3. “Software-as-a-Service (SaaS) enables firms to significantly
reduce upfront costs and even eliminate some costs—like
one-time software license purchases . This fact alone may
make it easier for software buyers to get budget approval in
economically tight times .“
Firms Can Benefit from SaaS in Times of Economic Uncertainty,
Forrester, July 2008
It is tempting to react to the downturn in the The main motivation for service management projects
economy by cutting costs across the board, including is to address negative customer satisfaction issues
investments in customer satisfaction . However, associated with the help desk . Typically, most process
customers will not put up with poor service in any improvement programs, therefore, start by addressing
economy . Investments in service management today the Incident and Problem Management IT processes
will not only lead to improved customer satisfaction, within the help desk; and at some point, the help desk
but ultimately customer retention . becomes a service desk .
Of course, these investments must be made Today’s service management solutions rely on
wisely . One attractive option is to deploy service best-practice frameworks such as Version 3 of
management software using the software-as-a-service the IT Infrastructure Library (ITILv3) . IT Service
(SaaS) model . The SaaS model offers several financial Management (ITSM) is a core component of ITIL and
advantages including lower upfront costs, reduced involves standardizing, consolidating, and automating
operating costs, and the tax advantage generated IT processes to increase efficiency and improve quality
when costs are shifted from capital expenditure to of service . In functions critical to business success,
operational expenditures . such as event, incident, and problem management;
change, configuration, and release management;
This white paper examines why companies are
service level management; knowledge management;
continuing to invest in service management in light of
service catalog; and request fulfillment, ITSM helps
today’s focus on relentless cost cutting and how SaaS
to mitigate the risk of outages that can stop revenue
can be of benefit both financially and operationally .
streams and reduce customer satisfaction .
Why service management is more By enabling a central point of contact among end
users, lines of business, and IT, ITSM helps to align
important now than ever IT with the business, to focus efforts on the end-user
Despite technology investments, many companies are experience, and to integrate complex IT operations .
still in reactive mode when it comes to service desks . And it enables IT organizations to manage services
Unfortunately, this reactive mode comes at a steep across a lifecycle that spans strategy and design,
price . In a recent study on IT Service Management, development, and operations to establish, monitor,
IDC found that customers who use service desk and report on service levels, reduce efforts, and
management software with embedded processes contain costs .
have experienced a 559% return on investment and
a payback period of less than one year .1 Clearly, 1
IDC Whitepaper sponsored by HP, HP IT Service Management: An ROI
organizations who are not using these tools and Study, #217237, January 2009
processes are putting their company at a
competitive disadvantage .
4. “SaaS shifts software expenditures from a capex to an opex
model, which can be beneficial from a cost recognition
standpoint—and therefore a tax standpoint—in the short run .”
Firms Can Benefit from SaaS in Times of Economic Uncertainty,
Forrester, July 2008
Effectively implemented, ITSM makes it possible to: How software-as-a-service can drive
• Measure and optimize IT value delivered to
the business almost continuously by proactively
monitoring service levels to meet or exceed Software-as-a-Service has long been viewed as a way
performance objectives, make informed decisions to accelerate implementation, reduce the risks inherent
that balance cost and service quality, and provide in rolling out new technology, and introduce flexibility
decision-makers with actionable key performance into IT . However, in today’s budget crunch, SaaS has
indicators across the IT service portfolio taken on a new role as a financial enabler .
• Optimize cost control by automating IT services, SaaS acts as a financial enabler in four ways:
processes, and tasks to increase staff efficiency and 1 . SaaS has lower upfront costs . Instead of purchasing
reduce spending, to integrate end-to-end service licenses in perpetuity, SaaS customers either pay
delivery, and to fully understand the total cost of a fee inclusive of software and services or a
ownership of the services IT delivers term-based license fee plus services . Maintenance
• Mitigate risk by centralizing and enforcing and support fees are excluded from the equation .
processes and automating change and configuration 2 . SaaS presents a tax advantage . By recognizing
management to reduce service disruptions, achieve costs as operational expenses rather than capital
regulatory compliance and certification, and isolate expenses, organizations are able to lower their
potential sources of business problems and address tax burdens .
them according to financial priorities
3 . SaaS offers a pay-as-you-go model . Rather than
IT departments that have well-defined ITSM practices making an initial purchase based on expected
in place are already ahead of the game, and usage over three or more years, you can purchase
the businesses they support will have less trouble additional capacity as needed .
weathering the storm . And, they are well poised once 4 . SaaS offers predictability . Because the costs are all
the economy rebounds . inclusive, there are no additional surprises around
additional server, storage, or network expenditures .
It is no surprise, therefore, that IT organizations both
large and small are embracing the SaaS model .
5. A complete service management
solution should cover: What to look for in a SaaS provider Completeness of solution
• Incident management Even if the SaaS solution is the best in class, if it only
Once you have decided to go with SaaS, the next step
• Problem management covers a small portion of your IT needs, it may present
is to determine your provider . In addition to selecting a
• Change management difficulties . IT organizations can quickly find themselves
proven vendor with a reputation for excellent customer
• ervice asset and configuration
S managing multiple SaaS vendors and facing multiple
management service, you should also consider the technology
integration challenges . It can also mean additional
• elease and deployment
R underpinnings, flexibility of the solution, and level of
management challenges around tracking passwords, access rights,
subject-matter expertise provided .
• Knowledge management and charge-back models .
• Request fulfillment Market-leading technology
A complete solution also needs to be configurable
• Service level management Whether it is a SaaS solution or deployed in-house,
and extensible (see sidebar) . For example, you may
• Service catalog the quality of the software is the foundation for
need to add descriptive fields, add business rules,
• Service portfolio management success . No matter how complete a vendor’s
create workflows, or manage the service catalog .
