transform your it organization with process-based … · 3 © 2011 forrester research, inc....

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Transform Your IT Organization With Process-Based Service Management

Eveline Oehrlich, Principal Analyst

Forrester Research

May 31, 2011

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Agenda

• Three forces to recognize

• The MOOSE in IT

• A example of efficiency improvement

• Shift to modern IT

• People

• Process

• Technology

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The Bad News

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Back into a budgetary

deepfreeze . . .

. . . Priceless!

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Global business and government purchases of IT goods and services (*Forrester Forecast)

2010 2011 2012*

Infrastructure 11.6% 10.7% 5.5%

Telecom 6.4% 5.7% 3.0%

Software 6.6% 9.8% 5.4%

IT consulting 7.7% 11.0% 6.0%

IT outsourcing

6.7% 10.6% 6.7%

Total IT purchases

7.8% 9.7% 5.4%

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The Good News

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Business Demands IT Help Even When Revenues Fall

June 2006, Best Practices “How IT Must Shape And Manage Demand”

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Three Sets Of Forces Shaping BusinessDemand

2010 2012 2015 Beyond

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14M80M

Business-ready, self-service technologies are on the rise

$28B

$258B

2010 2012 2015 Beyond

Deg

ree o

f b

usin

ess c

han

ge

10%-33%

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Deg

ree o

f b

usin

ess c

han

ge

And a self-sufficient, tech-savvy workforce is rising with it

78%40% IT

22%

60%

2010 2012 2015 Beyond

26%

46%

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Deg

ree o

f b

usin

ess c

han

ge

The business environment will be radically more complex

2010 2012 2015 Beyond

$28T

1B

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The Challenges

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2010 2015

The result: An increasing IT capability gap

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M_aintenance ofO_ngoingO_perationsS_ystems andE_quipment

The MOOSE

© 2011 Forrester Research, Inc. Reproduction Prohibited15October 7, 2010 “2011 IT Budget Planning Guide For CIOs” Forrester report

2011 IT budgets and the MOOSE

© 2011 Forrester Research, Inc. Reproduction Prohibited16Source: Forrsights Budgets and Priorities Tracker Survey, Q2 2011

1%

4%

1%

1%

1%

1%

1%

1%

1%

1%

1%

2%

10%

23%

4%

9%

10%

22%

6%

7%

7%

16%

8%

25%

31%

35%

22%

35%

30%

38%

23%

26%

24%

38%

31%

35%

43%

29%

50%

40%

43%

30%

47%

44%

45%

33%

41%

26%

16%

10%

23%

15%

17%

10%

24%

21%

23%

13%

20%

12%

Improve the measurement of IT’s impact on business performance

Improve IT performance by adopting processes like CMMor ITIL

Improve the efficiency of IT (e.g., Lean initiatives)

Define strategy for risk and compliance

Increase the scope of IT’s centralized or shared services

Market the IT department within the firm

Increase IT capacity/resources to drive businessinnovations

Improve our customer management capabilities

Improve or streamline business processes

Improve the sustainability and energy efficiency of IToperations and infrastructure

Lower IT’s operational costs to free up money for new initiatives.

Create a comprehensive cloud/as-a-serviceadoption/migration plan

Which of the following initiatives are likely to be your IT organization’s top IT management priorities over

the next 12 months?

Don't know Not on our agenda Low priority High priority Critical priority

Base: 2741 North American, European, Asia Pacific, and Latin American IT budget decision-makers

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M_aintenance ofO_ngoingO_perationsS_ystems andE_quipment

The MOOSE

In 2011: Only 50% of the budget went to IT MOOSE . . . this is good!

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Traditional IT departments

- Technology tribes

- Engineer-to-order

- Lack of control with what processes and tools they work

- Pace of change/complexity

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Efficiency People

ProcessTechnology

=

+

+

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IT organizations (simplified)

Service

Management

PMO

Infrastructure

Operations

Security

Application

Development

DevOps

Customer Service

Center

Business

IT

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Process Model (simplified)

Manage

Govern

Control

Operate

Secure

Design

Transition

Service

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Process Details (simplified)

Availability

Capacity

Service Continuity

SLM

Service Catalog

Program & Project

Portfolio

Assets

Financial

Change Mgmt.

Configuration Mgmt.

Release Mgmt.

Problem Mgmt.

Event Mgmt.

Knowledge Mgmt.

Access Mgmt.

Information Security

Operational Security

Requirements

Design

Develop

Test

QA

Operation Specs

Test

Transition

Incidents Mgmt.

Request Mgmt.

Knowledge Mgmt.

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Adoption

Justifications

Customer satisfaction

Service delivery

Service consumption

New technologies

Business demands

The Reality

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IT Reputation ?

