What We Will Cover In This Module
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1 ITIL Considerations
2 What We Will Cover In This Module General Concepts Around ITIL (V3) Supporting Processes Principles ITIL Implementation Life Cycle Getting Started With A Practical Approach
3 Why Service? Security Availability Warranty Continuity Capacity Usability + Application Achieved Result Or Utility Removed Limitation Client Value
4 The ITIL V3 Service Lifecycle
5 Service Strategy Provide guidance on strategic analysis, planning, positioning, and implementation with respect to service models, strategies, and strategic objectives to deliver value to customers and capture value for service providers How to build and refine a service strategy Service Lifecycle IT Financial Management Demand Management Service Portfolios Organizational Design Generic Technology Requirements
6 Service Design Translates strategic plans and objectives and creates the designs and specifications for execution through service transition and operations bringing together the infrastructure, applications, systems, and processes, along with partners and suppliers, to create a superior service offering How to design services Sourcing Services Establishing Service Metrics Service Level Management Availability Management Capacity Management IT Service Continuity Management Information Security Management Supplier Management Service Acceptance Criteria
7 Service Transition Ensures that the design will deliver the intended strategy and that it can be operated and maintained effectively How to transition services to production Change Management Release Management Service Asset and Configuration Management Knowledge Management Management of Organization and Stakeholder Change Service Testing Service Release Acceptance, Test and Pilot
8 Service Operations Manage a service through its production life of day-to-day management. service owners, operational staff, vendors and service providers customers, end users, business and IT management How to operate services while in production Incident Management Request Fulfillment Management Problem Management Access Management Common Service Operation Activities Application Management Activities Service Monitoring and Control
9 Continual Service Improvement Ensure that a service delivers the maximum benefit and measure its performance through its life, suggesting improvements along the way 7-Step Process For Continual Improvement Service Measurement Service Assessment and Analysis Service Improvement Strategies Service Control Loop Service Measurement
10 Supporting Processes Principles
11 Process in General Objective Initiation preconditions Start Process management (process manager) 1. task n. task doer (role) doer (role) procedure (work instruction) procedure (work instruction) responsibility responsibility motivation motivation measurement measurement evaluation evaluation Evaluation Measurable result End Benefits
12 Processes Organization a Collection of Processes Stucture: Functions Director IT Ops Data Center Dept Change Management Configuration Management IS Dev Dept Service Level Management Incidents Management
13 Processes Organization a Collection of Processes Structure: processes Process Mgmnt DC Change Management Configuration Management IT Ops Service Level Management IS Dev Incidents Management
14 Processes Organization a Collection of Processes Core (Functional) Processes Service Management Processes Data Center Change Management IS Dev IT Ops Dept Configuration Management Dept Service Level Management Incidents Management
15 The ITIL V3 Service Lifecycle
16 Processes Finance Management Service Portfolio Management Demand Management
17 Processes Service Catalogue Management (SCM) Service Level Management (SLM) Capacity Management Availability Management IT Service Continuity Management (ITSCM) Information Security Management (ISM) Supplier Management
