ITSM
IT Transforms Itself into a Service
August 2007
Executive Summary
This report is a roadmap for IT organizations that desire to shift from a focus on technology and internal needs to how it services end users in support of the business mission through the use of IT Service Management (ITSM). Aberdeen’s research finds that Best-in-Class organizations are leveraging multiple capabilities and technology enablers to develop strategic ITSM solutions. The findings are drawn from a survey of almost 300 organizations.
Best-in-Class Performance
“My advice to clients is to move towards becoming a
“value-centered” organization - towards measuring and optimizing the business value provided by IT. This provides better focus on managing IT to provide improved service to users, since the business benefit is generally created by business users, not the organization itself.”
~ Robin Shiffman, National Practice Manager, Commander Australia Limited Aberdeen used three key performance criteria to distinguish Best-in-Class
companies from all other organizations. These Key Performance Indicators (KPIs) are some of the operational metrics that are frequently considered part of an effective ITSM solution:
• Best-in-Class companies achieve 86% of their Service Level Agreement (SLA) goals – 139% better than all others
• Best-in-Class companies have 85% of their IT services delivered on time – approximately 20% better than the Industry Average
• Best-in-Class companies experience 83% efficiency for IT processes – 112% better than all others
Competitive Maturity Assessment
Survey results show that Best-in-Class organizations shared several common characteristics:
• They are 74% more likely than Laggards to have asset management and technology refresh plans in place
• They are 61% more likely than all others to have a cross- functional team to steer IT policy
• They are 58% more likely than Laggards to have a framework to guide IT service delivery and improvement
Required Actions
In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, organizations must:
• Implement an IT Infrastructure Library (ITIL) framework
• Look to experienced IT service providers
• Utilize creative SLA agreements and policies
Table of Contents
Executive Summary...2
Best-in-Class Performance... 2
Competitive Maturity Assessment... 2
Required Actions ... 2
Chapter One: Benchmarking the Best-in-Class ...5
IT Service Management: Aberdeen Analysis ... 5
What is IT Service Management?... 5
What is the IT Infrastructure Library?... 6
Maturity Class Framework ... 7
Best-in-Class PACE Model... 7
Chapter Two: Benchmarking Requirements for Success ...10
Competitive Assessment...11
Organizational Capabilities and Technology Enablers ...13
Process...13
Organization ...13
Knowledge ...14
Performance ...15
Chapter Three: Required Actions ...17
Laggard Steps to Success...17
Industry Average Steps to Success...18
Best-in-Class Steps to Success...18
Appendix A: Research Methodology...20
Appendix B: Related Aberdeen Research...22
Figures
Figure 1: Top Pressures for IT Service Management...5Figure 2: Understanding of ITSM...6
Figure 3: Top Five Strategic Actions to ITSM Pressures ...9
Figure 4: Current Cost Savings from ITSM Implementations...11
Figure 5: Cost Savings from Last Year ...13
Figure 6: Percentage Improvements of SLA Goals Met from Last Year...14
Figure 7: Improvements in IT Service Delivery Times from Last Year...14
Figure 8: Improvements in Application and Network Uptime from Last Year ...15
Figure 9: Increases in End-User Satisfaction from Last Year ...15
Tables
Table 1: Companies With Top Performance Earn Best-in-Class Status...7Table 2: Best-in-Class PACE Framework...8
Table 3: The Competitive Framework...12
Table 4: PACE Framework Key...21 Table 5: Competitive Framework Key...21 Table 6: Relationship Between PACE and Competitive Framework...21
Chapter One:
Benchmarking the Best-in-Class
IT Service Management: Aberdeen Analysis
Fast Facts
√ 38% of Best-in-Class are currently using Business Process Management (BPM) software as an ITSM solution vs. 9% of Laggards
√ Best-in-Class companies are twice as likely to use hosted / ASP / SaaS models than Laggards
√ 28% of Best-in-Class dedicate more than 20% of their overall IT budget to ITSM vs. 10% of Laggards Amid the pressures businesses face to stay competitive in a global economy,
today’s information technology organization must adequately service the provisioning of critical technological functionality – especially in key areas such as application and network access – as if it were a self-supporting business. This is prompting the transformation of the IT organization from one historically focused on technical knowledge to one focused on providing technology to the rest of the business. Due in part to outsourcing and the arrival of Service-Oriented Architecture (SOA) and Software as a Service (SaaS), IT now has to manage a mélange of services that are both internal and external to the company. Given these pressures and a focus on delivery performance, how does IT drive business value for the organization?
