Should IT service management go back to basics?

Ovum is witnessing what is hopefully the start of an interesting go-to-market trend for IT service management (ITSM) software vendors – a change of product “markitecture”, from ITIL alignment to addressing key IT challenges in better meeting business needs and demonstrating IT-delivered value. While ITIL is still and will continue to be the de facto best-practice framework for ITSM, this change in vendor messaging is just what ITSM needs to solve the growing gap between ITIL theory and its real-world adoption.

ITIL has long driven the ITSM software market – will and should this continue?

In many ways, ITIL is now a technology blueprint for ITSM vendors. There are both pros and cons to this. The alignment with ITIL allows IT organizations to better understand a product’s capabilities and its use once deployed, and there is no doubt that the availability of fit-for-purpose technology has helped with the worldwide adoption of ITIL. On the downside, the parochial vendor and enterprise focus on ITIL has stifled ITSM innovation and limited the thinking of IT organizations.

However, recent briefings from CA Technologies and HP have provided us with food for thought on this. These vendors have crafted ITIL-light messaging that focuses more on business and IT organization need, than on the adoption of the best-practice framework. This is delivered in a markitecture that depicts the most commonly adopted ITIL v2 disciplines (of incident, problem, service level, and change management) with the ITIL v3 service catalog management process, supported by IT financial management, and asset and configuration management. Importantly, each element is targeted at pertinent enterprise pain points rather being elements of ITIL adoption. This is how ITIL was intended – “adopt and adapt” to business needs.

While ITIL will hopefully continue to change the thinking of IT organizations and be a critical part of their management toolkits, Ovum believes that such a focus on business-driven ITSM over “following the gospel according to ITIL” will benefit everyone, including the OGC and itSMF.

IT organizations would also benefit from a back-to-basics approach to ITSM

ITIL adoption has continued to gain a foothold in enterprise IT organizations worldwide, as more than 20,000 people per month gain the ITIL Foundation Certificate. The level of ITIL certification, however, belies the real level of ITSM capabilities within enterprises, with it being too easy for enterprises to overstate their position – stating that they “do” ITIL when in fact they only “do” a limited subset of the ITSM best-practice framework’s processes, mostly around the more reactive ITIL disciplines such as incident management. There is also often too heavy an emphasis on process. But just implementing an ITIL process is missing the point – IT organizations neglect the required change in mindset.

The service desk and incident management practices are a good example of this, as far too many IT organizations fail to understand the importance of service desk people on the business’s perception of IT performance. The service desk is the business’s “window into IT”. Service desk analysts are often the IT people that the business deals with most. Rightly or wrongly, their ability to efficiently and effectively resolve business stoppages caused by IT issues constitutes a large part of end-user opinion on IT as a whole. Consequently, an IT organization should take a second look at its service desk, understand its level of customer focus, and improve its ability to prioritize and solve end-user issues based on business impact – especially outside of the prescriptive following of “how-to” scripts. It should ask some difficult questions, such as:

  • Is our service desk only as good as its people? If so, how good are our people?
  • Where do our analysts sit in our IT hierarchy? How are they paid, educated, and trained?
  • How is their performance reviewed? How are they valued?
  • Do we prioritize the resolution of IT issues based on business impact?

Ultimately, service desk people can and should be the backbone of effective IT service management and IT organizations need to start treating them as such.

Originally published on http://www.ovum.com/news

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“Resource-strapped IT managers are fighting back,” says research by Numara Software

Numara Software, a provider of service management and asset management solutions, is about to release the findings of its study into the state of IT funding in the UK, Germany, and France, and the consequences of the lack of IT investment during the last few years. The results of this study, entitled “Rebirth of the IT budget” and based on the responses of 300 senior IT decision-makers (none of which are Numara customers), indicate that IT managers are now fighting back, demanding more funds and resources to support the continued provision of quality IT services.

82% of IT managers have seen IT funding affected in some way during the last two years

The recent corporate focus on IT costs and value was inevitable given the growing total cost of IT provision. However, with such a large proportion of IT spend being on “keeping the lights on” activities, many IT organizations are vulnerable to ever-increasing budget cuts. Not unsurprisingly, 52% of respondents state that the financial value of their IT budget has been affected, whether frozen (18%) or, more commonly, reduced (34%). But the decision-making process has also changed for 52% of companies, with 27% saying that it has slowed and another 25% saying more senior people are involved in the sign-off process.

Looking forward, however, the majority of the senior IT professionals surveyed expect things to improve – 15% in mid-2010, 45% by the end of 2010, and 29% in 2011 or beyond. While this might appear somewhat optimistic, 63% of respondents are concerned that the business has become accustomed to the slashing of IT budgets and that if not challenged the practice will continue for years to come.

