IT Service Management: Optimizing IT Performance And Delivered Business Value

Date: May 22, 2010
Pages: 288
Price:
US$ 2,995.00
Publisher: Ovum
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: IF95C494E10EN
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IT Service Management: Optimizing IT Performance And Delivered Business Value
As enterprises expect and demand more from their IT and the organizations that provide it, IT functions need management frameworks and enabling technologies to help to deliver high-quality IT services and cost efficiencies, to demonstrate delivered business value, and to increase IT-to-business alignment or integration.

IT service management is applicable to most enterprises, given the criticality of IT to modern business operations. In Ovum’s opinion, related management thinking and enabling technologies are both at a high level of maturity, with ITIL adoption in particular continuing to gain a foothold in enterprise IT organizations worldwide as over 20,000 people per month gain the ITIL Foundation Certificate.

The aforementioned levels of maturity, however, somewhat belie the real level of IT service management capabilities within enterprises. While ITIL (formerly known as the IT Infrastructure Library) adoption continues to grow, particularly within large organizations where ITIL deployment will facilitate improved IT governance and increased efficiency of IT service provision, it is all too easy for enterprises to overstate their position – in terms of both breadth and depth of adoption – with IT organizations stating that they ‘do’ ITIL when in fact they only ‘do’ a limited subset of the IT service management best practice framework’s processes, mostly around the more reactive ITIL disciplines such as incident management. Beyond individual process adoption, the level of IT employee understanding of, and commitment to, the ITIL-espoused concept of IT delivered as a service (rather than as technology components) is also somewhat patchy.

A piecemeal or phased approach to ITIL is recommended, with the mantra of ‘adopt and adapt’ often used in the context of ITIL adoption. However, in our opinion the limited subsets of ITIL processes within many enterprises are not the result of such a phased approach, but rather that of ‘adopt and lose momentum’, in that many ITIL-based IT organizations never progress past the initial adoption of incident, change, and maybe configuration management to reap the benefits of the more proactive elements of ITIL.

The introduction of ITIL v3 has somewhat muddied the waters for enterprises and IT service management software vendors alike. The UK’s Office of Government Commerce (OGC) launched the refreshed version of ITIL in June 2007, delivering valuable new processes, such as service catalog management, and the concept of the service lifecycle for managing IT services from cradle to grave. There were downsides however. Whereas the IT service management tool market had achieved a level of maturity and functional parity on the back of alignment with ITIL v2 best practice processes, technology enablement of the new processes (delivered within ITIL v3) has been addressed by vendors to differing degrees and in some instances with different interpretations as to what the process being supported should be. Additionally, many enterprises, which had adopted only a subset of ITIL v2, are stating that they now ‘do’ ITIL v3 purely on the back of ITIL v3 training or the implementation of a service catalog.

Despite these ITIL v2 and now v3 issues, Ovum has no doubt that IT service management strategies, policies, processes, and enabling technologies (whether backed by ITIL or not) are critical to IT organizations in their management of an increasingly complex IT infrastructure and to their ability to meet the growing demands for business-responsive IT services from the enterprise, particularly as enterprises consider the options available from the cloud.

Business issues

Migration to ITIL v3 isn’t easy. As mentioned above, too many IT organizations have adopted a subset of ITIL v2 processes without fully understanding or committing to the concepts of IT services and service delivery. The service lifecycle approach of ITIL v3 takes these concepts further and IT organizations must ensure that they understand the people, process, and technology changes required to succeed in ITIL v3 adoption. An IT organization also needs to be honest with itself in terms of existing ITIL adoption level and capabilities. Importantly, enterprises must fully subscribe to the concept of IT services and the service lifecycle for successful ITIL v3 adoption.

