Uncovering the Business Value of IT Service ManagementFive Ways HP Service Manager Can Make You a Hero

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IntroductionToday, IT departments are facing more demands than ever before. The world of IT is changing rapidly, becoming increasingly complex and decentralized with new advancements such as the move to the cloud. In addition, IT executives are now expected to meet the needs of both internal and external customers with far fewer resources – while also complying with quality practices and regulatory requirements.

“We want to reduce pain for our customers, save dollars and create efficiencies. ITSM from HP delivers on all three areas.” Director of Internal Services – U.S. Services Company

This is why IT organizations need robust, enterprise-class service management solutions that can effectively manage the service lifecycle from end to end. These solutions allow enterprise IT organizations to achieve much-needed increases in efficiency, to support business-critical quality improvements and to comply with mandatory regulatory requirements.

HP commissioned Dimensional Research to interview customers who have deployed HP IT Service Management (ITSM) solutions. Dimensional Research conducted 11 in-depth interviews with HP customers to answer the question: What specific ROI and benefits are they getting from HP ITSM solutions?

Participants generally categorized specific benefits into two areas:

• Lowered costs and risk instead of “reduced risks and costs”

• Ensured quality and compliance

This report summarizes the findings from the Dimensional Research interviews1.

Project MethodologyHP secured the participation of customers for a portion of the interviews and provided contact information to Dimensional Research. HP did not participate in the interviews and did not offer input nor influence this report.

Participants were not compensated for participating in this research project2. Because of the challenges involved with getting corporate approvals to discuss IT operations and business benefits publicly, all participants were assured their feedback would be presented as part of a summarized report with no attribution.

During the interviews, participants were asked about their IT environments and the challenges they faced, the specific challenges and business objectives they expected the HP ITSM solutions to address and the actual value and benefits the solutions delivered.

Participant ProfileThe participants were employed at national and global companies from a wide range of industries, including:

• Financial services • Telecommunications • Technology • Health care • Insurance • Retail and other services

Each of the participants interviewed used HP Service Manager in their day-to-day business operations. The time frame during which they had used the HP ITSM solution ranged from less than a year to more than 6 years. Each of the 11 participants was responsible for the operation and/or selection of the HP ITSM solution as well as some firsthand use. This allowed Dimensional Research to gain insight into the value achieved from both a strategic business perspective and an operational point of view.

1 All customer quotes were taken from interview transcripts, although quotes have been edited for grammar and readability. 2 As a token of appreciation for their participation (and if allowed by their company), a small donation was made to the charity of each participant’s choice.

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Several of the customers interviewed had integrated HP Service Manager with other vendor products and in-house custom applications. Many also leveraged other HP products such as HP Operations Orchestration, HP Asset Manager, and HP Discovery & Dependency Mapping to deliver broader business solutions.

About HP ITSM HP IT Service Management (ITSM) is a scalable enterprise solution that allows IT executives to manage and report IT functions in today’s increasingly complex environment. The HP ITSM solution builds upon HP Service Manager and includes the HP Universal CMDB with several key modules to allow IT organizations to create a rich, customized, integrated and automated enterprise solution that enables IT departments to run more efficiently. Notably HP Service Manager modules include the help desk, IT change management, service catalog, knowledge management, request management and service level management. HP ITSM is commonly integrated with existing in-house systems and other HP products.

The number of tickets (as defined by the total sum of incidents, problems and change requests) handled by the participants’ systems varied widely, ranging from a few thousand tickets per month to more than 100,000 tickets each month and more than 2 million in a given year.

Solving the Efficiency, Visibility and Compliance Challenges Faced by IT TodayMany of the participants interviewed began by discussing the increased pressure on IT operations in today’s world. They noted that a growing dependence on applications to support critical business processes often translated into more work for the IT department in creating and maintaining those applications.

They also noted that ad hoc systems could no longer be relied on to efficiently handle, document and prioritize service requests, incidents and problems. That’s because these manually intensive, often homegrown systems did not allow participants to prioritize effectively, track or report on tickets. Nor did they scale.

