Workshop Guide slides from our April 2014 session at the ITFMA conference in Norfolk: The IT Service Portfolio- an introduction to the Service Portfolio as Investment and how to measure value.

1. The IT Service Portfolio
A common sense approach to
IT/Business alignment
Copyright 2014 Thavron Solutions, LLC

2. Agenda
• Introductions
• Overview
– Context
– IT Services
– Service Portfolio: definitions and best practices
• Service Portfolio Measures and Metrics
• ITFM and the Service Portfolio
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3. INTRODUCTIONS
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4. Introductions
• Me: Nan Braun
• CEO Thavron Solutions
• nbraun@thavronsolutions.com/ @thavronsol / http://thavron.com/blog
• Corporate IT – many roles- “hands” on to BRM to architecture
• CTO, ontological modeling
• Director, TBM Practice
• You?
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5. My Biases
• Systems Thinking
• Manufacturing
– Lean (MESA Lean Manufacturing Strategic Initiative Guidebook author, Toyota Method via GM/Delphi)
– Deming
– Go to Gemba
• Modeling/Frameworks
• Common Sense
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6. OVERVIEW
IT Services, Service Portfolio: Definitions and Best Practices
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7. The IT Evolution
• Corporate IT has spent the last 20+ years re-organizing and re-
inventing itself in an attempt to align with the business –
without good success.
• IT organizations are in varying stages of maturity in their
attempts to run, grow and assist with transforming the
business at large.
• IT continues to become more and more commoditized and
comfortable for our consumers
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8. IT Lifecycles
• IT organizations typically have several complex processes and
lifecycles running ( sometimes at odds with each other).
• All of these are attempts to fulfill perceived business needs, but
can drive competing agendas and goals.
– Financial/Budgeting Lifecycle
– Project Lifecycles
– Software Development Lifecycles
– Product Lifecycles
– ITIL /COBIT/Val-IT
– ITSM
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9. What is a Service?
• Service- delivered and consumed at the same time
• Enterprise IT is a service
• Types of Enterprise IT Services:
– Workplace/End User
– Application/Functional Services
– Technology Services
– Infrastructure Services ( IT 4 IT)
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10. Catalog &
Asset
Management
Supplier /
Vendor
Management
IT Service Management
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IT Component Catalog
Incident management

11. Catalog &
Asset
Management
Supplier /
Vendor
Management
IT Service Management
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IT Component Catalog
Incident management
IT Service Catalog
Incident Prevention

12. Catalog &
Asset
Management
Supplier /
Vendor
Management
IT Service Management
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IT Component Catalog
Incident management
IT Service Catalog
Incident Prevention
Business Service Catalog
Customer Experience Management

13. The Service Lifecycle
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Design
Deliver
Delete

14. The Service Lifecycle
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Design
Deliver
Delete
Design Questions:
• When does a new Service need to be
introduced?
• When does a Service need to be
update or changed?
• Should we build or buy this Service?

15. The Service Lifecycle
Copyright 2014 Thavron Solutions, LLC
Design
Deliver
Delete
Deliver Questions:
• Is this Service meeting the needs of the Consumer?
• Did this Service provide the predicted ROI?
• Are the Consumers using something in place of this Service?

16. The Service Lifecycle
Copyright 2014 Thavron Solutions, LLC
Design
Deliver
Delete Delete Questions:
• Is there a better way to provide this
Service?
• Have market trends or business needs
deprecated this service?

