Enabling Strategic Planning with Demand, Portfolio & Financial Management

© 2016 ServiceNow All Rights ReservedConfidential © 2016 ServiceNow All Rights ReservedConfidential

Enabling Strategic Planning with Demand, Portfolio & Financial Management

Troy DuMoulin Richard HawesVP, Research & Development Director, IT Business Management Product MarketingPink Elephant ServiceNow

© 2016 ServiceNow All Rights Reserved 2Confidential

The Enterprise Cloud Company


The “Risk Gap” for Business Growth Goals

RISK GAP?

Increasing Demand• Increasing number of products and services • Increasing rate of change• Increasing complexity/data interdependency • Increased speed and efficiency• Increased speed to market• Reduced costs

IT Process / Data / Capabilities• Silo / Fragmented Data Sources/redundant processes• Lack of integration, automation• Lack of visibility

Operating as a mature IT Service Provider requires managing demand and efficient management processes and data across silos!

Scalability Of Management Processes Over Time

Increased Business Need O

f IT Services


Business Relationship Management


What is a Business Relationship Manager?

Sits at intersection of service provider and business partner.

Typical BRM Role…

Stimulates, surfaces and, shapes business demand for maximized value.

Member of both business and provider management teams.


Demand Management


Transition Planning

Change R + DM SACM T + Validation Evaluation Knowledge

Strategy Management

BRM Demand Portfolio Finance

FactoryStore Front Delivery & Support

BRM

Catalog

Request Fulfillment

Service Desk

Incident Mgmt.

Application & Infrastructure Maintenance

Design Coordination

Security Availability Capacity ITSCM Supplier SLM, SCAT

Project Portfolio

Operations Event Incident Request Problem Access

Business Services

Application LayerInfrastructure Layer

Data Layer

Professional Services

Data CenterEnvironment

NetworkFacilities

Technical Services

CSI

Lessons Learned

Charter

Initialize

Plan/Build

ImplementStabilize

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Sources of Demand – Four Types of Work

• Business Projects – Optimize, improve and transform the Business to achieve business strategies and objectives

• Internal IT Projects – Make improvements to the underpinning architecture, technical systems/infrastructure, and development platforms that are required to run IT and pay down Technical Debt

Strategic and Tactical

•Minor Enhancements/Fixes and Service Requests - Support both the business and IT, and do not require project administration. Can be handled with allocation of operational or support resources. May address technical debt

Tactical and Operational

•Unplanned Work – Address issues that surface as a result of the technical debt that accumulates over time.

Operational


The Three Doors of Demand & SLM

Business Relationship Mgmt.

Service Catalog

Demand Mgmt.

Request Fulfillment

Service Portfolio Mgmt.

Lean Principal: Pull versus Push Demand

Service Desk

Ser

vice

Lev

el M

anag

emen

t


Service Portfolio Management


Portfolio Management - Definition

The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance.

11


Managing the Investment LifecycleIt’s not just about new investments!

Making New Investments

Portfolio Analyses: Alignment with

business strategy Alignment with

provider strategy Cost/Benefit analysis Resource availability Implementation impact

Activities: Identify opportunities Make investment

decisions Manage service

development and deployment initiatives

Managing Existing Investments

Activities: Deploy and operate Collect benefits Monitor and sustain

business and service quality fitness

Portfolio Analyses: Alignment with business

strategy Benefits realization Investment condition Cost of ownership

Portfolio Management is often applied only to new investments – but the bulk of the budget is spent on legacy investments!

Retiring Old Investments

Activities: Identify redundant

investments and services Identify low value

investments and services Identify low quality

investments and services

Portfolio Analyses: Portfolio rationalization Cost of ownership Operational quality


Service Owners and BRM Roles in Portfolio

CSIExisting & IT Foundation

Projects

New Tech.New Market

Net New CustomerDemand

BRM

ServiceOwner

Filte

r

Valv

eProjectPortfolio

Service Portfolio

Value?Risk?

$?Compliance? Funded &

Prioritized Projects

Existing Capacity

Externalize

?

Insight on Capacity / Resource Capability

PMO


ITSM Roles and Customer Engagement

Service Owner

Business Relationship Manager

MonthlyServiceReport

toBU Mgr.

Customer

Business Application

Services

Infrastructure/ Technical Services

Professional ServicesSe

rvic

e Ca

talo

g

ServiceLine

Owner

ServicePortoflio Process

Owner

Service InformationAnd Requests

Project Mgmt. Office

Service CatalogManager

Service Level ManagementProcess Owner

Supporting Service Owners


Financial Transparency & Service Accounting


The Service Owner / Small Business Owner• Being a Service Owner is like being a small business owner• Service Owner must have familiarity with:

– The various components that make up all aspects of the Service– Service Model: Budget and Cost of the Service as well as factors that influence them (Run + Projects)– Customer(s) of the Service. Their needs, reasons for using the Service.– Ways to offer the Service to meet Customer needs in the most efficient way. Continual Service

Improvement

Offer a Service that customers want and are willing to buy.


Funding Without Chargebacks• Direct Budget: Money received directly from Line Of Business (LOB) units for services

directly consumed or projects directly beneficial to the LOB (money placed on account)

• Subsidies: Are enterprise-good services that an internal service provider does for the benefit of the enterprise as whole, not for the individual business units

• Ventures: One time funding for significant investments that improves an organization's effectiveness


Financial Sub-Systems• Planning

– Catalog of Services and Products– Demand Forecasting Service Consumption (sales forecast)– Cost Model (Direct, Indirect, Overhead)– Investment-based budget = Sales forecast + Ventures/Projects– Rate Setting

• Actuals– Consumption tracking– Control, Reporting and Chargeback/Showback (“Bill of IT”)– Dashboard for management and clients– External benchmarking

Optional


Money Flow to IT Funding

Client’s Budget

Client Prepaids

IT Budget

Subsidies & Ventures

Revenues

Costs

Direct Budget

Corporate Allocations

Fee For Service

Forecast

IT Decides

NDMA.COM


Key Integrations – Take Away

Service Catalog

Budgeting &

Recovery

Service Model(Run +

Projects)

ServicePortfolio

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Troy DuMoulin VP, Research & Development Pink Elephant

[email protected] twitter: @TroyDuMoulin blogs.pinkelephant.com/troy

http://www.servicenow.com/products/business-management.html/?cid=s:330

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Enabling Strategic Planning with Demand, Portfolio & Financial Management