In our opinion, much of this is to do with the focus on what IT costs rather than the value that it delivers to the business. While the business continues to see IT purely from a cost perspective, it will remain at risk from progressive corporate budget cuts. To address this, IT organizations need to better understand and communicate how individual IT services deliver value to the business and how decreasing IT expenditure will ultimately affect business services. But before they can do this, they need to understand the IT assets employed and how their usage drives both cost and IT service delivery.

92% of enterprises feel under some sort of pressure in relation to asset tracking

The most common pressure is being able to resolve users’ technical issues in line with agreed SLA targets. This is followed by keeping track of IT assets in an ever-changing IT landscape. While not discounting the importance of the former, the latter point is critical for IT organizations on the back of the ever-increasing focus on what IT costs. In our opinion, there are a variety of opportunities for enterprises to gain a better understanding of the assets employed and then use this information for short-term rationalization exercises of hardware, software, applications, and even IT services before creating a longer-term platform for both application and service portfolio management. Asset tracking and service costing will both be key to this.

61% of IT decision-makers consider software maintenance costs to be a burden on their IT budget

Additionally, 40% describe this burden as significant, with 45% describing software maintenance contracts as a necessary evil. There is no doubt that software costs (both initial purchase and maintenance) are a large part of total IT expenditure these days; in fact many IT organizations do not truly appreciate how great a cost this is. Software asset management is a key activity here – not only understanding the licensing position in respect of the installed software base, but gaining an understanding of how software is used to make better use of agreed licensing terms and identifying opportunities to reclaim unused or underused licenses for use elsewhere. From a software maintenance perspective, SaaS-delivery options can help. In the case of IT service management tools, SaaS vendors will often state that the annual subscription charge for everything involved in delivering IT service management capabilities (including the infrastructure) is not dissimilar to the annual support and maintenance charges levied on traditional on-premise tools.

Originally published at http://www.ovum.com/news/euronews.asp?id=8726

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

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

The continued rise of SaaS-delivered IT service management

Last week, BMC announced its IT service management (ITSM) on-demand solution and Service-now.com quietly delivered the Winter 2010 release of its SaaS for IT service automation offering. As expected with a true SaaS solution, the upgrade was delivered to customers with no downtime and all customisations preserved. Looking forward, Ovum has no doubt that SaaS ITSM solutions will continue to steal market share from their on-premise siblings, as evidenced by the recent announcement of PepsiAmericas as a Service-now.com customer.

SaaS delivery of ITSM capabilities will forever change the ITSM software landscape

SaaS continues to gain much publicity and vendor backing, and a growing corporate acceptance as an immediate opportunity to quickly and flexibly deliver business-enabling IT services at a lower cost. The ITSM tool market is rapidly filling up with SaaS-delivered solutions from SaaS-only vendors, new dual-play vendors and traditional ITSM vendors adding SaaS versions of existing ITSM offerings, as evidenced by BMC’s announcement of controlled availability for BMC Remedy ITSM Suite On Demand. After the functionality and capability additions necessitated by the move from ITIL V2 to V3 in 2007, the SaaS delivery of ITSM-enabling capabilities is the biggest shift in the ITSM product landscape in the last five years, and it is quickly gaining traction.

SaaS is a good fit with ITSM enablement, with ITSM a low-risk entry point for organisations seeking to ‘experiment’ with SaaS

A major benefit of SaaS for ITSM is that it is aimed directly at the heart of the now commonly overstretched IT function – scarce IT resources can be redirected away from internal IT systems to focus on the delivery of business-critical IT services. However, for many organisations the key benefit of SaaS is its simple, subscription-based pricing model – usually a cost per month (or year) per user that covers everything needed to operate, including support and maintenance. This provides a lower and consistent level of expenditure that is opex rather than a capex investment. However, a lack of clarity over the meaning of SaaS can cause problems for procuring organisations. While the transferral of the application, hardware, and support and maintenance activity to the vendor and a better TCO scenario are relatively black or white issues, there is an area of greyness to traverse related to the technology that sits behind the ‘vendor curtain’. A SaaS solution must be architected such that the customer is able to self-customise its ‘application instance’, with these customisations preserved through what should truly be an effortless upgrade process. Without these facilities, the SaaS business case is not so compelling.

SaaS ITSM vendors will continue to catch traditional on-premise solutions in terms of product functionality

SaaS vendors often have multiple releases per annum, compared to the 12- or 18-month release cycles for on-premise tools. As a snapshot in time, Service-now.com has 11 ITIL v3 processes with PinkVERIFY certification, compared to BMC’s 11 and CA’s 14. Its Winter 2010 release does not include support for any new ITIL v3 processes, but it does deliver key functionality and new features requested by its growing customer base. However, its Spring 2010 release will organically develop and deliver new applications, such as run book automation, field service, more shared services and project portfolio management, to complement and enhance existing capabilities.

