Welcome

Welco
to Transformation and

me
Innovation 2007
The Business Transformation Conference
Loy Allen
Director, Consulting

The Business of IT

May 22-24, 2007 1

The Business Transformation Conference Washington Dulles Hilton
Information Technology
Today
• Growing technical and business complexity
• Cost pressures are never ending
• The value of IT is questioned
• The users of IT don’t know exactly what they are
getting nor how much they are paying
• Outsourcing/Off shoring/best of breed decisions
are difficult
• Consultants everywhere
• The mountains are getting bigger and the heroes
fewer

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No Shortage of Ideas
• Running IT like a business
• IS Lite
• ISCo
• Information Technology Infrastructure Library
• Service Oriented Architecture
• Business Service Management
• Common Themes
– Self sustaining
– Customer focus
– Service based
– Process centric
– Business alignment
– Measurable service levels
– Ability to show value
– Transformation may be needed

May 22-24, 2007 3

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If IT is a business…

• What does it sell?

• Who buys it? (Customers/Consumers)
• How is what it sells built and delivered
• Who creates and delivers what IT sells?
• Where is it created and delivered?
• What does it cost?
• How much is it worth?
• Doesn’t a business focus mean contracts and arms
length customer relationships??

May 22-24, 2007 4

The Business Transformation Conference Washington Dulles Hilton
 Service Defined
• A Service
– Definition 1: Activity that does not produce anything
– Definition 2: Work done by somebody for somebody else as a
job, a duty, a punishment, or a favor
– Old TV image of IT Services: Computer tape spinning, lights
flashing, cards being sorted
– Services are not tangible, they are hard to describe
• Service: Activity that produces an outcome, valued by a
consumer, when and where it is needed
• A service is different from a process
“Wisdom begins – Services are a discrete bundle of components (processes,
with the definition enabling technology, skilled people, organization and facilities)
of terms” – Services can be bundled into offerings which have meaning
and value to the consumer
Socrates • Services, offerings and components have owners
– Responsibilities include quality, cost, delivery
– Owners ensure integration with other services

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 Domains of IT Service
Management
Management of
Information Technology Services
ITST operates
within 6 domains
that encompass an Governance
IT environment.
These domains are
focused on
Service Support
enabling the IT Service Delivery
organization to
operate in a
business like way Application Infrastructure
that ensure value
is received for the
Management Management
use of IT resources
within an
enterprise .
Architecture Management

May 22-24, 2007 6

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 An IT Organization
The same principles
that apply to the
analysis of the Culture
performance of any
organization apply to
the performance Organization
assessment of an IT
organizations.
Facilities &
Competency
All of theses Infrastructure
components must
integrate and Strategy
function as a unit for and
IT to be successful in Vision
Process
the delivery of
services to its
customers.
Equipment
APQC’s process Infrastructure
framework and the
vast majority of
Performance
business diagnostics
can be applied to the
assessment of IT
organizations May 22-24, 2007 7
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There are specific

 IT Organizations Deliver
Services
Enterprise

Business Business Business

Consumer
Unit Unit Unit

Broker Information Technology Services

Information Technology
Creator
Service Provider

May 22-24, 2007 8

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 Service Model

Customer Customer

Service Service
Level Level
Agreements Agreements

Offerings

Operating
Technology, Skills, Facilities

Operating Operating
Level Level
Processes, Organization

Level
Agreements Agreements Agreements
Cross-service

Service Service Service

Service Specific
Processes, Technology, Organization, Skills, Facilities

May 22-24, 2007 9

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Multiple Service Providers
Customer Customer

Service Service
Level Level
Agreements Agreements

Offerings

Operating Operating
Technology, Skills, Facilities

Operating
Level Level Level
Processes, Organization

Agreements Agreements Agreements

Cross-service

Service Service Service

Service Specific
Processes, Technology, Organization, Skills, Facilities

May 22-24, 2007 10

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 The Service Catalog
The catalog is the heart of the services based organization

• Offerings created from

services
• Services are created
Offerings
from components
• Offerings are
presented to
Services customers
• Services can be
presented to
customers or
Components regrouped to provide
customized offerings

May 22-24, 2007 11

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 Service Oriented Technology
Management
The concept of Service Oriented Technology Management leverages experience and
industry best practices to guide IT toward achievement of their objectives