18 Processes Processes Driving this Phase: Change Management Resource and Configuration Management Knowledge Management Processes Focusing on Service Transition, but Supporting Other Phases as Well: Transition Planning and Support Release Management Service Validation and Testing Evaluation
19 Processes Event Management Process Incident Management Process Request Fulfillment Process Access Management Process Problem Management Process
20 7 Steps Improvement Process Identify: Vision, Mission, Values Strategy Tactical Objectives Operational Objectives Step 1: Define, What You Should Measure Step 7: Implement Corrective Action Step 2: Define What You Can Measure Goals Step 6: Present and Use the Information, Assessment Summary, Action Plans, etc. Step 3: Gather the Data (Who? How? When? Integrity of Data) Step 5: Analyse the Data (Relations? Trends? According to Plan? Targets Met?) Step 4: Process the Data (Frequency? Format? System? Accuracy)
21 Implementing Lifecycle Theory
22 The Program Implementation Lifecycle Month 1 Months 2-3 Month 4 Months 5-7 Continual Service Improvement Service Strategy ITSM ITSM Visioning Visioning ITSM ITSM Assessment Visioning ITSM ITSM Initial Wins Visioning ITSM ITSM Planning Visioning ITSM ITSM Foundation Visioning (Measure) (Assess) What Is The Vision? Where Are We Now? Service Operations ITSM ITSM Control Visioning Service Transition Service Design (Define) Months 8-11 (Implement) How Will We Get There? (Control) How Do We Get To Our Vision? How Do We Know We ve Succeeded? Occurs after implementation
23 Implementing Lifecycle Practical Approach
24 A 5-Step Tactical Approach Using ITIL Service Strategy To Transform How IT Manages Itself Step 1 Build Portfolio Of Services Service Portfolio Step 2 Build Cost Baseline IT Operating Statement Step 3 Build IT Service Model IT Service Model IT Service Operating Statements IT Service Ledger Integrated Cost/Value Model Step 4 Identify Service and Cost Improvements Inventory of Service Improvement Opportunities Prioritized Service Improvement Project Scope Statements Step 5 Identify ITSM Service Improvement Roadmap ITSM Roadmap
25 Step 1 Building The IT Service Portfolio 1. Inventory IT Services being provided (or planned to be provided) to the business 2. Inventory IT Business Support Services drawing them from applications inventories 3. Create high level service descriptions for each service identified 4. Group services into service lines 5. Create the IT Service Portfolio
26 Step 1 - Building The IT Service Portfolio Creating Service Descriptions Service Title Status Proposed Description This service is for delivery of electronic messages to and from bank Associates. Standard Service Features Send and receive messages, both internally and via the Internet. Includes a calendar feature with scheduling capability. Easily accessible Global address list of addresses and white page information. Allows 100Mb of mailbox storage space by default. Send and receive file attachments (such as Word documents, Excel spreadsheets, etc). Provides the ability to create distribution groups holding a number of e -mail addresses for easy distribution. and calendar items over 90 days old are automatically deleted, per legal requirements. Provides access to mailbox via a browser (Outlook Web Access) Allows for shared messages, contacts, and calendar items through Public Folders. Anti-virus and anti-spam functions. Allows for SEC compliance. Available only for Associates bound by Section 16 and Section 20 requirements, and other Associates bound by specific licensing. Delivery Scope Enterprise-wide, within the domestic U.S. Delivery Channels BAND desktops/laptops, Blackberry, mainframe terminal (for TAO only) Availability 24 hours 7 days per week including holidays. User Requirements Any standard BAND desktop configuration. Active Directory account. Exchange 2003 mailbox. Service Initiation iorder; EC website ( Service