Article 4 IT Physician Heal Thyself Building Bridges and Breaking Boundaries

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Article 4 – IT Physician Heal Thyself

‘Building Bridges and Breaking Boundaries

‘End to End Service Management’

A Case Study

By John Gibert – Southcourt

This is the fourth in a series of six articles that are due to appear in SERVICEtalk, Computing and its sister papers through Europe. They support the theme of this year’s UK itSMF conference on building bridges and breaking boundaries. They are also part of the bITa programme to improve the alignment of Business and IT.

Summary of the Previous Articles

Previous articles have introduced the idea of a Unifying Process Framework that aligns the domains and frameworks across IT and into the business.

The articles considered some key IT Management Domains:

1. IT Service Management 2. IT Project Management 3. IT Applications Management 4. IT Infrastructure Management 5. IT Strategy & Architecture..

Each of these domains have their own frameworks ITIL, MOP, PRINCE2, ASL, BSD/SSADM, RUP, DSDM, ISPL, IS-7799, COBIT and Catalyst POLDAT, that were developed separately and in parallel by different groups with different outlooks. They were not designed to align with one another and so they don’t!

The Unified Process Framework (UPF) The articles introduced the Unified Process Framework (UPF) which has been developed to be a ‘Framework of Frameworks’, into which all the best practices within the individual frameworks can be assembled so that processes are truly ‘end to end’.

The UPF is a process unifying framework that aligns not only the domains within IT, but also aligns IT with the business.

The UPF is made up of four dimensions and the last article explained the two dimensions of the core UPF processes that interact with one another.

- The ‘Governance Framework and Domains’ that

operates in the Vertical Dimension, the development of which was influenced by the control framework of COBIT.

- The Value Chain Framework and Domains’ that

operates in the Horizontal Dimension, the development of which was based upon Michael Porter’s Value Chain.

Figure 1 provides an overall picture of the UPF.

The Unified Process Framework (UPF)

The Purpose of this Article

The purpose if this, the fourth article, is to provide a worked example of how an IT service is developed and operated as part of a business development programme. The example takes an IT Service: from concept as an IT Service, in the Strategy and Architecture domain; through development, as part of a Business Development Programme domain; into day to day operation and support in IT Service Delivery domain. The article shows how the UPF model works across the Business and IT Governance domains. The case study shows how the Governance Framework and the Value Chain Framework of UPF align IT and the business through the life cycle of business and IT Services – ‘End to End’.

The Case Study

The case study is based upon the practices of a utility company that had a business development directorate who were responsible for driving strategic change. Wee will call them Ajax.

The case study deals with the provision of internet billing and payment services to millions of customers. This was part of a programme of business service development that was significantly enabled by IT, but which also involved significant business process development and organisational change, as well as heavy marketing and selling.

The case study shows how IT Service Management was at the heart of the process of developing as well as delivering a business solution, with service management influencing strategy, architectures and projects to deliver service focused solutions.

The case study shows how a new set of IT services were developed and delivered as part of a business programme to improve the way the business provided services to its customers.

The new services involved the delivery of bills and the processing of payments over the internet. This capability was delivered through the IBAP project (Internet Billing and Payments) which was part of an 18 month programme to rationalise the customer interface as part of a revamp of the Customer Relationship Management, all under a Programme badged ‘CRM2’.

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Ajax’s Original CRM Programme

Customer Relationship Management had been implemented by Ajax in the late 1990s through the original CRM programme. CRM brought together call centre, billing centre and sales centre interfaces with customers.

The original CRM programme was delivered before UPF existed. Whilst the CRM programme had produced a solution, there were many shortcomings in the way CRM worked for the company and the overall development and operational costs - the total ownership costs were 70% higher than they thought necessary.

These shortcomings included:

• Marketing problems because of the slower than expected delivery of the IT solution

• Business process problems because the solution was not inline with the required business processes

• Lack of reliability and flexibility because the solution and IT infrastructure were not highly serviceable

• High cost of business staffing because of staff intensive processes and systems usability problems

• High IT ownership costs because of poor serviceability and costly IT infrastructure

To address these shortcomings, Ajax made a significant investment in a follow-up programme CRM2, to sort out the issues and reduce the total business operational costs and to be at the forefront of market trends.

