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com

The Service Catalogue

and the CMDB
Front Office and Back Office IT

X Analysis without compromise 1

White Paper www.butlergroup.com

Written by: Martin Gandar

Published July 2006 All rights reserved. This publication, or any part of it, may not be reproduced or adapted,
© Butler Direct Limited by any method whatsoever, without prior written Butler Direct Limited consent.

X MANAGEMENT SUMMARY

Many organisations implementing ITIL as part of their IT Service Management framework begin with the
Configuration Management Database (CMDB). While a CMDB is a key piece of any successful ITIL
implementation, there are several traps that are easily fallen into when implementing one. In fact, its complexity
and asset-centric view of IT can present a significant hurdle for organisations seeking to use ITIL to improve their
operational efficiency and the alignment of IT with their customers. There is also strong evidence to suggest that
asset-driven CMDB projects can quickly become dangerously siloed as independent groups within IT (service
desk, data centre, etc.) attempt to build their “own” CMDB.
Realising that many organisations are finding difficulty with determining how best to approach ITIL, we have
asked ourselves whether the implementation of a Service Catalogue should be started early in the process of
adoption, either in parallel or before the introduction of the CMDB as a means to overcome this hurdle. This
approach would entail using the Service Catalogue to first define what services are to be offered to IT’s business
customers and the user community, and then integrating the Service Catalogue with the CMDB so that each
complements the other.
The core of this argument is based on the need to start from the perspective of a ‘Front Office’ for IT, where
business customer needs drive the definition and delivery of IT services – rather than from the perspective of the
‘Back Office’ of systems, assets, and resources, currently and historically managed by IT. This is a fundamental
shift that is needed to overcome the historic structures that have made the workings of IT impenetrable and
indecipherable to its internal customers.
The case is based on four key propositions:
1. Unless business needs drive the definition of services and delivery of those services, there will continue to
be a disconnect between IT and its internal customers. This is because building up service definitions from
configuration items and available technology assets takes the same IT-centric view that has contributed to
much of the communication problems inherent in IT’s relationship with the business, nor does it consider the
lifecycle of provision and support needed to maintain and optimise the services supported. There is a strong
case to say that the data model for a CMDB should be drawn from a Service Catalogue, because that is how
IT articulates what it does for its customers. Starting with a Service Catalogue forces IT to review, define, and
present what it offers from a customer’s view, and not from an infrastructure perspective.
2. The benefits of the Service Catalogue will come much earlier in the adoption cycle than those for the
CMDB, especially when considering the long time to completion of most CMDB projects. Starting with a
customer-facing Service Catalogue makes the most sense for an IT organisation that wishes to increase its
customer visibility and effectiveness. An actionable Service Catalogue can be completed quickly, particularly if
based on existing commercial software and templates that enshrine ‘best practises’, giving IT a quick and
visible win. IT can then integrate the Service Catalogue with a CMDB for complete service and configuration
management.
3. A Service Catalogue enables more customer-focused IT service management. The Service Catalogue
achieves this through offering clearly understood, consistent, standardised, and rationalised services and
appropriate service levels with associated costs to both business unit managers and end users. This applies to
both simple services such as the installation of a telephone, as well as complex services that may involve the
use of multiple underlying services and resources over time, such as the provision of an order-management
solution. The interactive nature of the Service Catalogue and the feedback it can give to users regarding the
status of requests or service performance to business unit managers, significantly enhances the opportunity to
set and deliver against user expectations.

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4. The Service Catalogue will accelerate a CMDB deployment and improve operational efficiency. The Service
Catalogue will help define and capture the information required to populate the CMDB and present back
information generated by changes to the CMDB in a manner that is intelligible by IT’s customers. An
actionable Service Catalogue improves efficiencies by eliminating the unnecessary back-and-forth clarification
of services requested by users, multiple mechanisms to carry out the same processes, and unnecessary
‘shepherds’ who manually co-ordinate service request processes. The information gathered by the Service
Catalogue also enables better demand management, budgeting, and planning. And as an aid to benchmarking
it should allow comparative analysis with industry standards, and thus enable better decisions to be taken on
the value of outsourcing services, if appropriate.
Butler Group’s conclusion is that the deployment of a Service Catalogue is an essential early step in the adoption
of ITIL and one that is likely to deliver significant return on investment with relatively low risk—providing results
in a much shorter timescale than one would achieve through implementing a CMDB in isolation. Our research
indicates that the implementation of the Service Catalogue and integration with a CMDB will bring considerable
benefits both operationally and financially, whilst restoring a great deal of the lost credibility of IT in the process.

