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IT’s Case for Service Catalogs: Why do you need one?

by Les Viszlai

I’m surprised by how often I come across IT organizations that still aren’t fully persuaded of the value of using service catalogs. There is a lot of conversation around the value to the Business but I would like to jump in and outline the advantages of service catalogs from an IT Organization’s perspective.

First and foremost, service catalogs defend IT spending and budgets.

Without a service catalog, IT owns the generic technology line items that keep other parts of the business running. It’s not unusual for the software, hardware, and external IT services used by finance, marketing, sales and everyone else to get lumped together and tracked within IT’s budget. This bundling makes the IT Department’s spend look like a massive cost center compared to other departments within the business.  This then suggests that IT is overspending and ripe for an across-the-board cuts.

Under the generic model, finance teams looking to cut business costs by a target amount across the board start with IT.   To add insult to injury, I have found that IT departments are normally understaffed compared to other departments within the business and often underpaid based on industry benchmarks.

Moving to a full services catalog model changes that game. A successful service catalog defines all of the various offerings individually provided by IT to the business and aligns the software, hardware, and external IT services components needed to provide each of these offerings.  The services catalog should also clearly communicate the costs and service-level agreements associated with each service, giving IT the ability to show-back or charge-back the other departments.  This isn’t as monolithic a task as it may sound.

How does a service catalog make life better for IT?

Service CatalogLet me give you an example of how this changes behavior.   A company I was involved with in the past was running a number of different CRM products as a result of company acquisitions over time.  We kicked off a project that justifies the consolidation of the various CRM tools for both cost and efficiency (see my blog on ROI for tips on building such a business case).

Consolidation projects usually transition various users off of the legacy CRM tool onto the new consolidated centralized tool. Inadvertently a core group of users (usually tied to the original acquisition) resist the migration for some good and some bad reasons.  The net result is that our IT team is stuck supporting two tools.  The difference now with a defined Service Catalog is that IT can clearly charge the hold outs for both CRM product services. The corporate sanctioned CRM tool and the legacy CRM tool can be clearly tied to the holdout business unit.   In addition, IT is now in a position to defend the costs related to this and any additional Service Catalog items now tied to the end user or department that uses the service.

Now, let’s fast forward to budget time.  The CFO asks IT to reduce costs by 15%. Where before the dialog might be framed around reducing head count on the networking team, it can now be about which services in the service catalog the company wants to go without.

From a purely selfish point of view, that insulates IT from demands that are all-but impossible to satisfy. It gives the organization the ability to clearly signal when proposed cuts will damage the business. Additionally, the business also benefits, because they have now a less opaque window into their IT spending and its impact on, and interconnection with, their business functions.

Benefits for both IT and the Business

When we look at the broader case for service catalogs from the business perspective, that interconnection goes deeper.

On-Demand Access and Reliability

Service catalogs, of course, allow us to move to a model where end users click on a service they need and then just click once more whenever they need it again. Even at the end of the quarter, or when there’s some looming deadline, those end users always have the extra resources they need available without having to wait. So they’re gaining reliability, especially during times when IT resources traditionally got bottlenecked.

Speed

This model also opens the window for IT to add additional automation to any service. Say your SLA for providing an FTP-based service for file uploads and downloads is three days. With automation in place, you may be able to speed that up to hours, if not minutes. What’s more, you can offer this service as soon as the initial automation is complete and then keep fine tuning it by adding new tools, capabilities, and resources as they’re developed.

Efficiency

Standardizing clients, logging, auditing, and security, and adding system-relevant restrictions based on user profiles, restricts on-demand access so you only get service requests from people with a valid reason to ask for them. This saves IT money and time.

More Growth Potential

That automation and simplification story hints at the other major win for IT here. With a much more streamlined process enabled by its service catalog, IT has more resources available to manage growth more efficiently than it would have been able to under the old model.

Improving Business and IT Alignment

At the core, what both IT and the business are gaining when they adopt a service catalog is better alignment to needs.

When you have a common language and supporting data to communicate with the business the conversations around budgets fundamentally change.  Whereas before IT might have just presented a shopping list for approval, they can now say to the business, for example: “We’re creating ten times more FTP sites than we anticipated and they have to stay around three times longer. We’re out of storage, though. So, we need storage for the FTP site service.”

Similarly, the business can explain to IT that it needs IT’s four day process for creating an FTP site to be reduced to four hours. And because IT thinks in terms of services, it can easily budget out the resources it will take to make that happen.

