quint wellington redwood ©2002 business value through it performance performance based service...

Quint Wellington Redwood ©2002

business value through IT performance

Performance Based Service Management (PBSM)

“A new approach for quick & measurable business performance improvement”

Dragana Mijatovic MSc, MBASenior ConsultantQuint Wellington Redwood



The ITIL implementationProcess-based Implementation

Key Unit of planning: process Key Success Indicator: maturity improvement Implementation style:

Working groups working per process Often experts hired to design ITIL processes Often tool experts hired to configure and implement the

Service Management Tool Traditional discussion on which process first



The challenges of traditional ITIL implementations

No goal/focus Focus on individual processes with a lack of integral

overview Too many KPIs Unprepared management team An inconsistent organization No Communication and Management of Change Plan Processes ITIL compliant, but customers still not

satisfied



Business

Market

IT

Customers

Reliable Service

No Service Outages

No IT Outages

New Services

Quick Time to Market

of ChangesNew Use of IT

Service + Price + Customer =

Perceived Value

ImprovementsService + Price +

Customer = Perceived Value

Serving Customers



IT Services and Value Drivers

1. Lost Production Hours 2. Time to Market of Changes3. Effectiveness of Changes4. Quality of Plans5. Number of Proactive Changes

No IT OutagesQuick

Time to Market of Changes

“Maintain current functionality”

“Provide new functionality”

“Give advice on current and new functionality”

New Use of IT

Management Imperative: Communication with the (IT) Customer



Calculating Lost Productivity

A.

No. of incidents and resolution

times

B.

Time that incidents are open

C.

Time that IT customers

cannot work

D.

Excess cost and lost revenue

Priority Total numberAverage time to

repair (days)

Number of users

affected

Gross lost production

days

Cost per day

DependancyNet Lost

production daysNet costs

Costs per day to business per incident

Total cost to the business

Critical 1042 0.7 20 14,227 € 240 50 % 7,113 € 1,707,213 5000 € 3,556,695

High 2796 5.4 10 149,634 € 240 40 % 59,853 € 14,364,817 1000 € 14,963,351

Medium 12196 10.3 4 500,948 € 240 30 % 150,284 € 36,068,234 500 € 62,618,462

Low 376 9.8 1 3,699 € 240 20 % 740 € 177,556 100 € 369,908

16410 668,507 217,991 € 52,317,820 € 81,508,415



Actual Case

5 billion euro global company150 IT staffOver 4500 users50 locations3 IT Shared Service Centers



Net cost to business

January to December 2008

January to May 2009

4.4 mill

3 mill

0.78 mill



Results: Incidents

Explanation Backlog Reduced from 483 (1 Dec

08) to 6 (22 May 09) Reduction of backlog is

not just administrative Some incidents translated

to problems (approx. 30)

Time to Repair Reduced Normal distribution of

performance Goal: maintain current

performance, reduce MTTR of low incidents

Number of Incidents Problem Management

0

100

200

300

400

500

600

December 08 January 09 February 09 March 09 April 09 May 09

Backlog

Open

0,02,04,06,08,0

10,012,014,016,018,020,0

Critical

High

Medium

Low



Customer Results

Reduced lost production hours by over 85% Cost of IT disruptions reduced by over 82% Improved service level performance to over 90% of

calls resolved with reduced timeframe IT employee involvement increased (better

understanding of their contribution to the business)



Getting started

Create a group of people who have ITIL knowledge Implement the Help Desk Implement the Service Management Tool Start registering incidents and service requests Define standard changes For non standard changes implement your accept,

approve, authorize steps Take your deadlines seriously and manage them



Way of working



Typical Project Activity

The following activities will be carried out: Step 1 Measure: Measure performance based on

Value Drivers Step 2 Analyze: Determine areas of improvement

using team members observations in combination with the Value Driver measurements;

Step 3 Plan Activities: Determine measures to improve performance and assign actions to the members of the Improvement Team;

Step 4 Communicate: Explain the findings and the way forward;

Step 5 Execute: Execute performance improvement measures

Stage 3 Performance Improvement

Stage 2MOC

Preparation

Stage 4Advanced

Control

Stage 1Project Start-Up



Performance Based Service Management

Measurable, fact based, result- oriented way of improving IT services delivery, aligned with business objectives

Steps beyond ITIL by limiting the number of business-focused IT KPIs, called the IT Value Drivers

Radically improves IT Organization capabilities in a short

time with easily and unambiguous measurable results

It is a repetitive method building on previous achievements to improve step by step – a defined evolutionary approach

Uses available resources



Characteristics of PBSM

Quick Wins, Business results driven 2 week incremental result windows ongoing

PBSM is built on a core of Management of Change The product is sustainable, long lasting Facilitates skills transfer to the organization Drives positive organizational change through objective

approach, quantitative measures, fact based PBSM is a 'fit for purpose' use of industry recognized

best practices (ITIL, ISO20K, PRINCE2, Lean Six Sigma)

Innovative Practical Measurable Customizable for each engagement



PBSM: Market Proven Methodology

“This project has delivered the CBS the necessary building blocks to improve our productivity. The approach, developed with Quint (reporting, assigning actions for improvement and execution) is applicable to all circumstances and the building blocks can be used over and over again.”

“Quint’s advisors have the know how of the best practices in this area and aren’t afraid to get their hands dirty. We now score an 8 or higher in terms of customer satisfaction and we have Quint to thank for that!”

PBSM elements in conjunction with ITIL v3 are currently being implemented

in a major Greek services organization



“Teach a man to fish… ”

“Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime”



Quint Wellington Redwood

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