Enterprise Cloud Operating Model Design

Enterprise
Cloud
Opera1ng

Model
Design

Service
Oﬀering
Descrip1on

Joseph
Schwartz

12/17/13

©
Copyright
2010-‐2011
Joseph
Schwartz

All
Rights
Reserved.

2

Opera&ng
Model

Elements

Processes
–
how
we
perform
ac1vi1es

that
deliver
predictable
and
repeatable

business
results
through
competent

people
using
the
right
tools.

Governance
–
how
we
make
and

sustain
important
decisions
about
IT.

Sourcing
–
how
we
select
and
manage

the
sourcing
of
our
IT
products
and

services.

Services
–
our
porPolio
of
IT
products

and
services.

Measurement
–
how
we
measure
and

monitor
our
performance.

Organiza&on
–
how
we
structure
and

organize
our
IT
capabili1es?

12/17/13

©
Copyright
2010-‐2011
Joseph
Schwartz

All
Rights
Reserved.

3

Agenda
•  Major Assumptions
•  Operating Model Scope
•  Value Proposition
•  Design Approach
•  Level 0 Process Model with Level 1 ITIL V3
Mapping
•  The Model as a Business Planning Tool
•  Candidate Operational Flows
•  Next Steps
12/17/13

© Copyright 2010-2011 Joseph Schwartz
All Rights Reserved.

4

Major Assumptions
• 

The scope of managed services addressed by the model should be flexible
enough to support technical services, e.g., network, storage, compute and
application infrastructure or middleware, needed to deliver service offerings
to the SBUs as well as the business services needed to run IT, e.g.,
infrastructure management systems, service management systems

• 

Best practice approaches should be leveraged wherever possible to deliver a
Type 2 or 3 Service Provider Model (ITIL V3), e.g. managed and shared
services

• 

In the Target Operational Model headcounts and skill levels will be aligned to
‘market standards’ to allow for operational metrics and KPIs to be
benchmarked against industry best practices, e.g. ratio of devices / admin,
incident metrics, etc.
– 

The best practice numbers will serve as a goal against which the target
environment will be measured as it matures

• 

Operational maturity and skill levels will be evaluated after a Due Diligence
phase and organizational gap remediation steps taken to ensure that the
saves promised by initiative (s) be realized.

• 

The model must support E2E processes for all service management flows as
they span Service Desk (e.g., incident, Support and Operations, e.g., config,.
change, facilities mgmt., etc)

12/17/13


5

Agenda
Mapping
•  Next Steps
12/17/13


6

Operating Model Scope
Process Model
•  End-to-end operating processes
•  Process triggers and interfaces
•  E.g., ITIL , eTOM, ISO 2000
•  Performance KPIs

Operating Model
Goals are:
•  Operational Efficiency
•  Customer Experience
•  Revenue & Margin

People & Organization
•  Roles & Responsibilities (RACI)
•  Process owners
•  Escalations & interactions, etc.
•  Performance KPIs and Metrics

12/17/13

Technology
(IT Infrastructure, Tools & Automation)
•  Process automation
•  Data models and repositories (e.g.,
CMDB)
•  COTS, standards & simplification


7

Agenda
Mapping
•  Next Steps
12/17/13


8

Assumed Operating Model Savings Targets Value Metric
Desired
Value Metric
Desired
OperationsDesired Value Metric Direction
Direction
Direction
Improved Audit
Compliance

% of Applications
Running on a
Virtualized
Infrastructure

Average cost per type of
service request

Number of emergency
changes due to
non-compliance

Percentage Re-use
and Redistribution
of Under-utilized
resources
and assets

Percentage increase in
the overall end-to-end
availability of service

Number of unauthorized
changes

Average cost per
incident

Service unplanned
downtime connected
to change activities
(hours / month)

Non-complaint assets
identified as the cause of
service failures

Mean-time between
Failures (MTBF)

Percentage reduction
in the costs and time
associated with service
provision

Time and cost to audit
and remediate (audit
cycle time)

% of Incidents
closed by
Level 1 Support

Change (all) to Admin
(all) Ratio

% Cost of Compliance to
Total IT Budget

Service downtime
connected to rollout
activities (hours /
month)

