February 7, 2012 TechRadar For I&O Professionals: IT Service Management Processes, Q1 2012

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1 February 7, 2012 TechRadar For I&O Professionals: IT Service Management Processes, Q by Evelyn Hubbert, Jean-Pierre Garbani, Glenn O Donnell, Stephen Mann, and John Rakowski for Infrastructure & Operations Professionals Making Leaders Successful Every Day

2 February 7, 2012 TechRadar For I&O Professionals: IT Service Management Processes, Q Mature Your ITSM Processes To Shift From Primary Service Provider To Service Broker by Evelyn Hubbert, Jean-Pierre Garbani, Glenn O Donnell, Stephen Mann, and John Rakowski with Doug Washburn and Lindsey Kempton Executive Summary Into 2020, the rise of as-a-service technologies, empowered workers, and a radically more complex business environment will challenge IT I&O leaders to deliver higher levels of value, agility, and user satisfaction, all while lowering the cost of IT services. This will require I&O organizations to shift from the role of primary provider of IT services to a broker of public and private services. To succeed, I&O leaders must improve and streamline IT service management (ITSM) processes by adopting best practices such as those described in ITIL. This report focuses on the key ITSM processes I&O leaders must improve to operate in this new model of IT and to provide IT-as-a-service. In particular, I&O leaders should prioritize incident, problem, and knowledge management in the short term, while maturing IT financial, configuration, and release management over the long term. table of Contents 2 The Value Of IT Service Management 4 Why The Future Of ITSM Matters 6 Overview: TechRadar For ITSM Processes Why Do These 18 ITSM Processes Appear In The TechRadar? Creation: Service-Level, Customer-Relationship, And Portfolio Processes Are Emerging Survival: Processes To Manage IT Assets, Releases, Requests, And Value Will Mature Quickly Growth: Significant Momentum For Processes That Streamline The Service Supply Chain Equilibrium: The Last Stop For ITSM Processes 17 ITSM TechRadar: IT Service Management Is Essential For A Cloud-Computing Era recommendations 37 As Your Business And IT Evolve, Strategically Prioritize Your ITSM Processes 38 Supplemental Material NOTES & RESOURCES Forrester interviewed 32 experts and users, including: Apptio, Axios Systems, BMC Software, CA Technologies, Cherwell Software, Hornbill, IBM, LANDesk Software, RightAnswers, Service Management 101, ServiceNow, TeamQuest, USU Software, and VMware. Related Research Documents The State Of IT Service Management In 2011 November 4, 2011 Updated Q4 2011: Cover Your Assets; Use IT Asset Life-Cycle Management To Control IT Costs October 5, 2011 IT Infrastructure And Operations: The Next Five Years May 3, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please clientsupport@ forrester.com. For additional reproduction and usage information, see Forrester s Citation Policy located at Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.

3 2 TechRadar For I&O Professionals: IT Service Management Processes, Q The value of it service management When approaching a discipline as expansive as ITSM, it s important that IT I&O leaders and their teams have a clear definition. Because the linchpin to mature ITSM is the adoption of a best practice model, in particular the IT Infrastructure Library (ITIL), we often find that ITIL gets more attention than ITSM itself. To avoid this confusion, Forrester defines ITSM as: A process-based practice with the purpose to align the delivery of IT services with the needs of the enterprise with emphasis of benefits to customers. ITSM requires a paradigm shift from the delivery and management of IT as stacks of individual technologies to a focus on the delivery and management of IT services using best practice process models, such as ITIL, a worldwide recognized best practice for ITSM. In a survey to 491 members of the USA chapter of the IT Service Management Forum (itsmf), Forrester found that nearly all large US enterprises have some form of ITIL-based approach to ITSM in place. 1 In particular, additional data finds that ITIL v3 has been adopted or is currently being adopted by 60% of IT organizations. 2 When it comes to the value of an ITIL-based approach to ITSM, I&O leaders benefit from improved productivity, quality, reputation with the business, and even cost control (see Figure 1): Improved productivity. Productivity is lopsided toward the positive, with 85% of respondents agreeing that ITIL helps improve productivity and only 2% disagreeing. Standardized processes simplify execution and yield fewer mistakes. Staff can therefore focus more on innovative efforts and less on repetitive tasks. Instead of fighting fires, they can prevent them. When automation tools are applied to good processes, productivity skyrockets to a level that is simply impossible with manual methods. Improved quality of service. An impressive 83% found ITIL to have a positive impact on service quality, and only 1% felt the impact was negative. Some of the benefits are obvious to ITSM professionals but not to others. For example, sloppy change management produces errors that business customers sense as poor-quality service. Naturally, these service consumers will hold their service provider (the IT organization) in low esteem. Consistent execution according to a well-defined change management process can dramatically reduce such errors, and services become trustworthy. A provider of high-quality, trustworthy services is thus also deemed to be of high quality and trustworthy. Improved reputation with the business. The biggest threat to IT s viability is its reputation with business stakeholders. So it s a positive sign that ITSM professionals overwhelmingly feel that their organization s reputation has improved due to programs implementing ITIL-based practices. An impressive 65% feel that ITIL has been beneficial or significantly beneficial, while only 3% said ITIL had a negative impact. 3 February 7, , Forrester Research, Inc. Reproduction Prohibited

