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Justifying ITIL - Building the ROI


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IT organizations are faced with a rapidly evolving environment coupled with a
more headcount-constrained staff, where standardization on optimal systems
and procedures is a critical success factor.

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Justifying ITIL - Building the ROI

  1. 1. Presented by: Shannon Magistad Building the ROI for
  2. 2. Building the ROI for ITIL® <ul><li>Defining ITIL® and Best Practice </li></ul><ul><li>IT Strategy and ITIL ® </li></ul><ul><li>Defining ROI, VOI and TCO </li></ul><ul><li>ROI: Qualitative vs. Quantitative </li></ul><ul><li>Benefits of ITIL® </li></ul><ul><li>Where To Start? </li></ul><ul><ul><li>Discussion on how to begin your ITIL® Journey </li></ul></ul><ul><li>Wrap-Up & Close </li></ul>
  3. 3. IT Service Management & ITIL Defined <ul><li>ITIL is the “de-facto industry best practice” for IT Service Management </li></ul><ul><ul><li>Non-proprietary and based upon proven practitioner experiences </li></ul></ul><ul><ul><li>International user support (IT Service Management Forum - itSMF) </li></ul></ul><ul><li>ITIL was developed by the UK Office of Government Commerce (OGC) </li></ul><ul><ul><li>Developed in the late 1980s and continuously updated since </li></ul></ul><ul><ul><li>ISO 20000 – Formal, international standard for IT Service Management certification, based upon ITIL best practices (formerly BS 15000) </li></ul></ul>ITIL is a comprehensive and consistent set of industry “best practices” for IT Service Management organized in an integrated, process-based framework in order to add VALUE to customers
  4. 4. ITIL Overview <ul><ul><li>ITIL and ITAM are being leveraged by 1,000s of organizations across the globe; even highlighted in a front page article in CIO Magazine entitled “IT Governance: The Power of ITIL” (November 2006) </li></ul></ul><ul><ul><li>Formal ITIL certification program through EXIN or ISEB </li></ul></ul><ul><ul><ul><li>Foundation, Practitioner, and Manager’s Certificates </li></ul></ul></ul><ul><ul><li>ITIL Version 3 (V3) was releases in June, 2007 and focuses on a “full lifecycle” approach to the processes </li></ul></ul>
  5. 5. Why Embrace IT Service Management & ITIL? <ul><li>Enable operational excellence and cost efficiency through streamlined IT service and maintenance </li></ul><ul><li>Enable more efficient and iterative regulatory and audit compliance </li></ul><ul><li>Improve IT service provision, stability, predictability and ongoing support </li></ul><ul><li>More effectively enable merger and acquisition synergy </li></ul><ul><li>Provide pertinent analytics to make sound IT investment and sourcing decisions </li></ul><ul><li>“… an estimated 60-80% of IT production-level changes lead directly to issues, Incidents, or disruptions to service within the user community” </li></ul><ul><li>“ … 75% of organizations contemplating widespread change will fail to consider the organization’s abilities and willingness to change” (i.e. Organizational Change). </li></ul><ul><li>“ … as much as 60% of change initiatives and other projects fail as a direct result of a fundamental inability to manage their social implications”. </li></ul><ul><ul><li>This lack of understanding typically manifests in dysfunctional behaviors that undermine and derail the intentions of the initiative. </li></ul></ul><ul><li>“ … inexperience, overextension, and under-committed executive sponsorship accounts for 50% of organizational change initiative failures …” </li></ul>According to Gartner: ITSM and ITIL Provides Stability and a Solid Foundation for Continuous Improvement!
