Embracing ITIL for Measurable Results David Cannon, ITSM Practice Principal George Sourvinos, Solutions Architect

Agenda What is ITIL? What difference does ITIL make? Keys to ITIL success from v2 to v3

What is ITIL?

ITIL Beginnings UK Government - CCTA Focused purely on Infrastructure Services Primary focus = quality and efficiency Basis for Compulsory Competitive Bidding Government practice

ITIL Today International – over 40 countries Commercial and Government Best practice – from over 300 organizations Basis for standards – ISO 20000 Formal mapping (e.g. COBIT)

ITSM Implementation 95% of organizations have SLAs And are expanding their use Source: Oblicore

Formal Adoption of ITIL (2008) Source: Oblicore

ITIL: Core of SIP

Aligning Business & IT Value

The Evolution of IT Service Management ITIL v3 Focus: Business-IT Alignment & Integration Service Mgmt for Business & Technology Automated and Integrated Operations Strategy and Portfolio Governance Continuous Improvement Strategic Partner IT Service Management Focus: Quality and Efficiency of IT Processes IT is a service provider IT is separable from business IT budgets as expenses to control ITIL v2 Service Provider Role of IT IT Infrastructure Management ITIL v1 Technology Provider Focus: Stability and Control of the Infrastructure IT are technical experts IT concerned with minimizing business disruption IT budgets are driven by external benchmarks Time

What Difference does ITIL Make?

Benefits – Some hard Figures Cost savings (up to 20% in year 1 and anywhere from 15% to 5% each year after that) Eliminate duplication and loss Optimize expenditure (i.e. spend money where it’s really needed, reduce where it’s not) Licensing and maintenance reduction Delay capital expenditure Technical support costs (through more effective problem resolution)

Benefits – Some hard Figures Incident Reduction (up to 25%) Increase in successful releases (50% - 65% in year 1 measured by # incidents and roll-backs) Faster, more effective build and test (reduction in time to users by 15% – 25%) System Availability (increases by 0.5% to 5%) Service Availability (increases by 5% to 15%)

Server Virtualization Storage Virtualization The ITIL Advantage… Source: Summit Strategies, Inc Server Virtualization ITSM Experienced 35% 34% 17% 10% ITSM Inexperienced 15% 20% 27% 17% 12% 9% Storage Virtualization ITSM Experienced 39% 27% 21% 10% ITSM Inexperienced 18% 17% 24% 17% 13% 10% SOA ITSM Experienced 25% 34% 20% 10% 6% 6% ITSM Inexperienced 11% 22% 17% 23% 12% 15% Currently in General Operational use for many major applications Familiar with. Plans to evaluate in next 1-3 years Currently in Pilot or Limited Operational Use Rejected. Not planning to evaluate Evaluating for use in next 12 Months Not familiar

Keys to ITIL Success From v2 to v3

From Process to Lifecycle Key 1 From Process to Lifecycle

What is an IT Service (v2)? A set of related functions provided by IT systems in support of one or more business areas This service can be made up of hardware, software and communication facilities, but is perceived by the business customers as a self-contained, coherent entity

Service Components

As Seen by the Customer…

Process Orientated Working Configuration Management Change Management Incident & Problem Management

The Problem with Processes Processes help to organize work better They are aligned to activity and output, not necessarily to value You have to know what you want to achieve, or else assume that the customer does Processes are not strategic Bottom line: Managing IT needs more than just a set of processes, people and tools

ITIL v3 Creating a way to integrate IT Processes, People and Tools with the Business Strategy and Outcomes Seeing IT as a Strategic Business Unit

Definition of a Service (v3) A ‘service’ is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks

The ITSM Lifecycle

Key 2 From Output to Outcome

Using Services to Achieve Business Outcomes

Key 3 From Cost to Value

What is Value? Benefit Price Value = Quality Received Expectations Value =

What is Value? Value is in the eye of the customer Value is variable Value has to be negotiated Value changes over time and context Value can be managed Value is not always financial

Value in Supply Chains Value Realized Money Spent Value Added Procure Develop Operations Market and Sell Value Added

Value in Supply Chains Lessons Learned If value is not realised, ‘value added’ is equal to ‘money spent’ Value Realized must be greater than money spent Value added internally is not value until it is realized

What does this mean for IT? If IT wants to demonstrate value it has to link its services to where value is realized, not where value is added If IT can not do this it will always be viewed as ‘money spent’ not ‘value added’

Supporting Business Outcomes © 2006-2007 Crown Copyright.

Manage Yourself and your Suppliers Key 4 Manage Yourself and your Suppliers

IT Value – an Example Enterprise IT Outsourcer 1 Other Suppliers Vendor A Commodities Enterprise IT Dept A Dept B Dept C Dept D Money Spent Value Added? BU1 IT BU2 IT Money Spent Value Added Business Unit 1 Business Unit 2

Link Strategy and Operation Key 5 Link Strategy and Operation

Context - Monitor Control Loop Norm Compare Control Monitor Activity Input Output

Complex Monitor Control Loops Norm Control Compare Monitor Norm Norm Norm Control Compare Control Compare Control Compare Monitor Monitor Monitor Input Activity Output Input Activity Output Input Activity Output