X INTRODUCTION

The State of ITIL Adoption

A poll conducted by the ITIL Forum showed that two thirds of respondents had only recently discovered ITIL, and
further studies amongst enterprise-scale clients show that as few as 3% have reached a broad level of adoption
where ITIL process maturity is driving quality improvements and new business opportunities for their
organisations. However, for those who have not yet adopted ITIL, a significant percentage perhaps as high as
40%, are recognising that they need to do so and plans for adoption are now of far greater priority.
As the community of ITIL adopters reaches a higher level of maturity there is pressure on them to adopt
predictive and optimising processes that deliver the best possible service capability from available resources.
They must also enable proactive planning and negotiation between IT and its users to set agreed levels of service
at acceptable cost. To do this requires a deep knowledge of the IT infrastructure and process models and the
costs associated with the delivery of these services.
There are thus two concurrent and parallel waves of ITIL implementation:
• New adopters facing decisions about how best to approach implementation.
• Companies that are mature in their ITIL initiative seeking to show value and service-quality improvements to
the business from the work undertaken so far.
Ken Wilson, at ITIL consultancy Pink Elephant in the UK, put it this way: “There is a ‘glass ceiling’ of
expectations through which the client has to break to prove the benefits of ITIL adoption. What is required now
is simple and effective guidelines for implementation that deliver benefits early.”

IT Front Office vs. Back Office

The terms ‘Front Office’ and ‘Back Office’ originated in an era when the typical company was bifurcated into two
disconnected sections: the ‘Front Office” roles like Sales and Marketing had the primary interaction with
customers, whilst all the core operational tasks of running the business such as manufacturing, transportation,
and administration, were handled out of sight in the ‘Back Office’. Clearly this ‘disconnect’ built a barrier to
communicating the needs of customers to the providers of core functions of the organisation. This analogy is apt
for the IT organisation in large enterprises today – unfortunately this barrier between the customers of IT and the
‘Back Office’ of IT operations remains a fundamental challenge.
The two central components of the ITIL framework that we are considering here – the CMDB and the Service
Catalogue – are at the crux of these different ‘Back Office’ and ‘Front Office’ perspectives and illustrate why there
is the need for a more customer-centric approach to IT Service Management.

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The complexities now present within IT infrastructures emphasise the need for automated Configuration
Management to assist in the creation and maintenance of the map of the infrastructure. In many IT organisations,
it is impossible to even consider carrying out this task manually, and those that do attempt it will find that it is
labour-intensive, expensive, and the resulting output is persistently out-of-date. Of course, out-of-date information
can be more dangerous and damaging than no information, causing severe problems when decisions are made
on this false or incorrect configuration data.
Configuration Management involves the identification and definition of the systems or assets within the IT
infrastructure, such as switches, software, and servers, and the relationship between these various components.
When stored in a central database such as a CMDB and updated to reflect changes, this up-to-date information
can be used to assess the impact and risks of proposed changes to the infrastructure. Developing and
maintaining the CMDB is very much an IT-centric ‘Back Office’ function that provides the IT organisation with the
opportunity to at last gain control over their assets. Thus, not surprisingly, the CMDB is a component of the
ITSM framework that most Chief Information Officers (CIOs) are eager to embrace. Yet because it is a ‘Back
Office’ function where core operational activity is often undertaken without direct interaction and involvement
from IT’s customers, the services and assets it manages are not necessarily those required by these customers.