4 TechRadar For I&O Professionals: IT Service Management Processes, Q The more surprising question is, If quality and productivity are so phenomenally improved, why isn t improved reputation even higher than 65%? The reason is inertia. IT s reputation has been spiraling downward for years, and inertia is its artifact. Turning the proverbial ship takes time and energy. If productivity and quality can remain high, reputation will certainly track with it. Changing an organization s culture and institutionalized behaviors and stereotypes are among the most difficult tasks in the world, but it s mandatory for most IT organizations to do so. Reduced operational costs. In a similar delayed correlation, operational expenses (opex) show improvement, although not nearly to the extent implied by quality and productivity improvements. A positive response of 41% is impressive by just about any measure; however, ITIL and ITSM require some investments that offset the savings. If pursued with sustained diligence, these investments will continue to reap rewards. Therefore, we expect even stronger opex improvements as ITSM efforts continue to mature. The most striking finding regarding opex is 24% in the Don t know camp. This tells us that the greater field of fiscal insights, including financial transparency, asset management, and cost accounting, still requires aggressive attention. If the profession is to truly gain the trust of the business, a starkly superior level of fiscal oversight is imperative. 2012, Forrester Research, Inc. Reproduction Prohibited February 7, 2012

5 4 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 1 An ITIL-Based Approach To ITSM Improves Productivity, Quality, Reputation, And Costs How has ITIL impacted the following? Detrimental Beneficial Operational productivity Service quality 2% 1% 85% 83% Reputation with the business 3% 65% Operational costs 4% 41% Base: 491 itsmf members, Forrester clients, and Twitter respondents Source: Forrester/itSMF Q US ITSM Online Survey why the future of ITSM matters Into 2020, three forces will forever change the relationship of business, technology, and the IT organization. 4 Today s IT and business leaders should prepare by rethinking the role that the IT department plays and how technology staff engages the business, shifting from controlling to teaching and guiding. Moreover, these three forces and their implications to IT dramatically drive up the adoption of ITSM. Here is what Forrester predicts and the role ITSM will play: As-a-service will become the norm. We forecast that spending on cloud software, platform, and infrastructure services will grow from approximately $28 billion today to $258 billion in 2020 reaching 45% of total IT services spend. The appeal of per-use pricing, faster timeto-productivity, and rapid feature enhancement highly differentiate these services from the IT status quo. Additionally, cloud computing is as much about the operational model as it is about the technology. For I&O professionals, the most relevant component of the broader as-a-service trend is infrastructure-as-a-service (IaaS). The role of ITSM: For many years, the promise of I&O leaders has been to run IT as an internal service provider. The ITIL framework provides best practices for such a service mentality. Combined with virtualization, automation, and self-provisioning technologies, I&O leaders have the basic building blocks to start delivering their infrastructure as-a-service to improve agility and flexibility and to reduce costs. Despite the availability of these technologies and best practices, however, Forrester believes that only 5% of IT organizations have enough virtualization, standardization, automation, and self-service maturity to pull off true private cloud or IaaS. 5 February 7, , Forrester Research, Inc. Reproduction Prohibited