Service Oriented Technology

Management is a comprehensive
approach to the transformation and
operation of a service based
enterprise relying on structure and
discipline to identify, define, support
and provide services, delivered to a
consumer, consistently meeting
standards in support of their
business objectives

May 22-24, 2007 12

The Business Transformation Conference Washington Dulles Hilton
Service Oriented Technology
Management
• Service Oriented Technology Management looks at
rethinking and structuring what the IT organization provides
to it customers and how well it does so
• Viewing a business in terms of services provided allows
Clients, including IT organizations to bundle process,
enabling technology, people, management structures and
facilities into offerings
• Services are then ‘shared’ with consumers across an
enterprise based on value to the consumer, cost that can
vary based on the appropriate per level of service
• Value is understood and appropriate services are provided
to enable consumers to meet their business objectives
and the enterprise to improve its performance

May 22-24, 2007 13

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What is ITIL?

• ITIL is a best practice in IT Service Management, developed

by OGC and supported by publications, qualifications and an
international user group (itSMF)
• It is a component of the foundation of the ITS&T practice
• It is primarily process driven, describing what should be done
but not how
• It is the de facto standard for IT Service Management globally
• It integrates with CoBIT, MOF, BS15000, ISO
• It is growing in acceptance and is being improved based on
experience
• IT is a guideline not a cook book
• It is not an out of the box solution

May 22-24, 2007 14

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 History of ITIL

• ITIL was initially developed in the late 1980’s

• The British Telecommunications Agency (CCTA), now
called the Office of Government Commerce (OGC),
developed a framework for efficient and financially
responsible use of IT.
• The goal was to develop an approach that would be
vendor-independent and applicable to organizations with
differing technical and business needs.
“Wisdom begins • ITIL version 1 grew from a collection of best practices
with the definition observed in the IT service industry.
of terms” • ITIL version 1 was static so over the last few years OGC
made changes (some of those are quite significant) to
Socrates ITIL and the latest publication of the library is regarded
as version 2
• In early 2005 work started on ITIL version 3, due to be
published in June

May 22-24, 2007 15

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 ITIL is changing
ITIL Version 3
ITIL V3 is a significant shift from
the process oriented approach
June 2007 in V2 to the focus on services.

V3 is to be published in June, it
is believed to be of considerable
value in defining how services
are identified, designed,
delivered and supported

ITIL Version 2
May 22-24, 2007 16
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OK, How??
IT must create value in the minds of its customers

• Moving from a functional view of IT to a service,

business view is transformational in nature
• A plan/framework/strategy is essential
• Define terms and measurements
• Shift thinking from functional to service
• Organize IT for focus and effectiveness
• Understand how services are delivered and how
much they cost to deliver
• Define how value will be determined and how the
costs of services will be recovered
• Transformation requires active sponsorship,
leadership and perseverance
• Governance (framework for decision making) of IT
must change
• New skills may have to be added to the IT
organization (account/relationship management??)
• Communication with customers and IT is critical

May 22-24, 2007 17

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Guiding Principles
Basis for transformation
• IT serves its customers, not IT
• IT enables customers to meet their business objectives
• IT has a mutually beneficial relationship with its customers
• Expectations for the delivery of services are clearly and
commonly understood by the customer and by IT
• IT communicates the value it brings in terms customers
understand
• Service offerings are customizable and based on
consistent delivery of services
• Customers pay for level of services they receive
• Service owners are responsible for the life-cycle of the
service including quality and cost
• A service is integrated with the other services
• IT and its customers operate within a commonly
understood framework, ITIL
• IT runs like a business

May 22-24, 2007 18

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WIIFM
What’s In It For Me???

• Clearer understanding of what IT offers the business it

supports
• Opportunity to align IT to the business needs
• Clarity of roles and responsibilities within IT
• Improved governance relationships with managed
service providers
• Improved governance relationships with the enterprise
• A more efficient and effective IT organization that
enables the business it enables to meet its objectives
• Survival???

May 22-24, 2007 19

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Than
Than
kou
Y
Loy Allen
Director, Consulting

Contact Information:
817 235 8153
loy.allen@ps.net

May 22-24, 2007 20

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