Master s Thesis. Productization of Services and Human Resource Management

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1 Master s Thesis Productization of s and Human Resource Author: Supervisor: Instructor: Location: Laukkanen, Jussi Professor Hämmäinen, Heikki M.Sc. (Tech) Marmo, Saara Helsinki University of Technology

2 Content of Presentation Introduction 1. Content of Presentation 2. Background and Objectives 3. Structure and Work Methods Preparation 4. Theory Framework 5. Productization and Mass Customization 6. Impact on Human Resource 7. Case Study 8. Industry Requirements / ITIL and ISO/IEC Execution 9. Structuring of Catalogue and Level Agreement 10. Piloting / Level Agreement in Practice 11. Findings by Piloting 12. Description 13. Model Conclusion 14. Findings of the Thesis 15. Work Results Utilization in Practice Laukkanen, Jussi 1 / 15

3 Background and Objectives Basis provider s hierarchic organization structure and customer specific operation processes Vision System Logic Managed and efficient service operations combined to enlargement of company based on organic growth and business acquisitions Development Idea To enhance service operations company realized a need for tools to manage human resources and knowledge of personnel Development Strategy As a prerequisite for development of operational tools company decided to define its services and operational needs based on managed services Work Objectives To define service management model for modern service provider s business requirements Past 1. Basis 6. Execution 5. Objectives 2. Vision 3. Development Idea 4. Development Strategy Future Suorce with adjustment: Normann, R Reframing Business When the Map Changes the Landscape. John Wiley & Sons, LTD. p.225. Laukkanen, Jussi 2 / 15

4 Structure and Work Methods From Theory to Practice 1. INTRODUCTION: Thesis background and objectives Evaluation 8. CONCLUSION: Findings of Thesis and suggestions for sequel study areas Theory of development of service business 2. THEORY: Development of service business Evaluation 7. SERVICE MANAGEMENT MODEL: Re-Structuring Description accompanied by service lifecycle management Case study of company viewpoint and need for service development Investigation of industry requirements by ITIL and ISO/IEC frameworks based on findings by case study 3. CASE STUDY: Company viewpoint and requirements for productization of services Evaluation 6. PILOTING: Level Agreement in practice Structuring of Catalogue and Level Agreement Piloting of Level Agreement 4. INDUSTRY REQUIREMENTS: management in ITIL and ISO/IEC frameworks Evaluation 5. EXECUTION: Structuring of Catalogue and Level Agreement Re-structuring Description based on findings by piloting Model Laukkanen, Jussi 3 / 15

5 Theory Framework benefit / Value to customer Theory Framework Understanding of customer needs and valuation of services Definition of services and scope Organization and human resources Delivery Operations Structure based on service valuation by customers Definition of operational human resources and organization based on services Time of service operations Quality Time Quality of service operations and cost-efficiency Cost Cost Source with adjustment: Turner, J. R The Handbook of Project-Based, Second Edition. McGraw-Hill. p.8 Laukkanen, Jussi 4 / 15

6 Productization and Mass Customization Modular Structure Overall s divided to service modules Overall service Modules Not offered to customer Definition of individual service modules Structuring of service packages by combining service modules Offered to customer Enable creation of value-networks by multiple service providers and easier use of sub-contractors Production of service module outsourced to sub-contractor Laukkanen, Jussi 5 / 15

7 Impact on Human Resource Human Resources of Operations Combination of service operation tasks and personnel roles Definition of personnel knowledge based on service operation requirements Understanding of company s human resource capacity Role based allocation of resources Definition of service operation responsibilities Specialist (A) Module Task definition Task 1.1 Required knowledge Knowledge A Responsible role Specialist Specialist (B) Task 1.2 Knowledge B Specialist Task 1.3 Knowledge C Consult Task 1.4 Knowledge D Sub-contractor Consult (C) Sub-contractor (D) Laukkanen, Jussi 6 / 15

8 Case Study Business Model and Challenges Heterogenic customer environment and different customer requirements Allocation of optimal human resources to right places Operations Objective to achieve centralized management of service support by Desk Operational stakeholders challenge is to understand agreed service scope with customer within service agreement Users Desk Request s ticket management Server Network Workstation Higher service level requirements by customers due to competition Ticket escalation and management Ticket escalation and management Ticket escalation and management Need for service specific operation measurement and reporting to enhance financial efficiency Third party companies On-Site Support Operational support companies Industry requirements to implement service processes based on ITL and ISO/IEC Laukkanen, Jussi 7 / 15

9 Industry Requirements / ITIL and ISO/IEC Level Public Catalogue Business process 1 Business process 2 Catalogue for Business Level Agreement A Catalogue defines services which are currently offered to customers Mutual understanding and definition of service scope is a requirement for defining an agreement of service levels A B C D Internal descriptions of services for operational purposes Catalogue for Operations Level Agreement Supporting services Infrastructure Applications Databases Defines agreed service levels between customer and service provider Source with adjustment: ITIL V Design, v.3. TSO The Stationery Office. p.62 ITIL and ISO/IEC define suggestions for structure of a Level Agreement Laukkanen, Jussi 8 / 15