The Creation of Ajax’s UPF

Between the original CRM programme and its follow up CRM2, Ajax executive had instigated a review of the governance structure covering the way the business organised business development, the way that the executive steered the business, along with the way business processes were designed and the way that IT delivered ‘Service driven’ solutions.

They had decided to appoint a Chief Business Process Officer’ CBPO to operate alongside the CIO, in a board advisory position.

The board looked to the CBPO to provide a top down structure to business process. One of the first tasks of the CBPO’s appointment was to lead the top down definition of business governance through the formalisation of the Unified Process Framework and to establish business wide commitment to its use it. The appointment of a CBPO was the key to the turnaround of business and IT management practices at Ajax. No longer was business process buried in ‘bottom up quality initiatives’ . With UPF, Business process was highly visible. It was driven by the executive: ‘Top Down from the boardroom’.

Ajax had been using the Balanced Score Card to develop, steer and communicated their business strategy.

They had adapted the Balanced Score Card to give full recognition to the core dimensions of UPF.

Governance was one of the four dimensions.

Ajax’s UPF Driven

Ajax’s UPF Driven --Balanced Score CardBalanced Score Card

Ob jec tives Me asure s Target s Init iati ves Ob jec tives Me asures Target s Init iati ves Objec tives Me asure s Target s Init iati ves Objec tives Me asu res Targ ets Init iati ves Customer Outcomes Capabilities Finance Governance Vision & Strategy

‘To achieve our vision, for best practice to govern the direction development and delivery of the enterprise’

‘To achieve our vision, how to develop and use our capabilities to best effect’ ‘To achieve our

vision, to satisfy the needs of our customers by the provision of excellent

products and services’

‘To achieve our vision, of short and long term growth in profits

and assets for the benefits of shareholders

Figure 2

The other three Balanced Score Card dimensions reflected the value chains of ‘Customer Outcomes’, ‘Capabilities’ (which included suppliers and partners and the ‘Finance’ value chain.

Ajax’s approach to UPF also incorporated both 6 Sigma and EFQM which were used in a more bottom up manner for tactical quality improvement initiatives to improve people, process and technology.

The Ajax Executive Governance Framework UPF provided the Governance Framework for implementing the Balance Score Card for top down direction and for incorporating 6 sigma and EFQM for bottom up improvement.

The following diagram summarises how the Governance Framework worked.

Ajax’s UPF Executive Governance Framework

Direct Develop Deliver Direct Develop Deliver

O p e ra ti o na l De li v e ry M a na g e m e nt O p e ra ti o na l D e li v e ry Ma na g e me nt O p e ra ti o na l S u p p o rt Ma na g e m e nt O p e ra ti o n a l S u pp ort M a n a ge m e n t R e le a s e & Read in es s Man a g e m e n t Re lease & R e a d in e s s Ma n a g e m e n t P o rtfol io & P roj e c t M a n a ge m e n t P o rtfol io & P roj e c t M a n a gem e n t Bu s in e ss D e v e lo p m en t P lan M a n a g e m e n t Bu s in e ss D evel o p m en t P lan M a n a g e m e n t Bus ine s s O p e ra ti o na l P la n Ma na g e me nt Bu s in e ss O p er ati o n a l P la n M a n a g e m e n t S tra te gy M a n a ge m e n t S tr a te gy M a n a ge m e n t Arc h it e c tu re Ma na g e me nt A rc h it e c tu re Ma na g e me nt Bus ine s s P la n Ma na g e m e nt B u s ine s s P la n M a na g e me nt Core Core 1 2 3 Value Chain Governance Framework 4 5 Figure 3 Figure 3

Explaining the diagram above, UPF provided:

1. ‘Executive Governance’ with clear processes supporting management accountabilities covering Business Direction, linking Strategy through Architecture to Business Planning and Control.

C:\data\bITa\documentation\gibert\Computing & Service Talk 4.doc Copyright Southcourt 2003

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2. ‘Management Governance’ with clear linkage from Business Direction Planning to:

• Business Development Planning for the development activities resources and costs and • Business Delivery Planning for the resulting

operational activities, resources and costs. 3. ‘Business Direction’ providing the architectural

framework for ‘Business Development’ to align the Value Chain components of the business, namely its current and planned: Markets, Customers, Products, Services, Processes, People/ Organisation, Technologies and Suppliers. This provided the overall design authority/ blueprint for Portfolio, Programme and Project Management for them to deliver the revised architectures in a synchronised multi disciplinary manner across the value chains.

