Developments In It Service Management

Published Date: 02 Nov 2017

In recent years IT departments and IT services providers have had to deal with new challenges. The key challenges are internal restructuring of the IT Departments,

The main challenges are internal restructuring of the IT-Department, the importance of service orientation caused by increased market and customer orientation as well as the industrialisation in IT-Service management. As a result of the increasing focus on efficiency and performance, organizations recognize that the operation of IT is not their key competence. Hence the organizational structure of IT-Departments is changed from internal cost centres to market oriented service providers. Organizations have started to evaluate the added value and performance of their internal IT-Departments and benchmark them against market offers from external IT-Service providers. On the one hand, this follows in a changed position of the IT-Departments and IT-Service providers as well in a modified situation for managing IT-Services. On the other hand, this results in an increasing procurement of IT-Service via external markets for IT-Services (Aileen Cater-Steel (ed) , 2009).

To illustrate selected trends and developments in IT-Managementthis chapter shows the need for anew conceptof IT-Service quality management. The goal is to emphasize important developments in IT-Service management and show their impact on the IT-Service quality management (Aileen Cater-Steel (ed) , 2009).

According to the situation mentioned before, there is an increased market and customer orientation in the IT-Management sector. The different departments in an organization become customers of the IT-Department or an external service provider. As a result, the relationship between the several departments and the IT-Provider is similar to a partnership with external customers. Both parties work together on basis of defined service levels under real market conditions (Aileen Cater-Steel (ed) , 2009).

Therefore, market and customer orientation makes new demands on IT-Departments and IT-Service providers. They are forced to define products and services which are provided for the customers. The definition of IT-Services, the "product" of the IT-Department, becomes a key challenge for the IT-Management (Zarnekow & Brenner, 2004). The development and customization of suitable service packages will be a future challenge for service providers in general (Spath, van Husen, Meyer & Elze, 2007). "IT-Products" are a combination of different IT-Services which support business processes (Uebernickel, Bravo-Sanchez, Zarnekow & Brenner, 2006). From a service providers’ point of view, this product orientation implies that a portfolio of offered services has to be defined and regularly updated to the customers’ demands. From a service recipient point of view, the IT-Service portfolio has to be actively managed and continuously adapted to the changing business requirements and the business processes (Aileen Cater-Steel (ed) , 2009).

The increased focus on business value and performance results puts an increasing pressure for IT-Service providers to improve their efficiency. In this context, the term "industrialisation" describes the transformation of productivity methods from the industry sector to IT-Service management (Aileen Cater-Steel (ed) , 2009).

The ISO 20000 Standard suite provides a basis for a measurable quality standard for IT-Service management. It is the further development of the former British Standard (BS) 15000. Therefore the original orientation of the ISO 20000 standard was derived from the BS 15000. On the basis of the ISO 20000 standard organizations can be audited and certified to proof the compliance with this international standard. Furthermore the ISO 20000 fosters the implementation of an integrated process approach for the IT-Service management within an organization. The standard covers all aspects which are relevant to implement an optimal service management. Hereby the standard especially focuses on the service providers perspectives. ISO 20000 consists of two parts. The first part promotes the adoption of an integrated process approach to effectively deliver managed services to meet the business and customer requirements (ISO 20000). The second part is a code of practice and describes the best practices for service management within the scope of the first part (Aileen Cater-Steel (ed) , 2009).

The goal of the standard focuses on the provision of a common reference standard for all organizations which provides services to internal and/or external customers. Due to the great importance of the communication between service provider and service recipients one of the main targets of the standard is the definition of a common glossary for the service providers and their customers (Aileen Cater-Steel (ed) , 2009).

2.12 World Class IT Service Delivery

According to Peter Wheatcroft (2007) service is not something we can call a manufactured product and can’t be made pre-packaged quantity and sold at a discounted price. It is not something can be stolen or taken away from its owner or a creator. Hence service is misunderstood in IT delivery chain. "It is often confused with operations, derided as being the province of back room staff, and yet it accounts for the greatest proportion of IT customer complaints when delivery does not match expectations". We can say, may be customer expectation could be wrong, but actual part of IT Service Delivery cycle is settings such goals, service involves the customer in the transaction.