6 TechRadar For I&O Professionals: IT Service Management Processes, Q ITSM plays a vital role in the adoption of cloud-based technologies. By maturing ITSM processes, I&O organizations are able to instantly respond to change or dramatically improve a specific business process. For example, processes like capacity, configuration, and change management allow I&O to increase capacity of resources at relatively short notice without additional staff members. Additionally, leveraging IT financial management allows I&O leaders to have a value-based discussion with the business to justify IT investments and the transition to the cloud. A tech-savvy workforce will be self-empowered with consumer technologies. It s easier than ever for empowered employees and application developers to circumvent traditional IT procurement and provisioning to take advantage of new desktop, mobile, and tablet devices as well as cloud-based software and infrastructure you don t support. As an indicator of this, Forrester finds that 48% of today s information workers already buy whatever smartphone they want and use it for work purposes. 6 By 2020, the number of empowered employees will rise as the younger, more tech-savvy Millennial workers become 45% of your business workforce demographic. And their perception of enterprise IT is low to say the least, with 34% of Millennial employees claiming that they have better technology at home than at work. The role of ITSM: As the boundaries between consumer-based and enterprise-ready technology and services continue to blur, the perceived value of I&O services will diminish. To stay relevant, I&O leaders need to better serve their empowered workers who demand better and faster support from IT and expect service similar to commercial levels. This means I&O organizations must shift from the role of primary provider of IT services to a broker of public, private, and consumer-like services. ITSM will help I&O leaders in this transition by adopting a service provider attitude via a service center that has a detailed service catalog of available services to users. These services will be made available through IT but won t necessarily be owned, delivered, managed, or operated by the I&O team. ITSM processes play a vital role in the support of I&O as a service broker. Customer obsession and new markets will create a more complex business environment. In the age of the customer, technology-led disruption is eroding traditional competitive barriers such as manufacturing strength, distribution power, and information mastery. 7 For example, empowered buyers have information at their fingertips to check a price, read a product review, or ask for advice from a friend from their smartphone. In the new era, the only sustainable competitive advantage will be knowledge of and engagement with customers. To make matters even more complex, by 2020, your customers won t be the same ones that you have today. Euromonitor predicts that by 2020, China will exceed the US as the world s largest economy, and the top Western European nations will fall out of the top five. But these new customers won t be able to afford the products you sell to the middle class today, requiring product and service innovation on your part to offer quality at lower price points. 2012, Forrester Research, Inc. Reproduction Prohibited February 7, 2012

7 6 TechRadar For I&O Professionals: IT Service Management Processes, Q The role of ITSM: To continue to grow, enter new markets, and develop innovative products and services, your business is going to be increasingly embedded with the processes of your buyers, partners, and suppliers. As a result, it s more critical than ever for your IT services to be reliable, agile, and flexible. The role ITSM will play in this transition is critical as IT services are part of almost all business processes supporting marketing, sales, and other functions in the enterprise that need to quickly modify business processes, capacity, and support demand from customers across a wide, diverse area. Flexible architectures providing elasticity and meeting customer demand can only be achieved with a well-functioning service management paradigm. Overview: TechRadar For ITSM Processes To help I&O leaders plan their ITSM strategy over the next decade, Forrester evaluated 18 ITSM processes across four key assessment criteria in the TechRadar research methodology: 1) the current state of the process; 2) the process potential impact on the business; 3) the time experts think the process will need to reach the next stage of maturity; and 4) the process overall trajectory from minimal success to significant success. 8 To form our opinion, we interviewed more than 30 experts in the field; assessed trends and best practices from our published research, consulting projects, and client inquiries; and consulted Forrester s own subject matter experts. Why Do These 18 ITSM Processes Appear In The TechRadar? Forrester selected 18 processes that represent the past, present, and future of ITSM. In particular, these processes are based on ITIL v3 and transition IT from the role of a primary service provider to a service broker. Some of these processes have been in use for years, some are relatively new, and some have existed for years but are now seeing a rebirth. This TechRadar includes ITSM processes that are (see Figure 2): Key to moving IT from the role of primary service provider to service broker. Enable the business to make solution decisions that serve business needs and address the security, compliance, and management risks that IT has always dealt with. But instead of I&O purely providing services, the I&O organization should also provide expertise, technical support, and creative thinking to make the business successful in its efforts to do more on its own. I&O has to both accept and proactively support the business by putting deep technical skills on call while at the same time streamlining its own processes to make business platforms the top production priority no matter if they are delivered on-premises or as-a-service from a third party. Included in ITIL v3 and are currently, if not widely, being implemented. Nearly all large US enterprises have some form of ITIL program in place. Although 24% of organizations formally embarked on ITIL-based programs more than five years ago, this still means that ITIL programs are less than five years old for the remaining 76% of organizations. We have selected the key processes that are either part of ITIL v3 or are common-sense practices in organizations which mirror ITIL with uncanny similarity. February 7, , Forrester Research, Inc. Reproduction Prohibited

8 TechRadar For I&O Professionals: IT Service Management Processes, Q Customer-centric. Today 70% of the IT budget is still allocated to IT MOOSE costs to maintain ongoing operations, systems, and equipment. And even if funds are available, most I&O organizations today are goaled on uptime and efficiency, not on supporting customer growth and customer experience. Just as the business must become customer-obsessed to defend and increase its market share in an empowered world, the I&O organization must follow suit by taking an outside-in view from the customer s perspective not inside-out from the data center. The good news is that the business views IT as an enabler of revenue and customer growth. Its expectations are high, and it firmly believes that technology s ability to serve and support customers is valuable, even more valuable than cost savings. 2012, Forrester Research, Inc. Reproduction Prohibited February 7, 2012