4. Clear definition of the business Value Chains with the value chain layers identified with clear life cycles and management accountabilities defined for the life span of the affected business value chain components.

5. A managed interface between Development and Delivery using Readiness & Release processes to manage entry and exit quality gates across the project stages for each of the value chains and their components within the multi-disciplinary projects.

The diagram below shows the Value Chain domains, as they applied to the to the CRM2 programme and the IBAP project, along with how they were linked together by Architecture Governance. Southcourt Ltd Copyright 2003 Business Business Internal Internal Chain Chain Finance Chain Finance Chain Outcome Outcome Chain Chain

External Chain

Market & Customer Management Market & Customer Management Product & Service Management Product & Service Management

Business Organisation Management Business Organisation Management Business Process Management Business Process Management

Business Infrastructure Management Business Infrastructure Management Business Information Management Business Information Management

Supplier Management Supplier Management Finance Management Finance Management Core Core

Ajax’s UPF Value Chain

Ajax’s UPF Value Chain linked by Architecture Governance linked by Architecture Governance

Application Management Application Management IT Infrastructure Management IT Infrastructure Management IT IT Value Value Chain Chain IT Service Management IT Service Management Arc h it e c tu re Ma na g e me nt A rc h it e c tu re Ma na g e me nt Figure 4 Figure 4

The CRM2 programme was very different from the original CRM programme because it used a unified management framework.

Strategy & Architecture Governance

The executive of Ajax recognised that they needed to provide web based services to their large consumer base. The customers needed to be able to do everything via the web.

CRM2 was likely to reduce significantly the workload of its call centres, billing centres and sales centres, provide customers with speed and flexibility and save significant costs.

This had been part of their Balanced Score Card Vision plan for a number of years. IT was the enabler but the executive had the vision.

As with all Strategic Programmes, the ‘Business Development’ function lead market and related research into all aspects of the business and what was going on in the industry. Included in the research were trends in the use and take up of IT, and at this point in time, the adoption of ‘web services’.

The Business Development function were also proactive in investigating potential scenarios and solutions. This strategic research involved experts from each of the business and IT value chains.

Business Development used ‘Architecture Governance’ to join together the analysts performing the analysis of the value chains, so providing an integrated architecture model that drove the CRM2 change programme.

The diagram below illustrates the business and IT components of the model with their relationships. The Architecture Governance model was maintained on a database supporting current and future scenario baselines. Southcourt Ltd Copyright 2003 Business Business Processes Processes IT IT Functions Functions IT IT Applications Applications IT IT Infrastructure Infrastructure Business Business Organisation Organisation Units Units Business Business Locations Locations Business Business Job Roles Job Roles Business Business Products/ Products/ Services Services IT IT Services Services IT IT Products Products IT IT Products Products IT IT Organisational Organisational Units Units Business Business Markets Markets Architecture Governance Architecture Governance Linking Business and IT Components Linking Business and IT Components

Business Business Customer Customer Types Types Business Business Information Information Figure 5 Figure 5

Business Development used the architecture model to identify existing solutions where they existed regarding all the value chains.

• It did not want to develop if it could buy.

• It did not want to invent if it could acquire and improve.

Consequentially it considered buying in everything and anything that made sense including guidance on the services offered to customers, the internal processes operated, the IT services needed, the IT application systems, the appropriate IT infrastructure, all along with the selection of strategic partners for the provision of guidance, products and services.

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For IBAP, the IT value chains were a critical part of the business value chains.

Business Development Governance

The purpose of the IBAP project was to deliver business and IT services that involved the parallel development and involvement of all the dependent value chains. This was a truly ‘multi-disciplinary’ approach, or as it was called a ‘multi-value chain’ approach which was managed by Portfolio, Programme and Project Governance, as illustrated in the following diagram.

External Chain

Ajax’s UPF Value Chain linked by Portfolio and Project Governance linked by Portfolio and Project Governance

Application Management Application Management IT Infrastructure Management IT Infrastructure Management IT Value Chain IT Service Management IT Service Management P o rtfol io & P roj e c t M a n a ge m e n t P o rtfol io & P roj e c t M a n a g e m e n t Figure 6 Figure 6

The IBAP project took the CRM2 programme’s Architecture and involved all the allocated value chain business and IT experts to plan the project.