• Availability management SaaS model is, if the software delivered is not well
designed, full featured, and proven, you will not get Subject-matter expertise
the results you want . In the most recent Gartner Magic To deliver the full benefits of service management on
Quadrant for IT Service Desk,2 HP was positioned in SaaS—especially fast deployment and reduced risk—
the Leaders Quadrant based on ability to execute and your vendor needs staff expertise and established
completeness of vision . best practices . SaaS vendors should provide a named
technical account manager to see you through the
Rapid time to value implementation phase and attend to your on-going
Within 30–60 days, your organization should have needs . Through this constant interaction, your technical
completed the on-boarding process . One way to account manager can help you get more out of your
accelerate the process is to use templates to import service management solution and share best practices
your historic data such as foundational data and gleaned from working with other organizations . Your
open tickets . Best practices are often embedded in technical account manager should also be product
the software rather than forcing you to create new certified and well-versed in ITIL version 3 if that is a
workflows or ITIL modifications . framework which you use within your organization .
One area often neglected is training . Your SaaS
vendor should include training for both end-users and
David M. Coyle and Kris Brittain, Gartner Magic Quadrant for the
IT Service Desk, November 4, 2008
administrators and provide guides to allow them to be
effective day one .
6. Flexibility to move in-house True service levels
Your SaaS provider should offer you the flexibility to In the software-as-service business, you need the
move your data and configurations to an in-house assurance of true service levels, that measure the
deployment if you so chose . SaaS may be the right availability of your ability to use the service rather
short-term choice based on in-house staffing resources than simple infrastructure uptime commitments .
or to transition during a merger or acquisition, but it is The end-user service availability should be defined
important to have the option to take your deployment in your vendor contract and should include financial
in house if you so chose . Your SaaS provider should penalties if those commitments are not met .
have tools in place to accelerate the transition and
offer the ability to move to an in-house environment Customer case study: Value in 14 days
easily . There is no need to have firewall access to your In 2008, a major financial institution in Europe
in house implementation for management or upgrades . acquired the consumer finance business of another
Security bank . Having a working service desk during the
Whether it is a shared deployment offering economies transition was a key factor in seamlessly transitioning
of scale or a dedicated one, SaaS must have the employees to their new company .
necessary safeguards in place to protect your data . The acquiring company needed an ITIL-compliant
Providers should conform to international standards for help-desk tool with a look and feel consistent with the
information security such ISO 27001 and infrastructure HP ServiceCenter the employees were accustomed to,
security standards such as SaaS Type II data centers and needed to migrate a portion of the existing tickets .
in the United Sates or BS7799 security standards for It also wanted 99% availability, 24x7 support, and the
British information security . In addition, other security scalability to support 5,000 tickets per week .
measures should include network security including
256-bit encryption, documented and audited process In order for the new employees to hit the ground
security, and personnel security background checks . running, the help desk solution had to go into
production as soon as possible after the acquisition
Long-term commitment happened . But to keep acquisition costs low, it
As businesses scramble to cut costs and SaaS becomes had to be as economical as possible . The solution
more and more attractive, new entrants will respond was HP SaaS for Service Manager, based on a
to the need . Generally speaking, you can expect yearly contract, with patches and upgrades to be
a more-established vendor to have a more reliable implemented by HP SaaS .
infrastructure, a well-thought-out communication and
support program, hassle-free upgrades, and best
practices for meeting your requirements .
7. Within 14 days, the solution was in place, delivering HP Service Manager was evaluated and HP is placed
99 .9% availability and around-the-clock support in the Leaders Quadrant by Gartner4 .* In addition,
serving three European countries from one location . HP Service Manager is ITILv3 certified by Pink Elephant
in 11 processes and is the first software from a major
The advantages gained by achieving productivity with
vendor to achieve certification in service portfolio
minimal cost and effort helped the company reduce
management .3 It includes Web-supported, integrated
the risk and gain the rewards of the acquisition . And
these benefits are equally applicable to the challenges
businesses face in today’s economic climate . • Incident management
• Problem management
HP Service Manager and HP SaaS • Change management
Together, HP Service Manager and HP SaaS make • Service asset and configuration management
a combination that is a perfect answer to today’s
• Release and deployment management
economic challenges . They give your IT organization
the opportunity—even within today’s tight budgets—to • Knowledge management
make a significant contribution to the business • Request fulfillment
initiatives that will keep your business healthy today
• Service level management
and position it to lead the recovery when it comes .
• Service catalog
Like the business it supports, your IT organization
• Service portfolio management
cannot afford to be passive in the face of today’s
challenges . You need to deliver breakthrough business • Availability management
outcomes to solve problems rather than simply survive
them . HP Service Manager, delivered as SaaS, can 3
PinkVERIFY ™ vendor comparison scorecard, as of February 2009, at
give you the ability to deliver business results rapidly, PinkVerifyToolsetV3.htm
with the cost and risk protection your business needs 4
David M. Coyle and Kris Brittain, Gartner Magic Quadrant for the
in turbulent economic times . IT Service Desk, November 4, 2008
*The Magic Quadrant is copyrighted 2008 by Gartner, Inc. and is reused
with permission. The Magic Quadrant is a graphical representation of a
marketplace at and for a specific time period. It depicts Gartner’s analysis
of how certain vendors measure against criteria for that marketplace, as
defined by Gartner. Gartner does not endorse any vendor, product or
service depicted in the Magic Quadrant, and does not advise technology
users to select only those vendors placed in the “Leaders” quadrant. The
Magic Quadrant is intended solely as a research tool, and is not meant
to be a specific guide to action. Gartner disclaims all warranties, express
or implied, with respect to this research, including any warranties of
merchantability or fitness for a particular purpose.