2007 yankee sm study - elevator pitch 180907.ppt
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© Copyright 2007. Yankee Group Research, Inc. All rights reserved.
Camille MendlerVice President, Enterprise Researchcmendler@yankeegroup.com
Paris: XX XXXXXX, 2007
Empowering Service Management Executive summary
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 2
Introduction
“Le langage est source de malentendus” “Language is the source of misunderstanding”
Antoine de Saint-Exupéry, Le Petit Prince
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 3
What we can prove
1. Speaking ITIL fluently is table stakes to deal with large enterprises
2. Depth and breadth of ITIL competence is a key selection criteria for more than 75% of large enterprises choosing managed IT and communications service providers
3. ITIL is top of mind among OBS’ leading competitors, and associated investments are accelerating
4. OBS’s Service Select campaign is differentiating: It creates a revenue opportunity in what was an operational function
5. Once committed, there is no going back: ISO20K is necessary to demonstrate and maintain world-class service management
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 4
Service provider and enterprise disconnectCommunication without mutual understanding• What’s at fault
– Service providers and enterprisesspeak different languages to definetheir ICT environment
• Lost in translation– Expression and interpretation of requirements
– Expression and interpretation of value delivered
• Consequences– Extended time to revenue to detail deliverables contractually– Focus on technical minutiae, rather than transformational impacts– Lack of recognition of potential service enhancements on offer– Risk of poor customer satisfaction, due to mis-communication of value
Pieter Brugel, The Tower of Babel, 1563
Service management, a body of practices governing the management of ICT environments, is at the front line of this communication disconnect
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 5
Introducing ITILA ‘lingua franca’ for empowered service management
Incident mgmt
Availability mgmt
Problem mgmt
Service Desk
Release mgmt
Change mgmt
Configuration mgmt
Service levelmgmt
Financial mgmt
Capacity mgmt
IT service continuity
Service Delivery
Service Support
Configuration Mgmt Database (CMDB)
Service Catalog
ITIL is a body of best practice in ICT service management organized into functional management groupings using a common definitional language
Source: Orange Business Services
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 6
Enterprise expectation of ITIL fluency is growing ITIL competence is a key supplier selection criteria
n= 525
2% 3% 1% 1%3% 4% 5% 1%
20% 16%23%
21%
51%49%
49%54%
24% 28%22% 23%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
All Enterprises North America Europe Asia
Extremelyimportant
Very important
Somewhatimportant
Not very important
Not at all important
ITIL competence is now a key supplier selection criteria for managed IT and communications services among large enterprises in key markets.
Source: Yankee Group 2007 Managed IT and Communications survey – large enterprises
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 7
Optimizing service management Summary: Does ITIL matter?
Company Agree? Comments
AT&T Agree • “ITIL is a standard element among the approaches required to deploy, monitor, maintain and optimize IT infrastructures”
BT Strongly agree
• “Adherence to [ITIL] standards creates opportunities that are revenue generating”• “It gives us a natural ability to add value”
DimensionData
Strongly agree
• “ITIL is great for us, it helps clients look behind big brands and see where we provide unique expertise – like unbundling the networking layer to us”
HP Stronglyagree
• “ITIL is fundamental for control over service environments, particularly with regards to compliance”• “We wrote [most of] the books on ITIL; we believe in the potential of continual service improvement”
TataConsultingServices
Agree • “ITIL’s popularity is tightly linked to growing outsourcing of support services and heightened regulatory concerns – it is part of what it takes to improve an organization”
Vanco Strongly agree
• “CIOs want to hear their language back or we have no credibility; with ITIL, we know what words to speak to the customer”• “ITIL is without doubt the most important of all frameworks we use”
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 8
Human capital: service management expertise Orange is in the leader pack
ITIL Trained Staff by Expertise
13%
10%
6%
2%
2%
70%
87%
90%
94%
98%
98%
2%
30%
98%
0% 20% 40% 60% 80% 100%
HP
IBM
BT GS/INS
Orange
Vanco
DiData
Sprint
Manager Other
Company TotalsAT&T refused*BT GS/INS 620DiData 550HP 5000IBM 5000Orange 1098Sprint 350Vanco 43
ITIL Trained Staff
Orange’s ratio of ITIL-trained staff is within comparative group, although a slightly lower ratio at Manager level. However, trained staff fall largely in internal rather than customer-facing functions. Others have focused their ITIL training investments from Sales outward.
