IT Service Management (ITSM) provides some great opportunities to save on costs and also demonstrate value. ITIL projects normally involve a lot of discussion and "culture change," which can be a euphemism for managing political situations—this also takes considerable time.
The downturn—and the inevitable need for review and cost-cutting—provides a good opportunity to bypass all of this. It can be used and seen as an opportunity for change and development—particularly if there have been issues identified but not resolved for some time. The downturn creates an environment where all political and personal issues must be put to one side and everyone pulls together for the greater good—often for self-preservation.
www.axiossystems.comWhite PaperITIL - Delivering Real Value in a Downturn:Three Fast Steps to Service ValueTable of Contents Executive Summary Overview Three steps to Service Value Management Mobilize the hit squad Untitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p2Executive Summary 3Overview4Three steps to Service Value Management7Mobilize the hit squad11Copyright Notice Copyright Axios Systems 2009. The information, which is contained in this document, is the property of Axios Systems. The contents of the document must not be reproduced or disclosed wholly or in part or used for purposes other than that for which it is supplied without the prior written permission of Axios Systems.Table of ContentsUntitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p3Executive SummaryGartner prepared a worst-case scenario for its 2008 and 2009 forecasts that showed worldwide IT market growth dropping from the previous forecast of 8.9 percent to 7.3 percent in 2008 and from 5.8 percent to 2.3 percent in 2009.Understanding how your organization will be impacted by the slowdown will let you adapt without overreacting. Even in the midst of dire financial news, there are opportunities for IT to maintain service quality and deliver improved value to customers. IT Service Management (ITSM) provides some great opportunities to save on costs and also demonstrate value. ITIL projects normally involve a lot of discussion and culture change, which can be a euphemism for managing political situations this also takes considerable time. The downturn and the inevitable need for review and cost-cutting provides a good opportunity to bypass all of this and implement change rapidly. This can bring about significant results as people band together in a united front to survive the current market challenges. Untitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p4OverviewWe can all feel the reach of the current financial crisis either through seeing the value of our investments fall, price increases, or more potently, the ever increasing unemployment figures. In November 2008, the US reported a 500,000 increase in unemployment and the UK unemployment figures recently in December 2008 rose to 6 percent. Some sectors such as financial services have witnessed devastating cuts in staff, hastily organized mergers, or ultimately companies failing. It is clearly a troubling time and a global problem that will take some time to resolve.Generally, all the questions that are asked often suddenly in a crisis can be answered using one of the key principles in Service Management (i.e. the understanding and definition of what services, and associated benefits, are actually delivered by IT). ITSM is concerned mainly with managing cost, quality and risk. So, if an organization has gone through the process to define and prioritize its services (not just systems), then it will be well-prepared to identify which services and components are business-critical, and which ones are not. This may seem obvious, but many organizations do not actually understand this concept. The nature of IT support and delivery is technology-focused, often inefficient and not properly understood in relation to its value to the business and the customers it supports. The issue also extends through the complexity of systems now in use, and it has become increasingly difficult to identify which parts of an IT estate are actually business-critical.The net result of this is that, (1) the IT organization s risk is exposed in the business, and (2) the IT organization is in a very poor position to make the right decisions regarding cost-cutting that it will inevitably be asked to make.Also, there is constant new hype and pressure around the opportunities for efficiency and cost savings through such concepts as virtualization and cloud computing. As always, these things require and involve a lifecycle of time, understanding, preparation and investment for success, and many IT people don t have that luxury. ITIL has a role to play in driving short-term cost optimization initiatives throughout the IT function. It s about the visibility and understanding that ITIL adoption delivers and how that provides organizations with the clarity needed to embark on a significant cost-cutting program while ensuring that such cuts can be implemented within a governance and control framework to mitigate associated change-related risk. From a report by Gartner s Rod Addy entitled, Cost Optimization: Three ITIL Processes Can Play an Important Role, published January 19, 2009.Untitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p5Now, more and more, the focus is to cut and reduce costs, do more with less and continue to maintain expectations on service. A key question to answer is:Where can we make savings and what should we leave well alone? It is a simple enough double question, but if you can answer it, then you will be in a good position to support your organization during the downturn, through trimming costs, maintaining service quality and managing risk.The Good News Certainly organizations that have fully embraced ITIL, with advanced maturity across ITIL disciplines, will be well-situated to make good cost-cutting decisions at this time. They will also find it easier to push back on cost-cutting where necessary