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© 2011 Forrester Research, Inc. Reproduction Prohibited1 © 2009 Forrester Research, Inc. Reproduction Prohibited
Transform Your IT Organization With Process-Based Service Management
Eveline Oehrlich, Principal Analyst
Forrester Research
May 31, 2011
© 2011 Forrester Research, Inc. Reproduction Prohibited2
Agenda
• Three forces to recognize
• The MOOSE in IT
• A example of efficiency improvement
• Shift to modern IT
• People
• Process
• Technology
© 2011 Forrester Research, Inc. Reproduction Prohibited3 © 2009 Forrester Research, Inc. Reproduction Prohibited
The Bad News
© 2011 Forrester Research, Inc. Reproduction Prohibited4
Back into a budgetary
deepfreeze . . .
. . . Priceless!
© 2011 Forrester Research, Inc. Reproduction Prohibited5
Global business and government purchases of IT goods and services (*Forrester Forecast)
2010 2011 2012*
Infrastructure 11.6% 10.7% 5.5%
Telecom 6.4% 5.7% 3.0%
Software 6.6% 9.8% 5.4%
IT consulting 7.7% 11.0% 6.0%
IT outsourcing
6.7% 10.6% 6.7%
Total IT purchases
7.8% 9.7% 5.4%
© 2011 Forrester Research, Inc. Reproduction Prohibited6 © 2009 Forrester Research, Inc. Reproduction Prohibited
The Good News
© 2011 Forrester Research, Inc. Reproduction Prohibited7
Business Demands IT Help Even When Revenues Fall
June 2006, Best Practices “How IT Must Shape And Manage Demand”
© 2011 Forrester Research, Inc. Reproduction Prohibited8
Three Sets Of Forces Shaping BusinessDemand
2010 2012 2015 Beyond
© 2011 Forrester Research, Inc. Reproduction Prohibited9
14M80M
Business-ready, self-service technologies are on the rise
$28B
$258B
2010 2012 2015 Beyond
Deg
ree o
f b
usin
ess c
han
ge
10%-33%
© 2011 Forrester Research, Inc. Reproduction Prohibited10
Deg
ree o
f b
usin
ess c
han
ge
And a self-sufficient, tech-savvy workforce is rising with it
78%40% IT
22%
60%
2010 2012 2015 Beyond
26%
46%
© 2011 Forrester Research, Inc. Reproduction Prohibited11
Deg
ree o
f b
usin
ess c
han
ge
The business environment will be radically more complex
2010 2012 2015 Beyond
$28T
1B
© 2011 Forrester Research, Inc. Reproduction Prohibited12 © 2009 Forrester Research, Inc. Reproduction Prohibited
The Challenges
© 2011 Forrester Research, Inc. Reproduction Prohibited13
2010 2015
The result: An increasing IT capability gap
© 2011 Forrester Research, Inc. Reproduction Prohibited14
M_aintenance ofO_ngoingO_perationsS_ystems andE_quipment
The MOOSE
© 2011 Forrester Research, Inc. Reproduction Prohibited15October 7, 2010 “2011 IT Budget Planning Guide For CIOs” Forrester report
2011 IT budgets and the MOOSE
© 2011 Forrester Research, Inc. Reproduction Prohibited16Source: Forrsights Budgets and Priorities Tracker Survey, Q2 2011
1%
4%
1%
1%
1%
1%
1%
1%
1%
1%
1%
2%
10%
23%
4%
9%
10%
22%
6%
7%
7%
16%
8%
25%
31%
35%
22%
35%
30%
38%
23%
26%
24%
38%
31%
35%
43%
29%
50%
40%
43%
30%
47%
44%
45%
33%
41%
26%
16%
10%
23%
15%
17%
10%
24%
21%
23%
13%
20%
12%
Improve the measurement of IT’s impact on business performance
Improve IT performance by adopting processes like CMMor ITIL
Improve the efficiency of IT (e.g., Lean initiatives)
Define strategy for risk and compliance
Increase the scope of IT’s centralized or shared services
Market the IT department within the firm
Increase IT capacity/resources to drive businessinnovations
Improve our customer management capabilities
Improve or streamline business processes
Improve the sustainability and energy efficiency of IToperations and infrastructure
Lower IT’s operational costs to free up money for new initiatives.