It’s not just SMEs buying into ITSM on demand

BMC is a key player in the enterprise ITSM tool marketplace, with its Service Desk Express Suite and Remedy ITSM Suite offerings making it the IT service desk market leader in terms of installed customer base. Its shift into SaaS is a shrewd, if not necessitated, move given both the increasing enterprise customer interest in SaaS-delivered ITSM capabilities and the frequent customer migration from an on-premise to SaaS delivery model. To demonstrate the enterprise-level credentials of SaaS ITSM offerings, Service-now.com’s latest high-profile customer addition, PepsiAmericas, serves more than 200 million customers in 17 different countries in North and Central America, the Caribbean, and Central and Eastern Europe, with 20,000 employees generating $4.9 billion in annual revenues. It joins a number of large corporate additions to Service-now.com’s customer base at the end of 2009 that have migrated from on-premise to SaaS-delivered ITSM.

Originally published at http://www.ovum.com/news/euronews.asp?id=8350

CA acquires specialist service-level management vendor Oblicore

CA recently announced its acquisition of Oblicore, a privately held provider of service-level management (SLM) enabling software, continuing its spending spree following the acquisitions of NetQoS and Cassatt at the end of 2009. CA’s increased focus on SLM is timely and a welcome change to the traditional ITSM vendor bias towards incident, change and configuration management.

CA is complementing existing SLM capabilities

The acquisition is designed to help CA’s customers ‘optimise IT for better business results and capitalise on the emerging cloud computing opportunity’ – addressing two of the major challenges facing IT organisations. This is an interesting play by CA – not filling a gap in its existing IT service management (ITSM) portfolio, but strengthening the ability for organisations to set, measure and optimise service levels across enterprise and cloud environments.

CA’s existing SLM solution, CA Service Assure, can already enable organisations to define SLAs and contract violation rules, monitor SLAs in realtime and report on SLAs from a business perspective. However, as a niche player Oblicore provides greater depth of capability and the ability to better manage cloud service quality levels.

Oblicore Guarantee is a highly competent SLM solution and a good fit for CA

Oblicore Guarantee is an enterprise-level SLM solution that supports the key phases of, and activities in, the management of SLAs and service delivery in IT engagements, from contract and SLA formulation, data import and aggregation into performance metrics, to the analysis and reporting of performance against SLA targets. Ovum had previously recommended that “any organisation with an extensive array of critical services, or any service provider, would do well to evaluate Oblicore Guarantee as a potential solution to managing the complexities of providing high-quality and highly available IT services.”

As a CA partner, Oblicore Guarantee integrates with CA solutions such as CA Spectrum Infrastructure Manager, CA Service Desk Manager, CA Wily Introscope, and CA eHealth. Designed for open connectivity, it also integrates with business systems and application and infrastructure monitoring tools from the major software providers.

With the level of functional parity within the ITSM software market, the Oblicore acquisition allows CA to emphasise its enhanced SLM capabilities as one of its key ITSM capability differentiators (‘true’ service portfolio management capabilities through CA Clarity PPM and CA’s Service Portfolio Management Strategy being another).

SLM is an oft-overlooked, yet vital, component of effective ITSM

SLAs have long played an important role in outsourcing and shared services organisation (SSO) engagements, and more recently for internal IT management purposes with the continued corporate adoption of ITSM best practice via ITIL. SLAs are important to support IT functions in their need to demonstrate business value and to maximise the availability of business-critical services.

However, most organisations find SLA management challenging. While drafting the right set of SLAs requires considerable time and expertise, it is the development of an automated system for performance data collection, aggregation and reporting that can be the major barrier to effective SLM. The recent corporate penchant for service catalogues, and the associated increased business focus on IT service delivery, has strengthened the need for a ‘true’ rather than a ‘one-off paper exercise’ approach to SLM.

Given the potential for IT functions to lose both visibility and control of IT services as they are migrated to the cloud, SLM along with IT financial management will become a key ITSM capability as organisations endeavor to manage a blended mix of on-premise and cloud IT service delivery.

Is this the start of the ITSM software market consolidation that some IT analysts have predicted?

The ITSM solution market is fragmented, split between vendors and products that address enterprise or SME requirements, niche ITSM products (such as Guarantee) versus those that deliver against the core ITIL processes, and by the method of application delivery with the emergence of SaaS-only ITSM solutions. This market is saturated and the ‘big four’ mega vendors have strong market share, but this is being attacked not only by traditional single-play vendors but newer, smaller vendors. The effect of potential ITSM pushes by SAP, Oracle and Microsoft will also no doubt change the ITSM software landscape forever.

Originally published on www.ovumkc.com