Figure 1: Top Pressures for IT Service Management
54%
36% 32%
20% 18%
0%
10%
20%
30%
40%
50%
60%
Customer Expectations
Cost of maintaining IT infrastructure
Business continuity
Competition Cost of deploying IT
resources All Respondents
Source: Aberdeen Group, August 2007
What is IT Service Management?
IT Service Management (ITSM) is a process-based practice intended to align the delivery of IT services with needs of the enterprise, while highlighting benefits to customers both internal and external. It combines proven methods such as process management and known industry best practices in the area of ITSM, to enable any organization to deliver quality IT services that satisfy customer business needs and achieve performance targets specified within SLAs. ITSM is about disaggregating IT, which traditionally was focused on managing IT as individual silos, to that of individual components focused on the delivery of end-to-end services using best practice process models. ITSM attempts to put the customer relationship first, by replacing the emphasis on an IT centered mindset to a customer service one.
ITSM came into existence in the large-scale mainframe computer world decades ago. The structure and key elements of ITSM, however, are applicable in both centralized and decentralized environments found in IT today. In addition, where mainframe services are typically stand-alone and technology-based, ITSM provides for integrated services that are process based with a focus on satisfying business requirements. In addition, ITSM is also associated with IT Infrastructure Library (ITIL). ITSM is one of the disciplines of ITIL, but they are not exclusively synonymous. ITSM employs ITIL documented best practices and in most cases, extends into additional areas such as enhanced processes and implementation to provide additional value-added functionality. At present, ITSM methods have evolved to include specific ways to enable and optimize assessment, planning and implementation of ITIL best practices.
Figure 2: Understanding of ITSM
3%
10%
25%
1%
32%
49%
37%
23%
3%
16%
0%
10%
20%
30%
40%
50%
60%
Very Low Low Med High Very High Company's Understanding
Respondent's Understanding
“Our focus on ITIL has enabled our IT organization to talk the same talk as the business.
These best practice
frameworks have enabled our team to increase end-user satisfaction and improve our SLAs to name a few.”
~ VP of Service Delivery
Source: Aberdeen Group, August 2007
What is the IT Infrastructure Library?
Fast Fact
√ 54% of Best-in-Class are currently using ITIL as an ITSM solution vs. 46% of Industry Average and 28%
of Laggards ITIL is a customizable framework of best practices that promote quality
computing services in the IT sector as a service methodology. These best practices form the foundation on which any organization can either design and/or adopt a methodology to meet its own specific needs. ITIL addresses the organizational structure and skill requirements for an IT organization by presenting a comprehensive set of management procedures with which an organization can manage its IT operations.
With the rollout of a third version of ITIL, there has been a shift in focus from an emphasis on the alignment of IT and the business, to the management of the lifecycle of the services IT provides and the importance of creating business value, rather than just the execution of processes.
Maturity Class Framework
Aberdeen used three key performance criteria to distinguish Best-in-Class companies from Industry Average and Laggard organizations. These KPIs are the operational metrics frequently considered to be the key benefits to an effective ITSM solution: (1) the percentage of SLA goals met; (2) the improved delivery times of IT services; and (3) the increased efficiency of IT processes. Table 1 summarizes these findings and defines Best-in-Class performance for this study.
