PROPOSAL FOR SETTING UP INTEGRATED SERVICE DESK FOR INFORMATION TECHNOLOGY (IT) DIVISION OF A PROMINENT INSURANCE AND TAKAFUL COMPANY IN MALAYSIA

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1 PROPOSAL FOR SETTING UP INTEGRATED SERVICE DESK FOR INFORMATION TECHNOLOGY (IT) DIVISION OF A PROMINENT INSURANCE AND TAKAFUL COMPANY IN MALAYSIA BY MOHAMAD AZMAN SOAED HISHAMUDIN HAJI WAHID FACULTY OF BUSINESS & ACCOUNTANCY UNIVERSITI MALAYA JULY 2008

2 PROPOSAL FOR SETTING UP INTEGRATED SERVICE DESK FOR INFORMATION TECHNOLOGY (IT) DIVISION OF A PROMINENT INSURANCE AND TAKAFUL COMPANY IN MALAYSIA BY MOHAMAD AZMAN SOAED Bachelor of Business Administration Western Michigan University Michigan United States of America 1991 HISHAMUDIN HAJI WAHID Bachelor of Science University of Pittsburgh Pennsylvania United States of America 1993 SUBMITTED TO THE GRADUATE SCHOOL OF BUSINESS, FACULTY OF BUSINESS AND ACCOUNTANCY, UNIVERSITY OF MALAYA, IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION JULY 2008

3 ACKNOWLEDGEMENT First and foremost, we are greatly thankful to our supervisor, Dr Noor Akma Mohd Salleh. Her guidance and advice have been very valuable towards the completion of the project. Abundance of thanks to En. Azizi, the Head of Information Technology of the Insurance and Takaful organization, for the blessing to carry out and complete the project at the company. Our most heartfelt thank you also goes out to Mr Ng, Encik Syed, Encik Kiswadi, Encik Hazmin, and all the staffs whose involvement and ideas are crucial in making the interview sessions successful. Great To our spouses and children deserve our undying gratefulness for their patience, support and encouragement during these tiring moments. Not to forget our friends Awasi Mohamed and Mohd Yazid Jali for being great course mates throughout these years. Our warm and sincere thank you to Dr. M Fazilah Abdul Samad, Director of UM Graduate School of Business, and her team of professors and other administrative team for all the knowledge, support, and happy moments we experienced in this great campus of academy. Finally, we feel blessed and overjoyed to be able to present our final project paper after going through three years of hard work and challenging moments. i

4 Table of Content Executive Summary...1 PART 1 - INTRODUCTION IT Service Management...3 Information Technology Infrastructure Library...5 Certification and Qualification Scheme...10 IT Service Management and Delivery of IT Services...12 Successful Implementation of IT Service Management Service Desk...17 Scope of Service Desk...18 Service Desk and Help Desk...21 Benefits of Service Desk...22 Literatures on Service Desk and Help Desk...24 PART 2 - THE PROJECT Objective Justification for Focus of Project...27 IT as Business Driver...28 Strategic IT Planning...29 IT Outsourcing A Global Phenomena...29 Service Level Management...32 Managerial Problem with Existing Vendor Research Methodology...35 Research Design...35 Preliminary Study...36 Sample Framework...37 Target Group...38 ii

5 Data Collection...39 Interviews...39 Secondary Data...40 Observation Method...43 Types of Observations...44 PART 3 - THE COMPANY Background of the Company...49 Insurance Business Unit for a Leading Financial Institution...49 The Insurance Group Of Companies...50 Vision and Mission...51 Merger and Acquisition...52 The New Brand Vision...54 BO-A New Brand Attributes Business Activities...56 Business Operation Model...57 Business Portfolio...58 Business Performance IT Operation...61 IT Operation Model and Group IT Policy...61 PART 4 - THE ANALYSES Current State of IT Services and Support...62 IT Help Desk...62 IT Application Support Weaknesses and Issues of Current IT Support Structure...68 Analytical Observation...68 Management Report...70 Interview with the Employees...72 Other Findings from Interviewees Responses...77 Insource Versus Outsource...80 iii

