the business of it: understanding itil and how to run it as a business

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


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


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


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


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


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


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


IT Organizations Deliver Services

Enterprise

Information TechnologyService Provider

BusinessUnit

BusinessUnit

BusinessUnit

Information Technology Services

Consumer

Creator

Broker

9 May 22-24, 2007


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



OperatingOperatingLevel Level






10 May 22-24, 2007


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











11 May 22-24, 2007


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


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


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


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


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


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


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


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


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


Thank YouThank YLoy AllenDirector, Consulting

Contact Information:817 235 [email protected]

ou