Enterprises can benefit from new ITIL v3 processes. IT organizations are challenged with reducing IT costs and wastage, providing IT governance-mandated visibility and assurance, and demonstrating business value and IT’s level of business alignment or integration, and the ITIL v3 service catalog management, service portfolio management, and continual service improvement processes can all help. Service catalog management and enabling technology can offer a raft of potential financial and process-related benefits through the provision of capabilities that include internal management and workflow, an end-user ‘shop window’ interface for ordering, and links to automation capabilities for increased speed of provisioning and cost savings.

Service portfolio management should allow IT organizations to link IT services to the business value they deliver, and for its comparison with the cost of provision, to identify winners and losers. In Ovum’s opinion, enterprises should use project portfolio management (PPM)-style service portfolio management to truly benefit from understanding and exploiting the value within IT services. Continual service improvement is not just another ITIL v3 process that can be adopted in isolation but rather one that must be treated as an integral part of ITIL v3. While it offers guidance on improving the design, introduction, and operation of services, it is more importantly a capability that needs to stem from a culture of improvement; with both IT service management metrics and employee innovation used to drive continual service improvement.

People are an oft-neglected element of IT delivery, and enterprises must not underestimate the importance of people and their behaviors to ITIL v3 adoption. With ITIL v2, there are many examples of how people behaviors have impeded or at least adversely affected the successful adoption of the IT service management best practices. IT organizations must therefore appreciate that people are a key ingredient in the successful adoption of ITIL v3, ultimately realizing that if they can’t change their people then they will need to change their people.

IT organizations need to be adequately prepared for the cloud and the management of the IT services provided from within it. However, while the cloud has a massive role to play in the future of IT service delivery, Ovum believes cloud-inspired ‘death of the IT function’ statements to be a little premature to say the least. In our opinion, there will not be a rapid migration to the cloud and even in the medium-term many IT organizations will still need to manage a blended mix of on-premise and cloud-delivered IT services. In starting this, IT functions will need to leverage IT service management strategies, people, processes, tools, and techniques to understand which IT services would be better served from the cloud, and the priorities for migration based on business pain points, internal capabilities, the existing quality of service, and the cost of provision, with the aim of providing better customer service and improved productivity.

IT organizations will need to evolve to reflect the change in focus caused by the externalization and loss of immediate management of some IT infrastructure and IT services. They need to reassess roles and responsibilities, and people’s skills and capabilities but even in an IT organization that migrates all IT services to the cloud there will still be a need for IT or business resource to own and manage service delivery using best practice IT service management processes.

Technology issues

In Ovum’s opinion, enterprises should rethink their requirement for IT service management tool capabilities in light of the extended capabilities of ITIL v3. Technology was important to support the key ITIL v2 processes, such as incident, change, and configuration management, and even where these are adequately supported existing IT service management-enabling technology should be reviewed as part of the transition to v3. This is not only in light of the needs of new ITIL v3 processes but also in respect of existing ITIL processes in the context of working with the service lifecycle.

The cloud will make IT and IT service management more complex. As enterprises weave cloud computing into their IT mix, they will face increasing interoperability and management problems, and it will take a lot of effort to make all this work and ensure that it does work. Instead of becoming nimbler and reducing the costs for maintaining the status quo, ill-prepared IT organizations will end up with their IT spread across a wider area and face a management nightmare as they venture into the cloud.

Therefore, enterprises need to consider a wide range of cloud-based issues from an IT service management perspective. Some are obvious: an IT organization needs to have a good understanding of the IT services it provides, along with the service-delivery quality levels required, and the SLA targets agreed with the business before considering the cloud. In Ovum’s opinion, one area where many IT organizations will struggle is service costing, particularly when an IT organization needs to ensure that ‘oranges are compared with oranges’ when making financial decisions around the cloud – understanding that the price paid per month is not likely to be the total cost of ownership (TCO) for cloud-delivered IT services.

From a cloud-enabling technology perspective, the ITIL v3-delivered service catalog management process and service catalog tool can be used not only for the design and costing of cloud-delivered services but also for self-service provisioning – supporting the cloud ethos of agility and cost efficiency. Ovum expects IT organizations to address many of the ongoing IT service management challenges of cloud adoption by defining their own service catalog with a menu of standard service options, policy-governed self-service, and other key service management capabilities such as pricing and usage tracking. But an IT organization must appreciate, however, that service catalog technology is not a starting point for an ITIL adoption and that the service catalog is a business rather than an IT tool.