9 8 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated Availability and performance management Definition Availability and performance management is the process responsible for measuring and improving all aspects of the availability and performance of IT services and its related configuration items or service assets (servers, network, DB, application layers). Usage scenario Vendors Estimated cost to implement Firms use availability and performance management to find the root cause of performance issues in applications or business services that are sitting on top of multiple configuration items that require a holistic view of the service and the cooperation of several technology expert teams. Availability and performance management is absolutely critical to organizations that increasingly rely on IT for their business. Understanding the performance of all underlying components from the end user, via the application, database, middleware, and all infrastructure components in a holistic view allows IT to manage and automate the availability and performance from a business perspective in a holistic way as well. Vendors in the availability and performance management area include AppDynamics, Allen Systems Group (ASG), Aternity, BlueStripe Software, BMC Software, CA Technologies, Compuware, Correlsense, dynatrace Software, Heroix, HP, IBM Tivoli, INETCO Systems, Knoa Software, Nastel Technologies, NetIQ, OPNET, OptTier, Oracle, Precise, Progress Software, Quest Software, ServicePilot Technologies, SL Corporation, and Visual Network Systems. The cost of implementing availability and performance management depends on the scope of the implementation. The cost can start at $100,000 for the solution and can increase according to the scope and scale of the implementation breadth and depth. Capacity management Definition Capacity management is the process responsible for optimizing the capacity of IT services (and business services) and the IT infrastructure so that the resources are available and able to deliver agreed service-level targets in a cost-effective and timely manner. The process of capacity management includes the planning, evaluation, and ongoing management of the available and needed capacities. Usage scenario Vendors Estimated cost to implement Typically organizations aim the capacity management process at eliminating the situations in which unnecessary investments are made in technologies that do not meet the needs of business. The process avoids the situation in which productivity is at stake because of a shortage or inefficient use of existing technology supporting an IT service and/or business service. Vendors that have focused on capacity management solutions include ASG-Perfman, BMC Software, CA (HyPerformix) Technologies, CiRBA, Orsyp, Systar, and TeamQuest. Capacity management solutions can start in the low $100,000s and increase in cost as the scope and scale increase. The vendors typically charge by infrastructure component. February 7, , Forrester Research, Inc. Reproduction Prohibited

10 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated (Cont.) Change management Definition Change management is the process responsible for controlling and monitoring the life cycle and risks of all changes (addition, modification, or removal of IT services, configuration items, processes, documentation, etc.) to ensure that standard methods and procedures are used and that these changes are tracked. Usage scenario Vendors Estimated cost to implement Companies implement change management because it allows for the efficient evaluation and plan for the change so that an organization follows the established procedures to ensure quality and continuity of the IT services at all times. The process starts with a request for change (RFC), which requires change logging, acceptance and classification, approval and planning, the actual implementation of the change, the evaluation of the change, and finally the closure of the request for change. Vendors covering change management are the ITSM vendors that also cover other ITSM process areas: ASG, Axios Systems, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, Hewlett-Packard, Hornbill, IBM, iet Solutions, LANDesk Software, ManageEngine, Numara Software, Serena Software, ServiceNow, Symantec, and VMware. Implementation costs can be two to five times (or more for complex configurations) the cost of the software, so consider these extra expenses when seeking solutions. Ongoing maintenance labor costs are also high (approximately 10% to 20% of purchase price) in addition to the standard 20% to 30% software maintenance fees charged by the vendors. Despite these costs, the tools are an absolute necessity. Configuration management Definition Configuration management is the management of configuration items throughout their life cycle, which delivers an IT service or part of an IT service. Usage scenario Vendors Estimated cost to implement IT organizations leverage the configuration management process to maintain business services and adapt them according to business needs. Badly managed configuration items make change/release management next to impossible and inhibits IT from maintaining solid SLAs over time. Properly managing the configuration state of CIs is essential to maintaining service uptime and reducing costs across the IT services and infrastructure. The criticality of the process will depend on the number of changes in the environment and the complexity of the CIs and their relationships. Vendors covering configuration management are the ITSM vendors who also cover other ITSM process areas: ASG, Axios Systems, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, HP, IBM, iet Solutions, LANDesk, ManageEngine, Numara Software, ServiceNow, Symantec, and VMware. The cost for configuration management is difficult to estimate, because it s related to labor costs such as possible new staff, changes in responsibilities, and a series of process adjustments. Many ITSM vendors offer their CMDB/CMS solutions at no charge, as these are databases that support a variety of processes. 2012, Forrester Research, Inc. Reproduction Prohibited February 7, 2012

