1 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Loy AllenDirector, Consulting
The Business of IT
WelcomeWelcome
to Transformation and Innovation 2007 The Business Transformation Conference
2 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Information Technology Today
• Growing technical and business complexity• Cost pressures are never ending• The value of IT is questioned• The users of IT don’t know exactly what they are
getting nor how much they are paying• Outsourcing/Off shoring/best of breed decisions
are difficult• Consultants everywhere• The mountains are getting bigger and the heroes
fewer
3 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
No Shortage of Ideas
• Running IT like a business• IS Lite• ISCo• Information Technology Infrastructure Library• Service Oriented Architecture• Business Service Management• Common Themes
– Self sustaining– Customer focus– Service based– Process centric– Business alignment– Measurable service levels– Ability to show value– Transformation may be needed
4 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
If IT is a business…
• What does it sell?• Who buys it? (Customers/Consumers)• How is what it sells built and delivered• Who creates and delivers what IT sells?• Where is it created and delivered?• What does it cost?• How much is it worth?• Doesn’t a business focus mean contracts and arms
length customer relationships??
5 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Service Defined
• A Service – Definition 1: Activity that does not produce anything– Definition 2: Work done by somebody for somebody else as a
job, a duty, a punishment, or a favor– Old TV image of IT Services: Computer tape spinning, lights
flashing, cards being sorted– Services are not tangible, they are hard to describe
• Service: Activity that produces an outcome, valued by a consumer, when and where it is needed
• A service is different from a process– Services are a discrete bundle of components (processes,
enabling technology, skilled people, organization and facilities)– Services can be bundled into offerings which have meaning
and value to the consumer • Services, offerings and components have owners
– Responsibilities include quality, cost, delivery– Owners ensure integration with other services
“Wisdom begins with the definition of terms”
Socrates
6 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Domains of IT Service Management
Management of Information Technology Services
Governance
Architecture Management
ApplicationManagement
InfrastructureManagement
Service SupportService Delivery
ITST operates within 6 domains that encompass an IT environment. These domains are focused on enabling the IT organization to operate in a business like way that ensure value is received for the use of IT resources within an enterprise .
7 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
An IT OrganizationThe same principles that apply to the analysis of the performance of any organization apply to the performance assessment of an IT organizations.
All of theses components must integrate and function as a unit for IT to be successful in the delivery of services to its customers.
APQC’s process framework and the vast majority of business diagnostics can be applied to the assessment of IT organizations
There are specific areas of IT understanding that are in addition to an overall business understanding
Facilities &Infrastructure
Process
Infrastructure
Organization
Performance
Equipment
Strategy and
Vision
Culture
Competency
8 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
IT Organizations Deliver Services
Enterprise
Information TechnologyService Provider
BusinessUnit
BusinessUnit
BusinessUnit
Information Technology Services
Consumer
Creator
Broker
9 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Service Model
ServiceService ServiceService ServiceService
Offerings
Customer Customer
Cros
s-se
rvice
Proc
esse
s, O
rgan
izatio
nTe
chno
logy
, Skil
ls, F
acilit
ies
Service Specific Processes, Technology, Organization, Skills, Facilities
Service Service Level Level
AgreementsAgreements
Service Service Level Level
AgreementsAgreements
OperatingOperatingLevel Level
AgreementsAgreements
OperatingOperatingLevel Level
AgreementsAgreements
OperatingOperatingLevel Level
AgreementsAgreements
10 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Multiple Service Providers
ServiceService ServiceService ServiceService
Offerings
Customer CustomerCr
oss-
serv
icePr
oces
ses,
Org
aniza
tion
Tech
nolo
gy, S
kills,
Fac
ilitie
s
Service Specific Processes, Technology, Organization, Skills, Facilities
Service Service Level Level
AgreementsAgreements
Service Service Level Level
AgreementsAgreements
OperatingOperatingLevel Level
AgreementsAgreements
OperatingOperatingLevel Level
AgreementsAgreements
OperatingOperatingLevel Level
AgreementsAgreements
11 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
The Service CatalogThe catalog is the heart of the services based organization
• Offerings created from services
• Services are created from components
• Offerings are presented to customers
• Services can be presented to customers or regrouped to provide customized offerings
Offerings
Services
Components
12 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
The concept of Service Oriented Technology Management leverages experience and industry best practices to guide IT toward achievement of their objectives
Service Oriented Technology Management
Service Oriented Technology Management is a comprehensive approach to the transformation and operation of a service based enterprise relying on structure and discipline to identify, define, support and provide services, delivered to a consumer, consistently meeting standards in support of their business objectives
13 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Service Oriented Technology Management
• Service Oriented Technology Management looks at rethinking and structuring what the IT organization provides to it customers and how well it does so
• Viewing a business in terms of services provided allows Clients, including IT organizations to bundle process, enabling technology, people, management structures and facilities into offerings
• Services are then ‘shared’ with consumers across an enterprise based on value to the consumer, cost that can vary based on the appropriate per level of service
• Value is understood and appropriate services are provided to enable consumers to meet their business objectives and the enterprise to improve its performance
14 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
What is ITIL?