Create a comprehensive cloud/as-a-serviceadoption/migration plan
Which of the following initiatives are likely to be your IT organization’s top IT management priorities over
the next 12 months?
Don't know Not on our agenda Low priority High priority Critical priority
Base: 2741 North American, European, Asia Pacific, and Latin American IT budget decision-makers
© 2011 Forrester Research, Inc. Reproduction Prohibited17
M_aintenance ofO_ngoingO_perationsS_ystems andE_quipment
The MOOSE
In 2011: Only 50% of the budget went to IT MOOSE . . . this is good!
© 2011 Forrester Research, Inc. Reproduction Prohibited18
Traditional IT departments
- Technology tribes
- Engineer-to-order
- Lack of control with what processes and tools they work
- Pace of change/complexity
© 2011 Forrester Research, Inc. Reproduction Prohibited1919 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
Efficiency People
ProcessTechnology
=
+
+
© 2011 Forrester Research, Inc. Reproduction Prohibited20
IT organizations (simplified)
Service
Management
PMO
Infrastructure
Operations
Security
Application
Development
DevOps
Customer Service
Center
Business
IT
© 2011 Forrester Research, Inc. Reproduction Prohibited21
Process Model (simplified)
Manage
Govern
Control
Operate
Secure
Design
Transition
Service
© 2011 Forrester Research, Inc. Reproduction Prohibited22
Process Details (simplified)
Availability
Capacity
Service Continuity
SLM
Service Catalog
Program & Project
Portfolio
Assets
Financial
Change Mgmt.
Configuration Mgmt.
Release Mgmt.
Problem Mgmt.
Event Mgmt.
Knowledge Mgmt.
Access Mgmt.
Information Security
Operational Security
Requirements
Design
Develop
Test
QA
Operation Specs
Test
Transition
Incidents Mgmt.
Request Mgmt.
Knowledge Mgmt.
© 2011 Forrester Research, Inc. Reproduction Prohibited23
Adoption
Justifications
Customer satisfaction
Service delivery
Service consumption
New technologies
Business demands
The Reality
© 2011 Forrester Research, Inc. Reproduction Prohibited24
IT Reputation ?
© 2011 Forrester Research, Inc. Reproduction Prohibited25
Only A Minority Perceive IT As Tightly Aligned With The Business
December 2010 “Beyond Alignment: BT Strategic Planning”
© 2011 Forrester Research, Inc. Reproduction Prohibited26
Source: Rudder Finn blog http://www.ruderfinn.co.uk/blogs/dotcom/files/2009/06/enviromental-head-in-the-sand.jpg
We could …
© 2011 Forrester Research, Inc. Reproduction Prohibited27
Efficient IT does much more than reduce IT costs —it also frees up time and money to focus on revenue generating and innovation activities.
…or address efficiency
© 2011 Forrester Research, Inc. Reproduction Prohibited28
Your new roadmap!
Source: The Sisters of Notre Dame (http://www.snd1.org/images/road15pavedwinding.jpg)
© 2011 Forrester Research, Inc. Reproduction Prohibited29
A framework for improving IT efficiency
Identify efficiency
opportunities
Define metrics
Measure and
analyze
Remediate
People
Process
Technology
© 2011 Forrester Research, Inc. Reproduction Prohibited30
1. A “changed” IT organization
2. An effective understanding of key business services and how IT supports them
3. Managing the IT supply chain as a service catalyst
4. Adoption of best practice framework(s)
All of which requires to shift to a modern IT (process based)
© 2011 Forrester Research, Inc. Reproduction Prohibited31
Traditional technology-oriented department
Source: March 11, 2009, “Inquiry Spotlight: Infrastructure & Operations Organizational Structures, Q1 2009”
© 2011 Forrester Research, Inc. Reproduction Prohibited32
Interest in restructuring is high
Source: July 16, 2010, “New IT Models Will Focus On Service Improvement And Cost Reduction”
© 2011 Forrester Research, Inc. Reproduction Prohibited33
Service improvement, cost reduction, and consistency are primary restructuring drivers
Source: July 16, 2010, “New IT Models Will Focus On Service Improvement And Cost Reduction”
© 2011 Forrester Research, Inc. Reproduction Prohibited34
Business unit
Business unit
Business unit
Business unit
Business services
IT enterprise management
IT process management
IT service development
IT service deliveryIT service transition
Source: December 8, 2009, “It's Time For IT Management Software 2.0”
The new IT organization: the IT enterprise
© 2011 Forrester Research, Inc. Reproduction Prohibited35
Applications groups are the primary targets for restructuring
Source: July 16, 2010, “New IT Models Will Focus On Service Improvement And Cost Reduction”
© 2011 Forrester Research, Inc. Reproduction Prohibited36
© 2011 Forrester Research, Inc. Reproduction Prohibited37
Elements of DevOps
� Complexity kills
� A common lifecycle (ITIL v3? SDLC?)
