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From CIO to CEO: How to run an IT as a Service Provider

Jason StevensonBy Jason Stevenson

A service involves two parties: 1) a customer and 2) a service provider.

A service fulfills a customer’s need. Though there may be many components to a service, those technology, process, and people components are combined to form a single service. The customer should not need to understand all the subcomponents of the service to benefit from the service. Nor should any service-specific knowledge be required for the customer to solicit the service. In other words, the service should be expressed in cohesive layman’s terms.

Water Service Example

  • Customer Needs:  Water services fulfill multiple needs: life/thirst, personal/environmental sanitation, etc. If you put in a well, you have your own water and there’s no need for water service. However, if you do not have a well, you will need to engage the county water service provider.
  • Service Provider:  To engage water services, you expect simple contract language and simple commodity pricing. The customer should not need to be a plumber or hydro-engineer to engage the service.
  • Customer Expectations:  Once engaged, the customer doesn’t care how the water gets to them, what must be maintained, or who maintains it. After procuring the water service, they never want to talk to the water service provider again unless their needs change. If water service is interrupted, it’s the service provider’s problem. Customers don’t care what service provider people, tools, or expenses are needed to fix the problem, they just expect it to be rapidly resolved by any means.

How does this example relate to IT services?

First, let’s lay out the key players:

  • CEO, CFO, and stakeholders = Mom and Dad paying for the water service
  • IT Users = the family drinking the water and bathing in it
  • IT department = water service provider
  • IT services = water
  • Data, applications, networks, servers, storage = water treatment plants, water towers, mainlines, pipes, trucks, wrenches
  • IT staff = plumbers and hydro-engineers

Every time a customer experiences interruptions and contacts a water service center, the support call is not considered a “service” but is ancillary to the water service they are already payed for. The customer would rather not engage the service center at all. This is the same with an IT service desk.

Though a water plant monitors water flow and quality, it is not a service. The customer assumes the water is available with adequate water pressure when they purchase the service. This is the same with an IT operations center.

Though hydro-engineers and plumbers may be needed, for example in a large mall complex, they’re assistance would not be a service, rather a project to support the delivery of water services to the tenants and patrons of the mall. This is the same with IT engineers, developers, and project teams.

We assume the water is safe, maintained, and appropriate precautions are taken to ensure ongoing water quality and availability. This is the same with IT security, IT service management, and disaster recovery.

How do CIOs apply this to running as an IT as a Service Provider?

Think of what a water provider service catalog website looks like. It’s pretty simple… Water. Everything needed to supply the water is moot. You may be thinking “Sure this is true of a water commodity but IT is not a commodity.” No it is not… not yet.

So let’s take it up a notch and talk about utilities like telephone and energy services. Their service catalog websites contain utility services. Telephone companies for example list things like local and long-distance, Internet, call waiting, caller ID, conferencing, etc. on their service catalog website. They may also segregate their services by enterprise, small business, and individual customers.

Cable companies are even more similar to IT in some respects. They list things like VoIP communications, Internet, television/entertainment packages, etc. You can draw a parallel between each station offered by a cable company to each application offered by IT.

Regardless of commodities or utilities, service providers of water, power, telephone, cable, etc. have very simple service catalogs considering their extremely complex infrastructure and organizations. This is because the service provider has matured their services to focus on the customer/users and highly refined their services to meet specific customer/user needs, to remain relevant, competitive, and accessible.

To become a true service-provider, IT must take a similar approach to interaction with customers and users. To be successful, CIOs become CEOs by defining a usable service catalog with:

  • A clear business-focus addressing specific needs
  • Inclusive pricing and options
  • Seamless delivery
  • Transparent fulfillment

Jason Stevenson is a Transformation Consultant based in Michigan.

We’re going to the Cloud. Do I Still Need ITSM?