Figure 1: The IT Organisation’s ‘Front Office’ and ‘Back Office’ Processes (Source: newScale, Inc.)
If IT must now be run as a business delivering quality services at acceptable cost, then one of the most important
ways in which this can be achieved is by marketing the products and services that are available to IT’s
customers. The Service Catalogue provides a ‘Front Office’ customer-centric view of available services that will
be intelligible to the user community. With a Service Catalogue, end users can actively provision services based
on a clearly defined definition of the service deliverables, service levels, and potential costs. This new level of
visibility is a major shift from the ‘Back Office’, hidden-away mentality where IT largely failed to explain its
actions and capabilities to business management and end users. The Service Catalogue establishes a dialogue
between IT and business management that enables proactive planning and resource allocation ahead of expected
service demand. If the CMDB defines what IT has done historically, then the Service Catalogue defines what it
does and will do.
As Jack Roberton-Worsfold, an ITIL practitioner at UK Consultancy iCore, told us: “Typically if you ask
operational IT staff to implement a CMDB without defining the services or the mapping to technology, it is
highly probable that these teams will define all of the IT components and create a CMDB with a high level of
complexity that is difficult to maintain and doesn’t effectively support the delivery of changed or new services.”

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By providing details of the services available from IT to the enterprise, the disconnect between the goals of the
business and IT priorities is bridged – another major issue that CIOs have to face.
Both the CMDB and Service Catalogue are clearly fundamental components of the ITSM framework, but there is
a strong case to say that the deployment of a Service Catalogue should not be reliant on the completed delivery
of the CMDB. In fact, to do so would be to ignore a potentially straightforward ‘quick win’ that will reap
enormous benefits both financially and in restoring the credibility of the often much maligned IT department with
its business users. This approach would also ignore the value that the Service Catalogue brings in delivering a
unifying mechanism for the definition and development of the most valuable content needed in the CMDB.
This White Paper examines the case for the early deployment of a Service Catalogue and the benefits that this
might deliver – as the first step in an effective CMDB and ITSM strategy.

X THE CASE FOR EARLY ADOPTION OF THE SERVICE CATALOGUE

Aligning IT Service Delivery with Customer Expectations

The poor standing of IT with its business users is based on a lack of clarity about the services being offered,
sometimes simply due to an over-technical and unfathomable presentation of what is available, coupled with a
lack of transparency on the costs and expected service-level commitments. To re-align IT with its business users
requires a radical refocus on the needs of IT’s customers.
The CMDB by its very nature is focussed on assets – the traditional internal-facing view that has characterised IT
in the past. The most common mistake IT organisations make is to articulate their services from an IT
perspective—from the CMDB out. Unfortunately this ‘Back Office’ approach makes it difficult to present services
to business customers in a way that is visible and understandable to them, for example, there is little benefit in
describing the server capacity, disk space, and a specified network bandwidth to a user who actually just wants a
reliable e-mail solution.
Or as Roberton-Worsfold of iCore put it, “If the user says he ‘wants it in blue and available the next morning’ he
won’t take kindly to a document that explains all the technical intricacies of delivery and associated risks in
terms he can’t comprehend.”
Users often set their own expectations of IT because products and services are not publicised or clearly explained.
Business unit executives do not understand or have the patience to examine IT’s siloed operations to get what
they need, so there is a disconnect between what the business really needs and what IT supplies.
If undertaken solely from the IT perspective, implementing the CMBD is also likely to enshrine the siloed view of
disparate IT functions with multiple competing taxonomies and a lack of relevance to the user community. Early
Service Catalogue adoption in tandem with the CMBD drives the focus from the ‘Front Office’ inwards, ensuring
that services are defined and managed from the perspective of the users’ requirements. In doing so, the Service
Catalogue sets the priorities for defining what needs to be captured in the CMDB.
A study by CFO Magazine in 2004 showed that 46% of CFOs reported poor alignment between IT and business
needs. The Service Catalogue is a major weapon in addressing the much needed re-alignment of IT to support its
business customers. The Service Catalogue is a ‘Front Office’ customer-facing portfolio of services presented to
the users through a simple-to-use portal. The services should be displayed so that a number of factors are clearly
visible: what is provided by the service, the service level, and the cost associated with its provision if appropriate.
Every provided service carries a cost, and organisations will need to ensure the minimum possible cost is incurred
during the delivery of the service. This is particularly important when setting and meeting the expectations of
users. If IT organisations provide a service at a much higher level than users require and at high cost, then they
are not aligned with the needs of the business. Allowing the user to choose the level of service based on optional
cost levels ensures that the service meets their expectations and budget. Tracking costs in this way also enables
IT to implement budget allocations, based on services provided and consumed, rather than based simply on the
number of users. Over time, IT organisations can use this foundation to potentially chargeback cost to the
business and thus move from purely a cost centre to a profit centre.