11 10 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated (Cont.) Continual service-level management Definition Continual service-level management is the process responsible for negotiating and ensuring adherence to the agreed-upon service-level agreements combined with a process of continuously checking the existing processes and services to see how to realign them to the changing need of the business (SLAs are met with underlying operational level agreements and underpinning contracts). Usage scenario Vendors Estimated cost to implement Enterprise IT operations teams leverage this process to establish key service targets between themselves and the line of business or customer. The service-level agreement that is the outcome of the service-level management process is a base for all other operational level agreements and contracts required to achieve the level of service required by the business. Note: There are two other constituencies that leverage the CSLM process the service provider and cloud providers. We focus on enterprise IT operation teams only. Vendors covering continual service-level management are the ITSM vendors who also cover other ITSM process areas: ASG, Axios Systems, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, HP, IBM, iet Solutions, LANDesk, ManageEngine, Numara Software, ServiceNow, Symantec, and VMware. The compensation for a full-time continual service manager should be comparable to the salary of a senior manager of IT infrastructure, operations, or architecture. The tool costs are minimal, as much of the work is around data analysis and service improvement suggestions. Customer relationship management Definition Customer relationship management is the process and activities that are responsible for building relationships with both internal and external customers who receive and are part of the service support and service delivery value chain. Usage scenario Vendors Estimated cost to implement Customer relationship management enables IT operations to connect with the customers they serve to optimize customer-facing processes such as service request management, incident, and service-level management. New technologies such as social media allow IT to develop, collaborate on, and manage IT service expectations with customers, suppliers, and partners to improve the service delivery and support processes. Vendors covering customer relationship management are the ITSM vendors who also cover other ITSM process areas: Axios Systems, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, HP, IBM, iet Solutions, LANDesk, ManageEngine, Numara Software, ServiceNow, Symantec, and VMware. Some vendors, especially Hornbill, are focusing on innovative customer-centric features in their solutions such as customer self-service through social media channels such as Twitter. The compensation for a full-time customer relationship manager should be comparable to the salary of a senior manager of IT infrastructure, operations, or architecture. The tool costs are minimal, as much of the work is done around management of customer satisfaction surveys, customer expectations, and communication. February 7, , Forrester Research, Inc. Reproduction Prohibited

12 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated (Cont.) Event management Definition Usage scenario Vendors Estimated cost to implement Event management is the process of managing events throughout their life cycle, from alerting and reporting to automated resolution perspective. Events are messages or displays produced by services, configuration items, or monitoring tools. Event management allows IT organizations to understand what issues arise in the managed environment through alerts that are leveraged to either automate a specific response or escalate the event to a subject matter expert who owns the situation. Vendors covering event management are BMC Software, CA Technologies, IBM Tivoli, HP, Microsoft SCOM, and NetIQ, as well as players such as Splunk. Event management is typically charged by the level and the number of the managed devices and applications deployed in the managed environment. Incident management Definition Incident management is the management of an unscheduled interruption to an IT service or reduction in quality of an IT service from detection to restoration. Usage scenario Vendors Estimated cost to implement Incident management includes any issue that disrupts or could potentially disrupt an ongoing service and is typically reported by a user or by a monitoring/management tool. Vendors covering incident management are the ITSM vendors who also cover other ITSM process areas: Axios Systems, ASG, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, HP, Hornbill, IBM, ICCM Solutions, iet Solutions, LANDesk, ManageEngine, Numara Software, Marvel Solutions, Serena Software, ServiceNow, Symantec, and VMware. The cost of implementing incident management depends on the scope of the implementation and the business model of the service desk, which is the function of who has ownership of the incident management process. The cost can start at $100,000 for the solution and can increase according to the scope and scale of the implementation breadth and depth and business model. SaaS providers charge on a per-user basis per month typically over a three-year contract. 2012, Forrester Research, Inc. Reproduction Prohibited February 7, 2012

13 12 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated (Cont.) IT asset life-cycle management Definition IT asset life-cycle management is the end-to-end process governing the way in which assets enter and exit the IT organization, with focus on the location, value, and ownership of the assets, from procurement to the recycling and/or obsolescence of the asset. Usage scenario Vendors Estimated cost to implement The manual tracking or the tracking of IT assets with spreadsheets is inefficient and error-prone. Effective IT asset life-cycle management means that the process is automated to support the knowledge of available assets for decision-making, capacity management, and planning efforts. When adopting the cloud model, the discovery and tracking of assets in real time is necessary to know where things are. By investing in ITALM people, process, and technology, I&O leaders can cut costs, reduce risk, and improve the quality of IT services. Some organizations start with managing, governing, and controlling their software assets; others start at the hardware and virtual level, and again others address both software and hardware at the same time. Vendors covering customer IT asset management are the ITSM vendors who also cover other ITSM process areas: Axios Systems, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, HP, IBM, iet Solutions, LANDesk, ManageEngine, Numara Software, ServiceNow, Symantec, and VMware. There are also specific IT asset management vendors that focus on hardware or software asset management or both. These vendors are Aspera Software, BDNA, Certero, Dell KACE, Eracent, Express Metrix, Flexera Software, Kaseya, License Dashboard, License Watch, Novell ZENWorks, Scalable, and Snow Software. The cost of implementing IT asset life-cycle management depends on the scope of the implementation and the business model of the service desk, which is the function of who has ownership of the incident management process. The cost can start at $100,000 for the solution and can increase according to the scope of the implementation breadth and depth and the number of assets managed. SaaS implementations typically charge on a per-user basis per month with contracts of one to three years. February 7, , Forrester Research, Inc. Reproduction Prohibited

