The ROI of Problem Management

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The dirty little secret is out…no one believes in Problem Management. Yes, we all want to follow best practices, but we seem to always fall short. The reasons are many, but we know it comes down to people, process and technology. That being said, we will take a look at some of the common pitfalls some have experienced and how you can mitigate some of the challenges and realize real “tangible” benefits as a result of implementing Problem Management for the service desk.

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The ROI of Problem Management

  1. 1. The ROI of Problem Management“Achieving tangible benefits through better process and analysis”Jim BlayneyDirector Product MarketingDiego JimenezSenior Solutions Consultant
  2. 2. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 2ROI of Problem ManagementAgendaWhat is the “Problem?”Key Problem Concepts & FunctionsOvercoming Common PitfallsKey BenefitsRealising Tangible Benefits
  3. 3. Poll Question #1
  4. 4. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 4The Problem Management Process(according to ITIL® v3)A `Problem is an unknown underlying cause of one or more incidentsThe goal of Problem Management is to reduce the number and severity ofincidents and problems on the businessThe proactive process identifies and resolves problems beforeincidents occurWhat is the “Problem?”
  5. 5. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 5The Problem Management Process(according to HDI 2012 Survey)In 2012, 43.5% of HDIrespondents follow ITILfor ProblemManagementPercent who followed ITIL® process in 2011 and 2012:2011 2012Availability Mgmt. 9.9 10.2Capacity Mgmt 11.2 9.6Change Mgmt 56.4 53.1Configuration Mgmt 28.6 24.2Financial Mgmt. 6.4 4.3Incident Mgmt 68.7 63.5Problem Mgmt 46.2 43.5Release Mgmt 20.6 20.3What is the “Problem?”
  6. 6. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 6What is the “Problem?”Problem Management is one of the least understood of the processes inthe ITIL frameworkProblem Management is (arguably) the most valuable process in the ITILframeworkProcess typically not defined in detailNever enough resources allocated to make the process fully effectiveRequires effective communications between related “silo” groups anddepartmentsNormally confused with Incident Management
  7. 7. Problem ManagementUnderstanding Key Concepts
  8. 8. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 8Formalize Problem Management processes and measurementsto ensure consistency and rigor for root cause analysis and issue prevention.Understand the process of how issues discovered by event management toolsget filtered into the IT service desk tool, and look to automate the process.Employ end-user satisfaction surveys in conjunction with cost analysis andOperational metrics to obtain a comprehensive understanding of IT servicedesk performance.Problem Management Recommendations(according to Gartner*)* Gartner 2008 Data Center Conference Polling Gives Insights Into IT Service Desk MaturityProblem Management: Key Concepts
  9. 9. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 9Goal:• Efficiently and rapidlyresolve minor andmajor servicedisruptionsBusiness Benefits:• MTTR can be reduced• FCR rates can beimproved• Service and response canbe optimized withprioritization based onimpact to the businessUserRapidResolutionService DeskA Knowledge Baseexists for resolutionsand efficient incidenthandlingNew Incidentsmatched withrelated IncidentsPolicies, Procedures &rules for registeringIncidentsFormalIncidentCaptureEscalationproceduresfacilitateefficient &timelyresolutionIncidents are assigned acategory, priority, impact &urgencyIncident Management: Key Concepts
  10. 10. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 10Goal:• Eliminate the causeof recurring andrelated servicedisruptionsBusiness Benefits:• Incident volume isreduced• Faster resolution ofIncidents• Service availabilityincreases• Shift from reactive toproactive delivershigher value serviceService DeskResources withrequired resolutionskills are assigned todetermine rootcausePolicies, Procedures &rules for relatingIncidents to ProblemsA Problem isdefined to be theunderlying causeof 1+ IncidentsIncident data isroutinely analyzed toidentify patterns ofrecurring incidentsProblems areeliminated throughresolution of RootCauseIT & BusinessCustomerKnown Errors are identifiedand documentedProblem Management: Key ConceptsProblem Analysis:• Kepner Tregoe• LEAN 5 D’s• 5 why’s (simple, lowlevel problem solving)• Why – Why and sixserving menRoot Cause Analysis:• What is the RCARoot CauseResolution
  11. 11. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 11Activities of Problem ManagementThe Reactive & Proactive prevention of Problems•“Problem”•A condition identified from multiple incidents exhibiting common symptoms, or from a singlesignificant Incident, indicative of a single error, for which the cause is unknownProblem Control•“Problem Control “•is the activity performed to identify the root cause, which CIs are at fault and to provideinformation and advice on Workarounds to the Service DeskError Control•“Known Error”•A condition identified by successful diagnosis of the root cause of a problem, when it isconfirmed which CI is at fault and a workaround has been identified•Managing Known Errors through the process of resolutionProblem ReviewsManagement Information for Decision Support
  12. 12. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 12How do I know if I have a Problem?You know you’ve got a Problem when......Can’t match the Incident to an existing Problem and/or Known ErrorAnalysis of Incident data indicates you have “recurring” IncidentsIncident Analysis shows Incidents not been matched effectively to the correctProblems or Known ErrorsAnalysis of events or symptoms from the IT Infrastructure indicates anunderlying Problem that could potentially lead to Incidents
  13. 13. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 13Problem Control - ActivitiesProblem Identification andRecordingRFC and ProblemResolution and ClosureProblem Investigation andDiagnosisProblem ClassificationProblemTracking &MonitoringProblem ControlProblemManagement
