Timo Hyvönen presented on establishing a Service Management Office (SMO) in multi-sourced IT environments. The SMO is responsible for defining, maintaining, and managing IT service management standards and processes. It ensures governance and that legal/financial interests are met. Hyvönen discussed SMO roles, governance, and two case studies - one for a traditional IT organization and one for a global corporation using multiple outsourcing vendors. He concluded with recommendations for planning and implementing an SMO.

1. Timo Hyvönen
04.11.2013
Service
Management Office
and Operating Model in Multi
Sourced Environments

2. Timo Hyvönen
• Master of Sciences, Production technology, Helsinki University of Technology
• Sonera Business School MBA
• ITIL Service Manager & ITIL Expert, accredited ITIL trainer, DPSM(CM), COBIT, SPICE...
• 1989 Helsinki University of Technology – you have played with these ”Computers”, would you come & build us a ”network?”
• 1994 Manusoft – manufacturing SW development & international sales management
• 1997 Sonera Telecom – new business development, technology development, hype
• 2001 Logisware – Forest industry global IT production ( IBM)
• 2004 Finland Post, IT strategy program director
• 2005 MATERNA, ITSM consultation, ITIL trainings
• 2008 itSMF Finland board member
• 2010 Tieto-Tapiola, technology and operations, service management
• 2012 3gamma Finland Managing director
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3. At 3gamma, we believe that great business deserves great IT
Stockholm
Malmö
Gothenburg
Bangalore
Helsinki
Manchester
New Jersey
3gamma short facts
 We are an independent consultancy firm specialising in IT management
 We offer practical, results-oriented advisory and consulting services based
significant IS/IT experience
 We can assist any organization through the entire IT sourcing life-cycle,
enhancing IT effectiveness and improving operational efficiency
 We are >100 consultants in Stockholm, Gothenburg, Malmo, Manchester,
Helsinki, New Jersey and Bangalore
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4. Service Management Office
• Background and reasoning
• Definition
• Service Management Office – Project Management Office
• Tasks and responsibilities in Service Management Office
• Key roles
• Governance
• Cases
• SMO inside traditional IT provider – shared service unit in national corporation
• SMO in multi-sourcing - retained organization structure in global corporation
• Conclusion – how do you build it
• Existing it organization
• In outsourcing situation
• Operating model
• Summary
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5.  Multi-sourcing is becoming the most common ICT service model
 Usually the road has gone either through big outsourcing trials or through organic
growth where internal resources have become insufficient in number or capability.
 Especially service design and transition in multi-sourced environment require strong
disciplines for decisions – who manages or delivers new application projects, how they
are brought to operations and how they are then operated.
Service Management Office background and reasoning
 Even in fully outsourced operational environments accountability of services and
operations remain within enterprise, usually the CIO office.
 SMO is a good way to ensure that this accountability can be carried.
 This presentation is based on practical experiences that have led to definition of
Service Management Office, SMO.
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6. Service Management Office - definition
 Service management office is a group or function within business or IT that is
accountable for defining, maintaining and especially managing standards for
service management and service management processes in the organization.
 SMO is the escalation and management point of IT services in daily operations.
 SMO ensures that the governance, legal and financial interests of enterprise are
met in continuous operations.
 SMO ensures that services are defined, continuous service operation processes
work in practice and vendors are managed according to policies defined by the
corporate, e.g. SMO itself.
 There is always a role for SMO in IT service
organization but it is particularly relevant
when parts or all of IT delivery is outsourced
to one or, especially, several vendors.
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7. SMO and PMO in service lifecycle
7
Retired
services
3rd party
services
Service
design
Service
Operations
Pipeline Service Catalogue
Service
concepts
Continual
Service
Improvement
New business
services
Service Management Office
Project
Management
Office

8. Accountabilities of Service Management Office
 ITSM process execution on operational level
 Owner of ITSM Processes and development, leads continual
improvement
 Setting policies & guidelines (priority definitions, change policies…)
 Assuring that Corporations ITSM processes are followed throughout
retained and external organization
 Accountable for ITSM toolset (ensures smooth alignment/
integration towards suppliers ITSM tools)
 Accountable for Service desk function
 Leads Change Management, Release Management (Chairs CAB)
ACCOUNTABILITY

9. Key roles in Service Management Office
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 Problem Manager
• Oversight and guidance in managing
and resolving problems.
 Change manager
• Write and manage change policy
• Chair overall CAB
 Release Manager
• Write and manage release policy
• Coordinate release roll outs
• Service design/transition Manager
• Ensure that the right services design and transition
work/documentation is being developed (SDP)
• Service Continuity Management
• Ensure risk and cost is balanced and that
Service continuity plans are maintained and
• Service Catalogue and Service Portfolios
• Drive the Lifecycle management of services
• Ensure that we invest in the right places at
the right times
• Retire services where beneficial to Business.
 Incident Manager
• Set policy for incident prioritization
• Verify and manage Major incidents
 Service desk owner
 Ensure SD is aware of all services
 Tool owner
 Own classification, categorization,
contents of the tool