• ITIL is a best practice in IT Service Management, developed by OGC and supported by publications, qualifications and an international user group (itSMF)
• It is a component of the foundation of the ITS&T practice
• It is primarily process driven, describing what should be done but not how
• It is the de facto standard for IT Service Management globally
• It integrates with CoBIT, MOF, BS15000, ISO
• It is growing in acceptance and is being improved based on experience
• IT is a guideline not a cook book
• It is not an out of the box solution
15 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
History of ITIL
• ITIL was initially developed in the late 1980’s • The British Telecommunications Agency (CCTA), now
called the Office of Government Commerce (OGC), developed a framework for efficient and financially responsible use of IT.
• The goal was to develop an approach that would be vendor-independent and applicable to organizations with differing technical and business needs.
• ITIL version 1 grew from a collection of best practices observed in the IT service industry.
• ITIL version 1 was static so over the last few years OGC made changes (some of those are quite significant) to ITIL and the latest publication of the library is regarded as version 2
• In early 2005 work started on ITIL version 3, due to be published in June
“Wisdom begins with the definition of terms”
Socrates
16 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
ITIL is changing
ITIL V3 is a significant shift from the process oriented approach in V2 to the focus on services.
V3 is to be published in June, it is believed to be of considerable value in defining how services are identified, designed, delivered and supported
ITIL Version 2
ITIL Version 3
June 2007
17 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
OK, How??
• Moving from a functional view of IT to a service, business view is transformational in nature
• A plan/framework/strategy is essential• Define terms and measurements• Shift thinking from functional to service• Organize IT for focus and effectiveness• Understand how services are delivered and how
much they cost to deliver• Define how value will be determined and how the
costs of services will be recovered• Transformation requires active sponsorship,
leadership and perseverance• Governance (framework for decision making) of IT
must change• New skills may have to be added to the IT
organization (account/relationship management??)• Communication with customers and IT is critical
IT must create value in the minds of its customers
18 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Guiding Principles
• IT serves its customers, not IT• IT enables customers to meet their business
objectives• IT has a mutually beneficial relationship with its
customers • Expectations for the delivery of services are clearly
and commonly understood by the customer and by IT
• IT communicates the value it brings in terms customers understand
• Service offerings are customizable and based on consistent delivery of services
• Customers pay for level of services they receive• Service owners are responsible for the life-cycle of
the service including quality and cost• A service is integrated with the other services• IT and its customers operate within a commonly
understood framework, ITIL• IT runs like a business
Basis for transformation
19 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
WIIFM
• Clearer understanding of what IT offers the business it supports
• Opportunity to align IT to the business needs• Clarity of roles and responsibilities within IT• Improved governance relationships with managed
service providers• Improved governance relationships with the
enterprise • A more efficient and effective IT organization that
enables the business it enables to meet its objectives
• Survival???
What’s In It For Me???
20 May 22-24, 2007
Washington Dulles HiltonThe Business Transformation Conference
Thank YouThank YLoy AllenDirector, Consulting
Contact Information:817 235 [email protected]
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