6 4.3 Proposed Course of Action...84 Summary of Issues...84 Proposed Solution: Integrated Service Desk...85 Rationale of Recommendation...88 PART 5 - RECOMMENDATION AND CONCLUSION Service Desk Infrastructure...90 Process Flow...91 Business Process and Procedure...92 System Design...98 Training New Service Level Agreement Work Area Governance Project Implementation and Key Milestone Conclusion Reference Appendix 1 Interview Questionnaire Appendix 2 Financial Reports iv

7 Abbreviation BO-A BO(P)-A BO-G;T;L;C BO-LL BO-N OV-B IT ITD ITSM ITIL SLA SLM IT Application Business Organization A Business Organization (Parent) A Business Organization Subsidiaries of BO-A Business Organization Subsidiaries of BO-L Business Organization Subsidiaries of BO-C Outsourced Vendor B Information Technology Information Technology Division IT Service Management IT Information Library Service Level Agreement Service Level Management An area of IT function related to the design, programming, maintenance, and support of the computer application system IT Infrastructure An area of IT function related to the design, acquisition, installation, maintenance, and support of the computer hardware, software, network, database and data storage, and other computer devices and peripherals v

8 Executive Summary The Insurance Group is fast expanding in the ever competitive insurance and takaful industries. Ineffective implementation of the IT Service Management leads IT to lack focus on the business need, misalignment of IT with corporate strategy, problematic delivery by outsource vendor, ineffective management of service level, and lack of management control on the Help Desk function. Thus, the need for improved and more effective implementation of IT Service Management is the basis to justify for this project. IT Information Library is one best-practice that provide the most recognized and comprehensive guidelines for the adoption and implementation of effective IT Service Management. Objectives of the projects are: to investigate the current setup of Help Desk; to examine weaknesses and issues on the current Help Desk; and to recommend necessary course of actions. The following gaps are identified from the current setup of the outsource Help Desk: Users do not get end-to-end support from the IT support service Status of request and incident are not updated to the users There is ineffective monitoring and escalation of outstanding issues Certain areas in the Help Desk are too technical and lack user friendliness There is no service level defined for User ID and password issues; and There is lack of effective governance by the management Overall performance of Help Desk is well below the expectation Implementation of Help Desk is not aligned with the corporate direction Page 1

9 Considering for a consolidated Service Desk that integrate both internal IT Application support and Infrastructure support by outsource vendor is the strategy to create a single point-of-contact for logging, tracking, and delivering result to end user s problem and request for IT services. The following improvements are recommended to support the effective Service Desk infrastructure: Improved process flow that facilitate efficient delivery of the support services Refined process and procedure that clarify the Service Desk activities Enhanced system functionality to support integration of technical team and more friendlier self-help functions for the business users Leveraging on the strength of existing human and technical resources for extended service hours Effective training of cross functionalities between the two support team Refined Service Level Management to cater for ultra efficient service requirement for user ID and password issues Conducive work area to support delivery of agreed service level Good governance model and practice to monitor and maintain the acceptable service performance In summary, integrated Service Desk would turn the IT organization from the generic technologically and technically inclined operation into a more service-oriented and business-focused function. Thus, strategic implementation and effective infrastructure of the integrated Service Desk would put back the IT Service Management on track. It also ensures the alignment of IT organization with the business direction. Page 2