10. SMO process governance
Strategic
Governance
Board
Process integration
Governance Board
Operational Governance
Board
Vice President level
Not for processes. Included in supplier governance board.
Strategic direction and issues
Business plans and budget
Client Director level.
Retain: Process owners.
Supplier: Representatives responsible for all processes from all suppliers
• Review process change proposals from Operational governance board.
• Process maturity rating,
• Review of Process KPI
• Escalated issues or questions regarding multiple processes
Process Lead level.
Retain: Process lead
Supplier: Process accountable or process team manager
• Review of process maturity and Process KPI.
• Review process improvements
• Process change proposal from Supplierx number of processes

11. Pyramid of business relationships
Application Service Manager Product manager
Demand manager
Business project managerProject Manager
BA owner Business department manager
Portfolio manager
Retained Business
Business unit manager
Business Demand Manager
Account manager
External
Service management officeProcess leads
Application delivery
manager
Project manager
Operations manager
Client director
Security CoESecurity manager(s)
SMO

12. Practical experiences
 Case: resourcing and structure in traditional IT organization
 Case: resourcing and structure in modern multi-sourcing
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13. Case: SMO resourcing and structure in traditional IT org.
 Shared service unit for mid size corporation
 Traditional ICT management model
 Application Development
 Application Management
 Operations Management
 400 people, 70 in operations
 Challenge: define services, implement processes
 Response: allocate service and process roles = SMO
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14. 14
Technology
Development
Architecture
Service
Operations
Servers – WAN –
MF - Middleware
User
Services
Desktops,
Mobile, Printing
Customer Service
Service Desk
Solution Support
Case example: SMO organization in traditional IT company
Managing
Director
Application
Development
Application
Maintenance
ICT Technology
Operations
Admin
SMO lead
Adequate authority or
sponsorship from
board level
132140120

15. Case example: SMO organization in traditional IT company
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ICT Technology
and operations
Technology
Development
Architecture
Service
Operations
Servers – WAN –
MF - Middleware
User
Services
Desktops,
Mobile, Printing
Customer Service
Service Desk
Solution Support
Configuration
Manager
Change
Manager
Problem
Manager
Incident
Manager
Catalogue
Manager
ITSM Tool
Management
Application
maintenance
Application
Development
Release
Manager
SMO lead

16. Role profiles, background
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 SMO lead
 Experienced people manager
 ITIL Expert with long ITSM experience
 Incident manager
 Customer service expert
 ITIL Foundation
 Problem manager
 Middleware senior expert
 ITIL Expert
 Change manager
 Mainframe application specialist
 ITIL Expert
 Configuration manager
 Server manager and expert
 CMDB certified
 ITIL Expert
 Release manager
 Application project manager
 ITIL Expert
 ITSM Tool management
 Operations manager
 ITIL Expert
 Technical experts responsible for
configuration (ITIL Foundation)
 Senior, committed people with long ITSM experience
 Will and ability to adapt ITIL in practice (ITIL Expertise)
 Mostly part time roles – time specifically allocated for process management work
 Accountability assigned and assured

17. Case: Global corporate, modern multi-sourcing
 60000 employees
 3 continents
 24/7
 IT main areas
 Operation
 Research & Development
 Sales
 Admin
 Full outsourcing 2000  now multisourcing with SMO
 Selected vendors for application management, development,
infrastructure, service desk…
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18. Organization example
Application
maintenance
(Appl.
Accountability)
Application
development
(Project delivery
accountable)
CIO
Information
Management
CIO Office
Architecture Q&C
Service
Portfolio and
Lifecycle
management
(Service
Introduction,
Design)
Customer
Service
Management
(Delivery
accountable)
Admin
Research
Sales
Operations
Admin
Research
Sales
Operations
Infrastructure
Service Delivery
Service
Management
(Process
accountability
Infrastructure
(Hosting)
Infrastructure
(Network)
Infrastructure
(EUC)
BRM
Infrastructure
(Collaboration)
25 65 7030 5025
25 Reference model
65000 employees
3 main geographies
This is the central org for
outsourcing mgmt

19. Service Management Office work-flow
TOOL
Service Management
IM PM KM CM RM
AM supplier
IM team
PM team
Change team
AD supplier
IM team
PM team
Change team
Infrastructure
(Hosting)
IM, PM and CM
team
Infrastructure
(Network)
IM, PM and CM team
Infrastructure
(EUC)
IM, PM and CM team
Training and
knowledge mgmt
Owning, Managing and using processes and tools
Users of processes and tools
Incident
Manager
Problem
ManagerProblem
Manager
Change
ManagerChange
ManagerChange/
release Mn
Problem
Manager
Tools config and
design
Retained
ESP
Incident Lead
(MIM)
Problem Lead Change / release Training & Tool
CMS