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When endeavouring to create a customer-centric Service Catalogue, it is wise to turn for guidance to real-life
catalogues that these customers use every day. IT’s internal customers include the employees, business unit
executives, and even other IT managers throughout the company. They are all consumers, and in today's world,
they are intimately familiar with the online sites of companies like Amazon.com, Dell, and eBay. These familiar
Web sites process thousands of transactions every day; more than just a static list of available products, these
catalogues are actionable and interactive. This is the type of actionable Service Catalogue that IT’s customers
expect to interact with and use from their IT organisation – providing the means with which to view available
services, request services, and track the status for the IT services they that require.
According to Rodrigo Flores, a Service Catalogue expert at software provider newScale, Inc., “Provide the same
look and feel (e.g., search and browse, create a shopping cart) that users encounter when ordering products or
services online. It’s a concept that we at newScale call “YADU”: Yahoo-like search and categorization,
Amazon–like merchandising, Dell-like configuration and UPS-like tracking for services.”

Figure 2: The Service Catalogue and the CMDB

We have talked to companies implementing ITIL, including the financial services company Allied Irish Bank (AIB)
and global energy supplier Shell. Both of these companies embarked on a proliferation of asset-based
Configuration Management initiatives, which included many local databases handling separate sets of assets
such as software licences or the inventory of personal computing facilities. In both cases, they view the Service
Catalogue as a mechanism for ensuring that the assets within the CMDB are defined and updated in the context
of services provided to their internal customers.
At AIB, they expect to replace multiple alternative request management mechanisms – based on intranet-based
forms and Lotus Notes applications – with an actionable Service Catalogue that provides a consolidated portal for
all IT requests and links in with purchasing systems, such as Ariba. The implementation will provide updates to
the CMDB and feed status information to their internal customers via the Service Catalogue. In such cases the
CMDB and Service Catalogue work in tandem delivering a significant improvement in internal customer
satisfaction, with the users negotiating the services they need and by doing so driving the structure of data that
must be maintained in the CMDB. AIB also found that the approvals process is often the biggest cause in
delaying the delivery of a service, even though the users may perceive the fault to be with IT rather than realising
that an approval request is stuck in a manager’s inbox. By feeding back status information to the users on the
progress of fulfilment, including the approval process, they expect a significant improvement in the users’
perception of IT.

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Again to quote Robertson-Worsfold at iCore: “An environment with a well-defined Service Catalogue, supported
by a service-centric CMDB, will facilitate effective IT Service Management.”
We have said that IT must be able to track costs in order to present value to the users, this becomes a critically
important issue when we consider alternative sources of provisioning. With the increase in standardisation of
services and the introduction of Service Oriented Architecture (SOA) based options, it is becoming increasingly
easy to outsource many IT services that were previously managed internally. To know which ones are good
candidates for outsourcing requires a number of considerations, but primary amongst them is cost of provision.
Only by tracking cost and service level offered, is it possible to compare and choose between suppliers. By
maintaining this information and tracking costs, the Service Catalogue can quickly become central to such
decision making and provide early returns on investment.
The Service Catalogue thus helps define CMDB content and provides a mechanism for better
business Relationship Management that could not be provided solely by the CMDB:
• It provides an easily understood definition of the services on offer by the IT organisation and explains both the
costs and expected service levels associated with delivery in a way that users find easy to use.
• It enables comparative analysis with external alternative suppliers of these services.
• It enables users to define and negotiate the services they require and thereby defines and drives the content
that must be maintained in the CMDB.
• It is a mechanism for the tracking of service levels against cost as a means to evaluate if the service is
meeting customer expectations of value for money.
• The Service Catalogue is a primary mechanism for the re-establishment of trust between IT and the business-
user community.