Greg LinkBy Greg Link

As of this writing, Boeing Aircraft Company is demonstrating its 787 Dreamliner at the Paris Air show. After a normal takeoff roll, the aircraft jumps off the runway into what appears to be a near vertical climb to the clouds! That is impressive. Recently a different form of cloud; cloud computing – has appeared on the horizon and appears to be here to stay. Forrester expects cloud computing will increase from approximately $41 billion this year, and rise to more than $240 billion in 2020. A 600% increase in 5-years is impressive indeed. Traditional IT shops have embraced IT Service Management (ITSM) frameworks, such as the Information Technology Infrastructure Library (ITIL®), to help them respond to dynamic business requirements. But is this framework still needed as more and more companies turn to the cloud?

What is the purpose of ITSM?

ITSM and ITIL are often used interchangeably. They are synonymous because ITIL has become the de facto or gold standard for the design, delivery and operation of quality IT services that meet the needs of customers and users. Its approach focuses on 3 major areas:

  • Using a process approach to
  • Deliver IT services rather than IT systems or applications, while
  • Stressing continual service improvement.

With the success of ITSM initiatives all across the globe there is little reason to abandon these critical practices simply due to a shift in the way storage and computing are being performed. The cloud is merely providing companies with powerful utility to meet business requirements and demand.

5 reasons why ITSM is still needed in the cloud

Your transformation to the cloud can take several paths. You can go the route of the Private Cloud where you have total control over the infrastructure and applications that will be used to do business. Another option is the Public Cloud where you contract with a provider that will host storage and computing resources. The final option is the Hybrid Cloud – combination of the two – that allows companies to meet seasonal or growing demand. Any path chosen will still require the basics covered in ITIL.

1) Service Strategy

Service strategy helps in understanding the market and customer needs to create a vision of the services needed to meet business objectives. In this phase we look at things like Financial Management. The cloud is best served when costs and fees are known and predictable. This segment also looks at Demand Management. This discipline proactively manages the dynamics of how the service will be governed from a resource perspective. Both of these are critical to success in the cloud.

5) Service Design

Service Design is the practice of taking a holistic approach to end-to-end service design while considering such things as people, process, technology and vendor relationships. Processes within this phase that are critical with the cloud are:

  • Service Level Management – setting and keeping service targets
  • Supplier Management – this is essential if you are considering going into the Public Cloud as the vendor you choose will be responsible for the delivery of your services.
  • Service Continuity Management – what is the backup plan and if needed, the recovery plan to resume business services should there be a disruption?
  • Capacity and Availability Management – will resources be available and in quantities needed to meet the business requirements in a cost effective manner?

3) Service Transition

Service Transition assists in getting a service into production with processes such as:

  • Transition Planning and Support – planning and coordination of resources in ensure your IT service is market ready.
  • Evaluation – does the service perform and do what it is supposed to do (warranty and utility)?
  • Knowledge Management – make sure that people have the information they need, in whatever capacity, to support the service.
  • Change Management – Private cloud users will follow existing process, however a well coordinated change management process will be needed for Public and Hybrid cloud users. Your vendor’s changes may affect your application in unwanted ways. Additionally, if the cloud is to be used for provisioning servers and environments, the Change Management should be optimized for agility and repeatability.

4) Service Operation

Service Operation manages how a company balances areas in consistency and responsiveness. Processes important when considering deployment to a cloud environment are:

  • Incident Management – where do cloud users turn to when things don’t go as they should and how is that managed?
  • Access Management – the method by which only authorized users are allowed access to use the application and other resources used in the delivery of services.

5) Continual Service Improvement 

  • Now that you’ve deployed to the cloud, how are customers reacting to your service? Is the service meeting their needs? Is it fast enough clear enough, secure enough…?

IT Service Management principles will help guide you into a successful cloud experience with ease and confidence.  Luckily, you’re not alone.  VMware professional services are not only experts in cloud innovation, we have ITIL Experts on staff who can help you ensure ITSM best practices are applied throughout your operating model.


