Business Service Management Hub

IT Transformation is and has been a hot topic for >20 years. Wow!  I was speaking to one of my analyst friends at Forrester not too long ago and we were chatting about how much waste exists in annual IT spend just “Keeping the Lights On” and how these metrics haven’t changed in >20 years. The answer has been simple, no competition, no catalyst for change.

This week I was reading an article from the NY Times Technology section, “Information Technology Spending to Hit $3.6 Trillion in 2012”, supported by information from Gartner and it pointed to this pent up demand for transformation within IT organizations. Much of the increase in spending is going to Cloud Service Providers and Consultancies even with economic challenges in Europe and China. There is an increase in Public Cloud spending by 20% representing considerable computing power and more efficient IT Systems due to complex systems, cloud computing and analytics. My reaction as I read the article was Wow again. Ironically, this comes on the heals of articles from the previous 2 weeks regarding the outage of the cloud and Amazon’s Ashburn, VA data center.

My first comment is no one outsources services because it is cheaper. Services are outsourced to create change that cannot be achieved from within. So let’s break this down into the great change that is underfoot and IT Transformation based upon cost, value and innovation.

Read full story here …….

I have posted a couple of new posts on NetIQ’s Qmunity and wanted to share here as well.  IT is under great Transformation to get to Service Brokers who can manage Service Governance.  This is the convergences of Development, Operations and Security functions within IT.  In the first post I discuss the convergence and the second post is on the topic of Service Governance and new research from Forrester.

Enjoy!

Overhauling Service Management – Developing, Operating and Securing

Previously I posted, “Why Service Management” discussing the melding of IT and the business for common objectives in managing, measuring and communicating service performance.  The recent Gartner Infrastructure and Operations Management Summit (IOM) also provoked the status quo of IT Operations andCameron Haight began to challenge and discuss a new term, DevOps, where development and operations are more closely aligned.  The post event Trip Report provides a glimpse into the many thought provoking challenges and discussions of the week.  continue reading…

 Communicating Service Performance – Beware of the Competition

We’ve discussed service management and the transformation that IT is undergoing with the catalysts being the cloud, service providers, SaaS, social media, collaboration, mobility, BYOD, etc.  The root catalyst is choice and options in the market and the competition speaks in terms of service value and service performance. I posted a question in LinkedIn regarding how much of your services are in the cloud today and expected to be next year?  Join the discussion.  The first answer was as I expected, a law firm that isn’t in the cloud and isn’t going there because of security concerns.  I responded as I bet they use services that are internet based, research likely, and thus they are in the cloud.  Just like a recent customer discussed having hundreds of apps in the cloud that now need to be reconciled, rationalized and managed for cost.  How did they get this point?  Easy, credit card subscriptions – cheap and easy to do business with.  continue reading….

The Hub Commentary_

The pay-as-you-go model counts on customers over using without regard to usage thresholds, much like company provided mobile phones.  Cloud providers make it easy to get started and even easier to over use.  I commend Amazon for putting some basic thresholds and emails in place, but the responsibility to monitor and manage services resides with the customer.

The monitoring, management and security of services and workloads in the cloud are the responsibility of the customer to instrument.  These are the hidden and unaccounted for costs of the cloud.  That which sounds cheaper on the surface is rarely cheaper.  Frustration levels are high and the race to the cloud is fast, beware of hidden costs.

It is the responsibility of the customer to manage the service provider, monitor and manage service quality, security and usage.

How are you managing your service provider?

Michele

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Amazon Web Services users can now start receiving billing alerts that help them continuously monitor their cloud costs, the company said on Thursday.

10 most powerful cloud computing companies

One of the basic tenants of cloud services like those offered by Amazon is the pay-as-you-go model, where the eventual monthly bill will reflect actual usage. But when usage varies from hour to hour, it is always a good idea to log in to the AWS portal and check account activity on a regular basis, according to an Amazon blog post.

(Read Full Article…)

The Hub Commentary_

Outsourcing has never been for a cost saving measure.  You must manage the vendor and once in a service agreement, anything requested beyond the originally contracted service comes with a fee.  Let’s face it, additional services and service requirements begin to change as soon as the ink is dry and where the providers starts making their profit.

Cloud computing provides platforms, infrastructure and commons services, but affords flexibility to they buyer in the management of the services without owning the infrastructure or technology in place with the cloud provider.  This does put the ownership of service management on the contracting organization.

Cloud computing is disrupting the traditional outsourcing model as well as in-house IT organizations which drives innovation into organizations.  When properly instrumented and managed, organizations have much to gain in re-thinking their sourcing and IT infrastructure strategies.