Fit-for-purpose technology will also be key in the management of IT service delivery. IT organizations will be faced with the need to manage the availability of IT services delivered both traditionally and via the cloud (whether public, private, or hybrid) and this will impact upon the IT management tools that they use.

Niche cloud-management vendors have already emerged with solutions to address a wide spectrum of cloud management needs and just as traditional systems management vendors have added virtualization capabilities to existing tools, so they will do the same with cloud-based capabilities. There is also a third tool possibility, where third-party vendors, spotting a gap in the market, will create solutions that allow cloud management vendor and systems management vendor tools to operate in their non-native environments. No matter what the future holds for these vendors and their solutions, IT organizations need to be thinking now about the best approach to, and tools for, managing a hybrid data center environment.

While much is made of moving internal-customer IT services to the cloud (based on a well-considered business case), IT organizations should not overlook a cloud opportunity that exists closer to home: moving the corporate IT service-desk tool outside of the firewall. Ovum believes software-as-a-service (SaaS) delivery to be a good fit for IT service management tools, especially given that, with a phased implementation, it can be a relatively low-risk environment for introducing both SaaS and IT service management into an organization. Enterprises are now far more aware of the benefits and risks of SaaS and, with the continuing influx of SaaS-delivered solutions from SaaS-only vendors, traditionally on-premise IT service management vendors, and new dual-play vendors, Ovum expects SaaS-delivered IT service management tools to continue to erode the market dominance of their on-premise siblings.

Market issues

In Ovum’s opinion, ITIL v3 is an opportunity for vendors to demonstrate new areas of IT service management innovation and 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 they support the processes. Ovum appreciates that vendors are led, or at least influenced, by what the market requires. We believe however that the needs of ITIL v3 are 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 gap that an innovative IT service management vendor could exploit, not just through new technology delivery but also through strategic intent. In our opinion, 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 organizations’ thinking forward from a service lifecycle perspective. 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 we expect the same to be true for v3. In many ways, IT organizations will need such a vendor approach to make the leap from ITIL v2 to v3.

IT service management tools have achieved a level of functional parity on the back of the continued worldwide adoption of the ITIL v2 best practice framework. The Ovum decision matrix supports this with very little difference in key functionality across the ITIL processes reviewed between the ten vendors. BMC, CA, and HP have the greatest level of IT service management-enabling functionality but the difference between first and tenth is mostly a factor of missing functionality to support service portfolio management, IT financial management, and service level management.

In terms of meeting the service portfolio management requirement, CA and HP are ahead of the IT service management vendor pack and, beyond the capable delivery of core ITIL v2 and v3-based capabilities, the ten vendors have their own unique selling point or points to differentiate themselves. For instance:
  • ASG leverages its best-of-breed configuration management database (CMDB) and comprehensive IT management software portfolio
  • Axios has a long legacy of successful IT service management tool implementations
  • BMC is a frontrunner in terms of business service management (BSM) and leverages its BMC Atrium CMDB
  • EMC Ionix is backed by its strong data center management capabilities
  • FrontRange offers additional IT service management efficiencies through telephony integration
  • IBM takes a business view, extending asset management to all business assets and also supporting BSM
  • LANDesk scores extremely highly from a customer sentiment perspective
  • Service-now.com offers value for money and convenience through what it terms ‘modern software-as-a-service’.