As compare to the past service delivery is more important than ever due to multiple technologies supporting each system and end users have also changed. Service provider is like a retail on the street now which provides service directly to the person. As only retailers know their customers well enough through service experience that the relationship between retailer and the person goes beyond what is just being bought from us. Should it effect managed IT service the same way (Peter Wheatcroft, 2007).

World Class or best practice terms are often used interchangeably to describe the attainment level of a particular IT organization or service offering. They don’t mean the same thing and their difference between these two terms must be understood. Peter Wheatcroft (2007) describes how these two terms have a relationship and can be used to govern IT service delivery. There are number of concepts and modules are introduced, well know examples starting with outside IT and concluding or merging with an accession model developed models for IT service departments (Peter Wheatcroft, 2007).

The issues and characteristics of organisations those have goal to achieve high level or outstanding service performance can be analysed and measure, and auther explains number of important models that do this are explained. Before exploring at the models it will be useful to know generally what is the definition of world class. For example, the Government Accountability Office in the USA defines world-class organizations as being ‘recognized as the best for at least one critical business process and are held as models for other organizations’. In contrast, The Bridgefield Group, which specializes in quality management and performance measurement systems, defines world class as being ‘a general term for a high level of competitive performance as defined by benchmarking and use of best practices’. And not least of all, Wikipedia – an online collaborative encyclopaedia – defines world class as ‘ranking amongst the foremost in the world; of an international standard of excellence; of the highest order’ (Peter Wheatcroft, 2007).

According to Peter Wheatcroft (2007) above explained world class definitions support performance as being based on the best practices, benchmarking and excellent delivery. And this will also be explained now and in later chapters of the book, that all aspects and factors are critical in order to explore a comparative and objective level of service quality.

The category in which we are most interested is World class. Organizations that continue their investment in effective processes continue to gain a benefit in terms of service performance. There are organisations which invests in their service delivery, to have a good relationship with their existing customers and taking on more customers and also winning awards. IT service delivery organisations should aspire in of that which can easily achieve this and it’s not impossible. "The service practices that lead to this level of performance can be grouped into five different result areas – service process, leadership, people, performance management and results". This type of formation or grouping is a common way of thinking about the actions those are due to be effectively delivered not on as IT service but other type of outputs too (Peter Wheatcroft, 2007).

2.13 Risk-aware Decision making for new IT Investments

According to Georges Ataya (2003) IT related decision are initially made in most organisations are some form of Return of Investment (ROI) or on the derived internal rate of return (RRT) to measure and evaluate the projects. We should not forget while allocating IT budget because most expenditures in IT are dominated by the operation and maintenance of the current application which are being used. Mostly business managers those who have to make an IT budget complain that they are paying too much for too little in return for the business benefits, but new investments retain small proportion of the global IT budget. The sixth edition of Corporate Information Strategy Management says that "few non-IT professionals understand that the cost of maintaining and managing the IT infrastructure often represented 80 percent or more of yearly IT budget, leaving few resources to be directed towards creating business value." While the traditional ROI-based approach neglects the alignment with business strategy and disregards project risk and intangible benefits, new methodologies are bringing additional elements to ROI analysis (Georges Ataya, 2003).

Successful projected related to technology require available skills, hardware, software or any existence of application software required to generate the anticipated value. Georges Ataya (2003) explores Contribution perspective as New, better and faster perspective development processes; development with new technologies. User perspectives are user interfaces for external users. Operational excellence is rapid development, web site development, data warehouse development and data mining development. Future orientation is based on training and education of IT staff to new and emerging technologies which can benefit the business. Decision making process and underlying planning and implementation process for IT into four critical dimensions that are assessed regularly and encapsulated throughout the organization are approached by the structure which Georges Ataya (2003) explores.

Upper level management and on people on the board are only few those who are advocated in this cost-cutting era. Due to recession and period of depression it’s hard to make such decisions to invest in existing operations, organisations rather investing in quick and fast revenue generating parts of the business due to business financial continuity issues to save their businesses. IT itself is another business of the enterprise with its own investment requirements. For longer terms IT should have investment scheduled for it and should determine the yearly costs of backlogs which were caused by lack of or unavailable funds for IT. When funds for IT are approved and accepted by management, IT should take full advantage of IT governance principles and reflect back on its own management process. When management is made aware of IT related information on a regular basis, it will be able to adequately perform corporate governance (Georges Ataya, 2003).