  6. 6. Where Does ITIL Fit? Focuses on Process (Not Technology) <ul><li>You don't implement ITIL: </li></ul><ul><ul><li>You use it to help create organizational change </li></ul></ul><ul><li>ITIL doesn't offer guidance on how to actually apply the best practices it catalogs </li></ul><ul><ul><li>each organization must design its own processes based on ITIL </li></ul></ul><ul><li>To run IT like a business, you need to understand the key services that go into it </li></ul><ul><ul><li>ITIL makes that work visible. It allows you to measure what is important, so you can emphasize the things that add value and take out the things that don't </li></ul></ul>
  7. 7. TCO: Definition <ul><li>TCO = Total Cost of Ownership </li></ul><ul><li>A methodology used to help make investment decisions </li></ul><ul><li>TCO assesses the full Lifecycle Cost of owning an IT Asset or Configuration Item (CI), not just the initial Cost or purchase price </li></ul>
  8. 8. ROI: Definition <ul><li>ROI = Return on Investment </li></ul><ul><li>A measurement of the expected benefit of an investment </li></ul><ul><li>In the simplest sense it is the net profit of an investment divided by the net worth of the assets invested </li></ul>
  9. 9. VOI: Definition <ul><li>VOI = Value on Investment </li></ul><ul><li>A measurement of the expected benefit of an investment. VOI considers both financial and intangible benefits </li></ul>
  10. 10. ROI In Other Words… What we give (investment) What we Receive (Return) ROI (Overall Worth) COST BENEFIT
  11. 11. ROI: Recap ROI = Return on Investment A measurement of the expected benefit of an investment When someone asks about an “ROI” what they are asking is: “ What do I get back (“return”) for the money that I’m being asked to spend (a.k.a. “Investment”)?” “ What is it really worth (a.k.a. “ROI”)
  12. 12. Financial Vs. Non-Financial ROI <ul><li>Financial ROI: </li></ul><ul><li>Generally Quantitative in nature </li></ul><ul><li>Do not necessarily take into account Key Goal Indicators (KGI’s), Key Quality Indicators (KQI’s) or Key Performance Indicators (KPI’s) fully </li></ul><ul><li>Non-Financial ROI: </li></ul><ul><li>No widely accepted metrics that can be applied – often Qualitative in nature </li></ul><ul><li>These are worth considering! </li></ul>
  13. 13. ITIL & ROI <ul><li>Different organizations = Different ROI equations </li></ul><ul><li>Tie ROI concepts to overall IT Strategy </li></ul><ul><li>Increase in productivity, capability to measure and quantify IT activities is an output of good Service Design and Leveraging ITIL often including ITSM Technologies </li></ul><ul><li>For a COMPLETE picture of ROI, you can place Non-Financial Benefits and Financial Benefits together to evaluate the Return on Investment* </li></ul><ul><ul><li>*Very helpful for Best-Practice Projects </li></ul></ul>
  14. 14. Sample ROI Worksheet
  15. 15. The Benefits of Implementing ITIL <ul><li>Speedy responses to customer enquiries and complaints </li></ul><ul><li>Improved team work and communication </li></ul><ul><li>Better identification of areas for improvement </li></ul><ul><li>Pro-active approach to service provision </li></ul><ul><li>More favorable perception of services provided </li></ul><ul><li>Improved quality of IT-related information for optimal management and decision-making </li></ul><ul><li>Reduced impact on the company's business activities </li></ul><ul><li>Better management and control over the IT system's infrastructure </li></ul><ul><li>Higher IT system users' productivity due to reduced down times </li></ul><ul><li>More effective and efficient usage of resources related to service provision and subsequent cost reduction potential </li></ul><ul><li>Improved first line resolution rates </li></ul><ul><li>Enhanced customer care and higher customer satisfaction </li></ul><ul><li>Improved control of SLA performance </li></ul><ul><li>Strengthened IT infrastructure </li></ul><ul><li>Eradicate loss and inconsistent records of information, incidents and customer enquiries </li></ul><ul><li>Reduced numbers of incidents </li></ul><ul><li>Discovery and implementation of permanent solutions </li></ul><ul><li>Systematic and consistent approach to all processes </li></ul>K.I.S.S.
