SaaS-delivered IT financial management from Service-now.com

The Spring (June) 2010 Service-now.com release adds much-anticipated IT financial management capabilities to its SaaS-delivered IT service management tool. The release will be applied to customer instances on 4 June, and is considered by Service-now.com to be the most substantial in its relatively short history. It contains six new applications that deliver capabilities for service portfolio management; IT cost management; project and portfolio management; field services; HR management; and facilities management. In our opinion, the additional financially based ITIL v3 service strategy processes of IT financial management and service portfolio management are both key enablers in the preparation required of IT organizations when considering the opportunities in the cloud.

IT organizations have long needed technology to enable IT financial management

For many IT organizations, the art of finance is pretty much a foreign language, with IT people not really understanding finance – in the same way that finance people often don’t understand HR, or HR people don’t understand marketing. Most IT organisations are able to budget and account for IT expenditure, but how many understand IT service costing – getting “under the skin” of IT services to determine the resources they consume and how cost drivers impact the overall cost of service provision?

A common barrier to effective IT financial management has been the lack of understanding of finance as a discipline within IT, because of both the “language” issue and the lack of comprehension of the “detail” of accounting practices. Beyond this though, there has long been a need for fit-for-purpose technology to enable IT financial management, in order to both support and guide the financial disciplines required within corporate IT organizations. This technology needs to help make IT financial management easier.

While many on-premise IT service management vendor tools have had IT financial management capabilities for several years, we believe the addition of these capabilities to Service-now.com’s SaaS for IT service automation offering is a sign of both the ever-growing need for IT financial management and the continuing suitability of SaaS-delivered IT service management for enterprise-level organizations. The addition of IT financial management capabilities (along with the other five applications) further increases the attractiveness of Service-now.com’s offering in the enterprise IT service management space.

IT financial management will be key to cloud migration decision making

Cloud computing is changing the way that IT organizations look at, and will eventually deliver, IT services. However, it is not going to be a total solution for IT service delivery, with most organizations eventually operating a blend of IT services delivered on-premise and via the cloud. Enterprises should apply cloud only to those areas where in-house IT is failing, rather than seeking to apply it (unjustifiably) to areas where in-house IT is already adequate and cost-effective.

In order to figure out which IT assets to keep and manage within a private cloud, which to trust to a traditional IT service provider, and which to source from the various public cloud solutions on offer, IT organizations need to understand what they already have and where they want to go. This is a comprehensive exercise that will need to leverage existing (or quickly assembled) IT service management knowledge and resources.

An IT organization clearly needs to have a good understanding of the IT services it provides (service portfolio management and service catalog management), along with the service-delivery quality levels required and the service-level agreement targets agreed with the business. One area where many IT organizations will struggle is service costing, and an IT organization needs to ensure that like is compared with like financially when making decisions around the cloud. It is necessary to understand what service delivery currently costs, that the price paid per month is not likely to be the total cost of ownership (TCO) for cloud-delivered IT services, and that the removal of some on-premise-delivered IT services might adversely affect the cost of those that remain.

Originally published at http://www.ovum.com/news/euronews.asp?id=8671

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Is ITIL v3 an opportunity for vendors to demonstrate new areas of ITSM innovation & product/marketplace differentiation?

While IT service management vendors state that their tools are ITIL v3 aligned, there is a vast difference between tools in terms of the ITIL v3 processes supported, the depth and breadth of support, and the ways in which the tools support the processes. I appreciate that vendors are led, or at least influenced, by what the market requires, I believe however that the needs of ITIL v3 offer a definite opportunity for a vendor to differentiate itself from the pack. For many vendors there has been too great an emphasis on service catalog at the expense of other ITIL v3 process, leaving a gaping hole that an innovative IT service management vendor could exploit – not just through new technology delivery but also through strategic intent.