Table 1: Companies With Top Performance Earn Best-in-Class Status
Definition of
Maturity Class Mean Class Performance Best-in-Class:
Top 20% of aggregate performance scorers
• On average, achieve 86% of their SLA goals
• On average, have 85% of their IT services delivered on time
• On average, experience 83% efficiency of IT processes
Industry Average:
Middle 50% of aggregate performance scorers
• On average, achieve 53% of their SLA goals
• On average, have 70% of their IT services delivered on time
• On average, experience 53% efficiency of IT processes
Laggard:
Bottom 30% of aggregate performance scorers
• On average, achieve 10% of their SLA goals
• On average, have 22% of their IT services delivered on time
• On average, experience 18% efficiency of IT processes
Source: Aberdeen Group, August 2007
Best-in-Class PACE Model
Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows:
Pressures — the external forces that impact an organization. These forces can be economic, strategic, regulatory, or competitive.
Actions — the strategic approaches that an organization takes in response to these pressures.
Capabilities — the business process competencies an organization must have in order to take action.
Enablers — the technology solutions required to support the organization’s enabling business practices and to carry out the actions.
Using ITSM solutions to achieve Best-in-Class performance requires a combination of strategic actions, organizational capabilities, and enabling technologies. Table 2 identifies the top pressures, actions, capabilities, and technology enablers that enterprises are using to help IT drive value across the company.
Table 2: Best-in-Class PACE Framework
Pressures Actions Capabilities Enablers
• Meet quality of customer service expectations from internal and external users
• Improve process alignment between IT and the business units
• Adopt / modify / enforce SLAs
• Ability to measure application and network uptime
• Cross-
disciplinary team that helps steer IT strategy and policies
• Internal
collaboration on service delivery standards
• Hosted / ASP / SaaS models
• IT asset management software
• SLA management software
• ITIL
• IT service catalog
• Software that provides a dashboard view
Source: Aberdeen Group, August 2007
Fast Fact
√ 53% of Best-in-Class are currently using ITIL as an ITSM solution vs. 44% of Industry Average and vs.
28% of Laggards.
The Best-in-Class actions in Table 2 show that top performing organizations are using a variety of technology enablers to solve their IT service management problems. Table 2 identifies the top pressure as the need to meet the quality of customer service expectations from internal and external users – cited by 54% of survey respondents. The top two strategic actions to combat this pressure are to improve process alignment between IT and the business units and to adopt, modify, and enforce SLAs within the organization. Figure 3 shows how organizations are strategically approaching the challenges identified in Figure 1.
Figure 3: Top Five Strategic Actions to ITSM Pressures
19%
21%
55%
63%
86%
0% 20% 40% 60% 80% 100%
Hire IT staff Outsource IT infrastructure Adopt internal compliance policies Adopt / modify / enforce SLAs Improve process alignment betw een
IT and the business units
All Respondents
Source: Aberdeen Group, August 2007
Aberdeen Insights – Strategy
Companies can gain visibility into their business processes using SLA management tools to more effectively adopt, modify, and enforce their SLAs to move towards increased efficiency of IT processes, increased percentages of SLA goals achieved, and improvements in IT service delivery times.
What the top strategic action implies is that companies need to look to adopting an ITIL framework (perhaps ITIL version 2) to help improve process alignment between IT and the business units. Once an organization has this in place, they can look to manage the lifecycle of IT services rather than just execute them. IT organizations can then conduct ITSM audits to measure KPIs to look at growth and value, budget adherence, risk impact, and communication effectiveness. An ITSM audit allows executives and IT management to determine the status of various processes and identify potential problem areas.
In the next chapter, we will see what the top performers are doing to drive business value across the enterprise.
Chapter Two:
Benchmarking Requirements for Success
The selection of an ITSM solution, and its subsequent integration with business intelligence and business process management systems plays a crucial role in the ability to turn these strategies into profit.