“With HP ITSM we can see it all: assets, system health, software licensing and utilization, user satisfaction, ticket response time and hardware performance. It’s IT mission control.” Sr Manager of Systems and IT Operations – National Health Care Institution

They confided that prior to implementing an HP ITSM solution, their teams worked hard but were flying blind most of the time, with a growing disconnect between the tickets generated and the resolution of problems. Not only were IT customers dissatisfied with how problems were resolved, there were also increased reports of problems such as fix collisions, where the IT department inadvertently caused a greater problem while trying to fix another. The lack of a centralized system also required those who were manning the help desk to repeatedly “reinvent the wheel,” often with each person solving the same problem differently.

“HP Service Manager transforms the way we do things and gives us the ability to improve. Prior to using it, we didn’t document what service was affected or the correlation between changes and incidents. HP ITSM helps create the process and information needed to reduce outages and speed recovery.” System Architect – Top 10 Insurance Institution

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In addition to the lack of organization, many respondents said they were lacking in other areas as well, prior to their implementation of HP Service Manager. Many were required to manage and report on service level agreement (SLA) compliance and manage regulatory and best practice requirements such as those published by the IT Infrastructure Library (ITIL), the International Organization for Standardization (ISO), the Sarbanes-Oxley Act (Sarbox), the Payment Card Industry (PCI), the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Federal Drug Administration (FDA) and others. But their previous ad hoc systems were incapable of complying with these regulations, let alone reporting on them.

A few shared that before they implemented their HP ITSM solution, they were out of compliance with regulations and new laws because they simply did not have the ability to comply. Participants agreed that these problems will likely get worse as industry leaders turn to new technologies such as cloud computing, which often require both in-house and outsourced infrastructure. In the future, they said, having one centralized system that effectively manages decentralized IT resources will become even more critical to success.

Eliminating Cost, Reducing Risk and Delivering a Solid ROIOf course, the functionality delivered by an enterprise-class ITSM solution is not only needed in the future – it is also critical for success today. In fact, participants indicated that they expected significant benefits out of their enterprise-class ITSM solution immediately after implementation.

“In the first couple years of using HP ITSM we saw a savings of around $10 million.” Executive Director – Top 10 Global Financial Institution

Those interviewed said they expected their ITSM solution to reduce costs through lower hardware and personnel costs – without increasing risks. In short, participants expected that fewer new equipment purchases would be required thanks to better use and troubleshooting of existing equipment. They also believed that increased scalability, improved manageability and better access to accurate information would increase efficiency and thus reduce personnel costs.

“A key aspect of the HP Service Manager implementation was that we could quickly implement and deliver value fast.” Director of IT – US High-Tech Company

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The participants indicated that they actually received many more benefits than they expected out of the HP ITSM solution. All interviewed stated that their HP solutions delivered very real savings and overall reduced risk for their business. Some found bottom-line savings in their operational budget from reduced hardware costs and reduced maintenance costs. Some said they could support an increasing number of IT services with existing resources.

Perhaps even more impressive than the ROI numbers was the fact that several of the participants who had relied on HP ITSM products for many years remarked that doing their jobs without it seemed unimaginable now.

Ensuring Quality and ComplianceWhen asked about service quality, participants pointed to fewer service interruptions and the ability to achieve service reliability objectives ranging from three nines (99.9%) to five nines (99.999%) reliability. Many of those interviewed said HP ITSM solutions delivered not only improved uptime but also helped them meet both internal and external service quality metrics, objectives and requirements.

Many of the participants found that the HP ITSM solution helped them easily comply with and report on regulatory requirements, such as those outlined by PCI, HIPAA, Sarbox and others. Those interviewed expressed that HP provides key tools, such as a universal change management database and knowledge management, that not only help them manage and operate to those requirements but also help them automatically produce the reports and keep the IT team abreast of changes and issues.

“We moved to HP ITSM because our old legacy and homegrown systems were no longer supportable. We couldn’t integrate them and there were no reporting capabilities. While we wanted to do this for a long time, audit and compliance reporting really drove this.” Director of IT – U.S. Technology Company

Several had been using HP Service Manager and key modules for so long that they said it was almost incomprehensible to consider running IT and meeting compliance requirements without the system. Eight of the participants ran ITIL-compliant shops, and several indicated how beneficial it is to have the ITIL v3 standard integrated into the HP Service Manager version 9 product line.

HP ITSM solutions were also critical in helping IT departments comply with customer-specific requirements, such as SLAs. Some of those interviewed employed automatic alerting and ticketing on system performance issues and possible SLA breaches as well as other established performance expectations for end-user customers.