Reduction in the number
of failed changes

12/17/13


9

Desired
Desired
Value Metric
Desired
Support Direction Value Metric Direction
Direction
Percentage reduction in
SLA targets missed

Reduction in
number
and percentage of
major incidents

and remediate (audit
cycle time)

% of Incidents reported by
End Users and
customers vs IT
Operations

% of emergency
changes due to
non-compliance

Number of changes
implemented to services
which met the customers
agreed requirements, e.g.
quality/ cost/time

and remediate (Audit
cycle time)

Percentage
increase in
customer
perception and
satisfaction of SLA
achievements

12/17/13


10

Desired
Value Metric
Desired
Value Metric
Desired
SBUs
Direction
Direction
Direction
% Increase in Customer
Satisfaction of SLA’s

Improved Audit
Compliance
(# of audit tests
passed
versus total)

Percentage reduction in
costs associated with
service
provision

% of IT Projects that Align
with Corporate Objectives

Cost of Unplanned
Business
Interruptions

Number of changes
implemented to services
which met the customers
agreed requirements, e.g.
quality/ cost/time

% of Budget Focused
on Operations, Labor,
Investments

Actual spend
versus
budgeted spend

12/17/13


11

Agenda
Mapping
•  Next Steps
12/17/13


12

Design Approach: Blending Industry Best
Practices
Isn’t ITIL Enough?
•  ITIL V3 covers 100%+ of Day 1 capabilities
•  From a pure end-state design perspective,
ITIL is Internally focused – experience shows
that once transparency is achieved for the
business, comparative valuation occurs –
eTOM offer management and campaign
processes could address an important gap in
the end state
•  ITIL does not link solutions and training to a
design process (it is part of release)
•  The use of eTOM simply ensures that the end
state design provides full coverage in the
event the client needs to access additional
capabilities as it matures

End-to-end operating processes

Integrate with
client
requirements

12/17/13


13

Agenda
Mapping
•  Next Steps
12/17/13


14

High Level-Process Model
Strategy & Service
Business
Strategy,
Architecture &
Planning

Operations and Support
Service Lifecycle
Management

Service
Fulfillment

Service
Assurance

Service
Management
and Operations

Service Development & Management

Customer Service

Resource Development & Management

Service Configuration & Activation

Supplier Development & Management

Service Quality Management

• 

The Operating Model shows seven vertical process groupings that are the end-to-end processes that are
required to support customers and to manage operations

• 

The operating model also includes views of functionality as they span horizontally across the clients’s internal
organization

• 

The horizontal functional process groupings distinguish functional operations processes and other types of
business functional processes, e.g., Service Development versus Service Activation & Configuration, etc.

12/17/13


15

Operating Model E2E Processes
•  Built on industry best practice business and IT process
models
•  Addresses all of end-to-end processes needed to deliver
Managed Services to customers - Includes
– 

Strategy and Service: “Enabling” processes of Business
Strategy, Architecture & Planning, including
•  Service Lifecycle Management and Service Development &
Management

– 

Operations and Support: “Lights on,” or core operations
processes of Customer Service, Service Management and
Operations, including
•  Operations Support, Billing/Chargeback, Service Desk,
Service Development and Management
•  Service Configuration & Activation, Service Quality
Management, Facilities and Operations

12/17/13


16

Facilities Management
Operations Management
Service Validation & Testing
Availability Management
Service Continuity Management
Service-Level Management
Continuous Service Improvement
Knowledge Management
Configuration Management
Change Management
Release & Deployment Mgmt.
Solution Management
Chargeback Management

Access Management
Event Management
Problem Management
Incident/Fault Management

Security Management
Supplier Management
Capacity Management
Demand Management
Compliance Management
Architecture Management
Risk Management
Service Catalog Management
Service Portfolio Management

Service Desk

17


12/17/13

Service
Management
and Operations
Service
Assurance
Service
Fulfillment
Service Lifecycle
Management
Business
Strategy,
Architecture &
Planning