Fast Facts
√ 50% of Best-in-Class enterprises identify their organizations as a profit center vs. 71% of Laggards who identify as a cost center
√ 66% of Best-in-Class enterprises are looking for ease of use in the implementation of an ITSM solution
Case Study: Achieving Cost-savings Through a Smart Investment in Effective IT Asset Management
Take the example of a Norwich Union (NU), the largest insurer in the United Kingdom and part of Aviva, the world’s fifth largest insurance group.
NU implemented a fully-integrated asset management solution to facilitate cradle-to-grave management of the organization’s extensive IT asset portfolio. Its distributed assets include some 45,000 desktops, laptops, and more than 4,000 Intel servers.
The project involved an extensive review and roll-out of updated processes and procedures. They also invested in a highly configurable, out-of-the-box asset management solution that integrates all ITIL processes with a single, underlying configuration management database (CMDB). This not only gave NU a simple registry of its physical assets but it also provided them with an accurate inventory of IT resources and the relationships between them.
The technology allowed Norwich Union to track asset depreciation and warranty replacement for forecasting, feeds for unity charge-back, feeds to the group’s IT fixed-asset register and base data to support software entitlement, and an ITIL-aligned configuration management service.
One of the most significant benefits NU achieved was increased asset visibility, which is especially valuable in tracking the dynamics of the changing estate and providing support for audits. In addition, the information stored in the CMDB helps NU identify assets suitable for disposal when they fall below the standards defined for economical and technological use.
With stock levels more closely aligned to industry standards, Norwich Union was able to expand its in-house services to include base building of desktop and laptops – a task that was previously carried out externally.
“Through the implementation of this particular asset management solution, we experienced a seven figure sum in cost-savings,” said Richard Oliver, IT Change and Configuration Manager at NU.
Best-in-Class organizations currently experience a higher return on investment (ROI) in ITSM strategies and technology enablers than Industry Average and Laggards (Figure 4).
Figure 4: Current Cost Savings from ITSM Implementations
“We completely revamped our IT service delivery capabilities by using a new service model and technical platform. These capabilities are focused on a dashboard-based, customer- centric SLA, and requirements for increased visibility and control, versus a traditional technical focus. This approach has enabled us to lower our technical SG&A costs and increase customer satisfaction by delivering high value
technical resources and skills to efficiently meet peak levels of service demand from our top clients.”
~ Vice President of Finance
Cost-savings 63%
30%
14%
0%
10%
20%
30%
40%
50%
60%
70%
Best-in-Class Industry Average
Laggard
Source: Aberdeen Group, August 2007
Competitive Assessment
The aggregated performance of surveyed companies determined whether they ranked as Best-in-Class, Industry Average, or Laggard.
In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the ability of the organization to adapt to changing conditions with no additional burden on the organization); (2) organization (internal focus and collaboration among key stakeholders in an organization); (3) knowledge management (contextualizing data and exposing it to key stakeholders); (4) technology (selection or appropriate tools and intelligent deployment of those tools);
and (5) performance measurement (the ability of the organization to measure the benefits of technology deployment and use the results to further improve key processes).
These characteristics (identified in the Table 3) serve as a guideline for best practices and correlate directly with Best-in-Class performance across the key metrics.
