A well-designed IT Service Delivery Model is critical to achieving success in IT management and operations. Many IT organizations focus on optimizing their technology assets -- the infrastructure and applications. However, in our experience, business value is achieved most effectively when technology assets and the IT service delivery model are integrated and work together seamlessly.

1. IT Service Delivery Model Discussion Document October 2009

7. As we’ve assisted our clients with their IT service delivery models, we have gained a number of insights that are important to consider Page Technology Shift Business Alignment Cost Efficiency Speed / Agility Observation Lesson Learned Many companies deploy new technologies (e.g., applications and infrastructure) without tailoring their IT service delivery models. Not only can this prevent positive ROI from the new technology, it can also lead to significant support challenges – a corresponding shift in the IT service delivery model is required to support the new technology and its usage effectively. Observation Lesson Learned Observation Lesson Learned Observation Lesson Learned Most IT service delivery models do not align with the overall business model – failing to consider overall company objectives or business imperatives. This often leads to mis-managed expectations, lack of true integration with the business, and proliferation of “Shadow IT” in the company – what’s required is that the IT service delivery model should follow the business model and hold the same things important. Most IT organizations have executed tried and true cost reduction initiatives (e.g., strategic sourcing, server virtualization, application rationalization), but have not considered the delivery model itself as a potential cost savings opportunity. We have found that the service delivery model represents the largest “hidden pool of cost” within an IT organization – establishing a delivery model with sound process controls continually identifies savings opportunities, addresses them, and makes them “stick.” More than ever, IT executives are asked to deliver more rapidly. The need to increase speed and efficiency often comes at the expense of poor quality and results. IT customers are often frustrated with solutions that aren’t sustainable – we have found that by applying leading business concepts (e.g., overhead lean) to IT operations, companies can deliver faster results without sacrificing quality.

18. In parallel, we review spending and labor distribution against industry averages Page • IT spending overall is inline with industry averages, though lab or spend / headcount is much higher as the organization has taken little advantage of outsourcing tactical support • The high number of local support resources drives these results and also diminishes the organizations ability to invest in more global / strategic initiatives Global / Strategy FTEs vs. Local / Tactical FTEs CapEx vs. OpEx IT FTEs as % of Total Employees** IT Maintenance / Operations Expense as % of Revenue Industry Average & Client Position Metric Overall Spend Analysis Global / Strategy FTEs vs. Local / Tactical FTEs CapEx vs. OpEx IT FTEs as % of Total Employees** IT Maintenance / Operations Expense as % of Revenue Industry Average & Client Position Metric Overall Spend Analysis IT Op Ex Analysis IT Op Ex Analysis 0% 3% 1% 2% 0% 3% 1% 2% 0% 3% 1% 2% 0% 3% 1% 2% 100% CapEx 50/50 100% OpEx 100% Global 50/50 = Industry Average = Client = Industry Average = Client 100% Local 75/25 30/70 = Industry Average = Client = Industry Average = Client Illustrative Example 0% 10% 20% 30% 40% 50% Labor Software Maintenance Outsourcing/SLA Depreciation

19. When Discovery and Analysis are completed, the outputs are holistically reviewed in order to produce a final recommendation Page Maturity Model Analysis Comparative Spend Analysis Maturity Model Assessment Final Recommendation The results of each analysis are compelling, but it is critical to review them side-by-side to understand the root cause of our findings… … we do not want to merely give you something to think about - - we want to give you something to act on.