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Justifying ITIL - Building the ROI
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Justifying ITIL - Building the ROI



IT organizations are faced with a rapidly evolving environment coupled with a ...

IT organizations are faced with a rapidly evolving environment coupled with a
more headcount-constrained staff, where standardization on optimal systems
and procedures is a critical success factor.



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  • 4/13/2005

Justifying ITIL - Building the ROI Justifying ITIL - Building the ROI Presentation Transcript

  • 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
  • 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.
    • Your Company will Save Big on group on-sites of 6 or more students.
  • We Can Help!
    • Thank You!