Table 3: The Competitive Framework
Best-in-Class Average Laggards Asset management plans / technology refresh plans Process
68% 46% 39%
Cross-functional team to help steer IT strategy and policy
81% 62% 33%
Internal collaboration on service delivery standards Organization
79% 54% 30%
Framework to guide IT service delivery and improvement Knowledge
75% 51% 29%
Technology investment strategies:
Technology
• 48% software that provides a dashboard view of IT service
Source: Aberdeen Group, August 2007
• 34% service- oriented architecture
• 38% Business Process Management (BPM)
• 41% Business Process Outsourcing (BPO)
• 54% ITIL
• 72% IT asset management tools
• 58% migration planning tools
• 70% SLA management tools
• 46% IT service catalog
• 95% hosted / ASP / SaaS
• 84% version control
• 32% software that provides a dashboard view of IT service
• 19% service- oriented architecture
• 23% Business Process Management (BPM)
• 15% Business Process Outsourcing (BPO)
• 46% ITIL
• 56% IT asset management tools
• 35% migration planning tools
• 40% SLA management tools
• 33% IT service catalog
• 55% hosted / ASP / SaaS
• 62% version control
• 10% software that provides a dashboard view of IT service
• 9% service- oriented architecture
• 9% Business Process Management (BPM)
• 11% Business Process Outsourcing (BPO)
• 28% ITIL
• 29% IT asset management tools
• 19% migration planning tools
• 16% SLA management tools
• 21% IT service catalog
• 47% hosted / ASP / SaaS
• 39% version control Ability to measure end-user satisfaction
48% 14%
70%
Ability to measure service delivery standards against SLA provisions
Performance
67% 41% 15%
Organizational Capabilities and Technology Enablers
“The first and most important step to increase SLA goals met over time is to ensure that the IT group does not over- promise and under-deliver. The IT group must understand its capability to deliver and the best way to ensure this is to measure (through tools and processes) the capability of the IT organization. Once measures are in place and outputs come from them, the IT group can understand and take steps to improve.”
~Chris Howard, IT Director, State Revenue Office, Victoria, Australia The essential ingredients of a well-designed ITSM strategy include process,
organization, knowledge management, and technology enablers that, when combined, form a working solution that translates to more effective and profitable working conditions for an organization.
Process
Aberdeen research has found that 68% of Best-in-Class organizations have asset management / technology refresh plans in place to help improve ITSM performance. As a result, Best-in-Class companies have experienced an average cost-savings of 17% from last year compared to Laggards, who experienced an average cost savings of 8% from last year (Figure 5).
Figure 5: Cost Savings from Last Year
17%
9% 8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Best-in-Class Industry Average
Laggards
Source: Aberdeen Group, August 2007
Organization
Seventy-nine percent of Best-in-Class organizations have internal collaboration on service delivery standards within the organization. The use of cross-functional teams (CFTs), made up of contributors across and enterprise, is not new by any measure. Eighty-one percent of Best-in- Class companies have exploited their internal capabilities in this area by creating teams made of IT, service delivery, and business analysts who understand the specific domain to help in the creation and design of user and system requirements. Having a CFT in place has enabled Best-in-Class companies to increase the percentage of SLA goals met last year by 22%
compared to 8% for Laggards (Figure 6).
Figure 6: Percentage Improvements of SLA Goals Met
from Last Year “With good, simple processes
that are mediated with all parties involved and
communicated effectively, any service organization can continually review how processes are working. A complete post-mortem on all SLA "misses" is also essential.
There is so much valuable information in this, but so little investment. Once "it's fixed"
everyone simply goes on.”
~Judith L. Cacco, Senior Business Systems Analyst Senior Project Manager, XAVIENT Information Systems
22%
9% 8%
0%
5%
10%
15%
20%
25%
Best-in-Class Industry Average
Laggards
Source: Aberdeen Group, August 2007
Knowledge
Just as Best-in-Class organizations are more likely to have a cross-functional team in place, they are also more than twice as likely than Laggards to develop a framework to guide IT service delivery standards within the organization. Roughly 50% of Best-in-Class companies have capabilities and a service methodology that use the ITIL frameworks and Control Objectives for Information and related Technology (COBIT). COBIT is a framework for information security created by the Information Systems Audit and Control Association (ISACA) and the IT Governance Institute (ITGI). This internal knowledge and capability has enabled the Best-in-Class to properly measure their service performance. Best-in-Class companies have, on average, experienced a 12% increase in service delivery times from last year compared a 5% increase for Laggards (Figure 7).
Figure 7: Improvements in IT Service Delivery Times from Last Year
12%
7%
5%
0%
2%
4%
6%
8%
10%
12%
14%
Best-in-Class Industry Average
Laggards
“Actually, we have constructed all of our service lines to connect with business and be profit-centered. So all cost- centers have been eliminated and are either primary or secondary profit centers.”