Operations and Support
Strategy & Service

Request Fulfillment

Financial Management

ITIL V3 Mapping

REFERENCE MODEL

TECHNOLOGY

PEOPLE

PROCESS

Operating Model

12/17/13


18

Business Strategy, Architecture & Planning
Processes
• 

Strategy & Service covers the
processes involved in forming and
deciding Service Strategy and gaining
commitment from the business for this

• 

Service Lifecycle Management covers
the services themselves – note that
the model distinguishes Service, used
by the client to represent the
“technical” part of the product, and
Resource (physical and non-physical
components used to support Service)

• 

The vertical functional groupings in
are mapped from ITIL V3, Service
Strategy and Design

12/17/13


19

Level 0 Operations & Support Processes
•  Operations & Support
(O&S) provide the core of
lights-on Operations and
first- and second-line
support
•  The vertical processes in
O&S represent a view of
flow-through of activity,
and map to ITIL V3
processes where there is
functionally-related
activity, e.g., Service
Transition, Operation and
CSI

12/17/13


20

Resource Model
Inputs
Cient Org. Roles / Process/
Task Headcount

Incremental Roles /
Process/Task Headcount
needed for SVMA

Pre-program Device Count

Baseline Operational
Metrics, e.g., Device to
Admin Ratio

Day 1 Device Count

Map To
End State Roles / Process / Task
Headcount

Device Retirement Schedule

New Device Deployments schedule

Role/Process/Task Headcount

Apply
Industry Benchmarks for Operational Metrics for Mature, Automated Processes, Roles Tasks

Result
Schedule of Decremented initiative Ops Roles / Process/Task Headcount

12/17/13

Schedule for Incremented Ops Roles / Process/Task Headcount


21

Resource Model at a Glance
Process
Grouping

ITIL V3
Processes

Key Baseline
Metrics
Industry
Benchmark
Metrics

ITIL Roles

Headcount
Forecast

Demand
Forecast

12/17/13


22

Agenda
Mapping
•  Next Steps
12/17/13


23

The Target Model as a Business Planning Tool
• 

Roles (ITIL V3)

• 

Processes (ITIL V3)

• 

Skills (SFIA)

• 

KPIs / Metrics (Role Based / Processes Based)
– 

• 

12/17/13

Baseline and improvement

Allows us to dial up and down to see ROI


24

Anticipated Trends Forecast (sample)
Infrastructure
Capacity, Efficiency,
Scale and Ability
Cope with Change

BAU Headcounts

BAU + Incremental
Initiative Headcounts

Aurora Planning Timeline

12/17/13


25

Key Planning Metrics
Low Hanging Fruit?

• 

Key Operations Metrics

• 

Key Support Metrics

• 

Mean Time to Repair (time required to
diagnose and resolve problems)

• 

Ratio of L1 to L2 to L3 support staff

• 

First call resolution rate

• 

Incident to Change Ratio

• 

Percentage of escalations to L2 and L3 support

• 

% of Incidents Reported by End Users

• 

Time to plan a change

• 

% of Outages Traced to Mis-configurations

• 

Time to approve a change

• 

% of Changes Completed within change
Windows

• 

Backlog of changes

• 

% of Changes Automated versus Manual

• 

# of change collisions

• 

Device to Admin Ratio

• 

% of changes rolled back

• 

Service roll-out cycle time (MTTD - mean time
to deploy)

• 

# of calls resolved via self-service requests
(call avoidance)

• 

Changes per Admin

• 

MTBF for business availability

• 

$ Unit per Device Managed

• 

Ratio of planned to unplanned changes

• 

Time and cost to Audit and Remediate (Audit
cycle time)

• 

Average cost per incident

• 

Average cost per type of service request

• 

% of incidents closed by L1 support

• 

# of Incidents

• 

Ratio of L1 to L2 to L3 incidents

• 

Time and cost to Grant and Revoke
Administrative Access

• 

Downtime traced to compliance violations

• 

% of configuration audits passed

• 

$ Operation per Device Managed

12/17/13

26

Candidate Operational Flows
•  Start the dialog
•  Guide POV / POC activities
•  Tied to KPIs / Metrics can help determine direct
value opportunity

12/17/13


27

Agenda
Mapping
•  Next Steps
12/17/13


28

1. New Service Request/Service Provisioning

12/17/13


29

2. New Service Request Development Environment

12/17/13


30

3. New Service Request Development Application

12/17/13


31

4. Application Promotion

12/17/13


32

5. Closed Loop Compliance

12/17/13


33

6. Proactive Incident Management

12/17/13


34

Agenda
Mapping
•  Next Steps
12/17/13


35

Call to action
•  Gather data to complete Resource Model spreadsheet
•  Cross-org. process “innovation workshop”
– 

Gain consensus and buy-in on high priority operational process
improvement targets, KPIs, phasing, etc.