Where are you with your sourcing and infrastructure strategy?

Michele

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For CIOs, the halcyon days of IT systems and architecture that were built and managed entirely in-house, or partly outsourced to a few mammoth vendors, are gone. In its place a hybrid model rises — one that maintains elements of the traditional IT foundation, but also takes advantage of new technology and platforms as they emerge.  (Read Full Article…)

The Hub Commentary

If you want to avoid IT silos and provide more value and transparency back to the business this is a worthwhile read.

Randy

Building IT around the business services it provides, rather than around assets or activities, pays off.   Learn more about the direct benefits…

I recently wrote an article about Service Level Agreements (SLA) and why I think they are so hard to manage and track.   Now what if your organization has its SLA implementation under control?   Your organization already provides reports to the management team and the customer showing accurate availability metrics for the business services your team delivers.

While working on SLA projects, I have found that we are intently focused on the end result…the reports.  The report needs to be accurate, show historical data, and perform reasonably.  After all, this is what the management team will see.  However, by the time you are showing the report to management or a customer, it’s too late.  The SLA violation has probably already occurred, and your company will pay the price.

SLA implementations need to warn you that a breach will occur.   In any SLA report, you can look at the metrics and determine that a business service was not available, but what was the root cause and how can it be fixed?   Better yet, how can future outages be prevented?   We know that management and customers will view the SLA reports, but the operations team also needs access to this data.   This is the team that is responsible for the IT resources, so they need a way to view availability metrics.  They need the ability to drill down into the business service and view what IT resources have failed.   They need a detailed list of outages and a way to view the root cause of these outages.   With this information, the team can research the cause of the issue and take action to prevent further outages from occurring.

Our goal is to meet a customer’s service level agreement.   A good SLA implementation will not only provide reports to the customer, but also give your organization the tools it needs to meet those SLAs.

The Hub Commentary_

Figuring out  facts from fiction will be key for CIO’s as they map out their cloud computing strategies and justify the investment to their CEOs.  Cloud Computing ROI will be measured in ways far beyond the typical promises of cost savings.  Business Service Management ROI can’t be overlooked as enterprises accelerate their way to the cloud.

Randy

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To borrow from Mark Twain’s famous remark about the weather, everybody talks about the cloud, but nobody knows anything about it. At a time when companies’ use of clouds is just getting started, the chief information officer’s judgment and store of knowledge are invaluable assets. These are especially important when the CIO sets out to educate that most important stakeholder of all, the chief executive officer.  (Read Full Article…)

The Hub Commentary

We’ve all had to “do more with less” in ever changing IT environments.  Cloud computing offers up an encouraging promise that we can actually “get more for less”.  But more of what?  Access to more applications, more compute power, more flexibility, more agility and certainly more innovation.

Randy

Cloud computing is more about agility, cost control and being able to do things previously impossible rather than increased productivity doing what the organization has always done.  Read more

The Hub Commentary_

The continuation of centralizing, sharing, cost saving with the commodity IT.  These are short term savings that improve the bottom, however, do not improve the top line.  These are required and must always be on the agenda, balanced with growth initiatives.

The article mentions while providing higher performance and availability or quality of service.  These initiatives work to drive the top line in customer retention and new services for the business.  It is all a balancing act, but the key is not to lose sight of the long term growth for the short term save.

Michele

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Cloud and virtualisation also on the agenda

CIOs across Europe have identified IT consolidation as a key near term initiative as they look for ways to maintain or improve performances despite the economic situation.  (Read Full Article…)

The Hub Commentary…

Several good  insights into effective ways to quantify the cost, quality, and value of IT in a way the business understands.

Randy

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Recently, we brought together 60 CIOs and IT leaders from the Fortune 1000 for our bi-annual “CIO Technology Business Management Council” meeting. The purpose of this event was to provide participants with an opportunity to learn from their peers about how to transform their IT organization into a services oriented organization and run “IT like a business.”  Read full article

I’ve seen a bit in the news about support, the consumerization of devices in the workplace and virtual desktop infrastructures that has brought this post together.  We seem to ebb and flow with new toys in the workplace and standardization of support.  The plain truth is that the standard environment is the most cost efficient.  If the role did not dictate that a given device be provided by the company to the individual, why would we assume we must support it?  I understand it did not come with a capital expenditure and made the employee accessible, if they choose to be, however, it does carry a significant cost burden that is often overlooked.

