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Vodafone Ireland Sees Huge ROI from Adopting HP Technologies to Emphasize Service Delivery
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Vodafone Ireland Sees Huge ROI from Adopting HP Technologies to Emphasize Service Delivery


Transcript of a BriefingsDirect podcast in conjunction with HP Discover 2011 in Vienna on how a major telecom provider has improved service to customers by shifting from a technology emphasis to …

Transcript of a BriefingsDirect podcast in conjunction with HP Discover 2011 in Vienna on how a major telecom provider has improved service to customers by shifting from a technology emphasis to service delivery.

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  • 1. Vodafone Ireland Sees Huge ROI from Adopting HPTechnologies to Emphasize Service DeliveryTranscript of a BriefingsDirect podcast in conjunction with HP Discover 2011 in Vienna on howa major telecom provider has improved service to customers by shifting from a technologyemphasis to service delivery.Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: HPDana Gardner: Hello and welcome to a special BriefingsDirect podcast series coming to you in conjunction with the HP Discover 2011 Conference in Vienna. We’re here in the week of November 28, to explore some major case studies from some of Europe’s leading enterprises. Well see how a series of innovative solutions and an IT transformation approach to better support business goals is benefiting these companies, their internal users, and their global customers.Im Dana Gardner, Principal Analyst at Interarbor Solutions and Ill be your host throughout thisseries of HP-sponsored Discover live discussions.Out next customer case study interview highlights how a shift from a technology emphasis to abusiness services delivery emphasis has created significant improvements in a largetelecommunications provider, Vodafone.To learn more, we’re here with Shane Gaffney, Head of IT operations for Vodafone Ireland inDublin. Welcome to the show, Shane.Shane Gaffney: Thank you, Dana.Gardner: Tell me what was the challenge that you faced when you decided to switch from afocus on technology purely to more one of a user experience of a business mentality? Why didyou think you needed to do that?Gaffney: Back in summer of 2010, when we looked at the business perception of the quality of service received from IT, the confidence was lower than we’d like in terms of predictable and optimal service quality being provided. There was a lack of transparency. Business owners didn’t fully understand what quality was being received and they didn’t have simple meaningful language that they were receiving from IT operations in terms of understanding service quality: good, bad, or indifferent.Within IT operations, as a function, we also had our own challenges. We were struggling tocontrol our services. We were under the usual pressure that many of our counterparts face interms of having to do more with less, and downward pressure on cost and headcount. We were
  • 2. growing a dynamic complex IT estate, plus customers are naturally becoming ever morediscerning in terms of their expectations of IT.Transactional and reactiveAs a large multinational, we specified a fragmented organization, some services being provided centrally vs. locally, some offshore vs. onshore. With that, we had a number of challenges and the type of relationship we had with our customers was transactional and reactive in nature. So with that backdrop, we knew we needed to take some radical steps to really drive our business forward. Gardner: And before we learn some more about that, Shane, tell me a little bit aboutVodafone Ireland? Tell us the extent of your services and your reach there?Gaffney: Vodafone is Ireland’s leading telecommunications operator. We have in excess of 2.4million subscribers, about 1,300 employees in a mixture of on-premise and cloud operations. Imentioned the complex and dynamic IT estate that we manage. To put a bit of color around that,we’ve got 230 applications, about 2,500 infrastructure nodes that we manage either directly orindirectly, with substantial growth in traffic, particularly the exponential growth in the telecomdata market.Gardner: When you decided to change your emphasis to try to provide more of that businessconfidence, the services orientation, clearly just using technology to do that probably wasntgoing to be sufficient. There are issues around people, process, culture, and so forth. How doyou, at a philosophical level, bridge the continuum among and between technology and theseother softer issues like culture?Gaffney: Thats a really important point. The first thing we did, Dana, was engage quite heavilywith all of our business colleagues to define a service model. In essence what we were looking atthere was having our business unit owners define what services were important to them atmultiple levels down to the service transactions, and defining the attributes of each of thoseservices that make them successful or not.Once we had a very clear picture of what that looked like across all business functions, we usedthat as our starting point to be able to measure success through the customer eyes.Thats the focus and continues to be the core driver behind everything else we in I operations do.We essentially looked to align our people, revamp our processes, and look at our end-to-end toolstrategy, all based around that service model.The service model has enforced a genuine service orientation and customer centricity that’sdriven through all activities and behaviors, including the culture within the IT Ops group in how