Greg Link is a Transformation Consultant based in Las Vegas, NV

Streamlining Service Management to Achieve Cost Savings Targets

By Reginald Lo

ReginaldLo-cropIT departments continue to face aggressive cost saving targets.  During the recent recessions, many IT departments did not just “cut the fat” but they have also “cut into the bone.”  How can IT cut more?  Every stone must overturned to find even more cost saving opportunities.  A legitimate question is, “how does Service Management help achieve the cost saving targets?”

To answer this question, there are a number of perspectives that will help:

  1. How does Service Management directly save costs?
  2. How do we reduce the cost of Service Management?
  3. How do we change the conversation around Service Management so the Business becomes more interested in maximizing the value of IT Services as opposed to minimizing the cost of IT services?

This discussion is focused on cost savings so we will investigate the first two perspectives.

How does Service Management directly save costs?
The adoption of mature Service Management processes can improve productivity and (let’s be honest as to what Executives are looking for) opportunities for reducing head-count:

  • Reducing the re-work.  The biggest cause of re-work is failed changes.  Better Change Management, Release and Deployment Management, and Testing and Validation, can reduce this largest contribution to waste.  Configuration Management can enable Change Management and make it more effective.
  • Reducing the fire-fighting. Many organizations do not realize the high cost of constantly fire-fighting.  Fire-fighting pulls resources from strategic project work so there are the direct costs to fight the fire as well as the indirect opportunity costs that the projects must bear.  In contrast, a proactive approach, giving people time to think strategically and plan reduces the number of fires and frees the resources that were fighting fires.  Being proactive means emphasizing, among many other things,  the Service Design processes, Event Management, Problem Management and Continual Service Improvement.  Another not well recognized cost of fire-fighting is the impact on the Business.  Fires, by its very nature, do not just create costs and inefficiencies within IT but also create costs (real and opportunity costs) for the Business.  So a reduction in fire-fighting will help IT as well as the Business.
  • Consistent adoption of efficient and effective processes. Too often, processes vary across the organization: different teams follow different processes, different individuals perform processes differently, there are differences between geographic regions, between different legacy organizations (due to the history of mergers and acquisitions), and between different services that IT provides.  If an organization identifies/defines the best practices for its organization and ensures consistent adoption, the organizations as a whole will experience a productivity boost.

How do we reduce the cost of Service Management?
Many of the cost saving arguments for Service Management have been discussed before.  However, a “dirty little secret” is that Service Management is sometimes the cause of “non-value-added” cost to the organization.  This is not the fault of Service Management framework but of an adoption that does not focus on business value.

If you hear comments like “I spend more time writing up a Change record then implementing the Change,” there are probably many cost saving opportunities within Service Management to:

  • Streamline processes and make the more efficient
  • Remove bureaucracy and administrative “busy work”
  • Remove overlapping controls, e.g., between Change and Release
  • More efficient use of tools that support Service Management

Another way of finding to reduce the cost of Service Management is to analyze who is doing what activity within each process.  For example:

  • Can the activity be performed by a less expensive resource?  What training and tools can we provide the less expensive resource so they can be successful at the same tasks as the more experienced / more expensive resources?
  • Can the activity be off-shored (again to a less expensive resource) in a way that we can still keep the process coherent?

To ensure Service Management is not causing a burden to the organization, you need metrics to measure the cost and value of each process.

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Reginald Lo is Director of Service Management Transformation with VMware Accelerate Advisory Services and is based in California.

Transforming Your Business with End-User Computing

By Daryl Bishop

Daryl Bishop-cropIn my last blog, I talked about the need for a common definition around what constitutes transformation within the IT organisation. In this follow-up post, I’ll discuss the VMware approach to an end-user computing (EUC) transformation.

First a recap, for an initiative to be truly transformational it must satisfy the criteria of change across the elements of people, process, and technology. Additionally, it should be aligned to business objectives and have clear benefits.

If we look at the typical EUC environment today, it’s transitioning from a rigid environment based on a desktop or laptop running a Windows operating system to one that is application and data-centric rather than device-bound. This has some profound transformational impacts for business and IT.

Today’s End-User Computing Environment
Let’s first take a closer look at the EUC environment found in most organisations today.

