated service management staff have five times the impact on effectiveness as part-time staff. $0.22 M No Service Part-Time Service Dedicated Service 1 Performance improvement is calculated by using the difference in regression coefficients for the individual organizational designs and scaling them to a no one response baseline of The economic model is calculated using the example operating budget improvement for a hypothetical $90 M operating budget company and then applying the corresponding performance improvement percentage. Source: Infrastructure Executive Council, Key Developments in Service Management, Arlington, VA: CEB, Service Roles and Skills 19

5 The New Model for IT Service Delivery: Volume II 20 To manage businessfocused, end-to-end IT services effectively, service managers must have authority over service-related IT planning, portfolio management, and delivery processes. Service managers who depend on influence as their primary means of driving decisions usually fail to improve satisfaction with the cost, quality, and composition of their services. The service manager role is designed to oversee the planning, cost, and performance for a service across functional silos within IT. This requires the ability to direct investments and set performance targets across those functional boundaries. The Authoritative SERVICE MANAGER How Service Definition and Degree of Responsibility Impact the Service Manager Role Nature of Service Definitions End-to- End IT Services Service Coordinator Delivers IT services against plans set by others Responsible for service quality and continuity Uses influence to drive decisions and secure resources Infrastructure Manager Manages assets aligned by infrastructure towers Tactical role focused on incident, problem, event, and configuration management Little involvement in strategy Service/Product Line Manager Develops service strategy from demand forecasts and business partner engagement Has direct authority over the planning, portfolio management, and delivery process related to a given service Sets service prices and owns service-line P&L Provides cost and capability transparency to business partners IT Operations Manager Manages all resources and operations required to deliver an IT asset focused service Responsible for ensuring technology and systems are continuously available Technology Services Low Degree of Responsibility for Resource Allocation High

6 Previous experience that emphasizes communications and planning are common among service managers. Where to Look for SERVICE MANAGERS Previous Experience of Service Percentage of Service with Experience in Specific Activities, by Years of Experience No or Less Than 1 Year of Experience Architects, policy development, and risk management backgrounds give service managers the planning skills they require. Experiences in sales and marketing IT and in partnerfacing roles (like business analysts) provide valuable communications skills. 49% 19% 20% 20% 41% 13% 15% 13% 88% 57% 78% 1 4 Years of Experience More Than 4 Years of Experience 43% 28% 42% 22% 60% 72% 14% 32% 46% 9% 28% 19% 30% 37% 4% 4% Infrastructure Technology Management Enterprise Architecture Applications Development Sales and Marketing Team Management Collaboration with Global/ International Teams Project Management Policy Development Risk Management n = 111 service managers. Source: CEB, Service Management Bootcamp survey, Service Roles and Skills 21

7 The New Model for IT Service Delivery: Volume II 22 The service manager is responsible for defining and delivering end-toend IT services and is the primary owner of one or more services. The service manager identifies the cost drivers for IT services and communicates to business partners how those cost drivers impact their IT expenses. SERVICE MANAGER Responsibilities and Skills Seniority Middle Management Key Responsibilities Collaborates with IT business relationship managers to develop the end-to-end IT services strategy Develops annual IT service delivery plan and negotiates delivery expectations with business partners Provides information to business partners about service-improvement opportunities and collaborates with them to drive down business costs and effectively support business capabilities Guides the service-review process to drive continuous improvement efforts for services The role is responsible for IT service demand planning and demand management conversations with business partners. Key Skills Strategy Development Business Opportunity Development Financial Management Reporting and Analysis Service-Level Management Service Engineering and Architecture Technology Roadmapping Communications and Change Leadership Business Relationship Management Vendor Management Sourcing Difficulty Possible Backgrounds and Hiring Sources Likely to have experience in IT service delivery, direct business engagement, technology sales and marketing, and developing financial plans Likely to be sourced from account manager/business relationship manager, solutions manager, architects or infrastructure manager roles Lack of IT financial management and IT service pricing skills rated by many members as the most likely failure points for new service managers

8 Thank You for Your Interest in CEB Research! If you re a member, please log into your account to access the full study. If you would like access to this full study, please contact CEB to learn more. Member Login Contact CEB 2014 CEB. All rights reserved. CIO SYN

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