14 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated (Cont.) IT financial management Definition IT financial management is the use of traditional accountancy and more modern value-based tools and techniques to ensure that I&O provides effective, business-focused stewardship of corporate resources in its delivery of customer-driven IT services. Usage scenario Vendors Estimated cost to implement IT financial management brings visibility and insight into the value and benefits of IT services and enhances IT and business decision-making capabilities. The three key vendors focused solely on the process of IT financial management are Apptio, ComSci, and VMware (DigitalFuel). Other vendors in the ITSM space have expanded their offerings to cover ITFM. These vendors are BMC Software, CA Technologies, HP, IBM, and ServiceNow. The cost of implementing IT financial management depends on the scope of the implementation and the depth of data to be collected. The cost can start at $100,000 for the solution and can increase according to the scope of the implementation breadth and depth. Knowledge management Definition Knowledge management is the process responsible for gathering, analyzing, storing, and sharing knowledge (data and information prepared for a target audience) within an organization. Usage scenario Vendors Estimated cost to implement IT organizations use knowledge management to share knowledge among all levels in the support delivery and with end users. The primary purpose is to improve efficiency by reducing the need to rediscover knowledge. The ITSM vendors have added knowledge management to their ITSM solution suite. One vendor RightAnswers is very focused on this topic and can integrate with the existing ITSM solution vendors. The cost of a implementing the knowledge management process is typically related to the hiring of additional staff members or the shift of existing staff members into the role of a knowledge engineer. The salary ranges for such roles are similar to those of IT process engineers or system administrators in an IT organization. 2012, Forrester Research, Inc. Reproduction Prohibited February 7, 2012

15 14 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated (Cont.) Portfolio management of services Definition Portfolio management of services is the management of the IT service portfolio describing services in business value terms that are articulated from the customer s perspective, specifying what the services are, how they re bundled or packaged, and what benefits they deliver. Usage scenario Vendors Estimated cost to implement Portfolio management of services allows the transformation of the IT organization into a value-added supplier to its business stakeholders by linking IT s activities and capabilities to business value and communicating this value effectively to stakeholders. The communication vehicle is the service catalog, and the value is established through the adoption of IT financial management. There are vendors that offer service catalogs and IT financial management, but at this point, the portfolio management of services is done outside of ITSM tools. The cost of implementing portfolio management of services depends on the scope of the implementation and the number of services and business supported. The cost can start at $100,000 for the solution and can increase according to the scope and scale of the implementation breadth and depth and business model. Problem management Definition Problem management is the process to manage the life cycle of all problems with the purpose of preventing incidents or minimizing the consequences of incidents that can t be prevented. Reactive problem management is incident and outage avoidance with a workaround. The purpose of proactive problem management is to resolve problems before they cause issues to the business process users. Usage scenario Vendors Estimated cost to implement IT organizations use problem management in analyzing and resolving the causes of incidents. Additionally, problem management allows for the development of proactive activities to manage current and prevent future incidents. Vendors covering problem management are the ITSM vendors who also cover other ITSM process areas: ASG, Axios Systems, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, HP, Hornbill, IBM, ICCM, iet Solutions, LANDesk, ManageEngine, Numara Software, Marvel, Serena Software, ServiceNow, Symantec, and VMware. Technology options are a minor component of the overall cost structure for problem management. Labor is by far the main cost, and much of this labor is wasted through ineffective processes and weak tool integration. This is why problem management remains in the Growth phase, even though it should have already reached a state of Equilibrium. February 7, , Forrester Research, Inc. Reproduction Prohibited

