A roadmap for building a robust Enterprise Service Management solution

Guest post by Prasanna Anantharamaiah, lead solution consultant, HP Professional Services

 

prasanna-anantharamaiah_tcm_245_979923.jpgEnterprise Service Management (ESM) is sometimes used interchangeably with the term IT Service Management (ITSM). ESM or ITSM is all about managing IT services and not just the technology. IT Services are delivered by an IT solution that has four key components—People, Process, Technology and Partners. Now we are adding “Information” as the fifth component of IT solution. ESM is thus responsible for managing all five components to ensure that IT services are delivered effectively, efficiently and are aligned to business objectives.

 

An interesting change that is currently happening in Enterprise IT is the close alignment between IT and business units. IT leaders no longer speak about “IT service provided to business”. They are talking more about business because they are part of business. They are part of all strategic business discussions.

 

Secondly, ESM in medium and large enterprises is outsourced to an external IT Service providers. This includes the infrastructure and application services of operations, administration and maintenance (OA&M). A majority of these outsource contracts work on SLAs. However, there is a trend toward enterprises looking for outcome-based contracts. This allows contract organizations to act as a business partner who shares in the risks and rewards. This leaves IT organizations to focus on IT strategy and governance, ensuring IT services are closely aligned to business objectives.

 

When should you think of Enterprise Service Management?

 

With an exception of Telecom service providers, in all other industry verticals enterprise service management is an after-thought and usually isn’t considered until phase2. In phase1, business is dependent on the management capability that core application vendors bring. This is because businesses are focused on launching products and recognizing revenue. Only after they have accomplished this do they start thinking of improving and optimizing IT services. This results in a heterogeneous environment, adhoc processes and chaotic operations.

 

Whether ESM function is outsourced or managed internally, your IT Strategy and Governance organization has to have a clear knowledge of sub-functions within the ESM. IT needs to know what is required, what is critical and what is not, in order to support the business objectives. Governance also means having visibility into outsourced vendor operations to monitor service assurance. This is where a reference to clear roadmap of prioritized sub-functions helps enterprises in building a robust ESM.

 

Various stages of building ESM

 

Service Foundation: In the foundation stage, build the capability to manage the core infrastructure. This includes: availability and capacity management of network, servers and storage. It also includes standard applications such as: databases, webservers, messaging platform and others.. Business applications and processes are directly managed by application teams it is important that they maintain the IT asset inventory. These teams should also establish baseline Configuration Management Database (CMDB) information  with all commissioned infrastructure and application elements. Finally, you should set up a basic Service-Desk function to manage the request fulfillment and incident management process.

 

In this stage, the organization, both internal and outsourced, should be skilled enough to manage the technology. It is very important to start measuring IT Services Key Performance Indicators (KPI) such as # of requests/day, # of Incidents/CI, MTTR (Mean Time to Resolve). The processes are simple and help the operations teams move from “chaotic” to “reactive”.

 

The true value of the foundation layer is awareness of how IT services are delivered.

 

Service Standardization: In this stage, standardize or look for standardization on all five components (people, process, technology, partner and information) of the IT solution. You should focus on implementing and standardizing IT processes based on ITILv3 best practices. While all processes from ITILv3 are important; depending on the business need, select a set of processes to be implemented and standardized across the enterprise.

 

On the technology side, you need to standardize infrastructure and applications, as well as the management tools layer. Build the enterprise information model and define processes to manage the information life-cycle. Standardize the service catalog and service delivery lifecycle. You will need to design the IT organization to be aligned to business needs and with clear ownership (internal and partner) and SLAs for delivering services in the service catalog. Establish IT Governance team with Service portfolio management.

 

Monitor KPIs such as:

  • Percentage of managed nodes
  •  Percentage of managed applications
  •  Number of service incidents
  •  Average interaction closure time
  • Node/Service Availability
  • Percentage of planned service outages
  • Average time to run compliance check
  • MTTR for service problem
  • MTTR from compliance
  • Percentage of projects on time

Standardization brings the hygiene factor into ESM by improving the quality of IT services, adhering to regulatory compliances, and having an organization with clear roles and responsibilities. Standardization of processes will ensure clarity and transparency in operations. It will enable IT to start providing SLAs on services. Thus IT operations maturity moves from being “reactive” to more “controlled” in nature.