USE CASE ROI DELIVERED BY HP ITSM

Better Compliance Reporting

HP’s automated, comprehensive compliance reporting capabilities saved a top 10 global financial institution from hiring at least 10 extra people.

Automation of Tasks

By no longer relying on manual spreadsheets to manage its engineering tasks, a top 5 global telecommunications company reduced errors and saved $75,000 per month.

Elimination of Other Applications

One HP Service Manager customer said the solution paid for itself within a year and continues to save the organization $22,000 each month because it eliminates the need for several previously used applications.

Incident Automation

One company now has 49,000 incidents a month that are resolved through a fully automated response. The savings in human resources alone: at least 10 people.

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Maximizing Team ProductivityWhen asked why they wanted an enterprise service management solution, respondents were most passionate about enhancing team productivity. Many said that prior to implementing an HP ITSM solution, their teams were fully extended just keeping the system up and running, leaving little time to create new applications or replace aging ones.

They said that prior to implementing an HP ITSM solution, top talent would often spend their days reacting to emergencies and acting as tier two or tier three help-desk support, instead of focusing on strategic initiatives.

“It would take an army to manage our 2,000 tickets a month versus the 2 admins we have today.” SR Manager of Systems and IT Operations – National Health Care Institution

Several discussed a pre-HP ITSM world where their time was consumed by manual processes and spreadsheet shuffling. As a result, their teams spent many unnecessary hours trying to manually track and correlate incidents, recent fixes, scheduled changes, upgrades and customer issues.

“We have one centralized tool now. It has reduced training by 50% and reduced issue remediation time by the same magnitude.” Director of IT – U.S. Technology Company

These respondents said that the move to HP Service Manager – which supports issue and incident resolution all in a single solution – has made their help desks significantly more effective by increasing the number of tickets resolved by tier one reps. It has also freed up their top talent for more strategic projects. Their teams could begin to operate in a proactive mode instead of a reactionary one. Some of those interviewed enabled automated ticket generation and resolution operations, where the system detects issues with monitoring, files

USE CASE IMPROVED QUALITY AND COMPLIANCE WITH HP ITSM

Compliance with ITIL v3 “The newer HP Service Manager 9 is directly aligned with ITIL v3, which helps us achieve our IT quality and operation standards.”

“ITIL is a big driver in our company and HP Service Manager is the only solution that fully enables you to be version 3 compliant.”

ISO and PCI Compliance “We used the HP ITSM reports for ISO9000 compliance and audits. We used to burn 20% of our resources on reporting and PCI compliance.”

Overall Compliance “It used to take a week to create a compliance report. Now it takes just a few minutes with HP ITSM.”

“Without HP ITSM, we would be out of business. The regulatory compliance and required accuracy of our systems cannot be compromised. Ever.”

Improved Service Quality “Before deploying HP Service Manager, we would make changes that collided and took the system down. It just doesn’t happen now.”

“We use network diagrams from HP ITSM (knowledge management) to quickly isolate problems and use the change management module to ensure consistent network engineering and resolution, which is absolutely critical when supporting broadcasting companies on your network.”

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tickets, and in many cases can actually initiate and resolve problems automatically. These efficiencies translate into increased customer satisfaction, faster resolution times and increased system reliability – making it easy for the team to handle more incoming tickets without adding headcount.

USE CASE MAXIMIZING TEAM PRODUCTIVITY WITH HP ITSM

Better Efficiency Through Automation

“We are upgrading to HP Service Manager 9 and the new UI is fantastic with key dashboards for each team leader as well as executives. Version 9 now provides integrated automation so that basic alerts and their routine fix can be automated and tracked.”

Processing Improvements With HP Service Manager, “some processes, such as change requests, sped up by 2 to 3 days (from request to completion).”

Accomplishing More with Existing Personnel

“Our company has grown 10X in the last few years, and we are getting 50% more calls than just two years ago. HP ITSM has allowed our team to handle the growth with better reliability without growing headcount.”

“The HP ITSM solution gives us more people capacity, and with our business growing we can take on additional work and scale without adding head count.”

“Now a new person could do in a week what used to take 3 months. HP ITSM tracks it all and provides the workflow, and we have a fully updated CMDB by due process.”