2.14 Focusing on Success in a Multi sourced Environment

Derek Lonsdale, Wendy Clark and Bina Udadia (2006) describe ITIL (IT Infrastructure Library) as a best practice framework for service management which provides standard guidance for deployment in one dimensional service delivery environment. Due to complex nature of most organisations aren’t that simple and because of all that IT is outsourced among several providers. Each service provider has several service management tools, support models and techniques of their own. According to Derek Lonsdale, Wendy Clark and Bina Udadia (2006) "Attempting to deliver ITIL best practice in these complex environments without consideration for the specific needs of the organization often results in the expected benefit or "step change" in performance not being realized". This will benefit the customer who is receiving such services managed on ITIL fundamentals.

To gain early success will be easier to achieve by comprehensive and focused implementation and it can help organisation improve rapidly. This type of implementation needs to be built upon the foundation of clear priorities to be successful in a complex environment. These foundations should include a program of activities that focuses on processes that will deliver visible benefit, a design for the organisation which runs end to end service management, underpinned processes and a continuous drive for benefit delivery (Derek Lonsdale, Wendy Clark and Bina Udvadia, 2006).

Any organisation implementing ITIL based Managed service strategy should divide deployments into list of priority changes because all organisations have different priorities which depend on their current process maturity and business issues. To fit quick wins there are number of processes can be added, service level management, problem management, incident management and change management because they are clear candidates’ prioritization (Derek Lonsdale, Wendy Clark and Bina Udvadia, 2006).

To build better customer relationship by faster service restoration and minimum downtime and deliver most visible and immediate benefit are advantageous by prioritizing the processes. Further than that outcome of prioritizing these process can give organisations the vision to implement the rest of the ITIL deployment. (Derek Lonsdale, Wendy Clark and Bina Udvadia, 2006).

The advantage of prioritizing these processes is that they deliver the most visible and immediate benefit to the customer through reduced service disruption and faster service restoration, and, at the same time, assist in building better relationships with the business. In addition, outputs from these processes give organizations the information they need to prioritize the remaining pieces of their ITIL deployments. For example, the problem management team may discover that most of the problems are being caused by a lack of effective capacity management. Delivering these benefits early will assist with building ongoing commitment to the change program (Derek Lonsdale, Wendy Clark and Bina Udvadia, 2006).

Derek Lonsdale, Wendy Clark and Bina Udvadia, (2006) concluded in their search by finding that although the ITIL best practice framework guidelines are standard and easy set of guidelines, it can be modified and implemented according to the organisational need where this guideline will be introduced. Implementation can be successful when "the complexity of the environment by prioritizing a small but critical number of focus areas, establishing a clear and accountable service management organization, implementing consistent technology across the environment, and ensuring that the right performance information is available from the outset". Implementing ITIL in any organisation who wants to provide managed services can make a real difference after implementing successfully ITIL (Derek Lonsdale, Wendy Clark and Bina Udvadia, 2006).

2.15 Service Integration in a Multivendor Outsourced IT Environment

Imagine asking two teenagers to take out the garbage every Wednesday. Anyone who has kids knows that the garbage will not be taken out on Wednesday because the two teenagers will point at each other and say, "I thought he/she would do it." In an environment where IT is outsourced to multiple service providers, IT struggles with a similar challenge. For example, when one has a complex incident that cripples a major business aspect, the suppliers will inevitably point at each other and say "it’s their fault." (Jan Vromant, 2010)

Jan Vromant (2010) explores that even though there is a less control due to multi sourcing or outsourcing, why there is still an increase trend out there? Then the best answer would be " different IT service providers have different strengths and capabilities and cost structures. Often, service providers have strengths in specific industry segments (e.g., health care, automotive) or with particular products or technologies (e.g., SAP R/3, network management) and have built up the skills and the knowledge to provide strong value in that particular area" (Jan Vromant, 2010).

Jan Vromant (2010) also explains that due to having in house application support for the organisation under the same roof has weak infrastructure or operation support. "One of the reasons for this phenomenon could be that apps are more a people-focused endeavor (because most of the cost of apps is people) than ops, which results in different types of corporate culture. Labor arbitrage or "cost-shoring" (i.e., finding the best geographical location for the service) in most instances can be more appropriate for apps than for ops".