Both conversations are now about the substance of the services that IT offers. Framed that way, they’re likely to be much more productive for each side – helping IT make good decisions about where to place its resources and allowing the business to understand how they can positively impact the services they are getting from IT.

Breaking Down Silos

When IT sets out to deliver a new service, like the simple FTP examples above, it’s very likely to involve people from a number of areas – in this case, networking, storage, and servers. In the past, everything and everyone was siloed. The network guy would work on the job then hand it over the hill to the server gal, who would hand it over the hill to the storage guy. With the new model, that behavior is broken down, because the network, storage, and server people are collaborating and sharing IP, all aligned to this one service, not their own specific technology silo.

Furthermore, by moving to a services model, IT is now aligning those various siloed resources in a way that enables knowledge transfer and increases overall efficiency and speed of delivery, and very likely lowers costs too.

Overall, the services model offers a route for IT to give business what it needs, but on terms that don’t compromise performance. Supported by the productive dialogue with IT that the model enables, the business can stay agile and scale up to meet demand, all while getting the most bang from its IT buck. That leads to growth, which IT, under this model, will be ready to support. Which of course is a good thing for everyone.

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Les Viszlai is a strategist with VMware Advisory Services and is based in Atlanta.

An SDDC Helps IT and Marketing Meet in the Middle

AUTHOR: Enrico Boverino

Companies need to deploy a modern workplace and innovative infrastructure in order to digitize business processes, and that often calls for organizational and financial shifts in both the IT and marketing departments. Can a software-defined data center (SDDC)—which at first glance may appear to be purely a technology strategy—help CIOs and CMOs work together to deliver competitive business innovation while reducing budgets? I believe so.

A standard definition of digital services is difficult to nail down, but I found this one helpful: A digital service is one that has been entirely automated and which is controlled by the customer of the service. This describes a wide swath of new applications, personalized services, social interaction, and data analysis that might also include digital marketing initiatives. In this context, CIOs are now expected to show the business results of technology investments, and CMOs are also increasingly open to spending budgets outside traditional marketing in order to reach new users.

Different goals, complementary skills
In general, CMOs know about product placement, go to market, and new customer demands; they also have to protect the business from surprises like new competitors and disruptive business models. Increasingly, time is a precious commodity, as emphasis shifts to short product lifecycles to test new markets and services.

CIOs typically have a great understanding of corporate business processes, information security, and available resources. They are skilled at scouting new technology and solutions with a focus on expenditures and new areas of savings. It seems obvious that enabling greater coordination between these two worlds will lead to a more competitive, robust, and agile organization. But how?

It’s interesting to see how both goals and approaches of the two departments diverge in my engagements with customers— it tends to look like this:

Despite the best intentions to collaborate for mutual advantage and company-wide success, challenges quickly surface when we lay out each department’s specific objectives in an organizational matrix, especially when it comes to personal MBOs.

How can a software-defined data center help?

Having the ability to exploit a unified data center platform that provides new standards for automation, flexibility, and efficiency can bridge the different perspectives. In an SDDC, the compute, storage, networking, security, and availability services are pooled, aggregated, and delivered as intelligent, policy-driven software. Other key components include self-service, financial visibility, and policy-based provisioning for infrastructure and application. This provides business users with faster deployment and more reliable access to differentiating technology tools.

When CIO and CMO strategies are joined, it’s important to highlight the impacts an SDDC will have on efficiency (cost control), agility (revenue contribution), and reliability (quality of service and risk mitigation). The impacts of an SDDC adoption,  together the priorities associated with the opportunities CMOs and CIOs are striving to take advantage of, will help to define and exploit personalized roadmaps.

When we consider impacts on agility, an SDDC implementation has three capabilities that can facilitate conversation between the CMO and CIO:

  1. Abstraction of applications from the underlying infrastructure enables true self- and automated provisioning of services, overcoming manual steps and the wait time that exists when multiple siloed IT groups need to communicate.
  2. The policy-based automation of pre-configured applications can simplify the processes related to the rework, which are often required to change configurations, or distribution of systems geographically.
  3. Governance and brokerage of public cloud services from IaaS to SaaS, which can also provide agility-related benefits such as lower costs and time to market, but must be evaluated and in many cases integrated within existing processes.

Over the past two years, I have helped many customers gain visibility and insights into their current level of maturity using a software-defined reference framework. Capturing meaningful KPIs helps to build an executable roadmap that aligns with user demand and provides the ability to measure improvement over time.

