Business Excellence through Service Management

Service management is rapidly becoming a central issue for a growing number of businesses all over the world. This new focus stems from the desire to improve brand equity by offering high quality, value-added services that attract and retain customers. But to deliver on this critical objective, virtually all common business functions need to be rallied: cost management, regulatory compliance, security, risk reduction, and above all, the meeting of financial performance and market share growth expectations.

So reaching this admirable goal invariably involves initiatives that diverge across three distinct internal business domains: the line of business (LoB), IT, and operations. That divergence requires the identification of key factors for quality service delivery in technology silos across the domains. Successful implementation of any key business service initiative depends on a business service strategy that aligns all vital business resources. It is essential that all stakeholders of a business service initiative understand the issues impacting availability, quality and security within a full end-to-end service context. Such a strategy puts all of the forces that support business growth, profitability, and competitiveness into optimal balance.

IBM® Tivoli® has a robust track record of success in IT Service Management (ITSM). Now the company is leveraging that experience to help enterprises implement a successful business service strategy by employing a strikingly similar process-based approach. This is the foundation of a new, broadened offering portfolio called IBM® Service Management.

A company may be most concerned with managing business process costs. Or perhaps they’d like the ability to respond to changes in supply and demand by adjusting critical business process in real-time. IBM can help. IT has been at the heart of every business process initiative dealing with the external forces of globalization, commoditization, shrinking product lifecycles, and increased regulatory compliance. As a result, business processes are more automated and IT dependant than ever before.

Making IT Work as a Business Service Provider
But all this automation created a serious business issue faced by many enterprises: Nobel Laureate economist, Robert Solow, summed it up, in 8 words: "We see computers everywhere except in the productivity statistics."

Pressured to innovate and grow their businesses, CEOs and CIOs struggle to quantify return on IT investments. Even economists, whose key measure is productivity, don’t have a consistent answer. This is The Productivity Paradox of Information Technology that was a critical issue raised by Erik Brynjolfsson, the director of the Center for eBusiness at the MIT Sloan School of Management.

In the early 1990s, Brynjolfsson examined studies of IT investment performance and found no consistent methodology to correlate IT investments and business performance. Brynjolfsson’s work came down to two trains of thought: Either mismanagement by IT was the core issue—the pessimistic view—or mismeasurement of IT ROI was the central problem—the optimistic view. The seriousness of those issues hit home in a 2001 Gartner Research Note, Key Competencies for Service-Based IS Organizations, which warned that IT departments were gradually "losing their franchise to deliver IT solutions" to a variety of specialized consulting and outsourcing firms.

IT was losing credibility within many corporations. Fueling the negative view from the Brynjolfsson Productivity Paradox, research on the performance of IT as a service provider revealed 85% of corporate IT problems were associated with changes introduced by IT. From a corporate viewpoint, IT needs to be transformed from an opaque, reactive, technology provider into a transparent, strategic, service provider.

The prevailing solution for such a makeover is through the introduction of an IT governance process dubbed IT Service Management (ITSM). The idea behind ITSM is to utilize quality control improvement techniques to revitalize IT processes in a way similar to the transformations fostered outside of the IT domain. The ultimate goal is to execute IT processes consistently, automatically, and correctly the first time.

Such a transformation is a dauntingly large-scale project. Tivoli has been unique in providing IT decision makers with a fully actionable ITSM solution with added flexibility derived from a service-oriented architecture (SOA). Tivoli has helped the successful transformation of IT organizations through a comprehensive solution suite that has three fundamental dimensions:

At the operations level, a plethora of IBM Tivioli® applications handles the tasks associated with day-to-day IT systems management, including user identity, data security, and resource provisioning. Key Tivoli process manager applications then help to automate those operational processes based on site policies. Through automation, the error rates associated with the complex interdependent operations fall dramatically, Linking IT process with IT operations, the IBM IT Service Management Platform serves as an integration point for IT Service Management processes and management data. In particular, this layer promotes visibility into application complexity by automatically creating and maintaining application infrastructure maps. The comprehensive application maps include complete run-time dependencies, deep configuration values, and accurate change history.

Nonetheless, there remains an important issue for sites embarking on an ITSM transformation. Throughout the IT industry, the agreed upon starting point for ITSM is the IT Infrastructure Library (ITIL). ITIL is considered the most comprehensive and respected source of information about IT processes needed to implement IT Service Management (ITSM). Unfortunately, this starting point is focused entirely on IT: There is no connection between IT and the processes involved in either network operations or corporate lines of business.

Connecting the dots from IT to Network Operations to LOBs
Traditional ITSM makes no provision for the revolution in operations management arising from the convergence of telecommunications services around the IP protocol suite. Addressing issues of network speed and scalability via quality of service (QoS), policy-based service level agreements (SLA), and the visualization of key performance indicators (KPIs), however, is just as daunting and complex as provisioning a host of desktop PCs over an extended geographic environment. What’s more, with IP convergence, IT is as likely to leverage this technology, as are telecommunications service providers. It’s becoming common for banks, airlines, investment service providers, healthcare providers, retailers, government agencies, along with other organizations to monitor and manage sophisticated technology infrastructures.

The final element of service management convergence relates to LoB interests. To deal with asset management and ROI at a corporate level, a framework developed dubbed Strategic Asset Management that brings together strategy, project management and benefit realization for assets designated as strategic in order to support business objectives. Once an asset is so designated, it has to be included whether it is on the plant floor, in the machine shop, or in the IT department. This enterprise-wide asset management strategy has to work across departments, plants, divisions and even continents if it is to be effective.

Extending the Benefits of ITSM to the Enterprise
This distinct convergence around enterprise service management by IT, operations management, and corporate lines of business makes a unified enterprise service management strategy critical for any enterprise. Through ITSM, IT can become as predictable, manageable, and consistent as any other business process. Through the principles and foundation of an ITSM structure, critical service operations become visible to corporate managers. Finally, by following a fully integrated approach that connects all traditional technology silos, a unified strategic asset process can be implemented.

What’s more, by addressing the broader issues of service management via the expansion of a successful ITSM infrastructure, existing advanced tools and techniques such as the IBM Tivoli Unified Process - and the IBM Open Process Automation Library (OPAL) become available to all of the stakeholders of a business service. In particular, the “IBM Tivoli Unified Process” /software/tivoli/itservices is a navigational tool that provides necessary how-to information to customize and implement best practices to improve processes, The “IBM Open Process Automation Library (OPAL)” http://www.developer.ibm.com/tivoli/workflow.html has been working with partners to expand Tivoli and business partner products to include "automation packages" with workflows for automating common IT processes. These will now be augmented for workflows surrounding operations management and the Tivoli NetCool family of offerings.

For CEOs, CIOs, and LoB VPs the results of implementing a solid business service strategy can be profound. For the CEO there is a higher return on assets (ROA). For the CIO, there is an IT manageability never before obtained, an increase in crucial corporate credibility and, finally a way to report on IT ROI. For the LoB VP trying to build new product lines around service offerings, both service and asset management and the ability to grow revenues is strengthened. More importantly, successful project implementation builds trust across domains that once only represented isolated silos of technology. This trust fuels cooperation and extended innovation.