2.16 The Drive for Value Management

According to Jon Thorp (2008) every small business, medium business or a large enterprise in USA which is public or privately owned, whether profit or non profit organisations they all have to deliver value in return to their stakeholders or their owners. Past few years or so this has been the part of enterprises business discussion that how to achieve the value. The current interest in value management is driven by a number of factors including, poor track record of capturing value, changing nature of value with a greater contribution coming from intangibles, the increases complexity of value creation, resulting in great part from the pervasive use of IT and globalisation, increased transparency mostly driven by regulation such as the Clinger-Cohen and Sarbanes-Oxley act in US.

John Thorp (2008) explains the survey taken in 2006, 150 senior executives worldwide took part in the survey, which was conveyed by Economist Intelligence Unit in conjunction with Deloitte "1 found that that the notion of value creation and preservation through investments in business change is still usually treated as an implied principle, and not a conscious and pervasive tenet-guiding behaviour" (John Thorp, 2008).

As John Thorp (2008) summarises that Investment involving IT affected by such type of thinking, which changed the views that investment in IT is no longer just about the technology itself but this is the investment for an organisation as whole. The failure to realize business value from investments in IT enabled organizational change is a symptom of a wider malaise, one that presents managers with significant new challenges. Implementing any major change successfully is terrible track record. The success rates of business process reengineering and mergers and acquisitions.

2.17 Unlocking the Value of IT Investments

According to Georges Ataya, (2007) the importance of application of Information Technology from automation of work through information management to business information has been increased the number of different potential application of information technology. It’s not that only more things can be done with the help of automated application for information technology, they can be a great help in any type of complex environment to make work easier and faster. Due to the fact automated application can be very helpful for any type of complex business, organisations are not making IT investments but they are investing in Information Technology enabled change. Most organisations have plenty of legacy applications of technology installed which are quite large, they have to be maintained and updated according to the business need. With an increasing amount of potential valuable work to do an amount that consistently exceeds available resources, the challenge of selecting the right Information Technology business investment is becoming difficult because there are many issues, for example making choice, complexity, increase of risk, impact on business, more visibility and more management executive attention required.

Georges Ataya, (2007) describes the challenges faced by organisations are to make the choice of investment which have great benefits for business and which can also deliver the value to the business. Portfolio management is the power fool to be discussed is a big challenge for organisations. "One of the three processes of Val ITTM.1 Portfolio management has been applied to financial investments for decades, helping decision makers choose amongst increasingly numerous and complex options in a volatile environment". Core of effective governance is the combination of performance management and portfolio management.

Georges Ataya, (2007) explores the meaning of portfolio management and process management. A portfolio can contain any investment or asset that an organisation needs to manage and investments or assets which can be described on the basis of their type or characteristics. Criteria can be established to support the evaluation of investments or assets in each category based on what is of interest to management, including contribution to value, strategic and financial objectives, and degree of risk. How to manage the portfolio can be decided on the bases of criteria and performance of the portfolio including identification of actions to increase the overall value of the portfolio.

The focus of portfolio management in the initial release of Val IT is on new investment programmes. The programmes in the portfolio must be clearly defined, evaluated, prioritised, selected and managed actively throughout their full economic life cycle to optimise value for both individual programmes and the overall portfolio. This includes the proper allocation of resources, the management of risk, the early identification and correction of problem (including programme cancellation, if appropriate), and board-level programme portfolio oversight (Georges Ataya, 2007).

According to Georges Ataya (2007) Portfolio management has nourished it’s importance over the last few years and now often promoted as the solution to aligning business and IT and demonstrating the value of IT’s contribution. "Whilst programme portfolio management, as described in Val IT, certainly holds this promise, most current implementations of portfolio management relate to project portfolio management (PPM), which is generally more narrowly focused on IT projects" (Georges Ataya, 2007).

Georges Ataya (2007) explains that "While PPM is certainly useful in managing IT resources and costs and, to some extent, in addressing strategic alignment, portfolio management must be extended to encompass IT-enabled business investment programmes if organisations are to realise the potential of IT to contribute to business value". For IT governance and effective enterprise governance Portfolio Management can be used a very powerful tool. The link between Portfolio Management and enterprise specific investment strategy is also linked provided by this also initiatives and actions undertaken to execute strategy. Portfolio management also supports the identification, evaluation, selection, execution and monitoring of investment. Portfolio Management further supports the on-going monitoring and evaluation of organisational assets which includes the results of investments and the resources are required to create, maintain and improve the value of those assets.