Loy Allen Director, Consulting The Business of IT Welcome to Transformation and Innovation 2007 The Business Transformation Conference Welcome

Loy Allen

Director, Consulting

The Business of IT

Information Technology Today Growing technical and business complexity Cost pressures are never ending The value of IT is questioned The users of IT don’t know exactly what they are getting nor how much they are paying Outsourcing/Off shoring/best of breed decisions are difficult Consultants everywhere The mountains are getting bigger and the heroes fewer

Growing technical and business complexity

Cost pressures are never ending

The value of IT is questioned

The users of IT don’t know exactly what they are getting nor how much they are paying

Outsourcing/Off shoring/best of breed decisions are difficult

Consultants everywhere

The mountains are getting bigger and the heroes fewer

No Shortage of Ideas Running IT like a business IS Lite ISCo Information Technology Infrastructure Library Service Oriented Architecture Business Service Management Common Themes Self sustaining Customer focus Service based Process centric Business alignment Measurable service levels Ability to show value Transformation may be needed

Running IT like a business

IS Lite

ISCo

Information Technology Infrastructure Library

Service Oriented Architecture

Business Service Management

Common Themes

Self sustaining

Customer focus

Service based

Process centric

Business alignment

Measurable service levels

Ability to show value

Transformation may be needed

If IT is a business… What does it sell? Who buys it? (Customers/Consumers) How is what it sells built and delivered Who creates and delivers what IT sells? Where is it created and delivered? What does it cost? How much is it worth? Doesn’t a business focus mean contracts and arms length customer relationships??

What does it sell?

Who buys it? (Customers/Consumers)

How is what it sells built and delivered

Who creates and delivers what IT sells?

Where is it created and delivered?

What does it cost?

How much is it worth?

Doesn’t a business focus mean contracts and arms length customer relationships??

Service Defined A Service Definition 1: Activity that does not produce anything Definition 2: Work done by somebody for somebody else as a job, a duty, a punishment, or a favor Old TV image of IT Services: Computer tape spinning, lights flashing, cards being sorted Services are not tangible, they are hard to describe Service: Activity that produces an outcome, valued by a consumer, when and where it is needed A service is different from a process Services are a discrete bundle of components (processes, enabling technology, skilled people, organization and facilities) Services can be bundled into offerings which have meaning and value to the consumer Services, offerings and components have owners Responsibilities include quality, cost, delivery Owners ensure integration with other services “ Wisdom begins with the definition of terms” Socrates

A Service

Definition 1: Activity that does not produce anything

Definition 2: Work done by somebody for somebody else as a job, a duty, a punishment, or a favor

Old TV image of IT Services: Computer tape spinning, lights flashing, cards being sorted

Services are not tangible, they are hard to describe

Service: Activity that produces an outcome, valued by a consumer, when and where it is needed

A service is different from a process

Services are a discrete bundle of components (processes, enabling technology, skilled people, organization and facilities)

Services can be bundled into offerings which have meaning and value to the consumer

Services, offerings and components have owners

Responsibilities include quality, cost, delivery

Owners ensure integration with other services

Domains of IT Service Management Management of Information Technology Services Governance Architecture Management Application Management Infrastructure Management Service Support Service Delivery ITST operates within 6 domains that encompass an IT environment. These domains are focused on enabling the IT organization to operate in a business like way that ensure value is received for the use of IT resources within an enterprise .

An IT Organization The same principles that apply to the analysis of the performance of any organization apply to the performance assessment of an IT organizations. All of theses components must integrate and function as a unit for IT to be successful in the delivery of services to its customers. APQC’s process framework and the vast majority of business diagnostics can be applied to the assessment of IT organizations There are specific areas of IT understanding that are in addition to an overall business understanding Facilities & Infrastructure Process Infrastructure Organization Performance Equipment Strategy and Vision Culture Competency

IT Organizations Deliver Services Consumer Creator Broker Enterprise Information Technology Service Provider Business Unit Business Unit Business Unit Information Technology Services

Service Model Service Service Service Offerings Customer Customer Cross-service Processes, Organization Technology, Skills, Facilities Service Specific Processes, Technology, Organization, Skills, Facilities Service Level Agreements Service Level Agreements Operating Level Agreements Operating Level Agreements Operating Level Agreements

Multiple Service Providers Service Service Service Offerings Customer Customer Cross-service Processes, Organization Technology, Skills, Facilities Service Specific Processes, Technology, Organization, Skills, Facilities Service Level Agreements Service Level Agreements Operating Level Agreements Operating Level Agreements Operating Level Agreements

The Service Catalog Offerings created from services Services are created from components Offerings are presented to customers Services can be presented to customers or regrouped to provide customized offerings The catalog is the heart of the services based organization Offerings Services Components

Offerings created from services

Services are created from components

Offerings are presented to customers

Services can be presented to customers or regrouped to provide customized offerings

Service Oriented Technology Management The concept of Service Oriented Technology Management leverages experience and industry best practices to guide IT toward achievement of their objectives Service Oriented Technology Management is a comprehensive approach to the transformation and operation of a service based enterprise relying on structure and discipline to identify, define, support and provide services, delivered to a consumer, consistently meeting standards in support of their business objectives

Service Oriented Technology Management Service Oriented Technology Management looks at rethinking and structuring what the IT organization provides to it customers and how well it does so Viewing a business in terms of services provided allows Clients, including IT organizations to bundle process, enabling technology, people, management structures and facilities into offerings Services are then ‘shared’ with consumers across an enterprise based on value to the consumer, cost that can vary based on the appropriate per level of service Value is understood and appropriate services are provided to enable consumers to meet their business objectives and the enterprise to improve its performance