Bringing Early Rewards

Developing a CMDB is no easy task. Even using auto-discovery tools the issue of finding and accurately
configuring the items into the CMDB takes considerable time, often counted in years rather than months, and it
could be said to be never ending. Butler Group in our recent review of ITSM noted that auto discovery is probably
able to find around half of all the assets that need to be tracked by the organisation, which clearly leaves a great
deal of manual and continual detective work. The benefits of the CMDB to IT asset management are considerable
and form the basis for sound asset management and planning. However, these benefits are often not immediately
understood or visible to the business-user community; in fact they often find it surprising that IT does not have
such information under its control in the first place.
Creating an actionable and customer-centric Service Catalogue is a much faster process than creating a CMDB,
especially when using a packaged software application and concentrating first on the highest priority services.
Experience shows that an interactive and transactional Service Catalogue can be enabled in weeks or months
rather than in years. Safeway, the large grocery retailer in the US, presents a typical example: after realising that
its CMDB implementation was going to take two years, it decided to create the Service Catalogue as a ‘quick
win.’ Phase one of its delivery, which included the most widely used services, took less than three months to
complete. The use of pre-defined service templates enabled a rapid implementation; so that if the company is
prepared to adopt best practice from the Catalogue supplier it can offer the portfolio of services as soon as it is
able to link them to the service delivery capability.
Ken Wilson, of ITIL consultancy Pink Elephant in the UK, said that “For those at the early stages of
implementing ITIL there can seem to be a ‘glass ceiling’ characterised by frustration and effort that seems to
deliver little until you break through to a higher stage of maturity and realise benefits. For most what is needed
is a clear definition of how to get there with simpler well defined steps. The Service Catalogue looks likely to be
key to the process of delivering visible benefits in reasonable timescales.”
Butler Group knows of US companies that have adopted ITIL and have realised massively increased customer-
satisfaction rates rising from 33% to 95%: given the customer-facing nature of the Service Catalogue we would
regard this as a prime component in delivering such improvements.

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In summary:
• The Service Catalogue provides the basis by which the user can request services, and bridges the divide
between the business community and IT’s service delivery capabilities.
• The timescale for delivery of Service Catalogue benefits is far shorter than for deployment of an operational
CMDB.
• The Service Catalogue should set the customer-focused priorities and direction for building a successful CMDB.
• The rewards are highly visible to the business community and restore confidence in IT.

Enabling End-to-End IT Service Management

From the ‘Back Office’ perspective, getting a firm grip on the assets and resources that IT uses to deliver services
to its business customers is of critical importance. Obtaining a consistent and accurate definition of the
configuration of such assets and resources enables the key processes needed to manage the delivery of these
services such as Configuration Management, Change Management, and Release Management. This approach
should then enable IT to plan for known future changes in demand. But the danger lies when this is done purely
from the perspective of IT operations and bears no relation to the needs and expectations of IT’s customers. As
Flores of newScale told us from his experience, “A common mistake with many Service Catalogue initiatives is
defining services in technology terms, with service levels based on the metrics that are easiest for IT to track.
We call this the inside-out approach and it almost always fails.”
The Service Catalogue can provide a readily accessible and always available self-service mechanism for the
customer to transact business with IT. A consumer viewing an on-line catalogue at Amazon.com assumes that if
they want something in the catalogue that they can order it. The same must be true for the mechanism offered to
users when requesting services. The Service Catalogue provides a shopping ‘cart’ mechanism for submitting
service requests and tracking services on-line, with services described in customer-friendly business language.
At a higher level it is also true of the business unit executives who are examining options for the provision of
services such as applications hosting to large numbers of end users. They must see the delivery options and
service quality options on services that involve the provision of multiple associated activities over a time-line, as
well as linking the use of resources to the billing / budgeting information. For example, the Service Catalogue can
define the offer, service levels, and costs for an applications hosting service used by 2,000 call centre staff with a
peak load of 1,000 orders, per hour including support for a new order entry system and an expected staff
turnover of 100 per month – together with all the required bandwidth, server capacity, disaster recovery, and
planning to support the delivery.
The Service Catalogue thus becomes ‘the face of IT to the business customer’, and should be the vehicle by
which appropriate service offerings and levels of service delivery are negotiated and measured. In parallel the
CMDB becomes the source of information on the physical instances of Configuration Items (CIs) that are used to
support these services. This is also a positive reinforcement message to IT to stop them from focusing on the
delivery of technology and to switch to managing the services that meet the needs of their customers. If there is a
single, unifying Service Catalogue it will also deter IT from developing multiple CMDBs in different silos of IT
delivery that do not align with each other or with the Service Catalogue, and this could in itself save a
considerable amount of wasted effort.
In order to complete the loop of end-to-end IT Service Management, Service Level Managers and Relationship
Managers should examine the CMDB information to provide actual usage and performance information and present
that back to IT’s business customers through the Service Catalogue portal. An example of the relationship that exists
between the Service Catalogue, Service Level Management and the CMDB might be something like the following:
• A business customer subscribes to the service offering called Business Intelligence, which itself includes IT
services (e.g. custom report writing) that have no relation to IT systems, as well as IT services (e.g. hosting of
a business intelligence application) that are intimately connected to IT systems (servers, databases, etc.).
• As part of the overall service offering there may be included cost and service level objectives that are
dependent on usage and availability of certain CIs connected to the relevant IT systems.
• The Service Level Manager would want to look to the CMDB to provide actual usage and performance data as
they are consolidating billing and performance data for presentation back to the business customer.