BISHOP-EUCAs shown in the diagram above, staff have historically used either a laptop or desktop as a primary device. This device, running Windows as the operating system, is locked down at the configuration layer with applications installed natively. This stack forms your traditional and very common standard operating environment (SOE) model. Coupled with the SOE, the EUC ecosystem included printers, isolated (not integrated) mobility devices, and finally an identity management authentication and authorisation component.

This model served us well, providing control, standardisation, and management of risk. However, the rise of the consumerization of technology, a modern IT-literate workforce, ubiquitous access to applications, the decreased usage of the Windows operating system, and the always-connected Internet means this model is, at best, inflexible and, at worst, irrevocably broken.

The Transformed End-User Computing Environment
So what does a transformed EUC environment look like? In the diagram below, the focus has been abstracted from the devices to the application and data access layer.

BISHOP-EUC2

Let’s look at each layer in a bit more detail to better understand the benefits of removing the focus on devices and elevating it to the application and data access layer:

  • Business layer
    Business is typically not just a single entity: It consists of your internal business and external B2B organisations that collectively form your business ecosystem. While your business will provide a core service, in the future it’s likely that smaller, more nimble organisations like start-ups will utilize your core business services and APIs to provide customers with innovative products. Your applications and data will not just be consumed internally, but also by external organisations as business-to-business transactions.
  • Application delivery platform
    The application delivery platform is a standardised access point where your consumers will access applications, data, and desktops. The key features of this abstracted application access layer are:

    • Device independence
    • Centralized management via policy
    • Auditable access and usage
    • Accessed over secure channels
    • Simplified ease of use

Where security and control was traditionally applied at the device and operating system level, it is now abstracted to the application and data access layer.

  • Lightweight device management
    In this context, lightweight management means the minimal IT controls necessary to manage devices, primarily for security reasons. While rigid, locked-down control has historically been the norm, in the transformed environment only lightweight controls are applied. For example, mobility devices use mobile application management (MAM) containerisation to ensure IT can remotely wipe or lock access only to the corporate container. Data, applications, virtual desktop access, and security controls are now applied at the application delivery platform layer via centralized policy controls.

Finally does this constitute a transformation? Let’s review the impact through the lens of people, process, and technology:

  • People
    A modernised EUC environment is a catalyst to elevate staff from traditional, task-based to knowledge creation activities using the productivity platform that best suits their work style. By unleashing staff from the rigid model of yesterday, staff exercise increased creativity, providing a real point of competitive differentiation through innovation.
  • Process
    The traditional EUC environment is awash with layers of process to manage a monolithic computing stack. From processes to deploy applications and patches to service desk support, they add complexity with many moving parts to manage. Shifting the focus to the application delivery platform with lightweight management of devices introduces policy-controlled automation and simplified management controls.
  • Technology
    Businesses today struggle with BYOD, security, and management. By abstracting the management to the access layer, BYOD becomes a moot point. IT is no longer concerned, apart from connectivity, about what device is being used. Security is applied where it should be, at the application and data layer. Finally, management is focused on controlling access to data and applications via policy, rather than managing a desktop and laptop stack.

I’ve really just scratched the surface of what constitutes an EUC transformation. The role of unified communications, changing work practices such as activity based working, the software-defined enterprise, and the changes to the IT organisational structure to support the transformed environment — can and should be significant components of a transformation program.

I’d be interested in your view from the trenches. What EUC initiatives do you have planned and how are they transforming your business?
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Daryl Bishop is a business solutions architect with VMware Accelerate Advisory Services and is based in Melbourne, Australia.

VMworld-graphicCheck out the VMworld 2014 Operations Transformation track for opportunities to hear from experienced VMware experts, practitioners, and the real-world experiences of customers transforming their IT infrastructure and operational processes.

Beyond Hype: Transforming IT to Deliver Faster Time to ROI

By Ed Hoppitt

ED HOPPITT-cropPhil Richards, Customer CTO for British Telecom’s global arm, BT Global Services, acts as customer champion and provides thought leadership, direction, and strategy to deliver both technical and commercial elegance to his customers.

