How to Create an Undisputable Service Management Business Case

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Nina Segura, Metaspire Consulting and Jayne Groll, ITSM Academy

Does your ITIL / ITSM Program need more resources? A compelling business case, capturing both the quantifiable and unquantifiable characteristics of your proposed project, can help you secure the resources needed. Join us in this session, where we will provide you with an awareness of core tools, including Lean Six Sigma best practices, which can be leveraged for a solid, undisputable process improvement business case.

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How to Create an Undisputable Service Management Business Case

  1. 1. How to Create an Undisputable Service Management Business Case Sponsored By March 24, 2011“Our mission is to provide groundbreaking, sustainable, Nina Segura B.S., M.A., CSSBB, Presidentprocess solutions from Strategy to Execution.” Phone (954) 260-3888 Consulting, Classes, Team Training Coaching Metaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026 Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com © 2005-2011 Metaspire LLC All Rights Reserved.
  2. 2. About ITSM Academy  Accredited Education  Since 2003 - Tens of Thousands  Certified Process Design Engineer (CPDE) Trained and Certified  ITIL® Foundation  ITSM Professional Diplomas  Change/Support/SLM  ITIL Capability (OSA|PPO|RCV|SOA)  Public Classes throughout U.S.  ITIL Lifecycle (SS|SD|ST|SO|CSI)  Corporate On-Site Classes  ITIL Managing Across the Lifecycle (MALC)  Virtual Classes  ITIL Service Manager Bridge  Courseware Licensing  ISO/IEC 20000 Foundation  Corporate & Partner (GEM)  MOF Foundation  Alumni Program  Practical, Value-Add Workshops  PMI Global Education Provider  ITSM Leadership  Federal Government (GSA)  ITIL, MOF, ISO 20K Overviews Contractor  Apollo 13, Visible Ops: The Class  Certified Woman-Owned  And more!ITIL® is a Registered Trade Mark of the Office of Government Commerce in the United Kingdom and other countries© ITSM Academy 2 Welcome!
  3. 3. Introduction & Expectations Metaspire combines extensive management experience with proven methodologies to create a practical and customized approach to help each client address their needs. Our scalable methodology integrates Business Process Management, Organizational Development Principles with Six Sigma Disciplines.We assist technology organizations in a variety of ways including:  IT and Business Strategy Alignment  Rapid Improvement Events  Technology Service/ Acquisition Business cases  Planning & Implementation of Portfolio Management, or Continuous Process Improvement Councils  Process Reengineering & Re-design Analysis & Facilitation - ProVision  Technology Solution Requirements  Resolution of complex challenges facing large-scale IT system implementations. Metaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026 Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 3 © 2005-2011 Metaspire LLC All Rights Reserved.
  4. 4. Session Objectives  Understand What is a Business Case  Identify Core Business Case Components  Understand How to Determine Benefits  Create a Cost Benefit Analysis  Understand What Six Sigma Lean is  Create an Awareness of Six Sigma Lean Tools:  Voice of the Customer  Value Stream Mapping  Root Cause Analysis  Benefits of Six Sigma Lean in the ITIL FrameworkMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 4 © 2005-2011 Metaspire LLC All Rights Reserved.
  5. 5. What is a Business Case?Information-Based Toolthat provides: Answers Fundamental Question: Utilizes multiple• Planning “What are the Financial & analytical approaches• Decision Support Business Consequences for• Project Prioritization taking an Action?”• Proposal Evaluation Metaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026 Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 5 © 2005-2011 Metaspire LLC All Rights Reserved.
  6. 6. Core Business Case ComponentsInputs -Critical Elements Approach Financial MetricsBusiness Knowledge Payback Period Assumptions Cost Benefit Analysis Internal Rate of Return Scope (CBA) Net Present Value Time Return on Investment Metaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026 Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 6 © 2005-2011 Metaspire LLC All Rights Reserved.
  7. 7. How do we Determine Benefits?Saves Costs Cost Reduction - Variable  IT software/hardware or Base cost expenditures Rework Elimination  Vendor Costs Reduced cycle time  Plant & Equipment Incremental Revenue -  Opportunity Cost Increased Sales  Cost of resources Cost Avoidance - Cost  Sunk Costs – Sizing Prevention Requests Labor Productivity - Time savings and not RIF Competitive LandscapeMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 7 © 2005-2011 Metaspire LLC All Rights Reserved.
  8. 8. Business Case Scenario A few months ago, ABC Company launched new Employee Identification Cards to 3,000 employees. Of the cards issued, 1,000 had magnetic strips that did not work, which resulted in employees calling the ABC Service Desk. Each call into the Service Desk costs $20.00. Each time a card needs to be re-issued it costs $7.25.Metaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 8 © 2005-2011 Metaspire LLC All Rights Reserved.
  9. 9. Cost Benefit Analysis $20.00 per call + X $7.25 ID Card Cost $27,250 = 1000 Financial Unit CostDefective + = Impact $547,250 DifferenceEmployee 1 day lost productivity x IDs X = $520,000 ($65 hr. $520/day) Total Cost 2 sigma Lost Productivity in Revenue $546,702.75 $20.00 per call + COPQ X $7.25 new plastic = $27.25 1 Unit CostDefective + = $547.25 IDs 1 day Lost productivity x = $520 X ($65 hr. $520/day) Total Cost5 sigma Lost Productivity in Revenue Metaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026 Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 9 © 2005-2011 Metaspire LLC All Rights Reserved.
