IT Service Catalog Awareness Session for C harles Williams IT Strategy Practice Leader WWW.KEDARit.C O M
Agenda Introductions and Welcome O bjectives, C hallenges, and Takeaways What is an IT Service C atalog? Why an IT Service C atalog? 7 Essentials for C reating a S.M.A.R.T. Service Catalog O pen Discussion
O bjectives, C hallenges & Takeaways Property of KEDARInformation Technologies Inc.
Copyright 2014 KEDAR Information Technologies Inc. All Rights Reserved No part of this training session may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of KEDAR Information Technologies Management. For permission requests, write to the publisher, addressed Attention: Permissions Coordinator, at the address below. To obtain permission contact KEDARit at the email below, addressed to Attention: Permissions Coordinator. ContactUs@kedarit.com
What Is An IT Service C atalog? Property of KEDARInformation Technologies Inc.
Just Managing Technology Is Not Enough The evolution of ITSM requires that we see IT through different eyes. The evolution of IT Service Management (ITSM) places more emphasis on delivering business value to customers. Why Now? ITSM Evolution IT Services are a means of defining and quantifying the delivered value to customers. ITSM has evolved to the point where IT organizations are adopting managerial cost accounting practices, in order to run IT like a Business within a Business. IT Service Management (ITSM) is a process-based practice to align the delivery of IT services to the needs of the organization based on the achieved benefits by the service consumer.
Where Did The Service Catalog Come From? IT Infrastructure Library (ITIL ) Version 3 best practice
IT Service Catalog 101 Service: A means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks Source: ITIL, Service Design book Service C atalog: Is a set of items managed to deliver IT offerings to the business community. Source: ITIL, Service Design book Key elements are: Customer Catalog: contains information about service customers Business Service Catalog: contains information about business facing services and their owner Technical Service Catalog: contains information about IT facing services and their owner More than a menu or shopping list Configuration Management Database (CMDB) Service Portfolio: Is a structured set of the items managed for the enterprise. Source: ITIL, Service Strategy book Key elements are: Service Fulfillment Structure: contains the relationships and dependencies of customers/ users of all Business and Technical Services Capacity, Usage and Cost Clarity: contains information about the customers/ users of services, their planned capacity, and their cost both planned and actual Proprietary & Confidential Copyright 2014 KEDAR Information Technologies Source: ITIL, Service Design book
ITSM Maturity Impact Typical Results Operational productivty 2% 85% Service quality 1% 83% Reputation with the business 3% 65% Operational costs 4% 41% 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Benefical Deterrimental Base: 491 itsmf members and Forrester clients Source: TechRadar For I&O Professionals ITSM Professionals 2012
Advantages End-user consumption and behavior change Business consumers begin to understand what services they are consuming and the cost impact to the business due to their use. Standard IT Services Standardization leads to the elimination of waste throughout the organization. Efficiency and productivity improvement Are achieved through use of consumer request catalogs and portals, and automated workflows. Prioritized and optimized IT Services IT performance and value reporting include business relevant service-based metrics. Improved Business Communications Greater ability to collaborate with consumers in business language ie., service, cost, demand and usage. Ultimately enabling the IT organization to demonstrate and deliver greater value. An IT Service Catalog is the foundation for significant effort and cost optimization
Let s Create An IT Service Service Name and Description What is the service being offered to the customer? Service Consumer Who is the user of the service? How much service are they expected to use? IT Service Development Value Proposition What is value of the service in the eyes of the customer? How is a unit of service measured? Cost Drivers What IT infrastructure and other resources are used to provision the service? Cost Allocation How much of the IT infrastructure and resources should be attributed to the service?
IT Service Model Examples Business Service A service that is known and experienced by the customer Project Services Business Application Services Telecommunications Network Services Distributed Hosting Services Service Desk Desktop Services C ore Shared Services Primary Services Extended Services High Performance Services Typical Services Model Technical Service A service that is used to provision and/or support Business Services SAP Basis Messaging C ommunications Radio C ommunications Telephone Services IT Security Services Backup & Recovery Services Disaster Recovery Services Alternative Services Model Laptop Services Server Services Storage Services Network Services Database Services
Putting It All Together Guidelines & Considerations Start With The End In Mind LOB Considerations Service Level Agreements Service Demand/ Consumption IT Considerations Operational Level Agreements Underpinning Contracts Be S.M.A.R.T. Strategic Measureable Actionable Relevant Transparent Establish the level of sophistication appropriate for your culture
Why an IT Service Catalog? Property of KEDARInformation Technologies Inc.
