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IT Service Delivery Model Discussion Document October 2009
Table of Contents ,[object Object],[object Object],[object Object],[object Object],Page
Archstone Consulting at a Glance ,[object Object],[object Object],[object Object],[object Object],[object Object],Page  DEFINING A NEW AGE IN CONSULTING SM Archstone Consulting Service Offerings  and   Industry Segments www.archstoneconsulting.com   Services Industries ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Our IT Effectiveness practice helps clients improve the business value on their investments in information technology Page  Business  Value The IT organization and processes needed to implement and operate IT capabilities across the enterprise. The IT applications, infrastructure , and associated data needed to operate a modern business . IT Service Delivery Model IT  Technology Assets ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Definition Definition Today’s  Focus Archstone Consulting provides services to improve quality and reduce costs of IT operations
Table of Contents ,[object Object],[object Object],[object Object],[object Object],Page
A well-designed IT Service Delivery Model is critical to achieving success in IT management and operations Page  Governance Organization Operational Processes Performance Management ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Key Components of a Robust IT Service Delivery Model
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.
Our experience has enabled us to drive operational improvements that can lead to significant cost savings in a number of areas Typical Operational Improvements Technology Alignment Business Alignment Cost Efficiency Speed /  Agility *Average savings based on Archstone Consulting client projects   Typical  “Hard” Benefits ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Technology Shift:   As companies adopt new technologies, they must also adjust their IT Service Delivery Model Page  Technology Shift 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. ,[object Object],[object Object],[object Object],Key Perspectives ,[object Object],Sample Client Experiences ,[object Object],[object Object]
Business Alignment:   Most IT organizations focus on the technology rather than alignment with the business  Page  Business Alignment 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. ,[object Object],[object Object],[object Object],Key Perspectives ,[object Object],Sample Client Experiences ,[object Object],[object Object]
Cost Efficiency:  The IT Service Delivery Model often represents the best opportunity to reduce annual IT spend Page  Cost Efficiency Observation Lesson Learned 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.” ,[object Object],[object Object],[object Object],[object Object],Key Perspectives ,[object Object],Sample Client Experiences ,[object Object],[object Object]
Speed / Agility:   Moving faster doesn’t have to mean sacrificing quality  Page  Speed /  Agility Observation Lesson Learned 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. ,[object Object],[object Object],[object Object],[object Object],Key Perspectives ,[object Object],Sample Client Experiences ,[object Object],[object Object]
Table of Contents ,[object Object],[object Object],[object Object],[object Object],Page
Our standard IT Service Delivery Model Definition Approach includes 4 primary phases and typically lasts 8-12 weeks Page  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Archstone Consulting  IT Service Delivery Model Definition Archstone Consulting  Project Timeline:  IT Service Delivery Model Definition
Our “Rapid Assessment” provides a high level analysis of IT maturity and spend and can be executed in 5-7 days Page  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Archstone Consulting  IT Service Delivery Model “Rapid Assessment” Archstone Consulting  Project Timeline and Deliverables Maturity Model Comparative Spend Analysis Recommendation Our “Rapid Assessment” can be executed in as few as  5-7 days  and includes these deliverables
Our “Rapid Assessment” approach typically requires 5-7 days of work over a three week period  Page  Discover Analyze Report 1 2 3 *Key Activities: Key Activities: Key Activities: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],*Archstone Consulting resources work remotely during the first week
Our IT Effectiveness Maturity Model allows us to quickly assess the high level capabilities of an organization ,[object Object],[object Object],[object Object],[object Object],Page  Maturity Assessment Maturity Levels Dimension Components  ,[object Object],[object Object],[object Object],[object Object]
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
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.
Too often, companies make the mistake of analyzing spend against benchmarks without understanding the root cause Page  In this example, labor spend is higher than the industry average, though there could be justification, such as: ,[object Object],[object Object],When comparing the spend analysis to the maturity ratings, a root cause is often discovered ,[object Object],Illustrative Example Illustrative Example
Table of Contents ,[object Object],[object Object],[object Object],[object Object],Page
Summary ,[object Object],[object Object],[object Object],[object Object],Page
How does Archstone Consulting differ from traditional IT consulting firms? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Page  We are excited at the prospect of working with you and stand ready to begin immediately

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IT Service Delivery Model Overview

  • 1. IT Service Delivery Model Discussion Document October 2009
  • 2.
  • 3.
  • 4.
  • 5.
  • 6.
  • 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.
  • 8.
  • 9.
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16.
  • 17.
  • 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.
  • 20.
  • 21.
  • 22.
  • 23.