~ Senior Business Analyst
Source: Aberdeen Group, August 2007
Technology
Fast Facts
√ 89% of Best-in-Class companies currently using BPO report they are strongly aligned on their operational excellence capabilities vs.
46% of the Industry Average
√ 67% of Best-in-Class that are currently using BPO report they are strongly aligned on their marketing awareness vs. 8% of Industry Average
√ The Best-in-Class companies currently using BPO are 2 times more likely than Industry Average to report strong alignment on IT governance
Best-in-Class organizations are looking for additional technology investment strategies to extend the value of ITSM across their organization. Nearly 4 times more Best-in-Class companies have a tool for SLA management than Laggards. In addition, 2 times more Best-in-Class companies use SaaS (hosted) solutions and 3 times more Best-in-Class use BPO compared to Laggards. As a result, Best-in-Class companies, on average, have improved application and network uptime by 17% from last year compared to Industry Average and Laggards that improved uptime by 9% (Figure 8).
Figure 8: Improvements in Application and Network Uptime from Last Year
17%
9% 9%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Best-in-Class Industry Average
Laggards
Source: Aberdeen Group, August 2007
Performance
Five times more Best-in-Class companies have capabilities in place that enable them to measure end-user satisfaction. In addition, 4 times more Best-in-Class companies have the ability to measure their service delivery standards against their SLA provisions. Due to these capabilities, Best-in- Class organizations were able to determine, on average, that end-user satisfaction increased by 14% from last year compared to Industry Average (8%) and Laggards (6%) (Figure 9).
Figure 9: Increases in End-User Satisfaction from Last Year
“Continue to clarify the expectations, deliverables, and manage according to those which eliminate the variables that can impact time.”
~CEO of Management Consulting Company
14%
8%
6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Best-in-Class Industry Average
Laggards
Source: Aberdeen Group, August 2007
Aberdeen Insights — Technology
When Aberdeen measured the top pressures for organizations, the data pointed to customer expectations, as well as the cost of maintaining the IT infrastructure. These are the true drivers behind Best-in-Class actions.
The Best-in-Class were able to lower the cost of maintaining and deploying IT by focusing their initiatives on SLA management, on-time delivery of services, unique service delivery models and technical platforms, as well as efficiency of IT processes. Aberdeen research also showed that Best-in- Class service organizations identified as profit-centers are dedicating more of their overall IT budgets to ITSM (more than 20%), while the majority of cost-centers are spending (less than 5%).
Chapter Three:
Required Actions
IT organizations are looking for an ITSM solution that delivers value across the organization. This is being driven by the need to fully align IT service delivery with the goals of the business as a whole and with the processes on which a business operates. Additional drivers include the need to improve the delivery and management of IT services throughout the organization, and to develop processes and procedures that act as a roadmap for the entire organization on how IT services are delivered.
Whether a company is trying to move its performance in the realm of ITSM from “Laggard” to “Industry Average,” or “Industry Average” to “Best-in- Class,” the following actions will help spur the necessary performance improvements:
Laggard Steps to Success
• Increase visibility into service delivery standards to align IT with business processes. Using asset management / technology refresh plans allows an organization to identify and understand the infrastructure assets of IT service delivery, assess how well these assets match the needs of internal and external service, and define priorities for upgrades, deployment, and utilization in the most cost- effective manner. Seventy-one percent of Laggards do not have IT asset management capabilities currently in place.
• Manage your SLAs. Best-in-Class companies are utilizing their SLAs to improve their IT service delivery through SLA management tools. Gaining control of this will provide greater efficiency of processes, leading to increased end-user satisfaction and higher percentages of SLA goals met. Eighty-four percent of Laggards do not have SLA management tools currently in place.
