ITIL Saves Money in Troubled Times

Transcription

1 ITIL Saves Money in Troubled Times George Spalding Executive Vice President Pink Elephant Pink Elephant Leading The Way In IT Management Best Practices

2 The Winds Of Change New Challenges For IT New Choices Mash-Ups SAAS The rise of the MSP Global Sourcing Open Source Low Cost Hosting New Requirements Financial Transparency Value vs. Cost Disruptive Technology Green Computing Cloud Computing Mobility 2

3 Technology Spending Rising The IT infrastructure at the core of the world's most serious business like government, healthcare and financial services is still highly fragmented, inefficient, underutilized and unable to keep up with the pace of transactions. Underlying this IT infrastructure is a trillion dollars of investment in applications, information stores, and data centers that exist as islands of one kind or another. Costs to manage this IT infrastructure have quadrupled in the last 5 years and are projected to continue to grow at least 10% a year. The overall impact? Enterprises report that IT operational overhead is up to 70% of IT budget and growing, leaving precious few resources for new initiatives. Keeping Enterprises' Head Above The Clouds! Mahesh H. Dodani, IBM, U.S.A. 3

4 The Increasing Operational Budget 4

5 The IT Paradox IT budgets rise along with the company's revenue and demand increases for sufficient IT capacity to enable growth. When the rate of growth is zero, the company focuses on internal efficiencies to improve margins. While the IT budget shrinks, demand increases for systems that reduce cost and improve operational efficiencies. The IT organization attempts to throttle down variable costs, while accepting fixed costs in areas such as network infrastructure. Finally, and most ironically, when growth turns negative and the IT budget shrinks further, the company turns to IT for more help in cost avoidance. Both fixed and variable costs must be reduced across the entire enterprise. PinkBOOKCASE Measuring the Business Value of Information Technology: Practical Strategies for IT and Business Managers by David S. Sward 5

6 Examples Of IT Waste Multiple Service Desks all with their own tools and separate processes Massive amounts of wasted server capacity due to a lack of Capacity and Demand Management Redundant and duplicate IT Management tools being purchased by various IT departments in the same organization Shadow IT groups and stealth data centers being built by independent parts of the business Multiple Change Management processes due to political boundaries A willingness to solve the same Incidents 1000 s of times without looking at the root of the problem Losing track of 10 s of thousands of dollars of IT assets due to poor tracking controls and inventory processes Supplier contracts expiring without knowledge until an Incident occurs A willingness to supply multiple / duplicate versions of the same services The loss of massive amounts of business productivity due to Incident tickets which disappear into the IT back office black hole until someone shouts loud enough The total lack of ability to provide visibility into the cost of an IT service The list goes on... 6

7 Reasons For IT Waste Silo / technology domain culture Lack of enterprise IT governance roles Immaturity of IT Management practices Lack of IT Financial and Asset Management (who, what, where, when, why) Lack of Enterprise IT Architecture Strategy Lack IT Service Management (Strategy, Design, Transition, Operation, Continual Service Improvement) Lack of Software Development Lifecycle No Supplier Management Etc. 7

8 ITIL Adoption Pink and BMC surveyed IT executives, directors, managers and consultants from the Americas, Europe, Middle East, Africa and Asia Pacific (664 Respondents) Among IT strategies being implemented, 71% are implementing ITIL Primary benefits from ITIL implementations are process standardization and efficiency The most common ITIL process implemented first is Incident Management, followed by Service Desk and Change Management The biggest challenges for ITIL implementation are cultural (Research/Papers) 8

9 Reasons For Adopting ITIL Most say that implementing ITIL helped them to standardize their processes Question 1: What problem was your IT organization trying to solve by adopting ITIL in your SAP environment? (check all that apply) About two-thirds said it helped them to become more efficient and to better align IT to the business Smaller companies are significantly more likely to use ITIL to become more efficient Americas respondents are significantly more likely to use ITIL to lower cost of management and align IT to the business 9

10 Have Benefits Been Realized From ITIL Best Practices? Have You Seen the Benefits from the ITIL Best Practices in Your SAP Environment? What Were the Benefits? Most (78%) have seen the benefits from ITIL Best Practices No Don t Know Yes Question 17: Have you seen benefits from the ITIL Best Practices in your SAP environment? Question 17a: What were the benefits? (check all that apply) The primary benefit received is efficiency, followed by increased availability Individuals/ consultants are significantly more likely to see the benefits of financial ROI and reduced headcount from ITIL best practices 10