As part of the extended VMware team partnering with BT, I’ve been working with Phil’s team to help identify opportunities for transformation — not just in the technology space but also people, process, and governance into the team’s key accounts. Phil took some time out for us recently to talk about his business and his relationship with VMware.

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Ed Hoppitt is a VMware Accelerate Advisory Services business solutions architect and CTO Ambassador and is based in the U.K. Follow him on Twitter @edhoppitt

Cloud Transformation and Its Impact on IT Service Delivery

By Franck Besnard

I believe that 2013 was the inflection point for private cloud adoption within large enterprises embarking on their journey to cloud computing. Gartner’s Magic Quadrant for x86 Server Virtualization Infrastructure estimates that approximately two thirds of x86 workloads are on virtualized infrastructure.[1] We’ve now entered the post-x86 virtualization era, with large enterprises such as SAP—with 80 percent of its global infrastructure virtualized—touting the benefits of virtualizing business critical applications.[2]

Last October, I participated in VMware’s CIO Event Europe in Barcelona, and many of the senior IT leaders attending acknowledged that now is the time to embrace private cloud and reap the associated benefits.  In addition to taking advantage of lower costs, improved operational efficiency, and increased business agility that cloud computing brings, IT now has the opportunity to provide real business value through innovation that can drive growth and directly impact the bottom line.

Yet these same IT leaders also understand that it’s not simply a technology or architecture play, but a true transformation that will occur over multiple years, impacting people and processes within their IT organization. One participant asked me how he could reduce TCO by an additional 50 percent if his data centers were already 80 percent virtualized, and my answer was straightforward: “By changing your IT operating model.

A private cloud infrastructure solution allows IT to achieve cloud service provider economics in the data center by leveraging a software-defined data center architecture. This architectural approach delivers virtualized infrastructure services (compute, network, security, and availability) with built-in intelligence that provides benefits allowing IT to:

  • Automate through software-defined environments, especially networking
  • Streamline complex business critical application deployments
  • Orchestrate IT service management processes
  • Standardize IT systems deployed on the infrastructure
  • Deliver true self-service and chargeback to lines of business
  • Provide predictive analytics on business usage

The dynamic environment of a private cloud presents challenges to IT operations that have been established for static data center architectures, but it also represents a major opportunity. Changing the operating model for the way in which IT delivers services will provide significant savings, and it will also require an investment in people and processes—for example, the training costs of developing new skills, or the change management involved as a result of moving to a model of automation.

To achieve the benefits of operational efficiencies gained from cloud computing, existing IT processes must be streamlined and new ones implemented while your IT organization is transitioning to become much more proactive. In my experience, most large enterprises will take at least three to five years to realize the full transformative benefits of cloud computing.

Keep in mind that the IT evolution is a journey. The way that successful CIOs leverage virtualization to transform the IT organization to become more service-oriented will be a combination of innovative technology and adapting to a new way of operating that’s focused on delivering business value.

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Franck Besnard is a business solutions architect with VMware Accelerate Advisory Services based in France. Follow him on Twitter @besn0847



[1] Source: Gartner “Magic Quadrant for x86 Server Virtualization Infrastructure” by Thomas J. Bittman, George J. Weiss, Mark A. Margevicius, Philip Dawson, June 27,  2013

[2] Solution brief: “Virtualize Your SAP® Environment, A Joint Solution Offering from SAP and VMware to Increase IT Agility and Minimize  Virtualization Risk

 

Learn from VMware’s Lessons on Transforming the Business with Private Cloud

At VMware, the process of testing and optimizing products often starts by implementing them in our own IT organization. Join us tomorrow at 10am (PST) for a free webcast and get the inside scoop on lessons learned from moving VMware’s Dev/Test provisioning to private cloud.

Kurt Milne, VMware Director of Cloud Operations Marketing, will lead the conversation with executives from the VMware Dev/Ops team, who will share their personal experience with a private cloud environment that supports rapid prototyping and innovation that wasn’t possible before.

