Enabling Business Value Through Effective Service Management

Sandeep GondhalekarDirector Consulting

Quint Wellington Redwood 

Introduction: Quint Wellington Redwood

Founded in 1992 in The Netherlands18 years of ITSM experience18 years of ITSM experienceWorld‐wide presence – 22 countries supporting 44 countriesCore business: improvement of ICT organizationsp gIntroduced ITSM in India in 1999.In India Since 1999 (Offices in New Delhi, Bangalore, Hyderabad & Pune)

•Benelux

•Finland

•Spain

•France •Germany

•Italy

•Mexico

•USA

•India

•Japan

•Brazil

•Malaysia

Brazil

•Australia

Quint’s PortfolioTraining Benchmarking and ConsultingTraining, Benchmarking and Consulting,

IT Service ManagementTraining and awarenessgAssessment – ITSM/ ISO 20000Process ImplementationService Management Tool SelectionService Management Tool SelectionBenchmarking and Performance Enhancement

Sourcing strategy, selection & contractingHelping organisations to out or in sourceHelping organisations to out‐ or in‐source  Evaluating Existing Outsourcing Relationships and adding value to improve the services out of the outsourcing relationship.Supplier IT Alignment and Integration with the Business DriversSupplier IT Alignment and Integration with the Business Drivers

Contract managementManaging outsourcing deals

kSourcing Governance FrameworkIT Strategy / IT Governance

Assessment based on Cobit 4.1 Balance Score card

“Demonstrate Business Value”

Top CIO Priorities

Finding IT’s Business Value

“In a recent Forrester survey only 15% of IT leaders declared themselves aligned with the business. What that tells us is that IT-business alignment isn’t just a problem it’s bigger andalignment isn t just a problem – it s bigger and persistent.”

CIO and Business agenda topics

“How can my IT Organization improve its Performance “How do I get the most outimprove its Performance towards the Business?”

How do I get the most out of my current IT organization?”

“How do I get my IT Organizationto be customer focused?”

“My customers do not recognize the added value of my IT Organization”

“My customers think the Time-to-Market of new servicesis too long”

“Does my IT organization have

is too long

“What is the added value of using a Service Management Does my IT organization have

the right size/cost level?”g g

standard?”

Effective Service Management can answer these questions

IT has changed the way business is run

of mission critical business processes are automated by enterprise applications90% Yankee Group

of IT projects are delivered over budgetof IT projects are delivered over budget50%Gartner

of IT projects fail to meet objectives50%Gartner

This brings an opportunity to change the way IT is run

How IT contributes to Business Value?

Stable Service Agile ServiceInnovation

PredictableReliableService

TimelyImprovements

Changes

New Features

EffectivenessService ChangesEffectivenessEfficiencies

The  Customer perspective !

CompetitorsCost DriversCustomers

CompetitorsCost Drivers

MarketReliable Service Improvements

New / Changed BusinessNo Service Outages New / Changed Services

ITNo IT OutagesQuick

Time to Market New Use of ITInnovations of ChangesInnovations

Measurement FocusWhy, What and Howy,

WhWhyWe require measurement so as to know where we standstandWe require measurement so as to know are we improvingimproving

WhatValue to ITValue to ITValue to Business

HowHowPerformance Indicators – Lead indicatorsGoal Indicators Lag IndicatorsGoal Indicators – Lag Indicators

The KPI’s and Value drivers

Content KPIsStrategic Value

Execution KPIsAbility toAbility to Strategic Value 

KPIsInternal Efficiency 

KPIsIT Operation KPIS

Value Drivers of ITAbility to define the right thing

Ability to Execute the right thing

IT Operation KPIS

Tactical KPIsPROC

Process Output

Indicators

CESS ProcessOperational KPIsSES

Process activity

indicators

IT Goals and Value Drivers

QuickNo IT Outages

Quick Time to Market

of ChangesNew Use of IT

“Maintain current functionality”

“Provide new functionality”

“Give advice on current and new functionality”

1. Lost Production Hours1. Lost Production Hours 2. Time to Market of Changes3. Effectiveness of Changes4. Quality of Plans5 N b f P ti Ch5. Number of Proactive Changes

Value drivers and their desired trends

TrendValue Driver

Time to Market of Changes

Lost Production Hours

Effectiveness of Changes

Time to Market of Changes

Quality of Plans

Number of Proactive Changes

Identify and Manage Value

More revenue€ Information is (part of the) the product

Increase revenue at the same cost level Better Service or

Higher Quality

€

€The Delivery channel

is IT based

of the) the product

Decrease Costs

g y

€ IT is a

Ability of business to define revenue generating opportunities

Increase the Value of IT

Decrease costs at the same

revenue level

Decrease Costs

Increased speed, predictability,

€ €

€ production factor

IT is a coordination p y

reliability, flexibility mechanism

Ability of business to define efficiency improvements

Decrease (TCO)