Support Service Desks supporting desktop productivity applications: National Help Line for Banking Centers, MTI Help Desks and Foundational Help Desk (800-SUPPORT) Costs $40/month per account chargeback. Service Targets Requests to add, delete, or change the name of an account are process ed within 3 5 days. Service restoration within 2 hours for a Severity 1 outage, within 24 hours for Service Name Description Status (i.e. Current, Planned) Key Features Scope Delivery Channels Customer Expectations Customer Definition Customer Demand Levels Availability Customer Charges Current Customer Satisfaction Levels Current Service Issues Service Agreements If They Exist
27 Step 1 - Building The IT Service Portfolio IT Business Support Services (Core business, operations support, basic IT) Business Facing Services IT Facing Services (Service Strategy and CSI) Strategy and Control Services Service Transition Support Services Operational Resource Management Management Support Services Services (Service Transition) (Service Operations) Service Design And Build Services (Service Design)
28 Step 1 - Building The IT Service Portfolio Expect These Challenges! IT Will Struggle To Identify Their Services The Business May Also Struggle Tendency To Make Functions and Features Separate Services Tendency To make Discrete Services By Technology Platform Or IT Organization Struggle To Avoid Technology-Speak When Describing Services
29 Step 2 Building The Cost Baseline Step 1. Gather existing budgets, financial documents, leases, cost pools and chargeback reports 2. Integrate this information into an IT Financial Ledger Output From This Step Becomes Your Cost Baseline
30 Step 2 Building The Cost Baseline Revenue Costs Hardware UNIX Server SaPAPI UNIX Server SAPDev etc Software Oracle database Licenses AIX V6.2 OS Software SAP License etc Staff Frank Mesina Joe Eggemeyer etc External Services SAP Maintenance Bangalore Service Desk SAP Consulting etc Facilities Building Rental Utilities etc Other Service Penalties Unplanned Labor etc Total Costs: $140,000 $110,500 $180,000 $610,000 $200,000 Direct SAP Chargeback Data Center Leaseback etc... Indirect Company Revenue $2,525,600 $1,500,000 $35,400,000 IT Operating Statement (Example) $100,000 $100,000 $50,000 $124,700 $432,000 $500,000 $110,200 $100,000 $765,200 $3,522,400 Total Revenue: $39,425,600
31 Step 2 Building The Cost Baseline Expect These Challenges! Asset Re positorie s Fin Info ancial rma tio n ers g d e nt L u o c Ac Budgets Cost Po ol Rep orts rts o p Re e s en p x Leases E Chargeb ack Resu lts Information Is Everywhere!
32 Step 3 Building The IT Service Model Integrate 3 Dimensions: Finances, Services and Demand Assign resources and assets to the service portfolio Assign resource percentages based on demand by each service that uses them Convert percentages to costs Summarize the costs for each service into Service Operating Statements Identify units of work that consume the services and their volumes (Demand Drivers) Identify unit costs for those units of work
33 Step 3 Building The IT Service Model 1) Assign Resources and Assets To Services Service Allocation Manufacturing Support HR Support Etc... UNIX Server SaPAPI X UNIX Server SAPDev X Oracle DB Licenses X AIX V6.2 OS Software X SAP Maintenance X Bangalore Service Desk X X X Building Rental X X X Utilities X X X Service Penalties X X Unplanned Labor X X X Etc... X X X Control Total
34 Step 3 Building The IT Service Model 2) Assign Percentages Based On Usage Service Allocation - Percentage Manufacturing Support HR Support Etc... Control Total UNIX Server SaPAPI 100% 0% 0% 100% UNIX Server SAPDev 100% 0% 0% 100% Oracle DB Licenses 66% 20% 14% 100% AIX V6.2 OS Software 22% 0% 34% 100% SAP Maintenance 100% 0% 0% 100% Bangalore Service Desk 18% 22% 12% 100% Building Rental 8% 2% 2% 100% Utilities 8% 2% 2% 100% Service Penalties 10% 27% 0% 100% Unplanned Labor 24% 67% 3% 100% Etc...