11 Good Practices Improve Operations Single point of contact Service Desk Strategy End-to-end Incident ownership Established Support OLAs Business focused priority model All Incidents logged Major Incident Process Managed Event Process Managed Request Fulfillment Clear Access Management Integrated remote support Integrated supplier support Improved speed to root cause Eliminate repeat Incidents Analysis of availability data Access to knowledge base Poor Mean Time To Repair (MTTR) = 11

12 Financial Impact Of Immature Service Transition Processes Unplanned application downtime causes havoc and great expense. Conventional vendor wisdom focuses on redundancy to improve availability. Redundancy, however, solves just 20 percent of the problem. Change Management Release & Deployment Configuration Mgmt. Service Validation & Testing Knowledge Mgmt. People/Process Issues Represent 80% of Downtime = Making Smart Investments to Reduce Unplanned Downtime D. Scott - Gartner 12

13 Balancing Capacity With Demand Service Portfolio / Catalog Mgmt. Client Relationship Mgmt. (SLM) Demand Management Business Assets Resources Service Value SLA IT Services Service Potential Service Assets Resources Capabilities Demand Unused Capabilities Capacity Goods/Services Value Customers / Markets Revenue Compensation Compensation Service Funding Capacity not balanced with Demand Costs = Supplier Contracts Budget Renewal or Charging Availability & Capacity Secure Service Delivery Service Based Costing Supplier Management Crown copyright 2007 Reproduced under license from OGC Based on Figure 4.17 Service management as a strategic asset and a closed-loop system SS Book p

14 Silo Based IT Management Tools = Customer Web Portal Resource & Project Portfolio Mgmt. Monitoring & Event Mgmt. Code & Doc. Mgmt. (DML) Provisioning Service Catalog Requests Fulfillment Service Level Management KPI Dash Boards Workflow Management Incident Management Problem Management Change Management Release & Deployment Management Access Management Etc... Configuration Management (CMS) Federated Data Sources Reporting Billing & Financial Management 14

15 Process Maturity & IT Efficiency Maturity Level 0. Non-Existent A general lack of process activities. Description 1. Initial / Ad-hoc 2. Repeatable but Intuitive 3. Defined Process 4. Managed & Measurable 5. Optimized There is evidence that the enterprize has recognized that the issues exist and need to be addressed. There are, however, no standardized processes; instead, there are ad hoc approaches that tend to be applied on an individual or case-by-case basis. The overall approach to management is disorganized. Processes have developed to the stage where similar procedures are followed by different people undertaking the same task. There is no formal training or communication of standard procedures, and responsibility is left to the individual. There is a high degree of reliance on the knowledge of individuals and, therefore, errors are likely. Procedures have been standardized and documented, and communicated through training. It is mandated that these processes should be followed; however, it is unlikely that deviations will be detected. The procedures themselves are not sophisticated but are the formalization of existing practices. Management monitors and measures compliance with procedures and takes action where processes appear not to be working effectively. Processes are under constant improvement and provide good practice. Automation and tools are used in a limited or fragmented way. Processes have been refined to a level of good practice, based on the results of continuous improvement and maturity modeling with other enterprises. IT is used in an integrated way to automate the workflow, providing tools to improve quality and effectiveness, making the enterprise quick to adapt. 15

16 IT Federated Model Centralized IT Federated IT Decentralized IT Enterprise IT Governance Accused of being unresponsive Limited business Ownership or control Doesn t meet business needs Economies of scale Standards Common Processes User priorities are met Strategic Supplier Mgmt. Organization-wide Service Strategy and architecture Business ownership & control Higher cost Variable standards and quality reinvention Lack of integration 16

17 Organizational Readiness For ITSM Value Chain Focused Business Partner Focused Business Customer Focused Service / System Focused Technology Focused Service Strategy Service Portfolio Management Financial Mgmt (costing and charging) IT Service Continuity Management Demand Management Transition Planning & Support Service Portfolio Management (CSI Focused) Financial Management (service-based costing) SLM (Business Relationship Management) Service Catalog Management (business customer focused) Capacity & Availability Management Enterprise IT Supplier Mgmt. (Cloud Computing, SaaS???) Knowledge Management Service Portfolio Management (Project Focused) Service Level Management (OLA / SLA) Release & Deployment Management (SVT & Evaluation) Service Asset & Configuration Management Problem Management (Proactive) Information Security Management Request Fulfillment / Event Management Service Catalog Management (IT & user focused) Change Management Problem Management (RCA Reactive) Incident Management. Service Desk Access Management Logical & Physical Device Security Capacity, Availability, Event Management (component / domain) Continual Service Improvement 17

18 Thank You George Spalding Executive Vice President Pink Elephant Pink Elephant Leading The Way In IT Management Best Practices