as they will have established a mature and common understanding of IT service value. Their customers will appreciate better value and benefits of key IT services and be less likely to remove or downgrade these unless absolutely necessary. In a difficult situation, there is always the temptation to panic-buy, which could ultimately lead to outsourcing that may not deliver the cost savings and service levels initially expected. This could be avoided if service value is known and communicated by all parties. Even organizations that are not fully committed to the ITIL approach can use some simple and inexpensive techniques based on ITIL principles in response to the financial situation and current demands. There are three simple steps to demonstrating business value from IT services, which can help organizations avoid the disasters of inappropriate outsourcing and unnecessary cost-cutting all of which can contribute to setting minds at ease throughout the IT department. The downturn can be used and seen as an opportunity for change and development particularly if there have been issues identified but not resolved for some time. The downturn creates an environment where all political and personal issues must be put to one side and everyone pulls together for the greater good often for self-preservation. ITIL is essential for aligning IT services with the business and providing full transparency [of] our IT operations. Arab Bank, Basil Abdel Nabi Deputy Head of ITUntitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p6The strategic elements and decisions around these three steps can be worked through within just a few days. Most of the other activities can be put in place within weeks, if given the appropriate levels of support. Use the three-step guide as a comfort-factor health check if you are already working with a service-value agenda. If not, then it can be used to quickly get you up to speed and identify the steps you need to take: (1) Build the Value Chain(2) Discover the Value(3) Make it Happen Now! Untitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p7Three Steps to Service Value Management1. Build the Value ChainResearch from Gartner over the years has consistently shown that most IT organizations spend the majority of their time fixing and supporting, rather than building and optimizing. This is often represented as an 80/20 split, i.e. that 80 percent of IT human resources are expended on maintenance and keeping the lights on, and only 20 percent on building and developing. Twenty years ago, the helpdesk of the future was predicted as a quiet and reflective room where staff carried out monitoring and tuning activities. Today, however, we have more Service Desk and front-line staff than ever before. The basic premise here is that support is usually inefficiently delivered, having evolved as an organic process rather than being thought through as a business process with a clear service model. In order to make appropriate savings that do not harm the business, an organization needs to be clear on what its service model actually is, or what it should be. It is essential that every service delivery organization define the supply chain of components that comprises the services delivered to customers. This is usually held in various sources as lists of hardware, software, processes, people, contracts, etc.In very few situations, however, is this understood across the organization as a business critical tool. This is a key component of ITIL that often is not properly executed. We can call it the Service Catalog and/or ADM (Application Dependency Mapping), however, it should simply be understood as a map of the business services that are delivered, showing the appropriate IT systems and components that comprise it.Pulling this together can be difficult and time-consuming, particularly as this often challenges many IT staff and managers existing perception of what they actually deliver. We looked very hard at our prioritization and reporting around critical business systems and this has changed the way we now work and manage incidents and changes. However, the proof of concept and initial visible improvements in customer perception during the initial stage of our project were absolutely essential to be given the green light to tackle more difficult areas of service management. Colm O Shea, Group IT Customer Services Manager at Irish Life & Permanent.Untitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p8With focus on the current climate, however, it is possible to run a successful Service Catalog workshop (asking such questions as: What are our services? What are the components?) in one day and work through 70 to 80 percent of the environment. Within a few more days, the map can be built and mostly completed. This will provide an invaluable building block on which to prioritize, build, remove, escalate and resolve service issues. The real benefit of this service Value Chain actually comes from the opportunity it provides to deliver reporting and management information that is based around the delivery of business services, rather than IT operations. The goal is that IT should be targeting, focusing and reporting on how well it delivers business services, rather than just producing lots of statistics on what IT does. At an operational level, the Value Chain will also provide the key to successful Configuration Management and Service Level Management (SLM). It provides the high level service definition that Configuration Items (CIs) are linked to and for SLM; this provides the list of services that can be discussed and negotiated for in terms of Service Level Agreements (SLAs).2. Discover the Value Once we have an understanding of our services, we can then identify areas of higher priority to focus on, where cost savings and efficiencies can be made.There are several areas where visible savings and improvements can be made quickly and reasonably simply. Find these areas, and you can build a value-based case to make this happen. Use