35 Step 3 Building The IT Service Model 3) Convert Percentages To Costs Service Allocations Cost Dollars Manufacturing Support HR Support Etc... Control Total UNIX Server SaPAPI $140,000 $0 $0 $140,000 UNIX Server SAPDev $140,000 $0 $0 $110,500 Oracle DB Licenses $118,800 $36,000 $25,200 $180,000 AIX V6.2 OS Software $134,200 $0 $207,400 $610,000 SAP Maintenance $50,000 $0 $0 $50,000 Bangalore Service Desk $22,446 $27,434 $14,964 $124,700 Building Rental $40,000 $10,000 $10,000 $500,000 $8,816 $2,204 $2,204 $110,200 Service Penalties $10,000 $27,000 $0 $100,000 Unplanned Labor $183,648 $512,684 $22,956 $765,200 Etc... Utilities Totals: $1,402,365 $989,600 $422,300 $765,200
36 Step 3 Building The IT Service Model 4) Summarize Costs Into Service Operating Statements Service Operating Statement HR Support Revenue Costs Service Operating Statement Direct Hardware Costs Are Summarized In Service Operating Statements ***Revenue=Chargeback, Contribution or Budget Dollars $2,525,600 SAP Chargeback $140,000 UNIX Server SaPAPI UNIX Server SAPDev $110,500 Revenueetc... etc Direct Hardware $2,525,600 SAP Chargeback $140,000 UNIXSoftware Server SaPAPI Indirect etc... Product Sales $110,500 Costs UNIX Server $17,500,000 OracleSAPDev database Licenses $90,000 Revenue etc $200,000 Direct Hardware SAP License $2,525,600 SAPIndirect Chargeback $140,000 UNIX Serveretc SaPAPI Software etc... Product Sales $110,500 UNIXOracle Server SAPDev Licenses Staff $17,500,000 database $90,000 etcsap License Frank Mesina $15,000 $200,000 $50,000 etc Joe Eggemeyer Indirect Software etc Staff $17,500,000 Product Sales Oracle database Licenses $90,000 External Services $15,000 Frank Mesina $200,000 SAP License SAP Maintenance $50,000$50,000 etcjoe Eggemeyer $25,200 etc Bangalore Service Desk Staff $432,000 SAP Consulting External Services $15,000 Frank Mesina etc $50,000 SAP Maintenance Joe Eggemeyer $50,000 $25,200 Facilities Service Desk etcbangalore SAP Consulting Absorbed Building Rental $432,000 $22,000 External Services $12,200 etc Absorbed Utilities $50,000 SAP Maintenance etc $25,200 Bangalore Facilities Service Desk SAP Consulting Absorbed Building Rental $432,000 $22,000 Other $12,200 etcabsorbed Utilities $0 Service Penalties etc Unplanned Labor $210,500 Facilities etc $22,000 Absorbed Other Building Rental Absorbed Utilities $12,200 $20,025,600 Total Revenue: $1,402,365 $0 Service Total Penalties Costs: etcunplanned Labor $210,500 etc Other $20,025,600 Total Revenue: $1,402,365 $0 Service Penalties Total Costs: $210,500 Unplanned Labor etc Costs Service Operating Statement Manufacturing Support Total Costs: $1,402,365 Total Revenue: $20,025,600
37 Step 3 Building The IT Service Model 5) Identify Units Of Work (Demand Drivers) Examples of Units of Work (Demand Drivers) Number of Customers Number of Sales Number of Employees Number of Service Locations Number of Messages Number of Reports Number of Requests Number of Products Manufactured Number of Products Sold etc...
38 Step 3 Building The IT Service Model 6) Cost Units Of Work (Demand Drivers) Service Service Total Cost: $989,600 Work Unit: Employee Work Unit Volume: 4,800 Cost Per Unit: $ ($989,600 / 4,800 ) Manufacturing Support Service Service Total Cost: $1,402,365 Work Unit: Widget Work Unit Volume: 3,565,200 Cost Per Unit: $0.39 ($1,402,365 / 3,565,200 )
39 Step 3 Building The IT Service Model Expect These Challenges! Deriving percentages Handling depreciation for service assets Handling capital versus non-capital cost assumptions Handling costs put off until later i.e. planned upgrades handling requested expenditures versus approved expenditures Whether to use net present value calculations in assumptions Maintaining accurate cost assumptions over time Ensuring cost model matches Step 2 output Demand drivers may be more complicated i.e. not all customers equal
40 Step 4 Identifying Service & Cost Improvements 1. Assess an Operating IT Service Portfolio 2. Identify future Business and IT plans and strategies 3. Model impact of future business and IT plans and strategies 4. Identify Service Improvement Actions (Lens Analysis) 5. Inventory and Rank Service Improvement Actions 6. Identify costs for Service Improvement Actions