20. Service Management Office
Service
management
Incident
Management
(Process and MIM)
Change / release
Management
Problem
Management
Tools
Management
Problem
Manager
Incident
Manager
Change and
Release Mgr
• Tools Training,
Knowledge
• Tool design,
Config
Manage all processes and tools.
Manage service desk
Make sure all processes are followed by the suppliers. Operational in MIM
Service Desk
Service Managers
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Service desk fully outsourced.
3 desks covering 24x7 globally

21. Service Portfolio and Lifecycle – part of SMO
Service Portfolio and
Lifecycle management
Service Design
and Transition
Service
Introduction
Management
Service Catalogue &
Portfolio
Management
Service Continuity
Management
Service Continuity
Manager
Service
Introduction
Manager
Service Catalogue
& Portfolio Mgr
Manage Transition of new services and keep track of existing services.
Service lifecycle management
30Most people working with Service design and transition

22. How to plan and implement SMO
 Assure leadership and sponsorship
 Top management must want this
 Find correct people to roles
 Senior experience
 Passionate, ready to work
 Ensure capability
 ITIL Training
 Process implementation competence
 Be patient
 Educate organization
 Iterate processes – ”why did you not log that change”
 Especially configuration management takes time – start with one service (80-20)
 Communicate new ways of work
 Customers, Users
 Employees, Suppliers
 Set minimum requirements on suppliers in processes
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23. When to plan for SMO in outsourcing
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Design & Implement Retained
Organization
Implement Retained
Organization
Design Retained
Organization w/ SMO
Design new
Service model
Select Services
to be
Outsourced
Desicion &
Vendor
Selection
Contract
Negotiations
Transition to
Vendor
Optimal implementation:
Desicion &
Vendor
Selection
Contract
Negotiations
Transition to
Vendor
Traditional implementation:

24. Define services – they will not change. Build CMS.
 Service Portfolio Management enables business to make sound decisions about
investments
 Service decisions are based on clear business cases to demonstrate ROIs
 Business customers are able to understand service content exactly to evaluate value of
service and identify new possible business opportunities
 Efficient communication & business requirement understanding (no need to seek
”hidden” information from IT support staff)
 IT’s role seen as a service provider where IT brings added value for business services
 Possibility for IT to manage IT business better
 cost and budget allocations
 reduces operational costs when services are provided within required SLA for capacity & availability
 Enables evaluation of delivery efficiency with other sourcing alternatives
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Biz-IT 1
Business
process
Business
process
Business
process
Biz-IT 1 Biz-IT 1
Biz-IT 1
Business IT and end user services
Supporting services
Biz-IT 1Biz-IT 1
Biz-IT 1
Biz-IT 1Biz-IT 1
Datacenter Application dev Databases NetworksApplication maint
Biz-IT 1
Biz2 Biz5
Business support services
Biz6Biz4Biz3Biz 1
CMDB
CMDB CMDB CMDB CMDB
CMS

25. Example organization, operating model and processes
BRM
Communications
Incident/request info
Change info
…
Strategy
Applications & Infrastructure
Architecture
Quality and compliance
Incident responsibility
Problem responsibility
Change responsibility
Capacity responsibility
Availability responsibility
Major incident coordination
Problem coordination
Change coordination
Configuration management
Lifecycle, Continuity, Catalogue
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26. Service Management Office in Multisourced Environment -
Summary
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Application
development
Application
operations and
maintenance
Solutions
Business apps
Integration
- …
Servers
E-mail
Load
balancer
Proxy
Firewall
LAN
Storage
Databases
Virus control
Mobile
Workstations
Video conf &
neg. rooms
Office printing AD-DNS ym
Data centers
Local support
Newco Inc
SMO
Enduserservices
Applicationmaintenance
Application projects
Application development
Infrastructure
Service desk
Service desk
Servicedesk
Servicedesk
Process and operational accountability
Services and projects
Vendor coordination
Common service model
PEOPLE
PROCESSES
TOOLS
ACCOUNTABILITY

27. Contact information
Timo Hyvönen
Managing director
3gamma Oy
Sentnerikuja 2
FI-00440 Helsinki
+358 50 3748371
timo.hyvonen@3gamma.com
www.3gamma.com – www.itil.fi
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28. United Kingdom:
3gamma Ltd
Silk Point,
Hulley Road, Macclesfield
Cheshire SK10 2LL
United Kingdom
Phone +44 161 219 8240
Group Head Office:
3gamma Group
Drottningtorget 5
SE-411 03 Göteborg
Sweden
Phone: +46 31 750 95 65
Sweden:
3gamma Sweden AB
Drottninggatan 92-94
SE-111 36 Stockholm
Sweden
Phone: +46 8 120 20 532
India:
3gamma Consulting India Private Ltd
c/o Swedish Trade Council
Kheny Chambers
#4/2 Cunningham Road
Bangalore - 560 052
India
Phone: +91 80 41529100
Finland:
3gamma OY
Sentnerikuja 2
FI-00440 Helsinki
Finland
Phone +358 50 3748371
USA:
3gamma Americas LLC
4 Rupells Road
Clinton, NJ 08809
USA
Phone: +1 908 894-5126
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