  • 3. we service customers. It’s really incorporating those commercial and business drivers at the heartof how we work.Gardner: Shane, Ive heard from other companies that another important aspect of moving to theshift on services delivery is to gain more awareness of what the products of IT are at that servicesabstraction. It involves, I suppose, gaining insight and then analysis, not at the point-by-pointbasis in the products themselves, but at that higher abstraction of how the users themselves viewthese services? Has that been important for you as well?Helicopter viewGaffney: We’ve taken the service view at a number of levels. Essentially, the service model isdefined at a helicopter view, which is really what’s important to our respective customers. Andwe’ve drilled down into a number of customer or service-oriented views of their services, as wellas mapping in, distilling, and simplifying the underlying complexities and event volumes withinour IT estate.Gardner: In order to get that helicopter view and abstract things in terms of a process level,what have you done in terms of gaining that insight? What has become important for you to beable to do that?Gaffney: There are a number of things we’ve considered there. Without having a consolidated orrationalized suite of tools, we found previously that its very difficult to get control of ourservices through the various tiers. By introducing the HP Application Performance Managementtools portfolio, there are a number of modules therein that have allowed us to achieve the variousgoals that we’ve set to achieve the desired control.Gardner: Before we go into any detail on products and approaches, let’s pause and step back.What does this get for you, if you do it right? What is it that youve been able to attain by shiftingyour emphasis to the business services level and employing some new approaches in culture?What did you get? What’s the payoff?Gaffney: First of all for IT, we build confidence within the team in terms of having a betterhandle on the quality of service that we’re offering. Having that commercial awareness reallydoes drive the team forward. It means that we’re able to engage with our customers in a muchmore meaningful way to create genuine value-add and move away from routine transactionalactivity to helping our customers to innovate and drive business forward.We’ve certainly enjoyed those type of benefits through our transformation journey by automatinga lot of the more core routine and repeatable activity, facilitating focus on our relationship withour customers in terms of understanding their needs and helping them to evolve the business.
  • 4. Gardner: Have you done any surveys or presented key performance indicators (KPIs) againstsome of this, so that you have some tangible hard numbers? Is it still early? How might we lookto some more concrete results, if youre able to provide that?Gaffney: In terms of how we measure success, Dana, we try to take a 360 view of our servicequality. So we have a comprehensive suite of KPIs at the technology layer. We also do likewisein terms of our service management and establishing KPIs and service level agreements (SLAs)at the service layer. Weve then taken a look at what quality looks like in terms of customerexperience and perception, seeking to correlate metrics between these perspectives.As an example, we routinely and rigorously measure our customer net promoter score, whichessentially assesses whether the customers, based on their experience, would recommend ourproducts and services to others.To give a flavor of the type of KPI improvements at an operational level that we’ve seen improveover the last year, we measure "customer loss hours," which is effectively due to any diminishedperformance in, or availability of, our services. We measure the impact to the end customer interms of the adverse impact they would suffer.Reduction in lost hoursWe’ve seen a 66 percent reduction in customer lost hours year on year from last summer to this.We’ve also seen a 75 percent reaction in mean time to repair or average service restoration time.Another statistic Id call out briefly is that at the start of this process, we were identifying rootcause for incidents that were occurring in about 40-50 percent of cases on average. We’re nowtracking consistently between 90-100 percent in those cases and have thereby been able to betterunderstand, through our capabilities and tools, what’s going on in the department and what’scausing issues. We consequently have a much better chance of avoiding repetition in those issuesimpacting customers.At a customer satisfaction level, we’ve seen similar improvements that correlate with theimproved operational KPIs. From all angles, we’ve thankfully enjoyed very substantialimprovements. If we look at this from a financial point of view, we’ve realized a return oninvestment (ROI) of 300 percent in year one and, looking solely at the cost to fix and the cost offailure in terms of not offering optimal service quality, we’ve been able to realize cost savings inthe region of 1.2 million OPEX through this journey.Gardner: And that would be €1.2 million? Is that what you’re measuring?Gaffney: Thats correct. €1.2 million.Gardner: Let me just dig into that ROI. That’s pretty amazing, 300 percent ROI in one year.And what was that investment in? Was that in products, services, consulting, how did youmeasure it?
