The HP Value Stream Framework: How does Service Management support the IT value chain?

Those readers who are regular followers of my writing have probably noticed my recent posts on the IT value chain. Simply put, the IT value chain represents the role IT plays in creating and delivering business differentiation. IT differentiates businesses in three ways: First, IT automates business capabilities (typically the 4-6 core capabilities that differentiate the business). Second, IT manages automated business capabilities and all pre-existing business services/applications. And third, IT services end-users. These three functions have been codified into four value streams as part of an overall framework embraced by both HP Professional Services and HP Software.

 

The value streams.png

So how does Service Management integrate with this new framework, and more importantly, how does Service Management help support the business across the four value streams it defines? I want to assert first that service management obviously plays a key role in determining the delivered quality of automated business capabilities as well as the quality of servicing the needs of end users. But it also plays a role in automating business capabilities. Given this, let’s examine the relationship Service Management has to each defined value stream, starting with the first one, “Strategy to Portfolio”.

 

Strategy to Portfolio

The life blood of Service Management is the word ‘service.’ Good service managers should be actively managing their portfolio of service level agreements (SLAs). And good business relationship or service managers should regularly interact with their customers around their evolving service needs. If service managers are truly effective, then their customers should be an input into what elements of the current state of the service catalog should remain intact.

Each service must be traced back to show how a business strategy is addressed by employees using IT services.  Hence, service managers and business architects have an important ongoing relationship.

 

Requirement to Deploy

For Service Management, the intersection point for the second value stream is service design and release management. Service managers play a major role in service design by creating realistic SLAs and operational level agreements (OLAs) that are acceptable to their end-users.  As such, the goal of service managers should be to ensure that:

 

  1. The enterprise understands how each service defined in a catalog addresses one or more business capabilities,
  2. SLAs reflect both enterprise needs and the capabilities of IT,
  3. Services are performed as stipulated in SLAs, and
  4. Moving forward, through increased automation and quality, services get cheaper and more effective.

Clearly, Service Management is where SLAs are first defined and subsequently monitored. But, over the longer haul, Service Management should also ensure that service delivery becomes more and more predictable over time. Effectively, the quality of service level delivered represents a final quality requirement. This is underscored by the notion of quality acceptance criteria in SLAs. Since Service Management owns the release management element of “Requirement to Deploy”, service managers need to show that they are getting better and better at this over time.

 

Request to Fulfill

The third value stream of “Request to Fulfill” is clearly a core Service Management function. It is where the operational demand function is realized.  Along with the quality function inherent in the “Requirement ot Deploy” value stream, Service Management is responsible for managing the quality of operational demand. This involves ensuring that the catalog is current and that requests associated with the catalog are managed according to the appropriate SLA.

Let’s look at what an SLA is intended to influence.  First, what is important is deployed first. Second, this value stream is about ensuring that the output of the “Requirement to Deploy” value stream is deployed appropriately through change management. Clearly, this is important because it impacts the quality of the services and applications delivered to the end-user. How, in this regard, should success be measured? We must understand the level of user satisfaction with service request fulfillment as well as measure the mean elapsed time for handling each service request type. These metrics need to improve over time for the “Request to Fulfill” value stream to be flowing adequately. Third, from a change perspective, we want to know that authorized changes are made in a timely manner and with minimal errors. The goal here should be to reduce errors and issues over time. Additionally, emergency changes need to be reviewed and authorized after the change. If this does not happen, you have just created business and security risks for the enterprise as a whole. In the end, releases that are promoted need to be successful, stable, and, most importantly, meet end-user expectations for the fulfillment of a business capability.

 

Detect to Correct

The fourth and final value stream, “Detect to Correct”, is the primary home for Service Management processes. This value stream touches most modules within Service Management. Clearly, the incident management process starts with interactions, self-support, knowledge DB, and events. And the quality of this process determines whether or not SLAs, and, in turn, service delivery standards are being met.. Because the value stream framework is data driven, the business wants to know that incidents are resolved within the time specified in the SLA. The business is also depending on IT to adequately prioritize so that we fix the things which matter first. Furthermore, the business wants to see that, over time, Service Management and operational processes are leading to a reduction in incidents that cause disruptions to business-critical processes and an overall increase in the mean time between incidents for delivered services.

Obviously, concrete improvements, should, over time, increase end-user satisfaction. Incident management connects to and from change, configuration, and problem management modules. Clearly change is a major source of incidents, and configuration management is about the state of service components. This, in itself, is a critical element of a well-run incident process. Problem management, if executed well, is seen as an incident terminator. Over time, we should be seeing recurring incidents reduced due to effective problem management because workarounds should be more quickly defined. Obviously, problem management should create better operational predictability for IT service delivery and better ability to deliver SLAs and OLAs.

 

Conclusions

Service Management intersects with all four value streams to differing degrees. In each value stream, the quality of service management determines the quality of IT delivered for the entire value chain. It is worth noting that service managers, in particular, play an important role not only in delivering automated services, but also in driving continual improvement in services according to ITIL. In business strategy, we talk about two big strategy types—effectiveness and efficiency. Usually, these are separated—Target pursues effectiveness while Wal-Mart pursues efficiency. But IT is a place where effectiveness can drive real and sustained efficiency. This means that the effectiveness of my Service Management can determine the efficiency of my IT operational spend. And more efficiency can be plowed into more differentiation of business capabilities.

For more information about value streams, please click here to read the eBook.

Related links:

Solution page:  Service Management

Twitter: @MylesSuer

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About the Author
Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product ...


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