Context - The ITSM Lifecycle Business Executives, Business Unit Managers, Customers Service Strategy Service Transition Continual Service Improve- ment 1 Portfolio, Standards, Architectures Service Design 2 Users Tech Architectures, Performance Stds IT Managers, Vendor Account Execs, IT Execs 3 Norm Norm Norm Control Compare Control Compare Control Compare Output Monitor Monitor Monitor Input Activity Output Input Activity Output Input Activity Technical Experts, Vendor Support, IT Operational Staff

Keep Service, Infrastructure and Applications Together Key 6 Keep Service, Infrastructure and Applications Together

Service Operation Functions Service Desk IT Operations Management Operations Control Facilities Management Technical Management Application Management

Bring Functionality and Manageability Together Key 7 Bring Functionality and Manageability Together

The V3 Value Proposition Governance (eg., CObIT) Availability Capacity Continuity Financial Configuration Change Release Request Incident Problem Demand Operations SLM Events Assets Business Needs Portfolio Service Strategy Service Design Service Transition Service Operations IT Services Bus. Req. Analysis Design Development Test Deploy Release Operate Architecture Continual Service Improvement (Six Sigma, TQM, etc.) Keeper, tied into our recommendations. Strategy Project Management (PMBOK, PRINCE2, etc.) TIME

Service Design Constraints © 2007 Metaphor Systems. All rights reserved.

So, DO we Need ITIL? Not an alternative framework, but: Builds on what we’ve already started and are doing well Not an obscure theory, but guidelines based on what has been proven to work At the core of what we do, not an add-on Implementation can be incremental Allows for determination of value, and management of multiple suppliers Addresses both the supply of and demand for IT services April 8, 2008

Secrets of Success Senior Management buy-in Tools alone do not solve problems If it isn’t broken, don’t fix it Reorganization is the last thing on the agenda, not the first Take one step at a time Communicate and sell at all stages Be prepared for Change April 8, 2008

ITIL® Value Proposition Improve the efficiency of the organization, IT staff and IT customers Improve the effectiveness of the processes Improve the ability of the technology to automate the processes Enable better measurement and control of the IT environment - key to meeting contractual agreements April 8, 2008

Some Examples

IT Delivery and Outsourcing Management Challenge Approach Results Challenges in delivery of IT projects (poor quality, cost and schedule control), many red projects, global IT processes cumbersome and inconsistently adopted. Looking to standardize and improve the way it outsourcers IT and manages the outsourcing Re-engineered global IT processes to become lightweight, automated and tailorable Integrated process silos across development, deployment and operations Implemented metrics & measurements framework Implement Quality Management functions in multiple divisions Defined CMMI-ACQ model in partnership with SEI, with first implementation at L4 QA and Performance Test COE setup & operations Schedule variance reduced from 45% to 20% Cost variance reduced from 37% to 15% Improved quality 200% Savings in outsourcing management costs by more than 40% All divisions certified CMMI L3 April 8, 2008

Service Levels Management and Integration Challenge Approach Results Meeting the service level expectations of 170,000 employees Replacing an array of disparate tools with a single, coherent ITSM solution Migrating massive amounts of data without impairing business operations Bringing together more than 4,000 IT professionals from a number of companies Transform Core ITSM processes, combined with rapid implementation of redesigned processes Training and Education Software solution implementation, including consolidated configuration management database (CMDB) High availability solution using multiple application servers, a clustered database configuration and a storage area network (SAN) Best practices shared across organizational boundaries Adaptability for growth and change in pace with business requirements 20% cost reduction Enhanced call resolution efficiency and greater responsiveness April 8, 2008

Improve Service and Business Performance Challenge Approach Results Improve service and business performance by transforming enterprise-wide IT Implement ITIL-aligned technology and create a scalable IT model and integrated, end-to-end management solution Extend call-logging system capabilities Define processes to better fix problems and track resolution Improve network insight and integration Design and implement an Information Technology Service Management (ITSM) solution: ITSM processes based on ITIL: Problem Management Operations Management Incident and Service Request Management Implemented using transformation approach and supported by appropriate enterprise software solutions A flexible solution with strong integration capabilities and room to support growth An ITIL-aligned infrastructure and central contact for all issues Reduced IT complexity by streamlining, consolidating and decommissioning legacy systems ROI study demonstrates: 396% ROI in 5 years 36% IRR in 5 years Payback within 19 months April 8, 2008

Additional Success Stories Accelerate business growth Decrease costs Mitigate risks The Challenge Enable seamless launch of new products The Solution Education, software, consulting, planning, design and implementation services The Results Higher revenues and increased online user experiences 70% reduction of Incident Mgmt resources The Challenge Consistent tools and processes The Solution Education, software, consulting and integration services, servers and storage The Results 20% cost reduction Best practices implemented across the organization Increased agility The Challenge Sarbanes-Oxley 404 compliance The Solution Education, software, ITSM transformational and operational services The Results Passed SOX audit easily Reduce Helpdesk costs 50% Increased alignment between IT and business goals Ensure regulatory compliance and improve operational controls Improve security, infrastructure and network management Reduce the business impact of downtime with quick problem resolution Reduce the risk of implementing projects with standardization and best practices Automate IT and business processes Link IT with Key Business Performance Indicators (KPIs) Transform IT to operate as a service provider Shift IT spending from operations to innovation for competitive advantage Reduce IT operations costs, improve processes and reduce labor requirement through automation Improve ROI through asset and capacity management Improve operational efficiency by reducing downtime and support Make staff more effective and efficient with education and training April 8, 2008

Questions?