10 Structuring of Catalogue and Level Agreement SERVICE CATALOGUE SERVICE DESK SERVICES Desk Call Center Access User Support SERVER AND CAPACITY SERVICES Server Monitoring Server SQL Database Monitoring SQL Database Backup Server Capacity Disk Space service Citrix Monitoring and Active Directory Monitoring and Exchange Mail Monitoring and Server Maintenance NETWORK SERVICES Network Monitoring and Network Virus Control Firewall Device Monitoring and VPN Device Monitoring and Network Device Maintenance WORKSTATION SERVICES Workstation Workstation Installation Security Patch Distribution Workstation Lifecycle Workstation Device Maintenance Recycling for Workstations PRINTER SERVICES Printer Device Installation Printer Monitoring and Printer Device Maintenance MOBILE SERVICES Mobile Office, Intellisync Mobile Suite (Wireless ) Mobile Device System APPLICATION SERVICES TTMi Application SAP Application LICENSE SERVICES Haltia Licence SPECIALIST SERVICES Account Manager IT Manager Catalogue Structure and definition of the overall Catalogue by case study company Definition of services in co-operation with service specific specialists and responsible managers Objective was to build the Catalogue in a language which target customers can understand Level Agreement Prerequisite for defining services was to develop common document format ITIL and ISO/IEC models were used in development of general SLA format Final role of a Level Agreement document in company s overall contract structure had not yet been defined at time Laukkanen, Jussi 9 / 15

11 Piloting / Level Agreement in Practice Piloting by an Offering Specialist services Account Manager 7 pieces of services from Server and Capacity s Core SQL Database Additional Server Capacity s chosen for piloting were all defined by the new Level Agreement format Core Server Additional Backup Offering enabled company to pilot the new document format without finalizing overall contract structure Required SQL Database Monitoring Required Server Monitoring Additional Disk Space The Level Agreement supported modular service structure and each individual document defined module s attributes such as service description, service levels, prices and service targets Supporting Desk Laukkanen, Jussi 10 / 15

12 Findings by Piloting Description and Level Agreement divided to separate documents General service definitions and customer specific definitions were divided to separate documents based on findings of piloting Agreed service levels and pricing was decided to manage in a customer specific Level Agreement CONTRACT CONTRACT SERVICE LEVEL AGREEMENT SERVICE LEVEL AGREEMENT SERVICE LEVEL AGREEMENT SERVICE LEVEL AGREEMENT SERVICE LEVEL AGREEMENT SERVICE DESCRIPTION SERVICE DESCRIPTION SERVICE DESCRIPTION SERVICE DESCRIPTION Laukkanen, Jussi 11 / 15

13 Description SERVICE DESCRIPTION Description Common document to all customers Description presents available options for possible service levels Descriptions version management must be defined Each service has to have named responsible service managers along with defined process for document updates CONTENT 1 INTRODUCTION 1.1 Introduction Relations to other s SERVICE CONTENT 2.1 < Part 1 >. 2.2 < Part 2 >. 2.3 < Part 3 >. 2.4 < Option 4 > Scope Restrictions Task Specification SERVICE LEVELS 3.1 Hours Priority Categorization. 3.3 Classes 3.4 Availability 3.5 Workload Limits Measuring and Reporting. 3.7 Exceptions to Levels.. Laukkanen, Jussi 12 / 15

14 Model SERVICE PORTFOLIO MANAGEMENT Offered s / Catalogue CUSTOMER VIEW Model DEMAND MANAGEMENT A B C Sales function use the Catalogue to present available services to customers Company strategy Customer Requirements Market development New and updated services Specification of services for internal operations SERVICE DEVELOPMENT Retired s Development and updates to the Descriptions and internal specifications are managed by defined processes Technology development Competitor actions Knowledge development Feedback from operations D A (Internal) B (Internal) C (Internal) X SERVICE OPERATIONS portfolio and structure of services is updated along with chosen service strategy operations produce agreed services based on internal specifications Time Quality Cost Laukkanen, Jussi 13 / 15

15 Findings of the Thesis Results Model, Model to manage service portfolio and service catalogue, categorization of services with relation to service operations Description, Common format for all services within service catalogue. Separate Level Agreement defines agreed service levels and prices Observations To restructure company s overall service catalogue requires decision and strong commitment from company directors combined with realized need to change by real case examples The structure of a service description has to be very simple and clear to enable its use as a fixed format in definition of all services within service catalogue by several writers. Sequel Study Areas Modular Catalogue and management of service cost, prices and financial profit manager s role and responsibilities in service operation management and development Effect of changes in customer needs and requirements relative to service provider s service strategy Laukkanen, Jussi 14 / 15

16 Work Results Utilization in Practice Enfo to outsource its on-site support and hardware maintenance service in customer premises to Relacom Enfo Oyj, Press Release 31st January Outsourcing on-site support services provided in client premises is connected with Enfo s new modular service structure and new business model. Our solution to this is a modular service structure, an IT toolbox that provides well though-out and mutually compatible service modules that can be used to build an entity matching the client s needs, says Osmo Wilska, Director of Information Technology s at Enfo. Users Desk Operations Server Monitoring Network Workstation Server VPN Device Workstation Lifecycle Otava-Kuvalehdet outsource Desk and Workstation services to Enfo Enfo Oyj, Press Release 6st May Request s ticket management Backup Disk Space Firewall Network Virus Protection Workstation Installations Security Patch Distribution We are proud that our modular product and service structure interested them, says Osmo Wilska, Director of Information Technology s at Enfo. Ticket escalation and management Ticket escalation and management Ticket escalation and management Destia concentrates on its core business and outsource all ICT service processes to Enfo Third party companies On-Site Support Operational support companies Enfo Oyj, Press Release 13st May New contract is very significant to Enfo by all measurements and creates strong growth to Enfo s Business in Finland, says Arto Herranen, Managing Director of Enfo. Laukkanen, Jussi 15 / 15

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