This document outlines 5 strategies for reducing costs with IT service management: 1. Review the service portfolio to align investments with business strategies and retire less critical services. 2. Optimize people resources by reducing unplanned, redundant and re-work which can save hundreds of thousands annually. 3. Improve processes by using standard models and leveraging problem management to prevent recurring incidents. 4. Align partners by retaining management control and aligning supplier processes. 5. Assess technology investments by optimizing existing tools before purchasing new ones to avoid unnecessary expenses.

1. 5 Proven Strategies for Reducing5 Proven Strategies for Reducing
Costs with IT Service Management
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2. About ITSM Academy
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Provider
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3. The Challenge
CoCo
yy
ontrolCosontrolCos
ceQualityceQuality
stsandRstsandR
ITServicITServic
Business/IT
Integration
Do More
With Less
RisksRisks
ncreasencreaseII
IT i ti t d t i i t d h t ffi i tl
Service Management
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IT organizations must adopt a service-oriented approach to efficiently
and effectively meet customer needs and deliver value for money.

4. Services Provide Value
Services are a means of delivering value to customers by
facilitating outcomes customers want to achieve without theg
ownership of specific costs and risks
Services facilitate outcomes by
Enhancing performance
Reducing constraintsReducing constraints
Service management (SM) is a set of specialized
organizational capabilities for providing value to customers
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organizational capabilities for providing value to customers
in the form of services

5. Realizing Value
Once “services” and “processes” have been defined,
activities become
Value Add – services and processes that directly
benefit your customer
activities become
Non Value Add – “overhead” that must be done to
support the “value add” activities
Waste – work that does not add value or support
added value and cannot be described as a part of a
service or process
Value is only realized if services, processes and activities
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Value is only realized if services, processes and activities
directly support your organization’s business objectives.

6. Before You Can Reduce Cost, You
Need to Understand IT CostsNeed to Understand IT Costs
Do you knowDo you know
The cost per service?
The cost per customer?p
The cost per activity?
How best to allocate indirect
?costs?
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7. How Do You Reduce Cost and
Increase Value?Increase Value?
1. Portfolio
Align IT investments with business strategies
2. People
Reduce unplanned redundant and re-workReduce unplanned, redundant and re-work
3. Process
Improve efficiency and effectiveness
4. Partners
Retain management control of ITSM processes
5 Products5. Products
Ensure ITSM technology costs do not outpace
benefits
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8. 1 Review Your Service1. Review Your Service
Portfolio
A Ser ice Portfolio represents theA Service Portfolio represents the
complete set of services managed by a
service provider.
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9. The Service Portfolio and IT Investment
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10. Ask Yourself …
Are your human and financial resources invested in
th i th t d li th t b i l ?the services that deliver the most business value?
Are less critical services consuming resources that
could/should be applied to more critical services?could/should be applied to more critical services?
Are there any services that could be consolidated or
retired?
Are IT investments delivering Value for Money?
How do you know?
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11. 2. Optimize Your People
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12. Reduce Unplanned, Redundant and
Re-WorkRe Work
Assess what everyone is doing and how it is being done
What’s being done by more than one person or unit?
What’s being done twice (or more)?
What percentage is unplanned (reactive) work?What percentage is unplanned (reactive) work?
Can you automate some tasks to reduce workload?
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13. ROI on Reduced Unplanned IT Work
Level 3 staff: 20
Average L3 salary: $75,000/year = $6,250/month
Monthly L3 salary: $125,000
P t f l d L3 k 50%Percentage of unplanned L3 work: 50%
Monthly cost of unplanned work = $62,500
Annual Cost = $750,000
Reduce to 25% unplanned work:Reduce to 25% unplanned work:
Save $375,000
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14. 3. Improve Processes
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15. Use Process Models
Repeatable, pre-defined
procedures
Model Types
procedures
Define
Steps to be taken
C
Change models
Incident models
Problem modelsChronological order and
dependencies
Responsibilities
Timescales and thresholds
Problem models
Request models
Timescales and thresholds
Escalation procedures
Ensure a defined path or
ti li i f ll dtimeline is followed
Can be automated
Pre-defined procedures control costs by predicting and optimizing the
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Pre defined procedures control costs by predicting and optimizing the
time, resources and effort needed to perform similar activities without
“reinventing the wheel”.

16. Leverage Problem Management
Recurring incidents
Are very costly
Consume resources that could be
otherwise appliedotherwise applied
Negatively impact the perception
of reliability and customer value
Assess the Top 10 recurring incidents
Can you identify the root cause?
Can you document a Known Error and trusted workaround?
Can you prevent future incidents by removing the error?
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17. 4. Align Partners
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18. Retain Management Control
ISO/IEC 20000 defines management
control ascontrol as
Knowledge and control of inputs
Knowledge and use of outputs
Definition and meas rement of metricsDefinition and measurement of metrics
Accountability for process functionality
Definition, measurement and review of
process improvements
Reduce costs by
Aligning supplier processes to internal processesAligning supplier processes to internal processes
Creating a common vocabulary
Using your tool whenever possible
Limiting time and resources spent on normalizing data or
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Limiting time and resources spent on normalizing data or
duplicate work

19. 5. Assess Technology
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20. Before Purchasing…
Inventory your current ITSM technology
Monitoring
Incident/Change/Request/Problem Logging
Configuration Management Systemg g y
Assess the gap between what you need to meet
current process maturity and available capabilities
O i i i i l d bili iOptimize existing tools and capabilities
Avoid the support costs of over-customization
Consider modular suites that allow you to plan yourConsider modular suites that allow you to plan your
purchases on a “just-in-time” basis
“Shelfware” is an unnecessary expense that may be obsolete
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Shelfware is an unnecessary expense that may be obsolete
when you actually need the capabilities.

21. Start Simple, Stay Simple
Do Not
T t “b il th ”Try to “boil the ocean”
Over-complicate cost models
Spend more on cost-reduction efforts
Do
Spend more on cost reduction efforts
than expected benefits
Do
Take baby steps – look for quick wins
Work to control costs before
attempting reduction
Require clear business cases
for non-value add expenses
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for non value add expenses
Look for waste everywhere!

22. Questions and Answers
Thank you for attending
Jayne Groll, President
ITSM Academy, Inc.
info@itsmacademy.com
www.itsmacademy.com
1. 888. 872. ITSM (4876)
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