Service and support is commodity.  It is something that can and should be easily outsourced and the service provider will either standardize the support or will tax the customer for the varying types of devices that are supported.  I know that sounds harsh, but in these days where we should be seeking to spend less on operating and more on innovating this is one of the easiest and biggest cost saving area.  In most IT Operations budgets, the service and support function represents about 10% of the budget.  Tools no longer need to be in-house and custom if the business would rather not outsource, there are good SaaS offerings on the market to at least alleviate the burden of supporting the tools, paying the big boys maintenance taxes and paying for customized support of a commodity function.

I’ll make another bold statement, we care too much about the “end user” for the wrong reason.  No one outside of a data center even really knows what an “end user” is, but we all know who is our customer.  IT has to make this transformation to drive business growth and this is one of those starting places in knowing who is really the customer.  Whether or not our “end user” in the business is really happy or not with IT services is a debateable point.  The most important factor is whether or not we are able to transact business and support our buying customers that grow the business.  This is the mindset shift that needs to occur.

So supporting the latest version of iPhone from whichever provider and carrier and how happy our “end users” are when we re-image their machine because it is far cheaper to re-image to standard than figure out what they downloaded that broke something.  It’s about keeping the business productive, growing and making the customer of our goods and services happy and buying.  We should be automating the operations and shifting this attention, focus and resources on the growth side of the see saw.

I know this post is a bit controversial.  This is something that happens with each new toy that comes to market and budgets loosen, we forget the good efficiency practices we put in place in lean times.  I’ve answered hundreds of inquiry calls on this subject just before this function gets outsourced, the services are cheaper because the service provider will impose a standard and tax for the luxory.  We should be doing the same with good business service management practices shifting our focus and resources to the growth of business.

Are you taxing for the non-standard or spending more reacting and maintaining?

Michele

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Network World — Cost-saving technologies remain a priority for IT in 2011 and virtual desktop infrastructure (VDI), with its ability to streamline operations, is one of the technologies at the top of the list.  (Read Full Article…)

Business service management practices are about understanding your costs and the value of services to the business so that IT manages as services appropriately.  I can hardly read an article these days that isn’t cloud or as-a-Service related.  I enjoy these and the transformation it is driving as it is long over due for most IT organizations.  When I wore an analyst hat and I would field inquiry calls regarding outsourcing, I would always start by saying you don’t outsource for cost savings.  I find these days with the flexible payment and contract options that we are being short sided and seeing these offerings as the low cost option.

Unless you are hideously inefficient, it really isn’t cheaper.  You outsource for change or to right source the services in your organization and drive standards.  Let me explain a bit more.  When you move portions of your IT to the cloud, a service provider, as-a-Service option, to a managed service provider or a full service outsourcing organization, they are still in the business to make a profit and you need to factor some time and resources (costs) to manage the provider.  The estimate to manage the provider is 3-7% of the cost of the contract, generally.  So this is one piece to factor into the overall cost, but change that is too difficult to create in your environment is another factor.  Short story of it, implementing standards.

So in some cases it may drive down costs with lower cost resources and standards, but that isn’t an apples to apples comparison to your current service offering.  However, it is the right reason to move the commodity to a service provider because we come full circle – not all services are created equal.  In-house data centers find themselves staffing the services with expensive resources and managing the services very similarly across the board.

So this is the driving down cost of the equation in right sourcing and creating change and standards, on the other side of the coin I read a lot about supporting the devices of our employees.  By not taking on the capex of buying smart phones, tablets, etc., but taking on the expensive support cost to support the devices of our employees.  I can guarantee you the service providers will tax you for this non-standard practice.  I can see the debate on both sides, you deemed they didn’t require the device or accessibility for their role, but they allowed themselves to be accessible if you support the device.  I would caution against this practice without fully evaluating the security and support costs of doing so.

We are in the midst of great change and there will be an ebb and flow as budgets loosen.  I find it exciting times and also find that there will be real success stories and others that may not enjoy the same success.

Are you right sizing your services and sourcing options?

The Hub Commentary_

In another article earlier this week regarding Business Service Management practices and turning the tables on the discussion from cost of IT services to value provided to the business, there was a similar discussion.  Not all services are created equal and costs can be moved from one service to another based upon the value provided to the business.  However, first we must be able to cost the services to drive to the value discussion.

Again, as long as services illustrate no cost, we consume at a 24×7, on whatever device we choose and from where ever we are, but introduce cost to the business and the value becomes quickly apparent and the facet turned off many things in all likelihood for the real value add services.

Tim provides some nice examples in his Value Based Model discussion.