10 PART 1 - INTRODUCTION 1.1 IT Service Management In the business world today, bridging the operational divide of Information Technology (IT) is necessary in order IT service provider to produce the most efficient, effective, economical, and equitable IT organization possible. Providers of IT services can no longer afford to focus on just the technology and their internal organization, they now have to consider and focus on the quality of the services they provide and on the relationship with customers. Information Technology Service Management (IT Service Management) is a discipline that helps IT managers to manage IT services and deliver to users from the customer s perspective, rather than the technological one. IT Service Management is a discipline for managing IT systems, philosophically centered on the customer s perspective of IT contribution to the business. IT Service Management stands in deliberate contrast to technology-centered approaches to IT management and business interaction. IT service providers provide IT service of value to the business organization. They do this by executing IT Service Management, using an appropriate mix of assets. These include various resources and capabilities: Management, Organization, Process, Knowledge, People, Information, Applications, Infrastructure, and Financial Capital. Internal and external suppliers of IT components provide the IT service provider with Page 3

11 Applications, Data, Infrastructure and Environment, which the IT service provider assembles into IT services. The scope of IT Service Management according to Information Technology Information Library extends partially into the domain of the suppliers of IT components. The manufacturing of standard products such as laptops, servers, operating systems, tooling and generic packaged applications is excluded from IT Service Management but the production of products made to order is partly included. This generally applies more often to applications than to infrastructural components. In the case of packaged applications that have to be extensively customized in order to be used effectively, the production of the standard application is excluded but any customization is included. The following diagram in Figure 1.1 illustrates the flow of IT products and services and the scope of IT Service Management. Figure 1.1 IT Service Management within the IT service chain Page 4

12 Information Technology Infrastructure Library Information Technology Infrastructure Library (IT Information Library), commonly referred to by its abbreviation ITIL, is the only consistent and comprehensive documentation of best practice for IT Service Management. IT Information Library is a cohesive best practice framework, drawn from the public and private sectors internationally. IT Information Library views the IT Service Management domain by primarily describing the phases of the service lifecycle. It describes the organisation of IT resources to deliver business value, and documents processes, functions and roles in IT Service Management. Within this perspective it uses processes that detail parts of one or more phases. Alongside processes, descriptions of organizational functions and activities are also used to provide guidance. The recommendations within IT Information Library were first developed in 1980s by a UK Government's agency which later merged into the Office of Government Commerce (OGC), an office of the UK Treasury. The concepts were initiated in response to the growing dependence on IT and a recognition that without standard practices, government agencies and private sector contracts were independently creating their own IT management practices and duplicating effort within their Information and Communications Technology (ICT) projects resulting in common mistakes and increased costs. As published in its official website, the Office of Government Commerce is responsible for improving value for money by driving up standards and capability in procurement, Page 5

13 from commodities buying to the delivery of major capital projects, maximising the effective use of 60 percent of Government spending and a 30 billion property estate. IT Information Library is built around a process-model based view of controlling and managing operations often credited to the famous quality guru, W. Edwards Deming. The ITIL Version 3 published in the website (http://www.itil.co.uk/) in September 2007 takes a lifecycle approach to guidance, as opposed to its earlier versions that were organised according to IT delivery sectors. The current version comprises 5 volumes with overview being described in the Table 1.1 below: Table 1.1 Overview of topics of the five volumes in ITIL Version 3 Topics of ITIL Version 3 Overview of topics 1. Service Strategy The achievement of strategic goals or objectives requires the use of strategic assets. The guidance shows how to transform service management into a strategic asset. 2. Service Design Guidance on designing IT services, along with the governing IT practices, processes and policies, to realize the strategy and facilitate the introduction of services into the live environment ensuring quality service delivery, customer satisfaction and cost-effective service provision. Page 6

14 3. Service Transition Guidance for the development of capabilities for transitioning new and changed services into operations, ensuring the requirements of Service Strategy, encoded in Service Design, are effectively realized in Service Operations while controlling the risks of failure and disruption. 4. Service Operation Guidance on achieving effectiveness and efficiency in the delivery and support of services to ensure value for the customer and the service provider. Strategic objectives are ultimately realized through Service Operations. 5. Continual Service Improvement Guidance in creating and maintaining value for customers through better design, introduction and operation of services, linking improvement efforts and outcomes with Service Strategy, Design, Transition and Operation. It is quoted in the IT Information Library official website that research confirms the approach above provides the following benefits: Establishes the integration of business strategy with IT service strategy. Enables agile service design and a ROI (Return on Investment) blueprint. Provides transition models that are fit for purpose in a variety of innovations. Demystifies the management of service providers and sourcing models. Page 7

