Justifying ITIL - Building the ROI

Presented by: Shannon Magistad Building the ROI for

Building the ROI for ITIL®
Defining ITIL® and Best Practice
IT Strategy and ITIL ®
Defining ROI, VOI and TCO
ROI: Qualitative vs. Quantitative
Benefits of ITIL®
Where To Start?
Discussion on how to begin your ITIL® Journey
Wrap-Up & Close

IT Service Management & ITIL Defined
ITIL is the “de-facto industry best practice” for IT Service Management
Non-proprietary and based upon proven practitioner experiences
International user support (IT Service Management Forum - itSMF)
ITIL was developed by the UK Office of Government Commerce (OGC)
Developed in the late 1980s and continuously updated since
ISO 20000 – Formal, international standard for IT Service Management certification, based upon ITIL best practices (formerly BS 15000)
ITIL is a comprehensive and consistent set of industry “best practices” for IT Service Management organized in an integrated, process-based framework in order to add VALUE to customers

ITIL Overview
ITIL and ITAM are being leveraged by 1,000s of organizations across the globe; even highlighted in a front page article in CIO Magazine entitled “IT Governance: The Power of ITIL” (November 2006)
Formal ITIL certification program through EXIN or ISEB
Foundation, Practitioner, and Manager’s Certificates
ITIL Version 3 (V3) was releases in June, 2007 and focuses on a “full lifecycle” approach to the processes

Why Embrace IT Service Management & ITIL?
Enable operational excellence and cost efficiency through streamlined IT service and maintenance
Enable more efficient and iterative regulatory and audit compliance
Improve IT service provision, stability, predictability and ongoing support
More effectively enable merger and acquisition synergy
Provide pertinent analytics to make sound IT investment and sourcing decisions
“… an estimated 60-80% of IT production-level changes lead directly to issues, Incidents, or disruptions to service within the user community”
“ … 75% of organizations contemplating widespread change will fail to consider the organization’s abilities and willingness to change” (i.e. Organizational Change).
“ … as much as 60% of change initiatives and other projects fail as a direct result of a fundamental inability to manage their social implications”.
This lack of understanding typically manifests in dysfunctional behaviors that undermine and derail the intentions of the initiative.
“ … inexperience, overextension, and under-committed executive sponsorship accounts for 50% of organizational change initiative failures …”
According to Gartner: ITSM and ITIL Provides Stability and a Solid Foundation for Continuous Improvement!

Where Does ITIL Fit? Focuses on Process (Not Technology)
You don't implement ITIL:
You use it to help create organizational change
ITIL doesn't offer guidance on how to actually apply the best practices it catalogs
each organization must design its own processes based on ITIL
To run IT like a business, you need to understand the key services that go into it
ITIL makes that work visible. It allows you to measure what is important, so you can emphasize the things that add value and take out the things that don't

TCO: Definition
TCO = Total Cost of Ownership
A methodology used to help make investment decisions
TCO assesses the full Lifecycle Cost of owning an IT Asset or Configuration Item (CI), not just the initial Cost or purchase price

ROI: Definition
ROI = Return on Investment
A measurement of the expected benefit of an investment
In the simplest sense it is the net profit of an investment divided by the net worth of the assets invested

VOI: Definition
VOI = Value on Investment
A measurement of the expected benefit of an investment. VOI considers both financial and intangible benefits

ROI In Other Words… What we give (investment) What we Receive (Return) ROI (Overall Worth) COST BENEFIT

ROI: Recap ROI = Return on Investment A measurement of the expected benefit of an investment When someone asks about an “ROI” what they are asking is: “ What do I get back (“return”) for the money that I’m being asked to spend (a.k.a. “Investment”)?” “ What is it really worth (a.k.a. “ROI”)

Financial Vs. Non-Financial ROI
Financial ROI:
Generally Quantitative in nature
Do not necessarily take into account Key Goal Indicators (KGI’s), Key Quality Indicators (KQI’s) or Key Performance Indicators (KPI’s) fully
Non-Financial ROI:
No widely accepted metrics that can be applied – often Qualitative in nature
These are worth considering!