For the Ops team, blueprints, policies, and cloud automation and management have provided agility and improved performance. For the Dev team, requests for instances are completed in a day, their work is no longer interrupted while they wait for dev/test instances that hoard scarce infrastructure resources.

So, how does it add up? Learn the keys to how VMware’s IT organization reduced provisioning from four weeks to 24 hours, and improved the productivity of 600 developers by 20 percent.

Register here for “Increased Agility and Lower Cost Automated Provisioning in VMware’s Private Cloud.

4 Tips to Make Your IT Transformation a Success

By Gene Likins

Accelerate consultants are fortunate to work with a wide variety of IT organizations. Our clients vary by industry, global footprint, size, and competitive landscape. But one common theme among IT leaders has been that true IT transformation involves much more than just updating the technology. In fact, technology consistently ranks low for the challenges IT executives brace for as they push their organizations to modernize and shift toward ITaaS.

With ITaaS, the expectations and ground rules for IT are rapidly changing from “internal shared service” to “quality services at a competitive price.”  As IT, our customers are no longer captive; they can easily work directly with public clouds and SaaS vendors. This conjures up a new meaning to “rogue IT.”

With any trend or shift in an industry, there are always those companies that lead through innovation and/or necessity. Based on our experience with these ITaaS leaders, here are a few recurring themes worth considering for your IT transformation.

  1. Set up a governance structure
    This structure should empower service managers to prioritize and fund end-to-end services, rather than point projects. For example, an end-to-end IT service might focus on quarterly budgeting and planning. This is made up of infrastructure, ERP, BI, and dashboards. Strategically minimize IT point projects that are simply limited to deploying one particular technology or application.
  2. Deploy services incrementally
    Avoid the “big bang” approach to launching services—agility is the name of the game now. Two potential options are to quickly deploy a couple of simple services across a large number of businesses, thus maximizing the footprint of the impact. Another option is to focus many services on a single business unit to showcase deeper impact. Either way, the incremental approach will enable iterations, which will enable IT to monitor and refine the outcome.
  3. Avoid wholesale org changes
    First gain a sense for the services and service level agreements (SLAs) you will offer. Develop the IT operating model to deliver IaaS then ITaaS with a private cloud. Then use the operating model to gradually build a new organizational structure. There has been much discussion about cloud centers of excellence (COEs). One weakness I’ve observed with COEs has been accountability. An alternative may be to form a small greenfield team to start. This team could then generate some quick wins and slowly grow to eventually envelope the existing IT model over time.
  4. Market IT services –   Never forget, that as a services business, you must always market and promote your services. Put in the effort and invest in communication and marketing plans to ensure customers are seeing the value, and that you are advertising the successes right back to your customers. Being IT no longer gives you an excuse not to market yourself.

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Gene Likins leads the VMware Accelerate Advisory Services practice for North America and is based in Atlanta.

Is Your Organization Ready for the New Wave of IT?

While most IT organizations have a high-level vision for their end-state cloud, and they have the people needed to implement the technology, many are missing the strategy to connect the two. What do you execute, at what stage, and how do the people and processes need to change to support that? The video below provides a strong starting point.

Don’t miss Accelerate Advisory Services strategist Padmaja Vrudhula’s great explanation of a service-based approach to change management. She provides tangible examples of how IT executives can shift the way they classify services and personnel roles to support the move to IT as a service.

Padmaja Vrudhula is a strategist with VMware Accelerate Advisory Services, based in Washington.

Constant Change in Technology Is the Steady State

The VMworld Barcelona TV crew caught up yesterday with Paul Chapman, VMware VP of Global Infrastructure and Cloud Operations. In this short video, he describes how VMware is challenged with the same IT complexities as other large, global corporations—we have to run the business on a day-to-day basis, take orders, ship products, recognize revenue and so forth. And, because internally we’ve solved real-world issues that resonate with many of our customers, we’re now in a position to share how to solve many of those problems in a game-changing way.