•  Organization skills assessment, remediation
recommendations
•  Interface mapping across upstream and downstream
systems (dependency mapping between SM, CRM, MIS,
etc.)
•  Implement operational flows in POV using defined
alternatives
•  Gain understanding of E2E optimization choices, e.g.,
replacement vs. migration
12/17/13


36

Operating Model Focus Group Plan Milestones
Day One – Operations
Transition Readiness
Phase One - Strategic
Target Operating Model
Design
Phase 2 - Skills Assessment
and Remediation Plan

12/17/13


37

High Level Roadmap
Q4

Day One

Phase 1

Phase 2

12/17/13

Q1

Q2

Q3

Q4

Q1

Q2

Day One Operations Transition Readiness
Dedicated Resources Assigned (see Resource Model)
Stakeholder Process
Transition Team and Infrastructure in place
Governance Process
Business-line Application Team Engagement
Complete Resource Model
Strategic Target OM Design
Identify Process Owners
Develop Approach
Gain consensus on priority
Develop and roadmap
Sync with program priorities

Skills Assessment & Remediation Plan
Identify Functions / Skills Roles
Develop Approach
Gain consensus on approach
Execute assessment, identify gaps, develop remediation plan
Align plan to roadmap


38

Day 1 – Operations Transition Readiness
Q4

Day 1

Q1

Q2

Q3

Q4

Q1

Q2

Day One Operational Transition Readiness
Qualified, Dedicated Resources Assigned (see Resource Required)
Stakeholder Process
Transition Team and Infrastructure in place
Governance Process
SBU Application Team Engagement
Complete Resource Model - deliver to WG5

Deliverables
• 
Operations transition team in place, transition processes documented and ready to support Day One
operations and activities
• 
Stakeholder process
• 
Resource Model Delivered
• 
Governance Process
o  Major dependencies – Dedicated resources and infrastructure (see Day One Resource
requirements), Stakeholder engagement, commitment by management to Governance Process
Dependencies
•  Existence of quality metric data
• 
Availability of Transition Team resources

12/17/13


39

Phase 1 – Strategic Target Operating Model Design
Q4

Phase 2

Q1

Q2

Q3

Q4

Q1

Q2

Strategic Target OM Design
Identify Process Owners
Develop Approach
Gain consensus on priority
Develop and roadmap
Sync with Aurora priorities

Deliverables
• 
Process Owners identified and committed – engagement with WG4
• 
Process Models / Roadmap delivered
• 
Prioritization Model / Approach / KPIs delivered
requirements), Process Owner participation (from Technical Operations), dedicated process
design resources (see Day One Resource requirements)
Dependencies
•  Availability of dedicated resources (Budget)
•  Availability and commitment of Process Owners

12/17/13


40

Phase 2 – Skills Assessment and Remediation Plan
Q4 2009

Phase 2

Q1 2010

Q2 2010

Q3 2009

Q4 2010

Q1 2011

Q2 2011

Skills Assessment & Remediation Plan
Identify Functions / Skills Roles
Develop Approach
Gain consensus on approach
Execute assessment, identify gaps, develop remediation plan
Align plan to roadmap

Deliverables
• 
Skills Assessment Framework
• 
Function / skills / role profiles
• 
Gap / remediation plan (e.g., Training / HR Plan)
requirements), Process Owner participation, dedicated HR / training resources
Dependencies (items still to be resolved – if any, and who might be the person / group to ask)
•  Assessment framework (Budget)
•  Availability of Process Owners
•  Dedicated HR / Training planners (Budget)
•  Training Resources (Budget)

12/17/13


41

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