15 Improves the ease of implementing and managing services for dynamic, high risk volatile and rapidly changing business needs. Improves the measurement demonstration of value. Identifies the triggers for improvement and change anywhere in the service lifecycle. Addresses the current gaps and deficiencies in IT Information Library today. The diagram in Figure 1.2 illustrates the five subject areas within the IT services lifecycle as described in the ITIL Version 3 as adopted from the publication of The IT Service Management Forum, titled An Introductory Overview of ITIL V3 (Cartlidge et al, 2007). Figure 1.2 IT information Library within the IT services lifecycle. Page 8

16 IT Information Library philosophy provides guides on the provision of quality IT services, and on the accommodation and environmental facilities needed to support IT organization. The philosophy behind the development of IT Information Library is the recognition that organisations are becoming increasingly dependent on IT in order to satisfy their corporate aims and meet their business needs. This leads to an increased requirement for high quality IT services. IT Information Library provides the foundation for quality IT Service Management. The widespread adoption of the IT Information Library guidance has encouraged organisations worldwide, both commercial and non-proprietary, to develop supporting functions such as Service Desk to realize the IT Information Library philosophy. Most IT organisations around the world adopted the IT Information Library philosophy, either via reference to the available guidance contained within the IT Information Library books or even via subscription to its professional qualification scheme. One of the primary benefits claimed by proponents of IT Information Library within the IT community is its provision of common vocabulary, consisting of enhanced glossary of tightly defined and widely agreed terms as a key deliverable of the IT Information Library Version 3. References to almost all of technical terminologies related to IT discussed in this project are made to the ITIL Glossary of Terms and Definitions released in 30 May Page 9

17 Certification and Qualification Scheme IT Information Library Qualification Scheme provides certification to support the formalized learning requirement for individuals and organization related to IT Service Management. Based on the ITIL Service Management Practices published in November 2007, the qualification scheme covers a broad scope of subject areas and capability elements including Service Level Management, Incident Management, Problem Management, Service Desk, Supplier Management, and Change Management. Table 1.2 in the next page provides a full list of the capabilities elements in the subject areas are grouped in various combinations and organized into three levels of certifications: Foundation Level, Intermediate Level, and Advanced Level to cater for different role and level of practice of the IT Information Library philosophy. While the qualification scheme certifies the subscribers to the formal learning process, it does not guarantee for effective adoption and implementation of the IT Information Library best practices to support the IT Service Management of one organisation. Page 10

18 Table 1.2 List of subject areas covered in the ITIL Qualification Scheme Page 11

19 IT Service Management and Delivery of IT Services A research conducted based on survey responses from Chief Information Officers (CIOs) revealed that one of the biggest drivers for IT Service Management adoption is the desire to create a common business language that ensures IT, the business and external service providers all communicate effectively, so as to deliver the highest levels of service to customers (PR Newswire, 2008). According to the survey, there is a link between adoption of frameworks such as IT Information Library and an organization's ability to establish and maintain clear channels of communication. These improved communication channels enable IT organization to provide more effective end-to-end service delivery to the internal and external customers. The research was commissioned by Dimension Data on more than 370 CIOs from 14 countries across five continents reveals that globally, more than 90 percent of CIOs believe IT Service Management can help align IT and business through the creation of a common understanding of the scope and term of reference of the IT services. This is particularly significant when an organization adopts a multi-sourcing strategy that entails using many best-in-class service providers to manage different functions within the business. Under these circumstances, a common language enables every department to have a clear project definition and insight into expectations and responsibilities. Page 12