IT service management vendors need to create, and engage with clients via, a robust ITIL v3 strategy, one that, while covering the core ITIL processes that have traditionally sold IT service management tools to prospective clients, helps to move IT organization thinking forward from a service lifecycle perspective. They should espouse, if not recommend, the tool capabilities required for successful ITIL v3 adoption, focusing on how their tool’s ITIL v3-enabling capabilities can help to further optimize IT operations and improve IT-to-business integration. In my opinion, IT service management vendors played a big role in the rapidity of worldwide ITIL v2 adoption through the availability of fit-for-purpose tools, and the same will be true for v3. In many ways, IT organizations will need such a vendor approach to make the leap from ITIL v2 to v3.

Project and portfolio management at CA World

CA attracted thousands of global IT professionals to Las Vegas for its annual CA World event on 16-20 May. As well as a predictable focus on all things cloud, the level of enterprise interest in project and portfolio management (PPM) was unmistakable. High-profile enough to operate as a discrete area of focus, the PPM stream claimed to be the largest PPM event (in terms of PPM practitioners) of its kind in the world. It introduced the latest CA PPM products including CA Clarity On Demand and CA Agile Vision, a SaaS-delivered Agile management tool built on the Force.com platform.

Enterprises continue to need project and portfolio management

Attendance at the event is indicative of the continuing enterprise adoption of PPM processes, tools, and techniques, with 623 people from 282 companies registered for the CA World PPM track. While 2009 was relatively slow for PPM software vendors due to more stringent investment criteria, 2010 has seen a resurgence in PPM technology demand as organizations continue to fight their way out of the downturn. CA has added more than 200 new Clarity customers in the last 12 months (with a sizeable portion of them choosing SaaS delivery), to give a total CA Clarity customer base of more than 1,200 customers. These numbers are testament to the growing need (or realization of need) for PPM within enterprises.

CA Agile Vision offers governance for Agile development

At the PPM stream keynote, CA asked the audience if it was ready for the next generation of PPM – which includes both Agile development and social collaboration in the context of PPM. The former, supported by the integration of CA Agile Vision Enterprise Edition and CA Clarity PPM, brings Agile projects into the portfolio management mix on the back of CA’s larger service portfolio management strategy. This strategy supports IT organizations struggling to demonstrate delivered business value across discrete IT expenditure silos. It is also further testament that PPM is breaking out of its silos to be more integrated into a broader IT ecosystem.

Agile development can be viewed as yet another resource-consuming IT silo, and may even be seen by some as a way of circumventing mandated IT governance processes and procedures. However, the integration of CA Agile Vision and CA Clarity has created a way of supporting both freedom and visibility to manage Agile resources in a larger IT organization context, helping to plug the oft-perceived “IT governance gap” associated with Agile development. By linking Agile projects as “investment items” alongside expenditure-driving and resource-consuming activities from elsewhere within the IT organization, it provides a business-based assessment of Agile-delivered value in the context of IT as a whole. It offers insight into resource consumption (people and money) and the ability to determine the strategic alignment of IT services (new and existing) to business goals.

Will we start to see PPM tool churn soon?

The IT service management tool market has long been subject to a cycle of technology churn, with enterprises changing their service desk (and beyond) provider every five to six years on average. In our opinion, there are many similarities between IT service management and PPM technologies. We anticipate a level of PPM maturity at which enterprises start to reconsider the suitability of their existing PPM tool against the benefits available from competing products. This would be the case especially where the incumbent tool was procured at a time of low PPM maturity, with an incomplete understanding of the necessary and unnecessary functionality delivered.

As with IT service management tools, the drivers for change will vary between organizations. They will include cost, ease of use, people changes (“we used the superior product X at my last company”), upgrade effort, and need for increased or reduced functionality. The availability of SaaS-delivered enterprise-level PPM capabilities will not only address some of these concerns – it will also make it easier to change between vendor products. On the back of SaaS, we predict that 2010 will be the year when PPM starts to feel this impending technology churn.

Originally posted at http://www.ovum.com/news/euronews.asp?id=8660