KEY FINDINGS
  • Many enterprises overstate their level of ITIL adoption, stating that they ‘do’ ITIL when they only do a subset of the best practice framework.
  • With ITIL v2, many ITIL-based IT organizations never progressed past core processes to reap the benefits of the more proactive elements of ITIL.
  • In migrating to ITIL v3, an IT organization must to be honest with itself in terms of existing ITIL adoption level and capabilities.
  • ITIL v3 adoption necessitates a business-driven service-oriented strategic approach.
  • Enterprises must not underestimate the importance of people and their behaviors to ITIL v3 adoption.
  • New ITIL v3 processes and enabling technology can help IT organizations to reduce IT costs and wastage, provide IT governance-mandated visibility and assurance, and demonstrate business value.
  • The technology enablement of the new processes delivered within ITIL v3 has been addressed by vendors to differing degrees.
  • ITIL v3 is an opportunity for vendors to demonstrate new areas of IT service management innovation and product/marketplace differentiation.
  • Enterprises should rethink their requirement for IT service management tool capabilities in light of the extended capabilities of ITIL v3.
  • IT organizations can realize efficiencies with service catalog tools.
  • Enterprises can use service portfolio management to understand and demonstrate the value IT delivers.
  • Continual service improvement is vital to the ITIL v3 concept of the service lifecycle and IT organization optimization.
  • Cloud computing is changing the IT landscape; at least in the short term it will be more complex and more difficult to manage.
  • IT organizations need to be adequately prepared for the cloud and the management of the IT services provided from within it.
  • Enterprises need to consider a wide range of cloud-based issues from an IT service management perspective.
  • Capable and skilled people will be key to the success of cloud.
  • IT organizations will need to evolve to reflect the change in focus caused by the externalization and loss of immediate management of some IT infrastructure and IT services.
  • IT service management technology has a big role to play in managing cloud-delivered IT services.
  • IT organizations need to be thinking now about the best approach to, and tools for, managing a hybrid data center environment.
SECTION 1: MANAGEMENT SUMMARY

1.1 Management summary

SECTION 2: INTRODUCTION AND BUSINESS PERSPECTIVES

2.1 Report introduction and objectives
2.2 Effective IT service management metrics
2.3 Change management best practice
2.4 Problem management best practice

SECTION 3: TRANSITIONING FROM ITIL V2 TO V3

3.1 ITIL v3 adoption necessitates a business-driven service-orientated strategic approach
3.2 The importance of people and their behaviors to ITIL v3 adoption cannot be underestimated
3.3 New technology can support ITIL v3 adoption

SECTION 4: DELIVERING NEW BUSINESS VALUE VIA EMERGING IT SERVICE MANAGEMENT BEST PRACTICE

4.1 Realize efficiencies with service catalog management
4.2 Use service portfolio management to understand and demonstrate the value IT delivers
4.3 Continual service improvement is vital to the ITIL v3 concept of the service lifecycle

SECTION 5: THE VALIDITY OF IT SERVICE MANAGEMENT WITHIN THE CLOUD

5.1 Cloud computing is changing the IT landscape
5.2 Capable and skilled people will be key to the success of cloud
5.3 IT service management technology has a big role to play in managing the cloud

SECTION 6: MARKET PERSPECTIVES AND VENDOR COMPARISONS

6.1 Features Matrix
6.2 Decision Matrix
6.3 Vendor Analysis
Contents – May 2010
CONTENTS – IT SERVICE MANAGEMENT

SECTION 7: TECHNOLOGY AUDITS

ASG – ASG-BSP for IT Service Management
Axios – assyst 9
BMC – BMC Remedy ITSM Suite 7.6
CA – CA Service Management Suite r12
EMC – EMC Ionix Service Manager v9
FrontRange – IT Service Management 7
HP – HP Service Manager 7
IBM – Tivoli Service Management
LANDesk – LANDesk Service Desk Suite v7.3
Service-now.com – SaaS for IT Service Automation
Section 8: Vendor Profiles
Biomni
Cherwell Software
Compuware
Digital Fuel
Epicor
Hornbill
ICCM
iET Solutions
LiveTime Software
Marval
newScale
Numara
Oblicore
Oracle
SAP
Staff&Line
Sunrise Software
Symantec
USU Software AG
Section 9: Glossary
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