The strategy work had already identified potential solutions to different parts of the value chain. These were investigated in further detail and confirmed or revised in the first stage of the project.

This first stage involved:

1. The Business Service Requirements had been identified by investigating other companies approach to web billing and payment. The business service requirements identified the services needed to be provided by Ajax and created Ajax’s ‘Billing and Payment Service Catalogue’.

2. The IT Service Requirements were identified in parallel from the same investigation process identifying the IT Services that were needed to be provided and created an ‘IT Billing and Service Catalogue which defined what functionality and service was needed from IT. This was very different from the pure functional approach which provides a ‘Functional Catalogue’ because it focused on the ‘Resulting Services’

3. The Business Process and Organisational Requirements - Ajax had a Chief Business Process Officer who reported alongside the CIO to the board. He directed a specialist Business Process Management team who were responsible for the development of ‘top down’ and ‘end to end’ processes. It was their responsibility to determine the business processes that were needed to support the highly automated business service.

They acquired a Web Billing and Payment process solution from web process consultancy. This provided the process model for web billing and payment. It also provided the organisational model and an indication of staff roles and staffing levels. 4. Information, Applications and Systems

Integration Requirements - The IT The web process consultancy were able to advise on the sources of IT application solutions. The IT systems analysts were able to follow up and verify them. They used the current information and application architectures to identify the changes needed to be made to existing applications for the required system integration.

5. IT Infrastructure Requirements – Once the application solution had been selected it was a matter or ensuring that the Application and the IT infrastructure could be developed to meet the business service requirements for availability, performance, security, operability, supportability, continuity and recoverability.

6. Business Organisation and Infrastructure Requirements – In the same way that IT needed to meet service delivery requirements so did the business organisation and infrastructure, and so the availability, performance, security, supportability, continuity aspects of the business organisation, its locations and the office infrastructure was determined.

Alignment using the Business Calendar The working of the first stage is illustrated in the following diagram which lays out the Governance Framework, from business and IT strategy to business and IT service delivery aligning the Value Chain Domains.

It illustrates how the Governance framework is executed over time – laid on top of the business’s fiscal calendar.

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2002 2003

Business Plan Management Strategy Management Architecture Management

Portfolio Management CRM2 Programme Management

IBAP Project Management

Market Management

Application Management Infrastructure Management

Business Calendar Alignment of UPF Governance and Value Chain

For the IBAP Project within the CRM2 Programme

Business Process Management

IT Service Management Readiness & Release Mngment.

IBAP Project Stage Mngment.

Business People Management

1 2 3 4 5

IBAP Stage 1

Figure 7

Figure 7 The Governance Chain

The Value Chain

Readiness and Release Governance

The diagram illustrates how the various stages of the project are progressed and controlled by the Readiness and Release Governance process.

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Change inevitably leads to problems and to potential loss of service to customers. A stable business without change experiences few problems.

The whole of the development process creates change, - a large amount of change to services and to the people, process and technology capabilities that deliver those services.

Ajax knew that requirements that are not understood at the beginning of projects are difficult and expensive to add later.

As a consequence an important aspect of Governance to Ajax within the Develop governance framework, was ‘Readiness and Release’ Management.

Readiness and Release Management is exercised during project development at project stage boundaries in the form of quality gates to ensure that projects are: • Going to ‘Release’ a complete and manageable

solution, one that met all the value chain requirements listed previously.

• Going to make ‘Ready’ all parts of Business and IT Delivery, ensuring the necessary resources, skills, tools and processes to deliver and support the new services are going to be in place.

Formal testing took place at each of the project stage boundaries to ensure that the solution was likely to be complete and that the organisation was being prepared to be ready to operate and support the solution

Value Chain Policies and Guidelines

Each of the value chains provided policies, guidelines and standards in line with the current business and IT strategy. These complimented the requirements. This enabled projects to know what was expected of them. Projects could then be effective in delivering what the value chains needed, for the value chains to operate and support in the final area of the Governance Framework – Delivery.