Increase the return on the IT assets Increased tili ation€

€ IT is a Cost Unit

IT is the Informationon the IT assets Increased utilization, technical performance

€ IT is the Information TransportationInfrastructure

Ability of IT to identify and define cost reduction opportunities

Value Drivers 1, 2: Translation to $“An example”An example

A.No. of incidents and  resolution 

times

B.Hours that

incidents are open

C.Hours that IT

customers cannot work

D.Excess cost

and lost revenue

∝ ∝ ∝

I id t P i it C iti l Hi h M di L T t lIncident Priority Critical High Medium Low Total

Number of incidents 29 43 166 2440 2678

Total time to repair (hours) 197 1100 4354 70125 75776

Influence factor 1000 100 10 1Influence factor 1000 100 10 1

Total loss hours in business 197000 110000 43540 70125 420665

Dependency factor 33 33 33 33

Adjusted time lost 65010 36300 14368 23141 138819Adjusted time lost 65010 36300 14368 23141 138819

Cost per hour 50 50 50 50Total cost to the business of lost productive hours 3250500 1815000 718410 1157063 6940973

∞ = proportional

Service Management – Traditional Process based ImplementationProcess‐based Implementation

Key Unit of planning: Process MaturityK S I di M i iKey Success Indicator: Maturity improvementBest suits organizations that: 

Are geographically widespreadDo not have a (basic) common toolHave diverse backgrounds (unconsolidated M&A’s) Have been given enough time to sort out the problemsHave been given enough time to sort out the problems

Pitfalls:Non optimized performanceMay not be focused on the customerMay not be focused on the customerFocus on individual processes with a lack of integral overviewToo many KPIsN l lNo clear goalsProcesses compliant but customers still not satisfied

Service Management – Emerging TrendPerformance based ImplementationPerformance‐based Implementation

Key Unit of planning: Value Drivers [Business Focus]Key Success Indicator: Measured value driver  improvementBest suits organizations that require rapid results in:

d l d h dReducing lost production hours due to ITImproving Time to MarketImproving relationship between Business and ITImproving relationship between Business and ITBetter anticipate future developments

Have a (basic) common tool (required)Have basic processes already implemented (required)Customer is willing to participate and learn (required)

Performance Based Service Management

Measurable, fact based, result‐ oriented way of improving IT services delivery, aligned with business objectivesy, g j

Steps beyond Process driven approach  by limiting the number of business focused IT KPIs called the IT Value Driversbusiness‐focused IT KPIs, called the IT Value Drivers

Radically improves IT Organization capabilities in a short time with l d b bl leasily and unambiguous measurable results 

It is a repetitive method building on previous achievements to p g pimprove step by step – a defined evolutionary approach

PBSM is a 'fit for purpose' use of industry recognised best practicesPBSM is a  fit for purpose  use of industry recognised best practices (ITIL, ISO20K, PRINCE2, Lean Six Sigma)

U il blUses available resources

Typical Project Activity

Stage 1 Stage 2 Stage 4

Stage 3 Act

Stage 1Prepare

Stage 2Focus

Stage 4Maintain

Step 1 Measure: Prepare the Value Driver report;report;Step 2 Analyze: Determine areas of performance weakness using team members observations in combination with the Value Driver measurements;Step 3 Plan Activities: Determine the course of action to resolve the performance weakness and assign actions to the members of the Improvement Team;Step 4 Communicate: Explain the findings and the way forward;Step 5 Execute: Implement the changes proposed in step 3. Performance on Value D i i bli i d d di d klDrivers is publicized and discussed weekly

Identify and measure KPI’s

Metrics and Present the

Implement corrective actions

ObjectivesAnalyze theinformation

conclusions

Generate the data

Process the data

Define the

Define availablemetrics

Define the necessary metrics

Set up a Performance Based DashboardDashboard

Non Standard Changes delivered within agreed date, (operations target: > 70% by 31-1-2008, >95% by 31-03-2008)

80%

100%

% open Std Changes older than 30 days, (operations target: less than 5% > 30 days)

50%

60%4

0%

20%

40%

60% Within agreed datetarget %

Within agreed date 68% 62% 58% 47% 60% 63% 36% 55%

target % 70% 70% 70% 70% 70% 70% 70% 95%

2007-11 2007-12 2008-01 2008-3 W10 W11 W12 W130%

10%

20%

30%

40%Target <30 d> 30 Days

Target <30 d 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%

>30Days 44% 52% 52% 45% 34% 34% 30% 20% 19% 22%

November December W1 W2 W3 W4 W5 W9 W10 W12

Dashboard

Count of Change Ref.ANCR Region TotalAPAC 68EMEA 616NASA 124#N/A 36G d T t l 844

g

95% of all standard changes delivered within agreed (contracted) delivery dateProposal on request within 8 days95% of all non-standard changes delivered as agreed upon