Industry Statistics 70% of Companies use the Service Catalog as an ordering mechanism Source: Gartner 90% of infrastructure organizations have created some form of Service Catalog Source: Gartner Many IT organizations have embraced ITSM as their goal for operational excellence only 10% have created a monetized Service Catalog 65% of Service Catalogs fail to meet objectives Source: Gartner Source: Gartner 63% of CIO s with a monetized Service Catalog say it drives greater self regulated cost containment within the business community Source: Infrastructure Executive Council 73% of Companies miss the opportunity to bring together their IT strategy, operational plan, and service-based cost optimization initiatives Source: KEDAR Information Technologies
What Industry Analysts Ar e Sa yi n g Service Based C osting Service-based costing is the organizing of your costs against the services you provide. This smart model for assigning prices and becoming more transparent with customers, puts spending decisions in the hands of the business. Service based costing gives you a highly strategic position, and can help to drive a customer-focused IT function to: Ensure that resources are focused on work that is demand-driven. Build financial transparency, and thus, trust with your customer. Create a business-value focus. - Jeff Gregoire and Mike Gough Business value, IT services value, operational excellence, and decision-making insight are the core capabilities that underpin IT financial management. A big part of IT financial management is the building of cost models for services. - Eveline Oehrlich, December 2013 IT Financial Management IT Spending Gartner suggests that by 2014 CIOs will effectively have lost control of 25% of the IT spending budget i.e. 25% or more of what the CIO owns today will be spent by other departments. Proprietary & Confidential Copyright 2014 KEDAR Information Technologies Gartner Symposium IT/ Expo, October 2011
Simplification & Transparency IT Service Catalog provides simplification & cost transparency to: Improve IT service while lowering and optimizing cost, Right-size IT services and costs to business value, Establish IT service cost controls and constraints, Map expenditures to IT services, Compare internal and external service costs, Establish cost and IT service consumption business relevant metrics, Make technology usage metrics business relevant, Adopt an Amazon style of ordering IT services with accurate cost information, Achieve ITSM process improvements and implement SLAs that are stable, sustainable and business relevant, Improve investment decision making about Mobile Devices, Cloud Computing, Virtualization, Consolidation, and Shared Services, and Drive greater business growth and innovation.
Seeing IT Through New Eyes IT Towers View IT Tower & Cost Centers Mainframe Server Desktop Storage Apps Network... Hardware $$$ $$ $$$ Software $$ $$$$ $$$ $$$ Staff $ $$ Projects $$ $$$ $$$ $$$ Expenses Vendors $ Cost Centers & Services Hardware Software Staff Projects Expense Vendors... Email ## ### ## CRM ### ## ## ERP ## ### SCM ### ## ### Consumers BI # Email CRM ERP SCM BI Backup & Services Backup Finance $$$ $$$ $$ HR $$$ $$ Sales & Mktg $ $$ $$ Field ops $$ $$$ Distribution $$$ HQ Services View Consumption View...
Vi sual i zati on Changes The Conversati on Think Business Intelligence (BI) Cube Visualization quickly delivers: where to look and what to look for, drives business relevance discussion, and ways to optimize and innovate. Means understanding: Services distribution across customers, Pareto analysis of services, and Knowing service cost elements and allocation rates. Transform IT capabilities and metrics into: Actionable, Meaningful, and Business decision-relevant knowledge. Build a model of IT services and cost to have Who, What and How Much discussions
IT Service Discussion Example Business Service Dashboard FAQ s What services does IT provide? How much do they cost? Are the costs competitive? What is our capacity? Business Service Business Service Group # Of Units Unit Description Unit Cost Total Cost 1 State of Texas Business Service Enterprise Support Services 1,000 # of Dollars $20,000.00 $20,000,000.00 2 Information Security Governance and Compliance IT Security Services 585 # of Employees $10,341.61 $6,049,840.71 3 Customized Desktop Application Support Desktop Services 1,511 # of Desktops $2,573.19 $3,888,096.03 4 Business Impact Analysis Disaster Recovery Services 965 # of Services $3,646.42 $3,518,793.78 5 Business Application Development Business Application Services 2,590 # of Applications $1,252.59 $3,244,207.95 Proprietary & Confidential Copyright 2014 KEDAR Information Technologies
Consumer Discussion Example IT Service Consumption Dashboard FAQs Who uses IT services? How much do they use? Are the costs competitive? Can we scale cost and usage? Consumer Showback Cost Total # Of Units # of Mission Critical Units 1 Police $20,000,000.00 1,000 1,000 2 Building Inspections $14,261,234.45 11,501 1,657 3 Engineering $5,217,345.87 59,698 369 4 Precinct # 4 $4,970,598.88 166,524 3,465 5 Fire Protection $3,458,830.97 8,937 6,191 6 Library $3,202,053.49 1,390 0 7 Economic Development $3,104,473.62 3,989 0 8 Human Resources (HR) $3,103,988.44 2,823 608 9 Governance & Risk Mgmt. Office $3,023,202.46 5,518 0 10 Customer & Utility Service $2,799,595.26 46,316 44,302 11 City Council $2,767,466.92 8,453 557
IT Staff Discussion Example IT Service C ost Diver Dashboard FAQ s What items impact services cost? Do the costs reflect our true consumption? What if? C an newer technologies reduce costs? Technical Service 5 Moves/Adds/Changes (MAC) Desktop Services 0 0 28.63 $1,223,967.39 Technical Service Technical Service Group Technical Service Group Projects Cost # Business Services Process Activities Cost # Consumers # FTEs Total Cost 1 State of Texas Funding State Funding 1 1 0 $20,000,000.00 2 Telecommunications Services Telephone Services 4 19 23.61 $8,216,935.30 3 Level 2 & 3 Support Service Desk 3 16 51.08 $4,099,465.18 4 Desktop Support Services Desktop Services 1 8 14.56 $2,297,791.12 Technology Cost Vendors Cost Other Expenses Level 2 & 3 Support Service Desk $12,022.32 $4,075,660.00 $7,743.64 $0.00 $4,039.22 Proprietary & Confidential Copyright 2014 KEDAR Information Technologies
Vendor Discussion Example Consumer IT Services Value Stream Dashboard FAQs Is our internal cost market competitive? How do we compare applesto-apples? Which IT services are critical? What are the detail cost & other specifications?