16 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated (Cont.) Release and deployment (service provisioning) management Definition Release management is the process of planning, scheduling, and controlling the movement of releases (a collection of hardware, software, documentation, or other components as a single entity) to test and the live environment. Deployment management is the activity responsible for movement of new or changed hardware, software, documentation, or process to the live environment. Usage scenario Vendors Estimated cost to implement Organizations leveraging release management are managing the process, systems, and functions necessary for the compilation, building, testing, and deployment of a release into production. Vendors covering release and deployment management are ASG, BMC Software, CA Technologies, HP, IBM Tivoli, Microsoft, Nolio, Opscode, Oracle, Puppet Labs, Serena Software, UrbanCode, and XebiaLabs. The cost for problem management is difficult to estimate because it is related to possible new staff, responsibilities, and a series of process adjustments. The cost for proactive problem management could mean the implementation of a solid availability and performance management process focusing on the end-to-end customer experience. Service catalog management Definition Service catalog management is the creation and maintenance of a service catalog with its associated statuses, interfaces, and dependencies in order to provide the service. Usage scenario Vendors Estimated cost to implement Service catalogs are used to define accurate details and status of existing services and business processes that are supported by IT, as well as those in development or already retired. It is the portion of the service portfolio that is visible to the customers of IT. Vendors covering service catalog management are the ITSM vendors who also cover other ITSM process areas: Axios Systems, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, HP, IBM, iet Solutions, LANDesk, ManageEngine, Numara Software, Serena Software, ServiceNow, Symantec, and VMware. A solely focused vendor in the service catalog area today is PMG. newscale has been acquired by Cisco Systems. The tools of service catalog management are possibly already part of an existing ITSM solution. The real cost is in the work to identify the service catalog, continuously manage the service catalog, and keep it fresh and up-to-date. Typically, a service catalog manager owns this role, and the compensation for a full-time IT service catalog manager should be comparable to the salary of a senior manager of IT infrastructure, operations, or architecture. 2012, Forrester Research, Inc. Reproduction Prohibited February 7, 2012

17 16 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated (Cont.) Service metrics and reporting Definition Service metrics and reporting is the process of identifying, collecting, and reporting information relative to the IT or business services delivered, that identifies and quantifies service value-add and contribution, risks, and improvement opportunities to the business. Usage scenario Vendors Estimated cost to implement IT organizations use service metrics to measure process and service effectiveness. Traditionally, the IT metrics have been functionally oriented in silos such as the service desk, server, technical services, or the operations department. Some organizations are shifting to process and service-centric organizational models, which requires metrics that are focused on the end-to-end user experiencing the service. Vendors covering service metrics and reporting are the ITSM vendors who also cover other ITSM process areas: Axios Systems, ASG, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, HP, Hornbill, IBM, ICCM, iet Solutions, LANDesk, ManageEngine, Numara Software, Marvel Software, ServiceNow, Symantec, and VMware. The tools associated with service metrics and reporting are possibly already part of the existing ITSM solution. The real cost is in the work to identify the metrics needed and potentially manage the variety of reports needed for the different audiences. Typically this is done by the service manager or the service owner on either a part-time or full-time basis. The compensation for a full-time service owner/manager should be comparable to the salary of a senior manager of IT infrastructure, operations, or architecture. For SaaS ITSM tools this should be part of the existing subscription, for some on-premises tools, however, it might incur additional licensing costs for a premium reporting module. Service request management Definition Service request management is the management of the life cycle of requests initiated from a user for information, advice, a standard change, or access to an IT service. Usage scenario Vendors Estimated cost to implement IT operations organizations automate customer requests for information, advice, a standard change, or access to an IT service. Service requests are usually handled by the service desk. Vendors covering service request management are the ITSM vendors who also cover other ITSM process areas: ASG, Axios Systems, BMC Software, CA Technologies, Cherwell Software, EasyVista, FrontRange Solutions, helpline, HP, Hornbill, IBM, ICCM, iet Solutions, LANDesk, ManageEngine, Numara Software, Marvel Software, ServiceNow, Symantec, and VMware. The tools associated with service request management are possibly already part of the existing ITSM solution. The real cost is in the work to determine how to structure the service requests and how to tie them into an already existing service catalog or front end of IT operations. Typically this is done by the service manager or the service owner on either a part-time or full-time basis. The compensation for a full-time service owner/manager should be comparable to the salary of a senior manager of IT infrastructure, operations, or architecture. February 7, , Forrester Research, Inc. Reproduction Prohibited