Easy Management “With HP ITSM, all the information is in one suite of tools. With the old system, IT personnel had to access many different screens and if you didn’t cross reference them correctly, many errors were made – costing us time and money. Now we can manage the incident, changes and knowledge base in one solution.”

Improved Strategic Planning

“I have been able to reposition some of our best talent from fire drill responses to strategic planning and deployment.”

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Improving the Customer Experience

USE CASE IMPROVED CUSTOMER EXPERIENCE WITH HP ITSM

Improved Ticket Resolution

“We reduced the time to log, handle and resolve tickets by 10%. That may not seem like a big number but when you get 50,000 tickets a month, it is a significant improvement.”

Automated Processing “We have 2-3X more tickets now than we used to, but they are almost all automated. HP ITSM creates visibility and traceability, which is very, very good. It is now very easy to open and create a ticket, where in the past it would just fester and then blow up.”

Increased Customer Satisfaction

“Today, 70% of all incidents are from automated alerts, 25% from customers and only 5% internally discovered. It used to be the inverse where most came from our customers. HP ITSM allows us to be proactive, and we have much happier customers.”

“HP Service Manager is more efficient, as it automatically routes tickets to the right people based on topic and severity. This makes both the support team and the customers happier.”

Enhanced Efficiency of Tier 1 Help Desk

“We heavily use the knowledge base aspect of HP ITSM and 75-80% of our incidents and problems are already documented with solutions resulting in fast remediation. Now our tier 1 help desk resolves 60% of the problems.”

“With HP ITSM, the right issues go to the right people and then knowledge of a solution is recycled to create faster problem resolution. First call resolution has gone up 10x.”

“We love HP ITSM solutions; they are customizable, easy to work with and make our customers satisfied.” VP of IT – Top 5 Global Health Care Company

Most of those interviewed represented their IT team and organization as a service department. Their charter is to serve the customer, which often includes both internal employees and the company’s external customers.

Many say that the HP ITSM solution improved the customer experience almost immediately by allowing faster resolution of issues and prioritization of customer requests. Before implementing HP ITSM, they recalled that keeping the basic IT system up was a constant challenge and problem resolution was slow, leaving very little time for new customer requests. Their customers felt the process of creating a troubleshooting request was arduous and often felt their requests were lost in an IT “black hole.”

In contrast, the HP ITSM solution allows the IT help desk to instantly respond with ticket receipt

confirmation and prioritize issues based on business priorities and SLAs. Many stated that with faster resolution and an easier process, initially more tickets were raised by customers. Ironically, the greater number of tickets actually increased the efficiency of the department because it allowed for proactive problem resolution and alerted the IT department to issues much sooner.

Many participants indicated that the issue and problem tickets filed by customers waned as the IT system’s performance and reliability improved, while the number of change and new project requests increased. This is a true indicator of good customer service, as users move from complaining about applications working properly to requesting new applications and services that solve other business problems.

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Maximizing IT Value

USE CASE MAXIMIZING IT VALUE WITH HP ITSM

Quantifying Value of IT “We now have a business dashboard that drives fact-based business discussions. We discuss what delivers value to the company and the next business priorities. Good data makes great IT.”

Better Linkage of IT to Business Objectives

“Utilizing HP ITSM as a global platform enabled our offshore strategy, as well as our asset management objectives.”

“HP ITSM gives us traceability and visibility back into the business and conformance to ITIL best practices.”

“HP ITSM makes us a good business partner.”

Improved Reporting “Prior to HP ITSM, the reporting we needed was impossible. We need to manage to tight SLA targets, and we provide the same ITSM reports we get for our team to our external customers.”

Faster Product Rollouts “It only took 10 months to rollout and support 6,000 users. We could never have done that before HP ITSM.”

“Every business process and practice uses HP ITSM directly or indirectly. Everyone needs it to do their job….We can’t go back to spreadsheets. We cannot survive managing it that way.” Sr Manager of Systems and IT Operations – National Health Care Institution

Several participants noted that IT is a cost center for their company – and said that they found it difficult to explain how the IT department directly propels the company. The biggest challenge was a lack of data – they had no way to track what IT infrastructure and software provided value.

Instead, they often found themselves trying to explain why 90% of their team’s time was spent resolving problems – a fact that made executive management question IT’s competence and perceive it as part of the problem, not the solution.