  • 5. Gaffney: Yes, the ROI is in terms of the expenditure that would have related primarily to ourinvestment in the HP product portfolio over the last year as well as a smaller number of ancillarysolutions.The payback in terms of the benefits realized from financial perspective that relate to the costsavings associated with having fewer issues and in the event where we have issues, the ability todetect those faster and spend less labor investigating and resorting issues, because the tools, ineffect, are doing a lot of that legwork and much of the intelligence is built in to that productportfolio.Gardner: I suppose this would be a good time to step back and take a look at what you actuallydo have in place. What specifically does that portfolio consist of for you there at VodafoneIreland?Gaffney: We have a number of modules in HPs APM portfolio that Ill talk about briefly. Interms of looking to get a much broader and richer understanding of our end-user experiencewhich we lacked previously, we’ve deployed HP’s Business Process Monitors (BPMs) toeffectively emulate the end-user experience from various locations nationwide. That provides uswith a consistent measure and baseline of how users experience our services.We’ve deployed HP Real User Monitoring (RUM), which gives us a comprehensive micro andmacro view of the actual customer experience to complement those synthetic transactions thatmimic user behavior. Those two views combined provide a rich cocktail for understanding at aservice level what our customers are experiencing.Events correlationWe then looked at events correlation. We were one of the first commercial customers to adoptHP’s BSM version 9.1 deployment, which gives us a single pane of glass into our full serviceportfolio and the related IT infrastructure.Looking a little bit more closely at BSM, weve used HP’s Discovery and Dependency MappingAdvanced (DDMa) to build out our service model, i.e. effectively mapping our configurationitems throughout the estate, back up to that top-down service view. DDMa effectively acts as aninventory tool that granularly links the estate to service. We’ve aligned the DDMa deploymentwith our service model which, as I mentioned earlier, is integral to our transformation journey .Beyond that, we’ve looked at HP’s Operations Manager i (OMI) capability, which we use tocorrelate our application performance and our system events with our business services. Thisallows our operators to reduce a lot of the noisy events by distilling those high-volume eventsinto unique actionable events. This allows operators to focus instead on services that may beimpacted or need attention and, of course, our customers and our business.
  • 6. We’ve gone farther and looked at ArcSight Logger, software which we’ve deployed to a singlelocation that collects logged files throughout our estate. This allows us to quickly and easilysearch across all logged files for abnormalities that might be related to a particular issue.By integrating ArcSight Logger with OMI -- and I believe we’re one of the first HP customers todo this -- we’ve enriched operator views with security information as well as the hardware, OS,and application layer events. That gives us a composite view of what’s happening with ourservices through multiple lenses, holistically across our technology landscape and products andservices portfolio.Additionally, we’ve used HP’s Operations Orchestration to automate many of our routineprocedures and, picking up on the ROI, this has allowed us to free up operators’ time to focus onvalue-add and effectively to do more with less. Thats been quite a powerful module for us, andwe’ve further work in train to exploit that capability.The last point to call out in terms of the HP portfolio is we’re one of the early trialists of HP’sService Health Analyzer. A year ago, we were to a degree reactive in terms of how we providedservice. At this point, we’re proactive in how we manage services.Service Health Analyzer will allow us to move to the next level of our evolution, movingtowards predictive service quality. I prefer to call the Service Health Analyzer our “crystal ball,”because that’s essentially what we’re looking at. It’s taking trends that are occurring with theservices of transaction, and predicting whats likely to happen next and what may be in jeopardyof breaking down the line, so you can take early intervention and remedial action before there’sany material impact on customers.We’re quite excited about seeing where we can go there. One of the sub-modules of ServiceHealth Analyzer is Service Health Reporter, and that’s a tool that we expect to act as our primarycapacity planning capability across a full IT estate going forward.Throughout our implementation, partnership was a key ingredient to success. Vodafone had thebusiness vision and appetite to evolve. HP provided the thought leadership and guidance. And,Perform IT, HPs partner, brought hands-on implementation and tuning expertise into the mix.Gardner: That’s very impressive. You’re certainly juggling a lot of balls and keeping them inthe air. One of the things that Ive seen in the market when it comes to gaining this sort of pane ofglass view into operations is they’re starting to share that as sort of a dashboard, or a graphicalrepresentation as a scorecard perhaps we could refer to it, with more of the business leadership.Have you been able to take some of the analysis, and insights and then not just use that in thecontext of the IT operations, but provide it back to business, so it would help them manage theirstrategy and operational decision making?