Service Oriented Technology Management looks at rethinking and structuring what the IT organization provides to it customers and how well it does so

Viewing a business in terms of services provided allows Clients, including IT organizations to bundle process, enabling technology, people, management structures and facilities into offerings

Services are then ‘shared’ with consumers across an enterprise based on value to the consumer, cost that can vary based on the appropriate per level of service

Value is understood and appropriate services are provided to enable consumers to meet their business objectives and the enterprise to improve its performance

What is ITIL? ITIL is a best practice in IT Service Management, developed by OGC and supported by publications, qualifications and an international user group (itSMF) It is a component of the foundation of the ITS&T practice It is primarily process driven, describing what should be done but not how It is the de facto standard for IT Service Management globally It integrates with CoBIT, MOF, BS15000, ISO It is growing in acceptance and is being improved based on experience IT is a guideline not a cook book It is not an out of the box solution

ITIL is a best practice in IT Service Management, developed by OGC and supported by publications, qualifications and an international user group (itSMF)

It is a component of the foundation of the ITS&T practice

It is primarily process driven, describing what should be done but not how

It is the de facto standard for IT Service Management globally

It integrates with CoBIT, MOF, BS15000, ISO

It is growing in acceptance and is being improved based on experience

IT is a guideline not a cook book

It is not an out of the box solution

History of ITIL ITIL was initially developed in the late 1980’s The British Telecommunications Agency (CCTA), now called the Office of Government Commerce (OGC), developed a framework for efficient and financially responsible use of IT. The goal was to develop an approach that would be vendor-independent and applicable to organizations with differing technical and business needs. ITIL version 1 grew from a collection of best practices observed in the IT service industry. ITIL version 1 was static so over the last few years OGC made changes (some of those are quite significant) to ITIL and the latest publication of the library is regarded as version 2 In early 2005 work started on ITIL version 3, due to be published in June “ Wisdom begins with the definition of terms” Socrates

ITIL was initially developed in the late 1980’s

The British Telecommunications Agency (CCTA), now called the Office of Government Commerce (OGC), developed a framework for efficient and financially responsible use of IT.

The goal was to develop an approach that would be vendor-independent and applicable to organizations with differing technical and business needs.

ITIL version 1 grew from a collection of best practices observed in the IT service industry.

ITIL version 1 was static so over the last few years OGC made changes (some of those are quite significant) to ITIL and the latest publication of the library is regarded as version 2

In early 2005 work started on ITIL version 3, due to be published in June

ITIL is changing ITIL V3 is a significant shift from the process oriented approach in V2 to the focus on services. V3 is to be published in June, it is believed to be of considerable value in defining how services are identified, designed, delivered and supported ITIL Version 2 ITIL Version 3 June 2007

ITIL V3 is a significant shift from the process oriented approach in V2 to the focus on services.

V3 is to be published in June, it is believed to be of considerable value in defining how services are identified, designed, delivered and supported

OK, How?? Moving from a functional view of IT to a service, business view is transformational in nature A plan/framework/strategy is essential Define terms and measurements Shift thinking from functional to service Organize IT for focus and effectiveness Understand how services are delivered and how much they cost to deliver Define how value will be determined and how the costs of services will be recovered Transformation requires active sponsorship, leadership and perseverance Governance (framework for decision making) of IT must change New skills may have to be added to the IT organization (account/relationship management??) Communication with customers and IT is critical IT must create value in the minds of its customers

Moving from a functional view of IT to a service, business view is transformational in nature

A plan/framework/strategy is essential

Define terms and measurements

Shift thinking from functional to service

Organize IT for focus and effectiveness

Understand how services are delivered and how much they cost to deliver

Define how value will be determined and how the costs of services will be recovered

Transformation requires active sponsorship, leadership and perseverance

Governance (framework for decision making) of IT must change

New skills may have to be added to the IT organization (account/relationship management??)

Communication with customers and IT is critical

Guiding Principles IT serves its customers, not IT IT enables customers to meet their business objectives IT has a mutually beneficial relationship with its customers Expectations for the delivery of services are clearly and commonly understood by the customer and by IT IT communicates the value it brings in terms customers understand Service offerings are customizable and based on consistent delivery of services Customers pay for level of services they receive Service owners are responsible for the life-cycle of the service including quality and cost A service is integrated with the other services IT and its customers operate within a commonly understood framework, ITIL IT runs like a business Basis for transformation

IT serves its customers, not IT

IT enables customers to meet their business objectives

IT has a mutually beneficial relationship with its customers

Expectations for the delivery of services are clearly and commonly understood by the customer and by IT

IT communicates the value it brings in terms customers understand

Service offerings are customizable and based on consistent delivery of services

Customers pay for level of services they receive

Service owners are responsible for the life-cycle of the service including quality and cost

A service is integrated with the other services

IT and its customers operate within a commonly understood framework, ITIL

IT runs like a business

WIIFM Clearer understanding of what IT offers the business it supports Opportunity to align IT to the business needs Clarity of roles and responsibilities within IT Improved governance relationships with managed service providers Improved governance relationships with the enterprise A more efficient and effective IT organization that enables the business it enables to meet its objectives Survival??? What’s In It For Me???

Clearer understanding of what IT offers the business it supports

Opportunity to align IT to the business needs

Clarity of roles and responsibilities within IT

Improved governance relationships with managed service providers

Improved governance relationships with the enterprise

A more efficient and effective IT organization that enables the business it enables to meet its objectives

Survival???

Thank Y Loy Allen Director, Consulting Contact Information: 817 235 8153 [email_address] ou Thank Y ou

Loy Allen

Director, Consulting

Contact Information:

817 235 8153

[email_address]