  16. 16. Where to Start: Assessment? <ul><li>Assessment Results review </li></ul><ul><ul><li>Provide process survey results </li></ul></ul><ul><li>Provide recommendations for improvement </li></ul><ul><ul><li>A Baseline to understand what you could expect for an ROI </li></ul></ul><ul><li>Articulates the following: </li></ul><ul><ul><li>The assessment is not intended to be negative in any way </li></ul></ul><ul><ul><ul><li>It’s just a tool to provide an overview on current processes in IT today </li></ul></ul></ul><ul><ul><li>ITIL Best Practice Process core activities are the process evaluation benchmark </li></ul></ul><ul><ul><ul><li>Opportunity to ‘benchmark’ against similar-type organizations </li></ul></ul></ul>
  17. 17. Assessment Objectives and Approach Page <ul><li>Objectives </li></ul><ul><ul><li>Provide a snapshot of the current IT process environment from a People, Process and Technology (Products) and Partners Overview </li></ul></ul><ul><ul><li>Recommendations as input into a structured plan </li></ul></ul><ul><li>Approach </li></ul><ul><ul><li>Data Gathering: </li></ul></ul><ul><ul><ul><li>Interviews: Management and Practitioner representation </li></ul></ul></ul><ul><ul><ul><li>Facts, supported by documents & examples </li></ul></ul></ul><ul><ul><li>Scoring </li></ul></ul><ul><ul><li>Structured maturity characteristics framework </li></ul></ul>
  18. 18. Process Maturity Continuum PROCESS MATURITY Initial (0-0.99) Defined (2-2.99) Managed (3-3.99) Optimized (4-5.00) Repeatable (1-1.99) <ul><li>Best practices are followed and automated </li></ul><ul><li>Processes are aligned with business objectives </li></ul><ul><li>Processes are optimized toward customer service </li></ul><ul><li>Continuous improvement </li></ul><ul><li>Well-documented overall tool architecture with complete integration in all areas of people, process, and technology </li></ul><ul><li>Loosely defined roles and responsibilities </li></ul><ul><li>Processes are irregular, undefined, and used reactively </li></ul><ul><li>Manual processes or a few specific discrete tools (pockets/islands) </li></ul><ul><li>• No internal resources are allocated to lead process maturity effort </li></ul><ul><li>Roles and responsibilities are assigned </li></ul><ul><li>Processes follow a regular pattern and are capable of being repeated </li></ul><ul><li>Many discrete tools, but a lack of central control </li></ul><ul><li>Data stored in separate locations </li></ul><ul><li>Clearly defined and agreed roles and responsibilities </li></ul><ul><li>Formal ITIL/ITAM training plan and schedule </li></ul><ul><li>Processes are documented and communicated </li></ul><ul><li>Consolidated data retained and used for trending and forecasting </li></ul><ul><li>Inter and intra process teamwork </li></ul><ul><li>Quality-based performance incentives </li></ul><ul><li>Processes are monitored and measured </li></ul><ul><li>Info is produced from processes to support management decisions. </li></ul><ul><li>Integrated toolsets, databases, and processes </li></ul>Level 2 Level 1 Level 3 Level 4 Level 5 0 – 5 Maturity Scale Based on CMMI Note: • Focus on ‘improvements’ • Implementation will focus on control. • Process design should be ‘integrated’.
  19. 19. Sample: Process Maturity Score
  20. 20. ITIL Certifications <ul><li>Managing Across The Lifecycle – 5 Credits </li></ul><ul><ul><li>90 Minutes exam </li></ul></ul><ul><ul><li>Multiple choice </li></ul></ul><ul><ul><li>65% required to pass </li></ul></ul><ul><li>IT Service Management Certification </li></ul><ul><ul><li>No exam </li></ul></ul><ul><ul><li>Must accumulate 22 credits </li></ul></ul><ul><li>Advanced Level Certification </li></ul><ul><ul><li>TBD </li></ul></ul>
  21. 21. Why Acend Corporate Learning? <ul><li>98% Pass Rate </li></ul><ul><li>Certified Course Material and Instructors </li></ul><ul><li>Our private classes are delivered by a highly trained and author-approved ITIL Experts trainer. </li></ul><ul><li>We use PowerPoint during lectures, but we don't do &quot;death by slide&quot; - our students are digging into the product, deeper every day. </li></ul><ul><li>Our classes are &quot;instructor led, student driven.&quot; If we need to spend more time on a particular subject, we will. </li></ul><ul><li>Your Company will Save Big on group on-sites of 6 or more students. </li></ul>
  22. 22. We Can Help! <ul><li>Thank You! </li></ul>