41 Step 4 Assessing an Operating IT Service Portfolio Not Strategic But Necessary Parts Catalog Opportunity Mgt Desktop Support Reduce Costs Strategic And Critical Now Online Catalog Service Sales Lead Mgt Service IP Telephony Server Hosting Data Warehousing Services Focus Investments Flyer Production Pipeline Analysis De-Invest Delay Investments Catalog Print Distribution Not Strategic and Not Necessary Strategic But Not Critical Now
42 Step 4 Identifying Service & Cost Improvements Identifying Business/IT Planned Strategies... Increase Business From 35 to 50 States Complete Acquisition of ABC Bank Will Add 2,000 Employees Across the Board 15% Budget Cut For IT Reduce Headcount by 33% Add Credit Card and Retail Banking Services Free Up Non-Discretionary IT Spend to Support New Banking Services
43 Step 4 Identifying Service & Cost Improvements...Then Model Their Impacts Current State Demand Driver Demand Volume Adding 2,000 More Employees Number of employees 5,000 Average Mailbox Size 100mb 70 Servers 100 Storage Devices 5,000 SW Licenses Future State Demand Driver Demand Volume Number of employees 7,000 Average Mailbox Size 100mb 98 Servers 140 Storage Devices 7,000 SW Licenses
44 Step 4 Identifying Service & Cost Improvements Lens Things To Look For Cost Wasted costs, costs too high, costs out of line for this type of service, service penalties Efficiency Redundant processes, labor intensive, wasted labor Frustration Availability, Responsiveness, Reliability, Hard to use Time Takes too long, wastes staff time, creates bottlenecks Risk Compromises Security, Maintainability, Serviceability Regulatory Compromises ability to meet audit criteria, controls requirements Customer Satisfaction Creates poor perception of service, customer issues, poor satisfaction ratings Future Can service still be sustained in the future given planned business changes? Value Is there opportunity to deliver more value for this service? Applying Lens Analysis Examine each business support service using a Lens approach to identify candidate cost and service improvement opportunities
45 Step 4 Identifying Service & Cost Improvements Ref Finding Service Lens Category Action Items 001 Costs exceed $3,000 per year per customer Cost Examine overhead resources to identify cost reductions to target $1,000 per customer 002 Frequent outages impacting production lines Manufacturing Support Frustration Conduct Availability analysis for Manufacturing Support Services and identify root causes 003 IT Personnel are slow to respond to needed manufacturing system changes Manufacturing Support Efficiency Review Change management process for this service and identify bottlenecks 004 Financial support services have warnings from recent SOX audit Financial Service Support Regulatory Identify SOX audit control weaknesses and bolster them with improved processes and reporting
46 Step 4 Identifying Service & Cost Improvements Expect These Challenges! Need to work across all of IT to develop improvement actions Will need to gain acceptance for rankings and action items Capacity Planning people will lack experience in business and service capacity planning tasks needed for this effort Need to handle competing interests
47 Step 5 Identify ITSM Service Improvement Roadmap 1. Establish Service Improvement Program and Steering Committee 2. Build work plans for each improvement action 3. Create overall Service Improvement Project Charter 4. Obtain agreement on the roadmap 5. Assign resources to identified projects You re On Your Way!!
48 Can ITIL Return Significant ROI? Company Fortune 100 credit processing company Situation Exponentially growing IT infrastructure costs with high business demand and growth exceeding 25% per year Results $58.7M cost reduction in year 1 - $100.9M by year 5 Fortune 500 Telecommunications Company Major data center relocation and service consolidation project with cost constraints Recouped $130M project investment in first 6 months reduced operating costs by $60M in 5 years Fortune 1000 National Health Insurance Agency Very expensive network infrastructure producing poor quality voice, data and video services 10% cost reduction per year for the networking infrastructure plus total recovery of all project an consolidation costs
49 Which Is Better? With A Service Approach The Entire Dynamic With The Business Has Radically Changed! We need $312,000* For Server Upgrades... OR... We expect the number of Widgets produced to increase by 800,000 next year at a service cost of $0.39 per Widget, this represents and additional $312,000 needed for IT Manufacturing Support
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