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The figure below provides an overview of this linkage and other example connections between the Service
Catalogue and CMDB.

Figure 3: Service Catalogue Linkage to the CMDB

In summary:
• The Service Catalogue aligns different components of IT service delivery with the needs of the user community.
• The Service Catalogue provides a transactional mechanism for the self-service provision of services to IT’s
customers.
• The Service Catalogue provides the mechanism for managing service delivery through budgeting, request
management, and service fulfilment for complex and interdependent services that may impact the CMDB.
• The Service Catalogue provides the linkage mechanism for providing continual feedback on costs and
performance to the business-user community, incorporating data resident within the CMDB.
• The Service Catalogue and the CMDB together enable linkage between the IT ‘Front Office’ and ‘Back Office’
for end-to-end ITSM.

Improving Operational Efficiency

The Service Catalogue ties the data in the CMDB to meaningful and relevant service lifecycle information, such as
budgeting, request management, and fulfilment. This helps to define what the attributes of a service are and how
the Service Catalogue and CMDB need to relate. If we are managing budgeting and planning around services that
we agree on, we want the CMDB to tell us how those services relate to underlying assets and systems: what is
the usage of those assets and systems so we can manage the pricing and planning. Integrating the Service
Catalogue with the CMDB will enable us to perform that analysis.
The Service Catalogue should help standardise the request and fulfilment of IT services because there will be a
single consistent definition of service costs and service levels. By integrating this standardised activity into the
CMDB, operational efficiency can be improved because unnecessary or non-standard services can be removed –
enabling resource provisioning and utilisation to map more accurately to demand. In effect this will deliver the
required service at the lowest possible cost as mentioned earlier.
The fact that a Service Catalogue unifies and normalises services often offers the opportunity to aggregate
underlying services to provide standard offerings that replace many alternatives. In effect it stops each request for
services being treated like a ‘unique deliverable’. This consolidation will also apply to external providers and we
would expect to see consolidation of supplier contracts as the services normalise.
The Service Catalogue is increasingly being used as an aid to Operational Benchmarking where it is used to build
the benchmarking framework often in conjunction with ITIL’s Service Improvement Programmes, for comparison
with external suppliers and industry leaders. The benchmarking results will be valuable in establishing the targets
for improvements in service.
Planning for IT will be considerably enhanced if the Service Catalogue is used as the basis to define standardised
services, track demand for services, and set service level expectations. For example, by capturing both service
consumption and requests for services within the Service Catalogue, the IT organisation can more effectively
anticipate and budget resources to respond to IT service demand.

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The increased visibility into service capabilities and the standardisation of services will be of significant value to
those planning merger or acquisitions as the commonality of potentially shared services and resources will be
more evident. Conversely it will be much easier to determine the exposure to risk if unique services requiring
specialist in-house capabilities are exposed at an early stage of negotiation.
The expected improvements to the operational effectiveness of IT service delivery, include:
• Improvements to management, budgeting, and planning for service provisioning.
• Significant reduction in operational cost of delivering IT services.
• Better allocation of resources to respond to service demand.
• Greater visibility and control for benchmarking, sourcing, and M&A planning.

X STARTING YOUR CMDB PROJECT WITH A SERVICE CATALOGUE

ITIL is currently under review and the area of the Service Catalogue is one that will be more fully addressed in the
version 3 release due for publication in late 2006. The ITIL version 3 refresh will include new core volumes that
focus on the overall lifecycle of a service. There is also a great deal of activity around the need to define how to
implement ITIL in a practical way that is easily adopted by those new to its principles.
From a practical standpoint, there are a number of well understood steps to the implementation of a Service
Catalogue and CMDB. The diagram below shows the key steps that can be taken to maximise the beneficial
effects of a Service Catalogue and CMDB implementation.