17. Bringing Business to the Center
• To align and enable the business, IT must bring the business
back to the center of what they do.
• A Business centric Service portfolio, supported by the other IT
lifecycles in an iterative and interactive way will create a
natural alignment without artificial processes.
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18. What is a Service Portfolio?
– ITIL definition:
• Allows management to have a view of all services
– Pipeline
– Service Catalog
– Retired
– Provides Understanding of how delivery of IT Services provides value
to the business, as well as the associated risks and vulnerabilities
– The Decision Point in the Service Lifecycle Transitions
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19. Evaluating Services
• Business Value
• Cost to develop and operate the service
• Capability to deliver the service
• Risks to the Enterprise
• Fit to overall IT Strategy
• Dependencies
• Business Case/ROI
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20. ITIL Service Portfolio meta data
• Name
• Description
• Status
• Classification/criticality
• Applications
• Data/Schema
• Business process supported
• Business Owners
• Business Users
• IT Owners
• SLA references
• Supporting Services
• Supporting resources
• Dependent Services
• Contracts/Agreements
• Costs
• Changes
• Metrics
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21. Back to Deming….
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22. Deming Cycle
• PDCA
• PDSA
• Shewart Cycle
• “Structured Problem Solving”
• Basis for DMAIC
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23. Portfolio Pitfalls
• Using the existing IT Project Portfolio Management as a model
– PPM is about balancing resources and prioritizing
– More of a Capacity /Delivery model
– Treats Service Portfolios as a finite bucket
• Developing the Service Portfolio and then “presenting” it to
the Enterprise
• Metrics that drive wrong/bad behaviors
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24. Service Portfolio as Investment
• Create a Policy Statement -A policy statement is the statement that contains the investor's
goals and constraints as it relates to his investments.
• Develop an Investment Strategy - This entails creating a strategy that combines the
investor's goals and objectives with current financial market and economic conditions.
• Implement the Plan Created -This entails putting the investment strategy to work, investing
in a portfolio that meets the client's goals and constraint requirements.
• Monitor and Update the Plan -Both markets and investors' needs change as time changes.
As such, it is important to monitor for these changes as they occur and to update the plan to
adjust for the changes that have occurred.
Copyright 2014 Thavron Solutions, LLC

25. Service Portfolio as an Investment
Develop a
Strategy
(Plan)
Implement
the Plan
(Do)
Monitor
the plan
(Check)
Update the
Plan (Act
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26. The Service Lifecycle
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Design
PDCA
Cycle
Deliver PDCA
Cycle
Delete
PDCA
Cycle

27. Triggers for Re-assessment
• Commercial
• Social
• Economic
• Political
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28. Service Portfolio must be Strategic
• Pull out of operational mode
– Service Portfolio is NOT
• Asset management
• Capacity planning analysis
• Budgeting guideline
• Project Portfolio
• What is the Business Strategy?
Copyright 2014 Thavron Solutions, LLC

29. Catalog &
Asset
Management
Service
Costing &
Billing
Product &
Project
Management
Supplier /
Vendor
Management
Service
Portfolio
A Framework for Business Service Success
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Financial LifecycleProduct Lifecycle
TM

30. SERVICE PORTFOLIO: MEASURES AND METRICS
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31. IT Value Stream aligned to Business Value Stream
Copyright 2014 Thavron Solutions, LLC
Catalog &
Asset
Management
Service
Costing &
Bill of IT
Product &
Project
Management
Supplier /
Vendor
Management
Service
Portfolio
Driven by Escalations

32. IT Value Stream aligned to Business Value Stream
Copyright 2014 Thavron Solutions, LLC
Catalog &
Asset
Management
Service
Costing &
Bill of IT
Product &
Project
Management
Supplier /
Vendor
Management
Service
Portfolio
Driven by Escalations
Service Catalog lifecycle management

33. IT Value Stream aligned to Business Value Stream
Copyright 2014 Thavron Solutions, LLC
Catalog &
Asset
Management
Service
Costing &
Bill of IT
Product &
Project
Management
Supplier /
Vendor
Management
Service
Portfolio
Driven by Escalations
Service Catalog lifecycle management
Service Portfolio Management

34. Value Stream Assessment
• Value Stream – end to end pipelines that cross functions that
deliver value
– Man, Machine, Material and Information
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35. Value Stream mapping
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36. Basic Value Stream Symbols
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37. IT Services in the value stream
IT Services
Business
Functions
Value Stream
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38. IT Services have a non-linear relationship to VS
Value
Stream
Business
Function
IT service 1
IT Service 2
Business
Function 2
IT Service 2
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39. IT Services have a non-linear relationship to VS
Issue License
Process payment
Payment
transaction
system
Email
Deliver license Email
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40. Portfolio Management Analytics
• Value
• Performance
• Market Position
• Utilization
Copyright 2014 Thavron Solutions, LLC