> 30 Days 44% 52% 52% 45% 34% 34% 30% 20% 19% 22%

TargetsGenerator

3Grand Total 844

Count of Change Ref. ANCR RegionOpen Week APAC EMEA NASA #N/A Grand Total

200632 1 1 2200639 1 1200642 1 1200645 1 1200650 1 1200652 2 2200653 1 1200702 3 3200703 2 1 1 4200705 1 1 1 3200706 1 1200708 1 1 2200710 1 1200713 1 1200714 2 3 5200715 2 2200716 4 4

95% of all incidents solved within agreed delivery dateless than 5 % of all incidents open longer than 30 days

Less than 5% of all standard changes open longer than 30 daysLess than 5% of all non-standard changes open longer than 30 days

CSVOr

Excel Extract

CSVOr

Excel Extract

Extraction

2

Information from registration tools

Extract Extract

1

IncidentsInformation from registration tools Changes

Roadmap Model

ACTION CYCLECONTENTEXECUTION

Service Strategy

G l & R ltQUARTERLY

Dedicateresources

Goals & Results

R d l t d ti

Make BenchmarkAnd Business Case

Reduce lost production hours due to IT

Improve Time to Market

Driv

ers

nt o

f Cha

nge

mm

unic

atio

n

Improve relationship Business and IT

Improve anticipation offuture developments

Valu

e

Man

agem

e

Inte

rnal

Co

BI-WEEKLY

Week 1 to n......

ACT

Realized Goals & Results Dashboard BI-WEEKLY

Maintain

Communication with stakeholders BI-WEEKLY

Maintain

Roadmap MilestonesAn example of PBSM implementationAn example of PBSM implementation

6-9 months 6-9 months 3-6 months 3-6 months

Reduce lostproduction

hours due to IT

ImproveTime to Market

Improve Relationship Business and

IT

Better anticipate

future developments

Incident/Request/Event Mng. Change Management Service Level Mng. Service Continuity Mng.Problem Management Release & Deployment Mng. Service Catalogue Mng. Capacity Managementg p y g g g p y gAvailability Configuration Management Service Evaluation Security ManagementService Desk Service Desk Service Desk Financial Management

R lt •Results:• Improved effectiveness of IT service delivery• Increase in cost control

•Results:• Customer expectations are managed (Catalogue, SLA and reports)

Results:• Implemented guiding coalition •Increase in customer satisfaction •Implemented common

•Results:• Changes implemented in time and without causing disruptions• Alignment between controlp )

• Customers needs are managed (aligning with business requirements)

Implemented common tooling solution• Outages repaired within agreed time• Recurring incidents are investigated and removed

Alignment between Software Development and Control & Distribution• Cost reduction• Increase in customer satisfactionremoved satisfaction

Case Study I

“Quint has achieved a tremendous result in training our people in IT Service Management. Our IT team now operates as a unit. What’s more, we now have fewer incidents and, when we do have them, they’re resolved more quickly!”

David Redpath, Group ICT Manager with Hertel

ChallengeStandardizing the way we work over the different countries• Professionalize the IT OrganizationChallengeChallenge Professionalize the IT Organization• Prevent unplanned outages by improving the processes

• Implementing Performance Based Service Management

g

Solution

A well functioning Service management organization within one

• Implementing Performance Based Service ManagementSolution

Results quarter:• 50% reduction of the number of critical incidents• 40% reduction of the ticket backlog• 25% reduction of incidents resolved outside of the SLA

Results

Case Study II

“Quint’s advisers have the know how of the best practices in this area and aren’t afraid to get their hands dirty. We now score an 8 or higher in terms of customer satisfaction and we have Quint to thankhigher in terms of customer satisfaction and we have Quint to thank for that!”

Eugène Boon, manager unit ICT, Zaans Medisch Centrum

ChallengeHelping IT organization to become a reliable partner for the business• Implementing service management processes in accordance with ITILChallengeg p g g p• Reduce lost production hours caused by poor IT

• Performance Based Service ManagementSolution

A well functioning Service management organizationResults• Reduced lost production hours by over 90%• Cost of IT disruptions reduced by 95%• Improved service level performance to over 90% of calls resolved with

reduced timeframe

Results

• Customer satisfaction increased from 7 to 8,5

To summarize…

KISS principleKISS principle

Iterative cycles than long haul

Incremental Improvements

Focus on values and outcomes

☺Thank you for your time ☺☺Thank you for your time ☺Sandeep GondhalekarDirector Consulting

s.gondhalekar@quintgroup.com