For example, the impact on agility described earlier can be measured through metrics that include:

  • Revenue generated by new services
  • Customer satisfaction
  • Percent of workload offloaded to hybrid clouds
  • Percent of requests fulfilled via self-service and standard catalog
  • Time to provision additional capacity

Using their results to determine action plans needed to improve these metrics, CMOs and CIOs can decide which capability to address first and which marketing/IT joint investments will lead to the most beneficial business outcomes within the shortest amount of time.

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Enrico Boverino is senior business solution strategist for VMware Accelerate Advisory Services based in Italy. You can follow him on Twitter at @eboverino.

CIOs, Lead the Cultural Change!

Author: Alex Salicrup

In my earlier blog, I described the challenges of competing with third-party service providers that many modern CIOs face. And, I closed by promising to come back with tips on how to transform a reactive, risk-adverse IT organization to one that’s more proactive and customer-centric. Here are some suggestions:

Automate
Your IT organization needs to run operations with the fewest number of IT staff possible. Now, don’t get excited—I’m not talking about reducing headcount. Rather than focus on reacting to requests, trouble tickets, and other events that can be fully automated, what I suggest is that your headcount be utilized to innovate, plan, and execute on new strategic initiatives that provide business results faster. In fact, companies that the Accelerate team has worked with and that have tried this approach discover that their attrition rate reduces as their employees learn new skills and gain focus in more rewarding tasks—job satisfaction increases.

Average Revenue Per User (ARPU)
It’s a strange term considering we’re talking about business users, but it translates to what is your average business user expects to pay for the average service they receive. What are your business users willing to pay AWS or other IaaS and SaaS providers for infrastructure and application solutions versus those of your IT organization? ARPU forms the basis of any service that is designed and added to the IT service catalog—this number drives everything. If your service is more expensive than the competitor, then what is the value that you are providing the user to justify that premium?

Service Offerings
Keep your service catalog relevant and enticing—but as lean as possible. Rather than offer a large number of bundles, narrow it down to basic offerings that will meet the needs of most of your users. Augment those services by adding additional features that have proven valuable to your users or your competitors’ users. These decisions can be complicated. This is one area I find most IT departments have to exercise constraint. The advice I give to my customers is that a small number of offerings can meet the need of the majority (70-80 percent) of users. When exposed to many choices, users will only be confused and distracted from your value proposition.

Business Cases
From this point forward, think of your IT department as a start-up company. Every time you have a business initiative that requires capital, you need to fight for it from other startups in the enterprise. It’s not good enough to prove how your initiative will mitigate a risk. Your business case will need to show projected service uptake over time, and how profitable it will be within an acceptable timeframe. Yes—I used the word “profitable.” Profitable should be the end goal for an IT organization. Even if internal finance practices are not suitable for this type of profit setup, it’s a cultural mindset that you will thank me for adopting.

Service Level Agreements (SLAs)
Your SLAs have to be aggressive and comparable to what external service providers offer. Why? Service providers are very innovative about how they mitigate all risks, including SLA risks, without expending a lot of capital. The same goes for the modern IT organization. This is an opportunity to let your business users differentiate between the levels of service they would like versus what they are willing to pay for. If your users want tighter SLAs, provide an SLA matrix with varied levels of risk mitigation (time-to-resolution, availability, performance targets) to choose from—they will pay according to level of risk assumed by IT.

An SLA matrix also sets users’ expectations for what can be demanded as a response from their IT organization. In my experience, this is typically a significant improvement for an IT organization’s service management. Of course, the organization will need to deliver on these SLAs, and metrics will be essential in keeping IT honest and to be able to demonstrate the value of SLAs. The business user must have a compelling reason to pay for the premium, which usually translates to consequences if SLAs are breached. Some are monetary penalties; some are services not charged for during breach. Your organization’s solution will be unique to your environment.

These are my high-level observations and suggestions based on personal experience as a service provider in a former life, as well as through my work with our Accelerate customers. Most of the IT organizations I work with have been running in reactive mode for years, and their biggest challenge in transforming to a more proactive role as service provider is cultural. To form a new partnership with business stakeholders based on the ability to deliver real business value, I encourage CIOs to guide the discussion from one that’s risk adverse to one of innovation and opportunity. Success is out there if you know how to get there.

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Alex Salicrup is a business solutions architect for VMware Accelerate Advisory Services.

VMware AccelerateTM Advisory Services can help you and your key stakeholders understand the IT as a service value proposition—our consultants quantify the potential benefits, develop architectural designs, recommend organizational and process changes, create a migration plan and advise during implementation. Visit our Web site to learn more about our offerings, or reach out to us today at: accelerate@vmware.com for more information.

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