18 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 2 TechRadar : IT Service Management, Q1 12 Processes Evaluated (Cont.) Time and resource management Definition Time and resource management is the management of staff time and resources for operations tasks, projects, and/or functions. Usage scenario Vendors Estimated cost to implement IT operations uses the time and resource management process to plan, assign, and monitor the time and resource requirements to the effective deployment of people with the appropriate skills to meet the prioritized demand for service support and delivery work. This topic has received weak coverage from the ITSM vendors. Vendors who have project and portfolio management solutions can integrate these with the ITSM tools, and some vendors can configure parts of their solution to track hours and time spend. Overall, this process area is still unexplored by many vendors. The tools associated with time and resource management are possibly already part of the existing ITSM solution. The real cost is in the work planning and organizing resources across projects, tasks, and the creation of schedules to support the business during available service hours. Typically this is done by the service manager or the service owner on either a part-time or full-time basis. The compensation for a full-time service owner/manager should be comparable to the salary of a senior manager of IT infrastructure, operations, or architecture. ITSM techradar: IT Service management is essential for a cloud-computing era In mapping the futures of IT service management processes, we found that (see Figure 3): There is a disconnect between business and IT priorities. Throughout our research, it became clear that there is a disconnect between what the business considers critical and what IT considers critical. For example, the business teams want to understand the value of IT investments with regard to the implementation of technology. However, IT has done a poor job implementing IT financial management to do so. To meet the demands and needs of the business, the I&O organization must adopt operational models that more resemble that of a service provider than a traditional enterprise IT shop. Infrastructure will still play a vital role, but building blocks such as service catalogs, self-service portals, process automation, and orchestration will be essential to connect IT and business. At the same time, these processes will orchestrate and automate previously labor-intensive operations to free up resources to focus on strategy, architecture, and innovation. There is a lack of integration between processes. Many processes that are widely implemented, such as incident, change, and problem management, are, in many cases, still not integrated with each other. Moreover, while we have seen a shift in process maturity, organizations moved from technology silos to process silos. 2012, Forrester Research, Inc. Reproduction Prohibited February 7, 2012

19 18 TechRadar For I&O Professionals: IT Service Management Processes, Q Processes that improve customer experience are critical to the cloud-computing era. The future of ITSM in a cloud-computing era revolves around processes that ensure quality of customer experience, such as service portfolio management and customer relationship management. Decision-makers want to improve efficiency of IT. According to 2,741 IT decision-makers, the top IT management priority in 2012 is to improve the efficiency of IT. In addition to optimizing costs, more efficient IT will allow the I&O organization to adapt its operating model to one of a service provider to quickly deliver the services that the business requires, when it requires it. 9 This transformation requires processes such as a self-service model with a catalog of standardized service options, as well as policy-based controls and management of the service levels, whether they re provided internally or externally. February 7, , Forrester Research, Inc. Reproduction Prohibited

20 TechRadar For I&O Professionals: IT Service Management Processes, Q Figure 3 TechRadar : IT Service Management, Q1 12 Trajectory: Significant success Moderate success Minimal success Time to reach next phase: < 1 year 1 to 3 years 3 to 5 years 5 to 10 years > 10 years Incident management Business value-add, adjusted for uncertainty High Medium Low Availability and performance management Change management Service catalog management Time and resource management Customer relationship management Knowledge management IT financial management Service request management IT asset life-cycle management Capacity management Configuration management Problem Management Service metrics and reporting Event management Negative Portfolio Continual management service-level of services management Release and deployment Creation Survival Growth Equilibrium Decline Ecosystem phase 2012, Forrester Research, Inc. Reproduction Prohibited February 7, 2012

21 20 TechRadar For I&O Professionals: IT Service Management Processes, Q Creation: Service-Level, Customer-Relationship, And Portfolio Processes Are Emerging While these processes are nascent, they will be critical going forward. Consumerization and an empowered workforce are forcing IT to do business differently, in particular to change its understanding of the business. Pure and simple, the business is the customer, and if IT can t meet its needs, the business will go elsewhere. These processes reflect the shift toward a customer-centric IT. Processes in the Creation phase are (see Figure 4): Continual service-level management. This process ensures that service-level agreements (SLAs) between service provider and service consumer are adhered to and continuously reviewed, updated, and adjusted to the need of the service consumer. No matter what the environment looks like, managing service levels will no longer be about a particular component but about the reliability of the service. For some organizations this is a paradigm shift, as the service level is set around the end user experience of the service. Customer relationship management. Although this is an old concept, it s just recently making its way into IT as a formalized process. Responsible for building and maintaining positive relationships with customers, this process is critical to IT s success in creating a partnership with the business and meeting its needs. Look for this process to advance to the next ecosystem phase quickly due to pressure from empowered employees who have experienced strong customer relationship management elsewhere, and expect the same from IT. The emphasis of ITIL 2011 on business relationship management will support the focus on customer-centric IT delivery. Portfolio management of services. To implement this process, it s pivotal for IT to realize that it is a service broker responsible for supporting and enabling the business in running, growing, and transforming itself. A service portfolio describes the services IT offers in terms of the business value. Adopting this process means that the IT organization and the business have a governance method that assists in investment decisions around technologies. In many IT organizations this process is reduced to the yearly budgeting exercise, which doesn t take into consideration the matching of business needs and the service broker s response to those needs. I&O has to better understand the business value of IT services relative to the services they consume so that it can make better-informed decisions as to where to invest and divest to better meet business needs. February 7, , Forrester Research, Inc. Reproduction Prohibited