20 Successful Implementation of IT Service Management Although IT Information Library is recognised to provide most acceptable best practices for IT Service Management, it only provides high-level concept that focuses on what should be done, but doesn t describe at a detailed level how to do it. According to an article published in the web page ITSMWatch.com titled How to Ensure a Successful ITIL Implementation, it is mentioned that ensuring success in the implementation of IT Information Library requires a lot of understanding from IT and the business. One main reason is that even though IT Information Library is a set of integrated, best practices the program does not provide step-by-step explanation that lays out the exact ways on how things should be done. It is recommended from the study that it is important for IT and business executives to work together to understand what specific business problems they are trying to resolve, and how IT Information Library can be an enabler to solving them. A smart IT team can start assessing the various business units to understand their short-term and long-term goals, and determine how IT fits in. The basic intelligence should provide IT management with a good feel for where the business is at today, where it is going and to determine the best implementation of IT Information Library around the aggregated goals. Both IT and business executives should then work together to determine the relevant IT services as described by the IT Information Library, and negotiate formal service Page 13

21 level agreements that correctly match the expectations of business needs with what IT is capable of delivering. The study concludes that IT information Library should be viewed as a means to an end. Implementation of IT Service Management should also be measurable to determine the level of implementation success. Thus, effective metric management is important in achieving accurate measurement of the implementation of technology services. Evans (2005) wrote in an article titled IT Metrics And Successful Measurement that achieving value-based measurement and continuous improvement of IT services requires the implementation of activities based on what the organizations want to accomplish, not on what they want to measure. The attributes in measuring the primary accomplishment should be based on the effective alignment of services with the current and future needs of the business and its customers as described and recommended by IT Information Library framework and IT Service Management. Evans listed the following key attributes to be considered in the metric management to achieve the above measurement: Vision: The future state of any measurement program should be clearly outlined, specifically identifying the people, processes and technologies that are required to support the future state vision. Page 14

22 Assess: Evaluate the current state of any existing measurement system and understand how best-in-class organizations implement these systems. Activities that are not value-based should be stopped immediately. Staffing: IT measurement is primarily built around people with clear roles and responsibilities to ensure accountability and efficiency. Obtaining formal commitment from senior management on support staff is critical to the success of any measurement program. Documentation: Measurement goals, objectives, milestones and underlying activities should be formalized to ensure sponsorship and continuity. Just like the core IT service support and delivery processes, the IT measurement process should also be captured and documented. Communication: Communication is required for measurement sustainability and ensures the entire organization understands and supports the program. More specifically, it is important to identify and maintain communication with those individuals that create value through use of the resultant performance measures. Consistency: The core building blocks of measurement should be established with consistency in order to minimize measurement costs. Specific metrics should be developed, captured, measured, reported and reviewed in a consistent fashion, supported by standard procedures, processes and policies. Page 15

23 Control: With the advent of IT governance, Sarbanes-Oxley and other legislative requirements, metrics and measurement should be monitored for completeness, accuracy, validity and appropriate authorization prior to commencement of any related activities. Prototype: A prototype or "proof-of-concept" measurement project may be a key activity in demonstrating value to the business. In turn, measurement activities can be bootstrapped and evolve with the maturing knowledge and support provided by the stakeholders. Prioritize: Any measurement results should be used as an input for prioritizing the service improvement program portfolio. Just as individual metrics themselves need to be evaluated for value, improvement projects based on measurement findings need to be cost-justified and prioritized based their inherent value to the business. Reporting: The true audience of a measurement program is the business leadership. Measurement results need to be rationalized, rolled-up and reported in a non-technical format, on a consistent basis and to the appropriate business audience in order to add real business value. Page 16