� Common release management process
� Automated release management execution
� Feedback across the lifecycle
� New incentives
� Organizational impact
– Who owns release management?
– Where does application support reside?
© 2011 Forrester Research, Inc. Reproduction Prohibited38
1. A “changed” IT organization
2. An effective understanding of key business services and how IT supports them
3. Managing IT supply chain as a service catalyst
4. Adoption of best practice framework(s)
All of which requires to shift to a modern IT
© 2011 Forrester Research, Inc. Reproduction Prohibited39
Infrastructurecomponents
Midtier
Businessprocesses
Applications
Businessservices
Middleware
WS, AS, BPEL, ESB, . . . Databases Virtual environments
Networking devices
Routers, switches, VOIP, . . .
Storage devices
NAS, SAN, . . .
OS/servers
Linux, Unix, Windows, . . .
Custom and composite apps
Java/.Net-based, portals, mesh-ups, proc-based . . .
Packaged apps
SAP, Siebel, PSFT, EBS, JDE, i-flex, . . .
Other apps
Exchange, Legacy, . . .
Customer
portal
Order
fulfillment
Product
catalog
Inventory
service
Shipping
serviceReturns
Billing
service. . .
Online
banking
Hire-
to-retire
Procure-
to-pay
Order-to-cash
(Enter order � notify customer � check credit� reserve stock � arrange delivery � confirm)
Lead –
to-order. . .
In the age of service
© 2011 Forrester Research, Inc. Reproduction Prohibited40
Service Management Framework
© 2011 Forrester Research, Inc. Reproduction Prohibited41
1. A “changed” IT organization
2. An effective understanding of key business services and how IT supports them
3. Managing service supply chain as a service catalyst
4. Adoption of best practice framework(s)
All of which requires to shift to a modern IT
© 2011 Forrester Research, Inc. Reproduction Prohibited42
Create a portfolio of standardized agile services
PaaS
Mainframe
Consultants
InternalIaaSWindows
ExternalIaaS
SaaSSANMPLS
Hosting
Middleware
Linux
© 2011 Forrester Research, Inc. Reproduction Prohibited43
1. A “changed” IT organization
2. An effective understanding of key business services and how IT supports them
3. Managing service supply chain as a service catalyst
4. Adoption of best practice framework(s)
All of which requires to shift to a modern IT
© 2011 Forrester Research, Inc. Reproduction Prohibited44
How has ITIL (IT Service Management) impacted the following?
Org Reputation Ops Productivity Service Quality
Ops Costs
Don’t know
Significantly detrimental
Detrimental
No change
Beneficial
Significantly beneficial
Source: Service Management Insights from the 2011 Forrester/itSMF-USA ITSM Study
© 2011 Forrester Research, Inc. Reproduction Prohibited45
Changes cause lots of incidents
Another 33% are undesirable25% are excessive
© 2011 Forrester Research, Inc. Reproduction Prohibited46
The focus in 2012 and beyond should be …
� Productivity
� Quality
� FlexibilityReduce
Cost
Improve
Quality
Improve
CustSat
Improve
Consistency
© 2011 Forrester Research, Inc. Reproduction Prohibited47
The customer experience with your service desk shapes the reputation of the entire IT group
Compliance
Cost
Customer satisfaction
Revenue
Compliance
Cost
Customer Business
© 2011 Forrester Research, Inc. Reproduction Prohibited48
Recommendations/Conclusions
1. Think service from the outside in. Is your service desk a service catalyst?
2. Look at how you work with your Development Team – what is the communication, how could that be improved?
3. Evaluate your change management process end-to-end. Is there an opportunity for improvement?
© 2009 Forrester Research, Inc. Reproduction Prohibited
Thank you
Eveline Oehrlich
+1 617-613-8803
Blog: blogs.forrester.com/eveline_oehrlich
www.forrester.com