Figure 4: The Path to Adoption for the Service Catalogue and the CMDB
In general, by adopting and implementing these steps, IT organisations will be able to better manage the overall
lifecycle of a service in the context of end-to-end ITSM:
1. Define the Service Catalogue first and later translate this into the CMDB taxonomy as the CMDB matures.
Work with your business customers to define what should be in the Service Catalogue and to negotiate
acceptable service levels and costs.
2. Give users a way to request services from the Service Catalogue automatically, and later populate the
CMDB with this service information. Capture requests for new services – this data can be used for
establishing service-related assets within the CMBD.
3. Discover assets and systems in the context of services to build your CMDB. Create your CMDB using both
auto-discovery and manual discovery, leveraging the information within the Service Catalogue to ensure that
assets and systems are relevant to the services required by customers.
4. Update and refine services, consolidate usage and performance data, and present back to customers.
Develop a full lifecycle to refine the services offered and keep them aligned with the business user’s
expectations whilst proving the value delivered by IT.

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X THE FINANCIAL CASE FOR A SERVICE CATALOGUE

The Operational Case

While the benefits of ITIL are proven, the adoption is not a trivial task. Whether starting out on that ITIL path or
having reached a level of ITIL maturity, there is strong evidence that a Service Catalogue will either accelerate
ITIL maturity or provide a good basis to start. We can see little that would prevent us from strongly
recommending the early adoption of a Service Catalogue and a great deal to support the case for implementing
one – preferably as a starting point that will integrate with, and advance, your CDMB deployment.
More fundamentally there are demands on IT that are unlikely to be met unless IT is firmly re-aligned with the
needs of its customers, compliant with regulatory requirements, in control of its expenditure, and comparable in
quality and cost to external suppliers. All these issues support the case for implementing a Service Catalogue.
The only remaining issue is how quickly the benefits are received and the cost of implementation recovered.
The Financial Case
Providing specific guarantees on the expected savings to be made through the deployment of a Service Catalogue
is difficult because of the widely differing levels of maturity and efficiency that exist before implementation.
However, we have found firm evidence from organisations such as HP who stated that they saved 30% of the
time taken to define and roll-out new services through the use of a Service Catalogue – other companies such as
Starbucks Coffee Company, and the insurance firm Allstate, have also seen significant improvements in the cost
of delivering services after the introduction of a transactional Service Catalogue. At AIB, for example, it is
expected that by adopting an automated and standardised request mechanism and eliminating the manual
shepherding previously required to follow up on service requests, will save up to 40% of the staff cost associated
with fulfilment. As another example, after deploying a packaged Service Catalogue software solution, Hitachi
Global Storage Technologies, stated that it had ‘reduced the Total Cost of Ownership for maintenance and
support of its Service Catalogue by more than 75%’.
The following table outlines example areas where potential financial savings can be made through the use of a
Service Catalogue.
The figures below represent conservative estimates of savings through the introduction of an actionable Service
Catalogue for an IT organisation with 100 unique IT services and 50,000 service requests annually:

Figure 5: The Financial Case for a Service Catalogue

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Return on investment calculations like these provide the basis for a serious debate about the potential value of
implementing the Service Catalogue. Even if all of the savings promised are not delivered immediately, or if some
could be delivered through alternative means, the estimates used in the above calculations are conservative and
illustrate the potential scope of possible savings.
In reviewing these figures we looked at evidence from other analysts, research studies, and the direct experience
of those working in this field. The figures vary considerably between sources but the weight of evidence based on
those practitioners and clients we interviewed, supports an overall level of expected savings of a 30% reduction
in the cost of delivering IT services and up to 50% faster fulfilment cycle times in provisioning services.
Finally, from a timing standpoint, the benefits of an actionable Service Catalogue can be achieved quickly,
particularly if based on existing commercial software and templates that enshrine ‘best practises’. As noted
above, examples from Safeway and other organisations indicate that a transactional Service Catalogue can be
deployed and operational within 90 days or less – thus giving the IT organisation a quick and visible win, as well
as a rapid payback and return on investment.
Conclusion
The operational and financial case for the early introduction of a Service Catalogue in parallel or in advance of the
CMDB is very strong and one that Butler Group supports.

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