24 1.2 Service Desk Service Desk, as defined by IT Information Library, is a crucial and an integral function within the IT Service Management that support for effective management of IT organization and the interaction between IT and users. Service Desk is also a primary IT capability called for in IT Service Management. It is intended to provide a Single Point of Contact ( SPOC ) to meet the communications needs of both users and IT and to satisfy both objectives of customer and IT service provider. Many organisations have implemented a central point of contact for handling customer, user and related issues ( user refers to the actual user of the service, while customer refers to the entity that is paying for service, e.g. business entity). The IT Information Library approach considers the Service Desk to be the central point of contact between service providers and users and customers on a day-to-day basis. It is also a focal point for reporting Incidents (disruptions or potential disruptions in service availability or quality) and for users making Service Requests (routine requests for services). The Service Desk handles incidents and service requests, as well as providing an interface to users for other IT Service Management activities such as change request. Within the IT Information Library Version 3, Service Desk is discussed under the topic Service Operation as part of the Incident Management Process and Problem Management Process. Page 17

25 Scope of Service Desk The specific responsibilities of Service Desk, as described in the An Introductory Overview of ITIL V3 publication, are: logging all incidents and requests, categorizing and prioritizing them; first-line investigation and diagnosis; managing the lifecycle of incidents and requests, escalating as appropriate and closing them when the user is satisfied; and keeping users informed of the status of services, incidents and requests. Incident Management An incident, as defined by the IT Information Library, is an unplanned interruption to an IT service, or a reduction in the quality of an IT service. The primary objective of Incident Management is to restore normal service as quickly as possible, and to minimize the adverse impact on business operations. Incidents are often detected by event management, or by users contacting the Service Desk. The incidents are then categorized to identify who should work on them and for the purpose of trend analysis. Incidents are prioritized according to urgency and business impact. If an incident cannot be resolved quickly, it is escalated to a specialised technical support team. After the incident has been investigated and diagnosed, and the resolution has been tested, the Service Desk should ensure that the user is satisfied before the incident is closed. Page 18

26 Escalation is defined in IT Information Library as an Activity that obtains additional Resources when these are needed to meet the targeted level of service, or customer expectations. Escalation may be needed within any IT Service Management process, but is most commonly associated with Incident Management, Problem Management and the management of customer complaints. There are two types of Escalation: Functional Escalation and Hierarchic Escalation. Meanwhile, a problem is a cause of one or more incidents. The cause is not usually known at the time a problem record is created, and the problem management process is responsible for further investigation. The key objectives of Problem Management are to prevent problems and resulting incidents from happening, to eliminate recurring incidents and to minimize the impact of incidents that cannot be prevented. For the sake of simplicity in this project, the term Incident Management and Problem management would are used interchangeably to refer to a same meaning: a management process to investigate, resolve, prevent, and minimize the impact of incident and problem on the users. Service Request Service Request is a request from user to obtain any of the following: general inquiry or request for information related to IT request for advice on IT issues request for new computing device request for access to an IT application, a network domain, or a file system Page 19

27 request for a standard change in the configuration of IT resource Example of Service Requests are scenarios when a user is contacting IT to reset a forgotten password, or a Human Resources personnel send a formal memo to IT to provide a standard desktop computer for a new employee, or the Head of Finance Department write an to IT to upgrade the permission level of a clerk that was recently promoted to be an Accounts Executive. Service requests are usually handled by a Service Desk, and depending on areas of the changes may need for formal documentation of the request description and authorization to carry out the relevant task. Change Request Change Request is a formal proposal or request for change (of Application or Configuration item) with appropriate approval from the management of customer and IT service provider. The proposal are recorded either on manual paper or as electronic format as function within the Service Desk system and tool. The scope of Service Desk is to provide interface and support for Change Management process. Change Management is the process responsible for controlling the lifecycle of all changes. The primary objective of Change Management is to enable beneficial changes to be made, with minimum disruption to IT services. Change Management ensure standardized methods, processes and procedures are used for all changes, Page 20

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