Michele

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In today’s highly volatile economic environment and rapidly changing landscape of IT best practices, most IT leaders are struggling with balancing competing priorities with ever-shrinking budgets. For many, it’s an ongoing debate with business executives on how to address the costs and risks associated with delivering IT services. Innovation within IT is being achieved by some; however the majority of IT organizations do not know where to begin.  (Read Full Article…)

The Hub Commentary_

Calculating ROI and managing costs in the data center for Business Service Management (BSM) projects is difficult.  In fact, I was asked this question so many times that I put my META Group analyst hat on and said, “Michele, what would Herb tell you to do?”  Yes, the very same Herb VanHook who is featured in the BSMDigest this month.  He would say create a model to calculate it and thus I did.  Anything that improves processes and does not remove people, hardware or software from the environment is really cost management.  This is still a good thing and needs to be recognized and justified and can be done quite simply.

What makes virtualization and cloud computing so appealing in the early stages is that it removes hardware and better utilizes hardware and software licenses and thus has a hard dollar impact early.  So let’s turn the tables, I posted a news piece that spoke of the same costs of outages that I have used for years now – $100,000/hr is what it costs for a mission critical system to be down.  10 hours per year =  to $1M, so Michele, cmon scale it, ok the usual metric is 1-2% of revenue to consider the size of your organization.

The insurance policy is your BSM strategy which is reliant upon the integration platform that brings together the bits of data into a meaningful view as services.  I also venture to guess that most solutions start at <10% of that outage and the automation they bring to the table helps to shift the resource utilization pie in favor of using resources to new and growth projects versus monitoring the screen for events more than paying for itself in it’s early adoption.

I’ll post my ROI calculation method very soon to give you a real idea what you are losing by postponing you BSM practice.

Michele

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Often, IT budget costs appear expensive as a result of being inflated by arbitrary allocation and loading of costs that should be shared or are otherwise improperly assigned. Unfortunately, old habits die-hard and the misallocation of costs continues to the detriment of both the organization and mainframe computing.  (Read Full Article…)

The Hub Commentary_

Back to basics balanced with growth opportunities.  Doing more with less and getting the most out of the bottom of the data center food chain and layering in the value add for future growth needs to be the theme for 2011.

I’ve spoken to many recently that are looking at consolidation projects as replacement projects too.  Replacing the commodity monitoring with lower cost open source options, ITSM SaaS offerings, adding value in the instrumentation of their next generation infrastructure (cloud, virtualization) and then the topic turns to integration platforms to stitch together the fabric for real-time visibility.

I believe we have all learned waiting for an uber framework that can do it all is just a dream.  Taking the best, most cost effective feeds into an integrated view that can be twisted like a Rubik’s cube depending upon the viewer is the fastest route to injecting run-time monitoring, management and measuring into the infrastructure of the future.

Michele

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Fifty-one percent of data center managers and decision makers at large organizations see technology refreshes as the top data center priority for 2011, according to a survey from IT infrastructure specialist SANpulse. This finding highlights the fact that mean time to migrate (MTTM) is critical for rapid adoption of new technologies and fast execution of these operations.  (Read Full Article…)

The Hub Commentary_

Ahhh the yin and yang of new technology.  The short sided cost saving and time saving view, we don’t have to buy and configure hardware and the longer term view of operationalizing the workloads by service enabling them to be supported.  Virtualization should be embraced and deployed as a cost saver, absolutely.  As with any techno gadget, it should be evaluated for good use and enabled to be supported to reap the greatest rewards.

Technology for the sake of technology and the short cut returns, never gets anyone anywhere very fast.  Measure twice, cut once and you will reap even greater cost savings.

Michele

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While the delivery of virtual machines is indisputably faster than deploying physical machines, it is often assumed that this also streamlines the process of deploying IT Services (applications).  (Read Full Article…)

The Hub Commentary __

A few interesting results from this survey of over 700 respondents.  Nothing shocking, more with less, improved business efficiency and drive business growth.  New investments on the rise and operating expenses on the decline.

I consider investments in the management, integration and infrastructure visibility enabling service delivery a key component to new investments.  In many of the the articles about new technology, the management component is an afterthought and it is the key to the success of the strategy.  It’s the whole package of leveraging new technology, delivery models and how you monitor/manage/measure it.

In these dynamic times integration is often mentioned in much of the dialog, however, I sense it is often overlooked.  I caution you not to overlook your integration and management strategy as part of your future investments to drive growth to the top line as is expected with all new investment strategies.

Michele

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In our fifth business technology survey, executives say they want more immediate value from IT and forward-looking strategies from technology leaders that support growth and innovation.  (read full article…)