  14. 14. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 14Error Control - ActivitiesError Identification andRecordingError AssessmentRecord Error ResolutionClose Error&AssociatedProblemsErrorTracking &Monitoring RFCChange ImplementedsuccessfullyError ControlProblemManagement
  15. 15. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 15Outputs from Problem ManagementTypical actions and outputs resulting fromProblem Management include:• Raising an RFC• Providing feedback regarding testing, procedures,training and documentation• Initiating Customer education and training• Initiating Service Support staff education andtraining• Ensuring adherence to Problem and IncidentManagement procedures• Process or procedural improvement
  16. 16. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 16Can you identify “high impact” recurring Serviceevents that are costing the organization asubstantial loss in terms of dollars?ProblemManagementDesignated Problem Management Resources: Create a specialty-trainedProblem Management TeamUnique Problem Management Toolset: Separate Incident and ProblemManagement Process ToolsIncident Resolution Knowledge BaseCMDB: Build Problem Management around a centralized CMDB so IT cantrack known errors against the affected CI and associated Business serviceITIL-based Problem Management
  17. 17. Problem ManagementIdentifying Common Pitfalls
  18. 18. Polling Question #2
  19. 19. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 19Lack of proper Skill / TrainingNo adoption top to bottomNo measurement to show improvementIncident bouncingNo objectives. Don’t have specific targetsConstraint by framework imposedReactive problem not under control – Trying to do proactive mgmtNo problem methodology – not enough why’sIdentifying common pitfalls
  20. 20. Problem ManagementKey Benefits
  21. 21. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 21Problem Management - BenefitsImproved Problem Solving Skills / Resolution• The Problem Management process is based on the conceptof learning from past experience• The process provides the historical data to identify trends,and the means of preventing failures and of reducing theimpact of failures, resulting in improved User productivityImproved First Call Resolution (FCR)• Problem Management enables improved FCR of Incidents atthe Service Desk• Improved Knowledge Management database containingIncident resolution and Workaround data integrated withinthe workflow automation of the Support toolset
  22. 22. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 22Problem Management - BenefitsImproved IT service quality• Problem Management helps generate a cycle of rapidly increasing ITservice quality• High-quality reliable services are good for the business users of IT• Improved Service provision and System stability is good for theproductivity and morale of the IT teamIncident volume reduction• Problem Management is the key to reducing the number of Incidentsthat interrupt ServicesPermanent Solutions• There will be a gradual reduction in the number and impact ofProblems and Known Errors as those that are resolved stay resolved
  23. 23. The ROI of Problem ManagementRealising Tangible Benefits
  24. 24. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 24Problem Management – Key MetricsPercentage of Incidents defined as ProblemsNumber of Incidents related to ProblemsNumber of Problems and Known Errors created - by status, service, impact, categoryNumber of Known Errors createdNumber of Problems by CINumber and impact of Incidents occurring before the Problem is resolved and closedNumber of Workarounds or temporary solutions providedNumber of Problems outstanding and expected resolution timeNumber of RFC’s issuedResolution times with respect to Service Level RequirementsProblem Management - Time Investment by Period
  25. 25. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 25Problem ManagementSavings Potential How is it Realized?Team to diagnoseProblems before they impact the businessIntegrated Incident, Problem and KnowledgeToolset that supports ITIL best practiceIncreased First Call ResolutionElimination of underlying problemsreducing Service impacting IncidentsRecurring Incidents AvoidedIncident Handling & Time ReducedOutbound Calls AvoidedBusiness Service Interuptions Avoided
  26. 26. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 26ROI Example - Baseline Metric ExamplesL1 Staff 14 FTE $50K SalaryL2 Staff 8 FTE $56K SalaryService Desk Manager 3 FTE $85K SalaryL1 Resolution Rate 63%L2 Escalation Rate 46%Annual Incident Volume 10,000Average Callback length 2 minutes Cost / Call: $0.50Small Business System Outages 30 per year 30 MinutesMedium Business System Outages 25 per year 45 MinutesLarge Business System Outages 6 per year 30 Minutes
  27. 27. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 27Problem Management InputRecurring Incidents Avoided
  28. 28. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 28Problem Management ROI TabIncident Handling Time Reduced
  29. 29. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 29Problem Management ROI TabOut-bound Call Avoided
  30. 30. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 30Calculating ROIBusiness Service Interuption Avoided
  31. 31. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 31$2,334 / year or $7K 3 year ROISavings Area Potential ROI$3,125 / year or $9K 3 year ROI$8,500 / year or $25K 3 year ROI$25,000 / year or $75K 3 year ROIRecurring Incidents AvoidedIncident Handling Time ReducedOutbound Call AvoidedBusiness Service Interuption AvoidedCalculating ROITotal Savings in first year: $53,969
  32. 32. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 32Intangible BenefitsROI does not always have to be expressed in financial termsSurvey, survey, survey…ROI Expressed in intangible benefits such as:• increased satisfaction of their users• improved perception of service, etc.Don’t forget about Customer Satisfaction
  33. 33. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 33SummaryKey Take-aways:People, Process & Technology• Measure• Identify• Analyze• Assess “ROI”• Implement• Communicate
  34. 34. Questions?
  35. 35. Thank You!For more information please find us atwww.frontrange.com

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