• Know how to measure performance. The ability to analyze, measure, and monitor the key benefits of an ITSM solution, and the ability to measure service delivery standards against SLA provisions, are areas where Laggards truly are lacking. Eighty-six percent of Laggards do not have the ability to measure end-user satisfaction and 85% do not have the ability to measure service delivery standards against SLA provisions.
• Implement an ITIL framework now. ITIL will enable IT to proficiently deliver quality IT services in a cost-effective manner by focusing IT employees on the many roles they play in delivering those services. Companies must start with incident and change management so they know what they are capturing and have the capability to measure it. With an ITIL framework then in place, IT organizations can use common terminology to effectively communicate the IT services they provide. The key benefit to an
organization to get the metrics they need to improve SLAs both internally and externally, increase the understanding of the organization's current IT capability, increase the flexibility and adaptability of services, enhance customer satisfaction, and improve the security, performance and availability of all IT services. Seventy- two percent of Laggards do not have an ITIL framework in place.
Industry Average Steps to Success
• Look to experienced IT service providers. Best-in-Class companies are three times as likely to look beyond traditional technology investment strategies (like help desk services and call ticketing systems) to more strategic and integrated ITSM solutions through IT service providers focusing on SaaS and BPO. Companies can avoid the expense and complexity of running their systems internally, while capitalizing on increased customer satisfaction and market awareness. SaaS solutions can tailor service management functions with customer needs and growth targets, offering a cost- effective software delivery method, on-demand. Ninety-five percent of Best-in-Class companies are using SaaS providers for service management. Industry Average companies that have identified autonomous and mature business processes should immediately consider experienced IT service providers for outsourcing non-core business activities. Companies looking to outsource must determine how security-intensive their organization and industry are and probe potential providers on their security practices to ensure the provider meets their security standards. Companies that outsourced to providers who focus on BPO achieved greater results due to the provider’s operational-excellence, focused competencies, deep domain experience, and focus on service quality.
• Utilize creative SLA agreements and policies. Industry Average companies must improve their ITSM delivery by utilizing creative service level agreements and policies. They need to continue to analyze, measure, and monitor service delivery in real- time across their IT service lifecycle to increase efficiency, increase SLA reaction time to improve customer satisfaction, and meet a higher degree of SLA goals. Sixty percent of Industry Average companies do not have SLA management tools currently in place.
Best-in-Class Steps to Success
• Continue to focus on transformation instead of installation.
Best-in-Class companies recognize that for an ITSM solution to work, they must approach ITSM implementations strategically.
These companies must keep their adoption of ITSM and ITIL frameworks as a business transformation, and recognize the higher level of benefits – and challenges – that such a transformation offers.
• Continue to optimize your environment around process, performance, and analytic tools. Business users in Best-in-Class organizations understand the wealth of information contained in the data flowing among their tools, and also understand that there are valuable insights contained in metadata about the workflow and data that can be mined and managed. Tools that combine process- oriented workflow automation and performance management, with integration of back-end data management, along with dashboard- based IT service provisioning and reporting systems, give companies an edge over their competitors that are still using more traditional, one-dimensional applications. Best-in-Class companies that focused on key tools early are now providing them with a sustainable, extendable path to business value.
Aberdeen Insights – Summary
Using tools, methodologies, frameworks, and processes alone doesn’t give you Best-in-Class status without a directional strategy for the business.
Putting ITSM practices and solutions into action requires more than just technology. For any solution to provide a business benefit, it must allow companies to change the way they do business so that they are more competitive, are able to reduce business risk, increase revenue, decrease cost, increase customer service capabilities, or in some other way recognize tangible business advantages. As past Aberdeen benchmarks have shown, ITSM provides significant bottom-line results. What is clear from this benchmark is that those companies that implement ITSM well are receiving more than their fair share of the benefits.