41. Metrics for Portfolio Management Governance
• % of Services with service valuation performed
• % of Services with documented customers
• % of Services with active business cases
• % of Services linked to business outcomes
• % of Services with documented risks
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42. Financial Metrics
• Services ranked according to Business Value
• % of Services with ROI achieved /% progress for ROI
• Budget Control measures for services
– Variance
– Control chart
– Demand impact analysis
Copyright 2014 Thavron Solutions, LLC

43. Performance/Utilization Metrics
These should have ties to the Pattern of Business Activities ( PBAs)
• Utilization/Uptake trends
• Overall ratio customer facing services/IT Services
• % support service ( cost and/or utilization) per service
• Service demand trends
• Complaints
Copyright 2014 Thavron Solutions, LLC

44. Market/Lifecycle Analytics
• Benchmarking
• Market Trends versus PBAs
Copyright 2014 Thavron Solutions, LLC

45. THE IT FINANCIAL MANAGER &
THE SERVICE PORTFOLIO
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46. What does this mean for ITFM?
• Analytics and Data for decision making
• Partners in the process
Copyright 2014 Thavron Solutions, LLC

47. Catalog &
Asset
Management
Service
Costing &
Bill of IT
Supplier /
Vendor
Management
Service
Portfolio
IT Financial Management
Copyright 2014 Thavron Solutions, LLC
Annual/Quarterly Actuals
Allocated Costs /low transparency
Manual Budgeting process
High Forecast variance

48. Catalog &
Asset
Management
Service
Costing &
Bill of IT
Supplier /
Vendor
Management
Service
Portfolio
IT Financial Management
Copyright 2014 Thavron Solutions, LLC
Annual/Quarterly Actuals
Manual Budgeting process
High Forecast variance
Monthly Actuals
Semi- Automated Budgeting process
Forecast variance

49. Catalog &
Asset
Management
Service
Costing &
Bill of IT
Supplier /
Vendor
Management
Service
Portfolio
IT Financial Management
Copyright 2014 Thavron Solutions, LLC
Annual/Quarterly Actuals
Allocated Costs/low transparency
Manual Budgeting process
High Forecast variance
Monthly Actuals
Infrastructure/TCO costs/transparency
Semi- Automated Budgeting process
Forecast variance
Rolling /monthly actuals
Business Service Prices
Rolling Budget/Forecast

50. Financial Metrics
• Services ranked according to Business Value
• % of Services with ROI achieved /% progress for ROI
• Budget Control measures for services
– Variance
– Control chart
– Demand impact analysis
Copyright 2014 Thavron Solutions, LLC

51. Performance/Utilization Metrics
These should have ties to the Pattern of Business Activities ( PBAs)
• Utilization/Uptake trends
• Overall ratio customer facing services/IT Services
• % support service ( cost and/or utilization) per service
• Service demand trends
• Complaints
Copyright 2014 Thavron Solutions, LLC

52. Data Inputs for Service Portfolio Management
• Service Definition/Decomposition ( Service Owners)
• Service Costs
• Service Consumption
• Service Pricing
• Service Budgets
• Complaints/Instance/Ticket ( Service Desk)
• Demand Forecasts ( BRM)
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53. Catalog &
Asset
Management
Service
Costing &
Billing
Product &
Project
Management
Supplier /
Vendor
Management
Service
Portfolio
Leverage ITFM info: build your platform for Success
Copyright 2014 Thavron Solutions, LLC
Financial LifecycleProduct Lifecycle
TM

54. Discussion
Copyright 2014 Thavron Solutions, LLC
Follow up questions?
Nan Braun
nbraun@thavronsolutions.com
765.252.4509 / http://thavron.com /@ThavronSol

55. Recommended Further Reading
• Architecture & Patterns for IT: Service Management, Resource Planning
and Governance by Charles T Betz
• Service Management for Dummies by Judith Hurwitz, Robin Bloor, Marcia
Kaufman, Fern Halper
• Technology Scorecards Aligning IT Investments with Business performance
by Sam Bansal
• The Remedy: Bringing Lean Thinking out of the Factory to Transform the
Entire Organization
• Implementing Information Technology Governance: Models, Practices and
Cases by Steven De Haes
• Thavron Blog: http://thavron.com/blog/
Copyright 2014 Thavron Solutions, LLC