7 Essenti al s for C rea ting a SMART IT Service Catalog Property of KEDARInformation Technologies Inc.
Solving World Hunger Common Pitfalls Transparency builds customer trust Inadequate service definition IT services and usage are not monetized Too high-level service fulfillment framework If you create a Service Catalog, they will come Services not aligned to Line-of-Business users SLA orientation, not enough business value identified Processes are unaware of service fulfillment framework A Service Catalog is just a front-end to the Service Desk Assume your customer understands what you re talking about
7 Essentials Creating a S.M.A.R.T. Service Catalog 1. O btain executive sponsorship 2. Know the organizational readiness 3. Establish a steering committee 4. Assemble the IT Service C atalog team 5. C reate a IT Service Portfolio & C atalog Service Po 6. Institutionalize process improvements re 7. Begin Lean IT Management
1. O btain Executive Sponsorship Guidelines Typical Executive Sponsors are responsible for: Human Capital Projects and Vendors Customer Satisfaction Hardware and Software Business O utcome and Cost Service Demand and Consumption Budget Planning and Management
2. Know The Organizational Readiness Guidelines Right-size the level of sophistication appropriate for your organization. Are business objectives/ results clearly defined? How will improvement and success be measured? What are the challenges or barriers? Are incentives available to reward positive behavior and improvements? Will the leadership support required changes to implement and sustain the initiative? How much time should be allowed for adoption? Is there sufficient training for staff?
3. Establish A Steering Committee Guidelines Establish a group of high-level advisors who have been appointed to provide guidance on key issues such as: budgetary controls, service fulfillment strategy, market competitiveness, company policy and objectives, resource and cost allocation, and decisions involving large expenditures.
4. Assemble The IT Service Catalog Team Guidelines Key to the A-Team success is their knowledge of the IT infrastructure architecture, applications and systems, and current utilization metrics. Be able to make decisions and achieve consensus about IT services, estimate LO B service demand, and identify process improvements. The team should have strong knowledge of: Line-of-Business processes and outcomes, Total Cost of Ownership (TCO) methods, Activity-based costing (ABC) methods, Value Stream Mapping disciplines, IT Service Management (ITSM), IT Financial Management (ITFM), the IT budget and planning process, and Cost Modeling disciplines.
5. Create A IT Service Portfolio & Catalog O utcomes IT Services Defined IT Service Metrics Established Business Value Confirmed Communicate & Collaborate Suggested Activities & Tasks Rationalize technology capabilities into services Create IT Service Portfolio & Catalog Develop services fulfillment value stream to LO Bs Gather cost data Confirm services & business unit alignment Establish services demand & metrics Right-size service usage, value, and cost Identify over/ under utilized services Implement service improvements Rollout services cost transparency Recommend business improvements Standardize Measure Optimize Innovate
6. Institutionalize Process Improvements O utcomes IT Services Defined IT Service Metrics Established Business Value Confirmed Communicate & Collaborate ITFM Processes Service Strategy Adoption IT knows the most important services to the business and why Consumers understand the value stream depth of service offerings Service Cost & Value IT is able to consistently measure its cost competiveness Consumers are able to propose realistic service alternatives to service offerings Quick Wins Service Cost Transparency Greater IT and business collaboration about services cost, usage, and value Consumers understand the capacity and cost of services they are budgeted to use Consumption Management IT can explain budget variations when due to changes in service consumption Consumers self-regulate service use to defined consumption and cost targets
7. Begin Lean IT Management Established Service Costs Business Innovation Service and Support Compliance Quality of Service Improvement Benef i t s Customer and Service Alignment Measured Service Usage ITService Management Service Demand Mgmt. Improved Processes Defined Business Value Knowledge of Services and Cost II I IV III Greater Business Objectives Alignment Industry Competitiveness Lean ITManagement Cost Optimization Frequent Cost Transparency What If Business Analysis Value and Activity Alignment Transf ormat i on Proprietary & Confidential Copyright 2014 KEDAR Information Technologies
O pen Di scussi on C harles Williams IT Strategy Practice Leader charles@ kedarit.com WWW.KEDARit.CO M