  10. 10. Process Architecture -CBA Provide Products/ Services Develop Planning the Maintain Perform Developing People Technology Business Maintain Client What is this Business Accounting Consulting Development Relationship Costing you? Solutions Develop Living Conduct Respond to Forecast Company Assess Client Create Virtual Create Marketing Strategic Business Performance Inquiries from Finances Needs Solutions Strategies Plan Appraisal website 2 2 $288.46 $0.00 Owners $0.00 $150,000 Conduct Weekly Conduct Perfor- Create Company Develop Status Report Build Solutions mance Maintain Website Acquire Clients Budget Newsletters Meetings Evaluations 3 $216.35 2 $62.50 $0.00 Maintain Master Maintain P&L Evaluate Results Lead Sales Event Operational Plan $0.00 Operations 2 $62.50 $65,000 $0.00 Develop Create Balance Advertising Sheet Materials $0.00 2 $62.50 3 $64.90 Create Press Produce Invoices Release $0.00 Technologies $0.00 $45,000 $0.00 Collect Invoice Develop e-mail $$$$$ solicitations $0.00 $0.00 3 $64.90 Create and Distribute Payroll $0.00 $0.00 $0.00 Total: $822.12 Notes: (Summary of Business Case) Weekly Total: $4,110.58 This matrix will help you identify how much it is costing you per day, per week, per month, and per year when a process is not working properly. Monthly Total: $16,442.31 In this example, were examining the TOTAL monetary impact (Owner, Operator, Technology) of a malfunctioning system.Metaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026 Yearly Total: $197,307.69Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 10 © 2005-2011 Metaspire LLC All Rights Reserved.
  11. 11. What is Six Sigma? Lean? What is Six Sigma? Six Sigma is a rigorous and disciplined methodology that uses data and statistical analysis to measure and improve a companys operational performance by identifying and eliminating "defects." Lean is based on five principles: 1. Specify what represents value to the customer 2. Identify all specific actions required to bring a product or service from order to delivery 3. Eliminate all kinds of non-value adding activities 4. Produce only what the customers need 5. Pursue perfectionMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 11 © 2005-2011 Metaspire LLC All Rights Reserved.
  12. 12. Lean is a Cyclical ProcessMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 12 © 2005-2011 Metaspire LLC All Rights Reserved.
  13. 13. Six Sigma- Lean Tools A few Core Six Sigma- Lean Tools to support business case  Voice of the Customer  Value Stream Map/ Workflow/ SIPOC  Fishbone  FMEAMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 13 © 2005-2011 Metaspire LLC All Rights Reserved.
  14. 14. Voice of the CustomerMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 14 © 2005-2011 Metaspire LLC All Rights Reserved.
  15. 15. Value Stream MappingMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 15 © 2005-2011 Metaspire LLC All Rights Reserved.
  16. 16. What is a Workflow Model? Customer Technical Problem Solution 4 Activities Source Receive Solution Swim/Workflow Lanes Line of Visibility Confirmed Solution Help Desk Support Rep Decision Point 1 Gather Issue 3 Process Information Diagnosis Solve Yes Implement Solution Performers/ Problem? Sink 5 2 No 6 Document Closed Diagnose Problem Assign to Level 2 Ticket Level 2 Ticket Closed Ticket Call Ticket Number Line of Automation System Stores Issue Description Update Call Update Create Call Record Record w/ Record Owner SolutionMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 16 © 2005-2011 Metaspire LLC All Rights Reserved.
  17. 17. Business Interaction Model - SIPOCPurpose: Determine Benefits • Depicts internal and external entities (organizational areas) interactions. • Typically used for identifying major business functions and the associated deliverables that the area of focus performs.Benefits: • Determines impacts of deliverables e.g. there may be two groups producing the same deliverables. Answers the question “How can we leverage best practices, departments, or positions ?”. • Helps establish what is required at a more tactical level to accomplish goals. • Provides a framework for making process improvement scope decisions. Metaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026 Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 17 © 2005-2011 Metaspire LLC All Rights Reserved.
  18. 18. Root Cause Analysis (Fishbone)Metaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 18 © 2005-2011 Metaspire LLC All Rights Reserved.
  19. 19. Prioritization TechniquesFailure Modes & EffectsMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 19 © 2005-2011 Metaspire LLC All Rights Reserved.
  20. 20. Benefits of Lean in the ITIL Framework  Help your IT organization achieve continuous improvement and organizational agility  Introduces a more structured engineering approach to ITIL’s framework  Lean thinking promotes continuous improvement and waste reduction into ITIL’s best practices  Identify and target waste  Document value streams  Measure customer satisfaction  Continuous process improvementMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 20 © 2005-2011 Metaspire LLC All Rights Reserved.
  21. 21. ITIL Training Scheme Master ISO/IEC 20000 ITIL Certified Process Foundation Expert Design Engineer (CPDE) Complementary Course 5 credits Complementary Course 1 credit 1.5 credits Managing Across the Lifecycle 3 credits each 4 credits each CSI Service Offerings and Agreement (SOA) SO ST SD Release, Control and Validation (RCV) SS Planning, Protection and Optimization (PPO) Operational Support and Analysis (OSA) Lifecycle Stream Capability Stream © ITSM Academy 2008 2 credits V3 FoundationMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 21 © 2005-2011 Metaspire LLC All Rights Reserved.
  22. 22. Metaspire ConsultingThank you for attending! 10211 Pines Blvd. Suite 117 Pembroke Pines Fl, 30326 954-437-7244 www.metaspireconsulting.com Questions??? Consulting, Classes, Team Training CoachingMetaspire Consulting - 10211 Pines Blvd., Suite 117, Pembroke Pines Fl. 33026Phone: 954-437-7244 - Fax: 954-442-8653 - www.metaspireconsulting.com 22 © 2005-2011 Metaspire LLC All Rights Reserved.

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