Although a 5% improvement in profit margins, and healthy a ROI is a tremendous boost to the bottom-line of most companies, more value can be gained from ITSM by:
• Developing a firm vision and strategy for ITSM that is tied to the business strategy;
• Adopting an ITSM program approach to implementing ITSM;
• Approaching the ITSM implementation as a business transformation as opposed to a technology installation; and
• Enabling the ITSM implementation with knowledge sharing and collaboration capabilities.
Appendix A:
Research Methodology
Between July and August 2007, Aberdeen Group examined the role of IT Service Management (ITSM) in driving value across an enterprise. Aberdeen considered the experiences and intentions of approximately 300 enterprises in a diverse set of IT enterprises.
Aberdeen supplemented this online survey effort with telephone interviews with select survey respondents, gathering additional information on ITSM strategies, experiences, and results.
The study aimed to identify emerging best practices for ITSM and provide a framework by which readers could assess their own management capabilities. Responding enterprises included the following:
• Job title/function: The research sample included respondents with the following job titles: Senior Management (31%), Manager (28%);
and Director (19%).
• Industry: The research sample included respondents exclusively from IT industries. High Technology / Software was the largest segment with 29% of the sample, followed by Computer Equipment and Peripherals (13%), and Telecommunications Services (12%).
• Geography: The majority of respondents (60%) were from North America. Remaining respondents were from Asia / Pacific (14%) and from Europe, Middle East, and Africa (EMEA) (26%).
• Company size: About 29% of respondents were from large enterprises (annual revenues from $1 billion - $5 billion); 25% were from mid-size enterprises (annual revenues from $100 million - $1 billion); and 46% of respondents were from small businesses (annual revenues of $100 million or less).
Solution providers recognized as sponsors of this report were solicited after the fact and had no substantive influence on the direction of the ITSM Benchmark Report. Their sponsorship has made it possible for Aberdeen Group to make these findings available to readers at no charge.
Table 4: PACE Framework Key Overview
Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows:
Pressures — external forces that impact an organization’s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive)
Actions — the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product/service strategy, target markets, financial strategy, go-to-market, and sales strategy)
Capabilities — the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products/services, ecosystem partners, financing)
Enablers — the key functionality of technology solutions required to support the organization’s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management)
Source: Aberdeen Group, August 2007
Table 5: Competitive Framework Key Overview
The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance
Best-in-Class (20%) — Practices that are the best currently being employed and significantly superior to the Industry Average, and result in the top industry performance.
Industry Average (50%) — Practices that represent the average or norm, and result in average industry performance.
Laggards (30%) — Practices that are significantly behind the average of the industry, and result in below average performance
In the following categories:
Process — What is the scope of process standardization?
What is the efficiency and effectiveness of this process?
Organization — How is your company currently organized to manage and optimize this particular process?
Knowledge — What visibility do you have into key data and intelligence required to manage this process?
Technology — What level of automation have you used to support this process? How is this automation integrated and aligned?
Performance — What do you measure? How frequently?
What’s your actual performance?
Source: Aberdeen Group, August 2007
Table 6: Relationship Between PACE and Competitive Framework PACE and Competitive Framework How They Interact
Aberdeen research indicates that companies that identify the most impactful pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute.
Source: Aberdeen Group, August 2007
Appendix B:
Related Aberdeen Research
Related Aberdeen research that forms a companion or reference to this report includes:
• The Business Value of IT Outsourcing; July 2006
• Outsourcing IT Infrastructure: The Productivity Payoff March 2007
• Management and Governance: Planning for an Optimized SOA Application Lifecycle; March 2007
• Aligning IT to Business Processes: How BPM is Key to Complementing ERP and Custom Applications; May 2007
• Who Outsourced the Outsourcers; June 2007
• BPO: The Next Generation; October 2007
Information on these and any other Aberdeen publications can be found at www.Aberdeen.com.
Author: Ralph A. Rodriguez, Senior Vice President and Research Director of the Technology Markets Group, ([email protected])
Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen for insights that drive decisions.
As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information – Opportunity – Insight – Engagement – Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com
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