the Service Value Chain to prioritize the areas that will have the greatest business impact. Usually, this can be done within a week or two. Although it took some time and effort to fully prioritize systems according to business imperatives and for key people involved to practically grasp the nettle in terms of what they each needed to do to make processes like Problem and Change Management really effective, it has been well worth the journey to see the improvements on the bottom line. Colm O Shea, Group IT Customer Services Manager at Irish Life & Permanent. There have been a number of quality and operational improvements in service and support which have been validated by data from regular customer surveys. In short, the IT operation is delivering a far better business service to the organization, and the business has noticed. Colm O Shea, Group IT Customer Services Manager at Irish Life & Permanent.Untitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p9What areas offer opportunities for value improvement? Here are some examples:Reduce the business cost of Incidents by pushing these to the left It is an established fact that support costs more money when escalated, so there should be opportunities to reduce cost by ensuring that as much resolution as possible takes place at the front-line, or by customers themselves. This is standard Incident Management, which delivers quick benefits of reduced resolution times and associated improvements in customer satisfaction. It is also an excellent cost-cutting measure, which is why it is a key focus for most Managed Service Providers (MSPs). Reduce overall support costs through Incident preventionOther than pushing left, it is also clear that Problem Management and Incident avoidance can lead to excellent cost benefits. Why spend time and money fixing things that could have been avoided in the first place? If Problem Management is given priority and resources, then it will deliver value and savings. Again, this is an area of ITIL that often is not implemented, even though it can deliver significant value.Relative Cost of Incident Escalation:The relative cost of resolving incidents at different support levels.Reduce unnecessary software license costs through discovery and re-negotiationIf you have mapped out the Value Chain and reviewed your Asset and Configuration Management approach, then you may be able to identify which of your licenses are actually needed. Using automated discovery and analysis tools will also help to spot opportunities for reducing license costs. Untitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p10Reduce and eliminate the business cost of unnecessary downtimeGood Change Management relies on accurate confirmation data particularly around dependencies. Once in place, however, this supports risk assessment in Change Management and will help to ensure that unnecessary downtime caused by poor Changes is avoided. 3. Make it Happen Now!Once you are clear on the objectives and priorities, progress with a fast and effective implementation. There can be a tendency in normal times to prevaricate and spend too much time discussing and over-engineering ITIL processes. Instead, you should seize the moment, get started and make change happen quickly.Many ITIL initiatives and projects fail simply because they are not resourced, supported or run properly. If you are serious about change, this is the practical step to take to ensure success.Untitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p11Mobilize the Hit Squad If an organization is going to review and improve its delivery and value proposition, it cannot and will not happen without some focused resources. Usually, you will not need a big team, but you should try to assemble a small and focused hit squad that includes:An Information Zealot: a sniffer-out of key pieces of data and information on what we do, when, for whom, why and how much it costs. An Analytical Thinker: someone capable of processing the data and coming up with some new perspectives on what it means, how it can be interpreted and what this could mean in terms of new options for action.A Decision Maker: usually a C-level person who is able to make quick and informed decisions.A Completer-Finisher: a project and task-oriented person who can drive through actions and get resolutions and results.Management support is critical to the success of such plans and changes, however, ITIL projects can take months or years, which can be related to organizational issues and lack of management and staff buy-in. We talk about culture change as part of ITSM implementation, but this is often a euphemism for having to deal with delicate or difficult people, entrenched positions and organizational politics. If you are in a crisis situation and there is a drive from senior management to get things done, with this plan, the delivery time and associated time-to-value can be cut drastically. Process changes, as outlined above, can be implemented within a few weeks, given the appropriate levels of direction and support.It is great to make changes and implement new ways of working, but equally important is the need to ensure relevant people are aware of the successes. Report what is relevant and pertinent to the business customer and their business processes. In reality, this sort of project might normally take six to nine months, but actually could still be done properly within four to six weeks. The key elements can all be done with the resources as suggested, although it may be useful to seek some external expertise to galvanize ideas and provide time-saving input to the plan.So ultimately, the downturn can help you focus your IT service on Value Untitled Documentwww.axiossystems.comITIL - Delivering Real Value in a Downturn p12Management, while also acting as a good catalyst for fast and effective change. Often we spend a long time prevaricating about how and when to do ITIL, when actually we are well-situated to cut through and make it happen quickly and effectively.