*approximately 10% of consultants
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 9
Evaluating Orange’s Service Management Propositions Emergence of a new revenue stream: Service Select
• Market use of ITIL in managed services
• ‘Productization’ of service management
• Actively used in managed service provision
• But largely as internal tool to govern management processes
• Not as a means to market new service management propositions
Consequence: Majority of service providers recognize use of ITIL important, but have not made the strategic leap to use ITIL as a means to sell enhanced management capabilities in managed services
• Repositions service management as a differentiator and revenue stream
• Establishes clear boundaries between what is basic, extended and customized
• Reduces risk in scoping complex outsourcing projects
Consequence: Accelerates repositioning of Orange from connectivity heritage and its legacy competitors into ICT infrastructure management, broadening appeal of service management’s value to a wider audience
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 10
Competitive Environment and Service SelectSummary View: Threat Ranking
Ranking 1 (lowest) to 5 (highest): Plans and ability to replicate Service Select offer
Company Threat ranking Comments
AT&T 3• Pushing best of breed service management which could be formally productized to respond to Orange Service Select – no current plans articulated
BT(inc. INS) 5
• Actively developing ‘productized’ service management offers as part of drive toward utility computing
DimensionData
4• Some productized service management offers, ambitions more limited in scope
HP 3 • Partnership with BT gives direct line into service management activities, but not core direction per se
IBM3
• Disconnect between consulting and managed services operations, but brand and capabilities mean it could respond to Orange with its bulk
Sprint 1 • Nascent stage, internally focused on service quality improvement, limited global market presence
Tata 2• Seeking annuity revenue boost, but will take time to execute in similar vein, fragmented activities partly at VSNL as well as TCS level
Vanco 4• Service management core to value proposition, quickly ramping up ITIL skills, has market attention to exploit
5
3
3
3
1
2
4
4
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 11
Orange: ITIL maturity detail• Vision
– Definition: Definition of an ITIL service management vision integrated into company’s ICT services roadmap
– Orange: ITIL identified as element of ongoing and future roadmap
• Internal skills– Definition: Investment in ITIL competence
across organization to execute on roadmap– Orange: Investments not finalized on
systems level, strong training program
• Service management capabilities– Definition: Execution of ITIL processes into
service management propositions– Orange: ITIL overlay onto legacy processes
with progressive migration plan
• Sales approach– Definition: Ability to leverage ITIL knowledge
fluently in client engagements, including response to RFPs
– Orange: Pockets of ITIL knowledge across go-to-market teams, reliance on small number of evangelists – but level of proposed productization is differentiator
Orange: ITIL Maturity
3
2
3
3
0 1 2 3 4 5
Salesapproach
Servicemanagementcapabilities
Internal skills
Vision
On a scale of 1 (nascent) to 5 (highly mature)
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 12
ITIL service management: A double-edged sword?
• Upsides– Sets a new standard in competitive capability through Service Select– Creates a revenue stream in an area which was fundamentally a cost centre– Reduces risk in scoping & pricing outsourcing deals and other large projects– Facilitates new technology innovation in converging IT and communications services– Repositions Orange as a skilled service provider across ICT infrastructures– Improves time to revenue and sales efficiency
• Downsides– Butts head with IT services juggernauts with deep consulting capabilities and ITIL
competence– Raises the bar in compliance/certifications and triggers new requirements– Requires cross-company collaboration to achieve Service Select’s potential
But benefits outweigh risks if Orange follows through on what is has started:
-Creation of a new annuity revenue category leveraging an IT-centric framework that IT services companies have failed to act upon
- Creative management of integrated IT and communications metrics to achieve business transformation through proactive use of ICT
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 13
Conclusions
1. Speaking ITIL fluently is table stakes to deal with large enterprises
2. Depth and breadth of ITIL competence is a key selection criteria for large enterprises choosing managed IT and communications service providers
3. ITIL is top of mind among Orange’s leading competitors, and associated investments are accelerating
4. Orange’s Service Select campaign is differentiating: It creates a revenue opportunity in what was an operational function
5. Once committed, there is no going back: ISO20K becomes necessary to demonstrate and maintain world-class service management
© Copyright 2007. Yankee Group Research, Inc. All rights reserved. Page 14
RecommendationsWhat you need to do
• Achieve fluency in ITIL across departmental boundaries– Orange will only achieve significant service management revenue growth if all
staff, and particularly sales, speak ITIL – Basic fluency in ITIL is required to understand customer needs, and respond
to bids effectively and successfully– Consider change to commission plan to incentivize service management add
ons
• Practice what you preach and prove it– ISO20K is the next hurdle to differentiate service management offers– Use of ITIL terminology will become a marketing veneer among weaker, less
competent competitors – This will necessitate differentiation with ISO20K
• Build integrated marketing campaign and find poster child– Gap in marketing story exists without one or more case studies– (eg: as was leveraged with Le Meridien)
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