For Ajax, the policies, guidelines and standards were under quarterly review under Strategy Governance to ensure they supported the current ‘Overall Business Strategy’ and reflected their current ‘Value Chain Strategy’. Southcourt Ltd Copyright 2003 Business Business Value Value Chain Chain

Finance Value Chain Finance Value Chain

Outcome Outcome Value Chain Value Chain

Direct Develop Deliver

External Value Chain External Value Chain

Ajax’s UPF Value Chain Polices Steer Projects and enable Readiness & Release Polices Steer Projects and enable Readiness & Release

Application Management Application Management IT Infrastructure Management IT Infrastructure Management IT Value Chain IT Service Management IT Service Management Arc h it e c tu re Ma na g e me nt A rc h it e c tu re Ma na g e m e nt P o rtfol io & P roj e c t M a n a ge m e n t P o rtfol io & P roj e c t M a n a g e m e n t R e a d in es s & Rel e as e Ma n a g e m e n t R e a d in es s & R e le ase M a n a g e m e n t Op e ra tio n a l D e livery M a n a g e m e n t Op er at io n a l D e li v e ry Man a g e m e n t

1. Strategic Policies 2. Assurance of Policy Adherence

Figure 8

The diagram above illustrates the linkages of policies: 1. From ‘Strategy’ in delivering policies to

‘Development Projects’.

2. From ‘Readiness and Release’ to control the delivery from ‘Projects’ into Delivery’.

The outcome for the IBAP project from a ‘Business Customer Service’ viewpoint, was that the business services provided what the customers were looking for. Marketing and Sales were successful and the business reached its target customer volumes.

The business processes ran smoothly, people were well organised and accepted the change in working practices.

The technology worked well for the staff as well as for Ajax’s customers who used many of the IT services directly.

The business ran at the planned low cost of operation and delivery management were happy to operate with the revised manner.

Delivery Governance

The outcome for the IBAP project from an ‘IT Service’ viewpoint, was that the IT services delivered what the business needed – a smooth transition from ‘Development’ into ‘Delivery’.

The IT Services provided effective application functionality, excellent performance, the required availability and continuity provisions, effective security, high level of operational automation and system management automation, easy support and maintenance of mostly standard IT infrastructure, all resulting in low cost of operation and ownership and happy IT management and relaxed IT staff.

With the implementation of the programme there were the operational budgets and resources to operate the revised business for a projected three year period based upon a demand and capacity plan. The UPF framework made sure that the effect of business development plans were reflected in the business operational plans budgets and resources.

All outstanding development issues and less desirable features of the solution were documented and made visible to the service delivery functions – so the help desk were able to comment on ‘Known Issues’ and ‘Known Features’ with advice documented in the projects as to how to use or workaround them. They did not have to treat them as incidents and waste time investigating what was already known in the development world.

All business components developed or changed by the projects were delivered into the business wide CMDB so that business information on its products, customer services, business processes, business functions and business locations were as visible as the IT components of IT services, IT applications, IT infrastructure, data flows and databases.

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More importantly was the outcome for the IBAP project from an overall business viewpoint. There was a smooth transition into delivery of the new business services and capabilities with effective marketing that ensured significant adoption of the new web enables services by customers. Business processes and organisation were optimised to reduce costs of the call, billing and sales centres which were able to scale down. The CRM2 programme had an effective first project with IBAP. UPF had provided the Governance Framework needed for ‘Direction’ and ‘Development’ to ensure smooth ‘Delivery’.

The Way Forward

The fifth article will examine the Support and Enabling Domains. These will reveal how the common processes that underlie what people do in the Core Domains are shared across the Core Domains and provide a common ‘support’ approach to running the enterprise. The sixth article will show how IT can move forward from being individual domain/ framework driven and how IT can improve, in a very pragmatic manner the interfaces between its existing frameworks like ITIL and PRINCE2, to integrate them practically into one Business – IT aligned ‘Unified Process Framework’.

For more information on the itSMF and its UK November 2003 conference, contact

service@itsmf.com

For more information on bITa and their alignment programme and planned seminars on this subject, in

Q4 2003 across the UK contact

support@bita-center.com or look up their web site

www.bita-center.com

For more information on UPF, UPF Master Classes and the UPF Handbook, contact the author of this

article J.Gibert@btopenworld.com

Copyright Statement

Please note these articles are the copyright of Southcourt Ltd. Companies are licensed to copy and use them as long as they acknowledge Southcourt as the copyright holders and reproduce this license to copy and use in any documentation they produce.