Participants said that this changed after they implemented HP Service Manager, in part because it made their IT operations better, faster and less costly than before and in part because the HP ITSM solution allows them to produce reports outlining their performance and showing exactly where all the resources are being invested.

IT executives use HP ITSM to explain which systems support the most users, facilitate revenue, require the most support, and have the highest or lowest reliability and why. For many of those interviewed, this information has allowed them to have a more business-oriented discussion about what initiatives are most important to the company and what IT can do to facilitate them.

HP ITSM helps IT executives have a data-driven discussion about the resources, hardware and budget needed to meet and exceed the expectations of the business. Thanks to HP Service Manager, IT executives can expand their role from technology implementers to decision makers. The HP solution gives them the tools they need to secure a seat at the table when their company is making decisions about key business initiatives.

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Why HP?

THE HP DIFFERENCE WHAT CUSTOMERS SAY

A True Partner “Vision is what sets HP apart, always looking 10 miles ahead, then asking the customers what they need. With HP, it is a partnership.”

Product Vision “HP has excellent product vision; this is exactly what is lacking with IBM.”

Better Technology “The new UCMDB has a new UI showing server orientation and configuration, and it can be uniquely tailored for the user. It is really incredible.”

Integration with Legacy Systems “We chose HP ITSM because we could phase in the implementation, integrate with some legacy systems short term and track everything in UCMDB. It is easy to see why HP ITSM tops the analysts’ reports every year.”

“We needed the features and the scalability that only HP could deliver…we continue to compare and they continue to come out on top.” Executive Director – Top 10 Global Financial Institution

We asked each participant why they selected HP, and the overwhelming majority said that HP products were the only ones that delivered the required functionality. Participants noted that HP has a strong history of continuing to invest in and upgrade its technologies, which is a key benefit to customers. Many of the customers interviewed were enthusiastically deploying the latest version of the HP ITSM solution, version 9.

Several also noted that HP products are adaptable and easy to integrate with homegrown solutions and other systems. This gives customers the flexibility

to address the largest problems first while keeping in place systems that are working – thus helping customers avoid a huge, expensive “rip and replace” project.

Participants noted that HP was unique in its delivery of enterprise-class scalability and its understanding of their business needs, which has often resulted in HP creating a solution that actually fits their company’s specific requirements. Many termed the relationship with HP as a “partnership” and felt free to communicate with HP any enhancements they would like in future upgrades to its solutions.

© 2011, Dimensional Research. All rights reserved. www.dimensionalresearch.comHP IT Service Manager is a registered U.S. trademarks of Hewlett-Packard Company. Additional product and module names are also the property of Hewlett-Packard Company and are hereby acknowledged.

About Dimensional Research Dimensional Research provides practical market research services that help corporate IT organizations and technology companies make smarter business decisions. Our researchers are experts in technology but also understand how corporate IT organizations operate. Our research services deliver a clear understanding of customer and market dynamics. For more information visit www.dimensionalresearch.com.

About HP Software This paper was commissioned by HP Software. Our business technology solutions help you make sure that every dollar invested in IT, every resource allocated and every application in development or production meets your business goals. For more information visit www.hp.com/software.

Conclusion While HP’s customers cited some exceptional and tangible ROI, perhaps most impressive is the comment by many that their businesses could not function without HP ITSM. All participants had also taken advantage of the HP ITSM enterprise approach that can scale and grow with the company. Several of those interviewed had started with HP Service Manager and eventually added on other HP modules or other HP products. Several had also integrated the HP ITSM solution with their existing IT Service Management components – thus avoiding the expense of a full “rip and replace.”

The IT executives interviewed overwhelmingly agreed that HP ITSM makes their jobs significantly more strategic. Not only can existing staff resolve more incidents, they can also easily comply with and report on SLA and regulatory requirements.

Those interviewed clearly articulated how their HP ITSM solution allows them to deliver excellent customer service while also increasing the overall efficiency of the IT department – thus allowing them to accomplish more with fewer resources.

In the future, participants said that the new capabilities supported by HP Service Manager 9 will become even more critical as industry leaders turn to new technologies such as cloud computing, which often require the support of both in-house and outsourced infrastructure and applications.

The bottom line is that HP Service Manager enables IT executives to increase the value they bring to the business and also to quantify that value – allowing them to make IT a hero to the business. For many, HP ITSM has become so valuable that they cannot imagine doing their jobs without it.