 

Service Optimization: In this stage, Increase automation and maximize shared services. Bring in automation for routine activities and to eliminate error-prone and manual actions. You can maximize process automation thru automated workflow systems and rationalize IT solution components and remove any duplication of functions. You should maximize reuse thru shared services concept and eliminate duplication of information thru the concept of federation and integrated service management. Strengthen the IT strategy and governance team with demand management, partner management and service financial management functions.

 

Start measuring KPIs such as:

  • NOC-FTE efficiency (total problems/total FTEs in NOC)
  • Percentage of Automated changes
  • Percentage of FCR
  • Average time to deploy a service (release-to-production)
  • Average time to run compliance
  • Average outage duration

Service Optimization will improve overall performance of IT services. Further, it also improves the overall productivity of IT organization. As a result, the IT operations maturity reaches a “manageable” state.

 

Service Intelligence: Service intelligence is all about building competency to improve user/customer experience of IT services by improving the quality of service. The intelligence is gathered through the following three KPIs:

-          Service Availability – whether the service is available when he/she wants to use

-          Service Response time – what is the response time for delivering the services

-          Service Quality – how is quality of service for example Voice or Video

 

Not only do these KPIs have to be monitored proactively, but also built with the competency to rapidly rectify any degradation noticed with these KPIs. This is possible when there is a high-degree of process automation with a built-in ESM solution. This solution provides automation ranging from service strategy to design, and from transition and to service operations.

 

It is important to build a high-degree of automation with a Real-time Service Model (RTSM) through the auto-discovery of infrastructure and applications, and mapping them to service elements. RTSM helps with the rapid detection and correction of service degradation. Make sure you establish a strategy-to-service portfolio process for automation to proactively introduce new and customer needy services by linking demand, service portfolio, proposal and project management functions.

 

Ensure that following list of KPIs are measured: –

  • Percentage of services met SLAs
  • Number of Service quality incidents/service
  • Percentage of applications met performance
  • Percentage of escalated incidents
  • Percentage of problems reported by customer
  • Percentage of rejected defects
  • Percentage of satisfied customers

Customer experience of IT services will be improved in this stage. This will reduce the risk of customer churn. The maturity level of IT operations after this stage will move from “Manageable” to “Proactive”.

 

Service Excellence:  Service Excellence is the final stage where there is a continuous improvement of IT performance to meet business objectives. The objective is to measure and improve KPIs that impacts the enterprise business directly or indirectly. Provide a feedback mechanism at each stage of Service Strategy, Design, Transition and Operations of Service lifecycle. You can establish Enterprise Architecture function in the IT strategy and governance team that is  responsible for defining a long term vision and roadmap for ESM.  Enterprise Architecture team will focus on architecting solutions that contributes to business growth and profitability. It will help you measure and monitor KPIs of IT performance via IT balanced scorecard and operations dashboard.

 

Use operational analytics to graduate IT operations from being “proactive” to bring “predictability”.

 

Monitor KPIs that improves the overall IT performance:

  • Percentage of assets in maintenance
  • Percentage of Capex vs Opex spending
  • Percentage of actual vs planned project costs
  • Percentage of documented requirements
  • Percentage of unplanned changes
  • Average age of HW assets
  • Average cost of IT delivery/customer
  • Average project initiation time
  • Mean-time between services

To summarize- ESM function is critical to run enterprise business. A robust ESM can be built in stages with Service Foundation, Standardization, Optimization, Intelligence and Excellence. These stages gradually improve IT operations from chaotic to a predictable state. The stages can be executed in parallel depending on the business need. The objective of each stage is to improve business-IT alignment. The goals are to improve revenue, reduce cost, reduce risk and improve customer experience. Finally, a successful ESM can only be possible where there is a culture to measure and improve KPIs.

 

Feel free to reach out to me in the comments section below if you want to know more. You can also share your thoughts with other readers who may be experiencing the same issues.

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