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Only A Minority Perceive IT As Tightly Aligned With The Business

December 2010 “Beyond Alignment: BT Strategic Planning”

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Source: Rudder Finn blog http://www.ruderfinn.co.uk/blogs/dotcom/files/2009/06/enviromental-head-in-the-sand.jpg

We could …

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Efficient IT does much more than reduce IT costs —it also frees up time and money to focus on revenue generating and innovation activities.

…or address efficiency

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Your new roadmap!

Source: The Sisters of Notre Dame (http://www.snd1.org/images/road15pavedwinding.jpg)

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A framework for improving IT efficiency

Identify efficiency

opportunities

Define metrics

Measure and

analyze

Remediate

People

Process

Technology

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1. A “changed” IT organization

2. An effective understanding of key business services and how IT supports them

3. Managing the IT supply chain as a service catalyst

4. Adoption of best practice framework(s)

All of which requires to shift to a modern IT (process based)

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Traditional technology-oriented department

Source: March 11, 2009, “Inquiry Spotlight: Infrastructure & Operations Organizational Structures, Q1 2009”

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Interest in restructuring is high

Source: July 16, 2010, “New IT Models Will Focus On Service Improvement And Cost Reduction”

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Service improvement, cost reduction, and consistency are primary restructuring drivers

Source: July 16, 2010, “New IT Models Will Focus On Service Improvement And Cost Reduction”

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Business unit

Business unit

Business unit

Business unit

Business services

IT enterprise management

IT process management

IT service development

IT service deliveryIT service transition

Source: December 8, 2009, “It's Time For IT Management Software 2.0”

The new IT organization: the IT enterprise

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Applications groups are the primary targets for restructuring

Source: July 16, 2010, “New IT Models Will Focus On Service Improvement And Cost Reduction”

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Elements of DevOps

� Complexity kills

� A common lifecycle (ITIL v3? SDLC?)

� Common release management process

� Automated release management execution

� Feedback across the lifecycle

� New incentives

� Organizational impact

– Who owns release management?

– Where does application support reside?

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1. A “changed” IT organization

2. An effective understanding of key business services and how IT supports them

3. Managing IT supply chain as a service catalyst

4. Adoption of best practice framework(s)

All of which requires to shift to a modern IT

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Infrastructurecomponents

Midtier

Businessprocesses

Applications

Businessservices

Middleware

WS, AS, BPEL, ESB, . . . Databases Virtual environments

Networking devices

Routers, switches, VOIP, . . .

Storage devices

NAS, SAN, . . .

OS/servers

Linux, Unix, Windows, . . .

Custom and composite apps

Java/.Net-based, portals, mesh-ups, proc-based . . .

Packaged apps

SAP, Siebel, PSFT, EBS, JDE, i-flex, . . .

Other apps

Exchange, Legacy, . . .

Customer

portal

Order

fulfillment

Product

catalog

Inventory

service

Shipping

serviceReturns

Billing

service. . .

Online

banking

Hire-

to-retire

Procure-

to-pay

Order-to-cash

(Enter order � notify customer � check credit� reserve stock � arrange delivery � confirm)

Lead –

to-order. . .

In the age of service

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Service Management Framework

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1. A “changed” IT organization

2. An effective understanding of key business services and how IT supports them

3. Managing service supply chain as a service catalyst

4. Adoption of best practice framework(s)

All of which requires to shift to a modern IT

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Create a portfolio of standardized agile services

PaaS

Mainframe

Consultants

InternalIaaSWindows

ExternalIaaS

SaaSSANMPLS

Hosting

Middleware

Linux

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1. A “changed” IT organization

2. An effective understanding of key business services and how IT supports them

3. Managing service supply chain as a service catalyst

4. Adoption of best practice framework(s)

All of which requires to shift to a modern IT

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How has ITIL (IT Service Management) impacted the following?

Org Reputation Ops Productivity Service Quality

Ops Costs

Don’t know

Significantly detrimental

Detrimental

No change

Beneficial

Significantly beneficial

Source: Service Management Insights from the 2011 Forrester/itSMF-USA ITSM Study

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Changes cause lots of incidents

Another 33% are undesirable25% are excessive

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The focus in 2012 and beyond should be …

� Productivity

� Quality

� FlexibilityReduce

Cost

Improve

Quality

Improve

CustSat

Improve

Consistency

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The customer experience with your service desk shapes the reputation of the entire IT group

Compliance

Cost

Customer satisfaction

Revenue

Compliance

Cost

Customer Business

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Recommendations/Conclusions

1. Think service from the outside in. Is your service desk a service catalyst?

2. Look at how you work with your Development Team – what is the communication, how could that be improved?

3. Evaluate your change management process end-to-end. Is there an opportunity for improvement?

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Thank you

Eveline Oehrlich

+1 617-613-8803

eoehrlich@forrester.com

Blog: blogs.forrester.com/eveline_oehrlich

www.forrester.com