ITIL & ROI
Different organizations = Different ROI equations
Tie ROI concepts to overall IT Strategy
Increase in productivity, capability to measure and quantify IT activities is an output of good Service Design and Leveraging ITIL often including ITSM Technologies
For a COMPLETE picture of ROI, you can place Non-Financial Benefits and Financial Benefits together to evaluate the Return on Investment*
*Very helpful for Best-Practice Projects

Sample ROI Worksheet

The Benefits of Implementing ITIL
Speedy responses to customer enquiries and complaints
Improved team work and communication
Better identification of areas for improvement
Pro-active approach to service provision
More favorable perception of services provided
Improved quality of IT-related information for optimal management and decision-making
Reduced impact on the company's business activities
Better management and control over the IT system's infrastructure
Higher IT system users' productivity due to reduced down times
More effective and efficient usage of resources related to service provision and subsequent cost reduction potential
Improved first line resolution rates
Enhanced customer care and higher customer satisfaction
Improved control of SLA performance
Strengthened IT infrastructure
Eradicate loss and inconsistent records of information, incidents and customer enquiries
Reduced numbers of incidents
Discovery and implementation of permanent solutions
Systematic and consistent approach to all processes
K.I.S.S.

Where to Start: Assessment?
Assessment Results review
Provide process survey results
Provide recommendations for improvement
A Baseline to understand what you could expect for an ROI
Articulates the following:
The assessment is not intended to be negative in any way
It’s just a tool to provide an overview on current processes in IT today
ITIL Best Practice Process core activities are the process evaluation benchmark
Opportunity to ‘benchmark’ against similar-type organizations

Assessment Objectives and Approach Page
Objectives
Provide a snapshot of the current IT process environment from a People, Process and Technology (Products) and Partners Overview
Recommendations as input into a structured plan
Approach
Data Gathering:
Interviews: Management and Practitioner representation
Facts, supported by documents & examples
Scoring
Structured maturity characteristics framework

Process Maturity Continuum PROCESS MATURITY Initial (0-0.99) Defined (2-2.99) Managed (3-3.99) Optimized (4-5.00) Repeatable (1-1.99)
Best practices are followed and automated
Processes are aligned with business objectives
Processes are optimized toward customer service
Continuous improvement
Well-documented overall tool architecture with complete integration in all areas of people, process, and technology
Loosely defined roles and responsibilities
Processes are irregular, undefined, and used reactively
Manual processes or a few specific discrete tools (pockets/islands)
• No internal resources are allocated to lead process maturity effort
Roles and responsibilities are assigned
Processes follow a regular pattern and are capable of being repeated
Many discrete tools, but a lack of central control
Data stored in separate locations
Clearly defined and agreed roles and responsibilities
Formal ITIL/ITAM training plan and schedule
Processes are documented and communicated
Consolidated data retained and used for trending and forecasting
Inter and intra process teamwork
Quality-based performance incentives
Processes are monitored and measured
Info is produced from processes to support management decisions.
Integrated toolsets, databases, and processes
Level 2 Level 1 Level 3 Level 4 Level 5 0 – 5 Maturity Scale Based on CMMI Note: • Focus on ‘improvements’ • Implementation will focus on control. • Process design should be ‘integrated’.

Sample: Process Maturity Score

ITIL Certifications
Managing Across The Lifecycle – 5 Credits
90 Minutes exam
Multiple choice
65% required to pass
IT Service Management Certification
No exam
Must accumulate 22 credits
Advanced Level Certification
TBD

Why Acend Corporate Learning?
98% Pass Rate
Certified Course Material and Instructors
Our private classes are delivered by a highly trained and author-approved ITIL Experts trainer.
We use PowerPoint during lectures, but we don't do "death by slide" - our students are digging into the product, deeper every day.
Our classes are "instructor led, student driven." If we need to spend more time on a particular subject, we will.
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Justifying ITIL - Building the ROI

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