Running IT as a Business How to Managing your Service Provision

Running
Running IT
IT as
as aa Business
Business
How
How to
to Managing
Managing your
your Service
Service Provision
Provision
Introduction
Introduction of
of Improved
Improved
Service
Service Level
Level Control
Control &
& ICT
ICT Management
Management Control
Control
SUEGI
Paris 2002
Mark Griep
© 2002 KPMG Consulting N.V.
ak01_101NvG-PCM
Sourcing the coming growth market for IT Service
Providers …
!
Technology firms are expecting a double digit growth for Business
Process and Technology outsourcing.
However …
!
Unsatisfied firms put the screws to US outsourcers.
!
Executives say that costs are too high and quality is too low …
!
… and drive down providers prices.
!
New Term outsourcing focus on Cost Relief.
!
Long term opportunities focus on new financial models.
Source Forrester, march 2002
© 2002 KPMG Consulting N.V.
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….and the Market power shifts from seller to buyer
Buyers
Buyers
Market
Market
Market
SellersSellers
Market
Euroland GDP Growth
4,0%
10,0%
3,0%
8,0%
2,0%
6,0%
1,0%
4,0%
0,0%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
E2001 E2002
2,0%
-1,0%
EU technology Services Operating Margins
12,0%
5,0%
0,0%
-2,0%
Euroland GDP Growth
EU Technology Services Operating Margins
Source: Goldman Sachs 2002
© 2002 KPMG Consulting N.V.
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The average ICT Service Providers is moving
towards service oriented
Business oriented
pro-active partnership
???
Custom er oriented
product
flexibiprevenlity
tive
Service oriented
Controlled
Technology driven
costs/
benefits;
volum e
flexibility
logistical
planning
and control
incident
and
problem
know ledge
build-up
registration
and control
quality
priority
param eter
cust
om
er
settings& process
level
telling
m easurem ngt.
m ents
integral,
differentiated
partially
integrated
service
level
m ngt.
service
agreem ent
m ethods
and
techniques
stable
process
operational
technical
???
2002
1998
re-active
inform al
Production
fragm ented
basic control
Incidents
&
problem s
Changes
&
configuration
© 2002 KPMG Consulting N.V.
Service
level
ad-hoc
inform al
1990
D evelopm ent
& m aintenance
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Management & Service Level Control ICT use both same
source information but require different reporting
ICT Management Control
Business
Planning & budget
Dept. A Dept. B
Dept. C
Service Management
Service Level
Agreements
Project Management
Advisory
Purchasing
Service Level Control
© 2002 KPMG Consulting N.V.
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Project Benefits are derived from Five different deliverables
that fit together and make up the MSP solution…
ICT Management Control
Service Level Control
!
!
!
send out reliable invoices to customers
insight in revenues & costs per service & customer
calculate and conclude feasible & profitable contracts
! manage your performance
on SLA services
! report your SLA
performance to your
customers
Gain insight in performance:
! of internal ICT process
! and individual ICT units
Control your cost:
! per ICT department
! per ICT process
! and even per activity
Data Administration &
Sources
!
!
IT Architecture & Tooling
!
! Taylored tool for IT organisations
!
Best practice admin. Procedures
Design admin and control
support
Standard data model
Standard extraction model
! Non propriety
! Proven collector
Approach
!Time box with 80/20 rule
!100 days incremental planning
!Combine mental & Fysical change
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Service Level Management is more than signing the
contract
"
"
"
"
"
© 2002 KPMG Consulting N.V.
Service Level Control more than
agreement
Standard Service structure
" Services
" Components
Best Practice “levels”
" Reliability
" Availability
" Service-ability
" Response times
Benchmarks
Pricing & Costing strategy
" Estimation contract & project
profitability (ABC approach)
" Invoicing 02C
" Fixed versus variable pricing
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Based on the maturity of service level control the
feasibility and scope of the MSP solution is defined
%
MSP
€
Business Value indicators Innovation
Value management
Control
Business Service indicators
Service L
Service costing
evel Con
t
r
o
l
Technology service indicators
Resource costing
Service
Process indicators
Agreeme
nt
Technology indicator
Process costing
Service
offering
s
Ad hoc
© 2002 KPMG Consulting N.V.
Input costing
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The cost management model provides cost information for
pricing and for financial monitoring
Budgetted Cost/
Actual Cost
Human Resources
Renumeration
IT … …..
Hardware
Software
Standard Cost price/
Actual Cost
per Product/ Servi
ce
ice
© 2002 KPMG Consulting N.V.
SAS-Introduction MSP-020411 /
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Management Control requires more than the definition of
performance indicators and financial reports
!
Archetype business models
- Services
- Projects
- Purchasing
- Advisory
!
Best practice process models
- Service Management
- Project Management
- IT Governance &
Management
!
Best practice performance & cost
indicators (Balanced Scorecard)
- IT Resource costs & indicators
- Individual/team/process costs
& indicators
- Business Balanced Scorecard
indicators
© 2002 KPMG Consulting N.V.
SAS-Introduction MSP-020411 /
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The Information architecture of the organisation needs to
be assessed to define the benefits the MSP solution
Service Level Control
Management Control
Business Intelligence
Business Applications
Service Management / Project Management tools
Asset
System
Management
Management
Static
Dynamic
HR tools
Static
Assets
Time
Keeping
Dynamic
Human resources
© 2002 KPMG Consulting N.V.
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IT Architecture & Tooling
Decision making and
Information content
Content:
!
Performance mgt./BSC
!
Financial control
Information Delivery
Ways to deliver to users:
!
Web, E-mail, Paper
!
SAS IT Scorecard & SLM
Data Marts
Calculation
Engines
Data modelling
Data extraction
Storage & Data Manipulation:
!
Cost/revenue modelling
!
SAS/Oros
Standardise data:
!
Define & document meta data
!
Determine data sources/systems
Data extraction:
!
SAS Collector
Source systems
Data source systems:
© 2002 KPMG Consulting N.V.
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Implementation Approach
Vision
•
Business case & program plan
•
Design the perfomance & Cost
management vision
•
Design architecture & support
organisation
•
Scope pilot area
•
Implement Pilot area
•
Manage & Improve based on
provided inteligence
•
Broaden the base
Mgt. & control
Program
Management
Performance
Processes
Systems
Current situation
Personnel &
culture
© 2002 KPMG Consulting N.V.
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Design and Implementation issues
!
Decisiveness for key cost & performance indicators
!
Unrestrained development of service design & cost allocation
!
Gap between ambition and capability
!
Quality of source data and admin procedures in the background
!
Immature infrastructure for continues management
!
Lack of time constraint in project
!
Commitment & Need for change
© 2002 KPMG Consulting N.V.
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KPMG Consulting Contacts
Steven van Agt
Mark Griep
KPMG Consulting Netherlands
KPMG Consulting Netherlands
Telephone +31 30 658 1497
Telephone +31 30 658 1564
Fax +31 30 658 3497
Fax +31 30 658 3704
Mobile +31 6 53714840
Mobile +31 6 52078840
E-Mail [email protected]
E-Mail [email protected]
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