  • 7. Full transparencyGaffney: Absolutely. One of our core principles throughout this journey has been to offer fulltransparency to our customers in terms of the services they receive and enjoy from us. On onehand, we provide the BSM console to all of our customers to allow them to have a view ofexactly what the IT teams see, but with a service orientation.We’re actually going a step further and we’re building out a cloud-based service portal that takesa rich feed in from the full BSM portfolio, including the modules that Ive called out earlier. Italso takes feeds in from a remedy system, in order to get the view of core processes such asincident management, problem management, change management.Bringing all of that information together gives customers a comprehensive view of the servicesthey receive from IT operations. Thats our aim -- to provide customers with everything theyneed at their fingertips.Its essentially providing simple and meaningful information with customized views and dynamicdrill-down capabilities, so customers can look at a very high level of how the services areperforming, or really drill into the detail, should they so desire. The portal, we believe, is likelyto act as a powerful business enabler. Ultimately, we believe theres opportunity tocommercialize or productize this capability down the line.Gardner: We’re about out of time, but Shane, now that youve gone through quite a bit of this,and as an early adopter, I wonder if you could share some 20-20 hindsight for those users aroundthe world who are examining some of the products and services available, thinking about culture,re-emphasizing the business process issues, rather than just pure technology issues. What wouldyou tell them as advice when they get started? Any recommendations now that youve beenthrough this yourself?Gaffney: For customers embarking on this type of transformation initiative, first off, I wouldsuggest: engage with your customers. Speak with your customers to deeply understand theirservices, and let them define what success looks like.Look to promote quick wins and win-wins. Look at what works for the IT community and whatworks for the customer. Both are equally important. Buy-in is required, and people across thosefunctions all need to understand what success looks like, and believe in it.I would recommend taking a holistic approach from a couple of angles. Don’t just look at yourpeople, technology, or processes, but look at those collectively, because they need to work inharmony to hit the service quality sweet spot. Holistically, its important to prepare your strategy,but look top down from the customer view down into your IT estate and vice versa, mapping allconfiguration items back into those top level services.
  • 8. Rationalize and automateRationalize and automate wherever possible. We had a suite of over two dozen tools, acting as acumbersome patchwork solution for operators. We’ve vastly rationalized those tools into a muchmore manageable single console that the teams use now.We’ve automated all resource-intensive and transactional activities wherever possible, whichagain frees up time to allow engineers to focus on the business relationship.I’d also recommend the people incrementally build on success. We started out with modestbudget, but by targeting early wins through that investment, and by building subsequent businesscases, particularly with the service model, we were easily able to get the buy-in fromstakeholders, because the story was compelling, based on the commercial advantages and thebroader business benefits that were accrued from the earlier investment.Lastly, for IT teams I would strongly suggest that you look to establish a dedicated surveillancecapability, whether that’s round the clock or whatever is appropriate for your business model.Moving from a traditional support model to this type of service-oriented view, the key to successis having people managing the eyes and ears across your services at all times. It really does payback in spades.Gardner: Excellent. A big thank you to you Shane Gaffney, Head of IT Operations at VodafoneIreland. This has been a great story, and thank you for sharing it on how a shift from technologyemphasis to a business services delivery emphasis has created some significant improvementsand has set the stage for yet greater business productivity from IT.I also want to thank our audience for joining us for this special BriefingsDirect podcast comingto you in conjunction with the HP Discover 2011 Conference in Vienna. I hope you have a greatshow. I appreciate your time, Shane.Gaffney: Thank you, Dana.Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions, your host for thisseries of HP-sponsored Discover live discussions. Thanks again for listening and come back nexttime.Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: HPTranscript of a BriefingsDirect podcast in conjuntion with HP Discover 2011 in Vienna on how amajor telecom provider has improved service to customers by shifting from a technologyemphasis to service delivery. Copyright Interarbor Solutions, LLC, 2005-2011. All rightsreserved.You may also be interested in:
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