ITIL and Outsourcing
Engagements
TABLE OF CONTENTS
What is ITIL?
The Relationship between ITIL and Outsourcing
Steps to Implementing ITIL to Address Outsourcing
Benefits and Obstacles in Implementing ITIL
Conclusion
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Executive Summary
About the Author
About Trestle Group Research
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Executive Summary
About the Author
About Trestle Group Research
Although many IT Professionals have educational backgrounds in Computer Science or Engineering, the truth in many companies is that Information Technology uses very little “science” or “scientific method” in its approach towards delivering and supporting IT systems. Application Development projects may be prioritized in a reactionary, emotional manner regardless of the business case and/or the business disruption. IT Professionals may use the “technology of the moment” approach when selecting the technology to build and deliver these systems. IT Infrastructure groups sometimes appear to have little discipline or consistency in the way they define, build and support the IT infrastructure. When a company adds “Outsourcing” to this lack of discipline and structure, the results can be both disastrous and costly to the business enterprise. This is where frameworks such as ITIL can be useful in helping an organization get its own house in order before multiplying the problem by adding yet another variable, the outsource provider.
Julie Short is a senior-level IT Manager and Management Consultant with over 20 years experience managing global ERP projects and IT organizations. With extensive experience in Applications Development, Infrastructure, and Enterprise Architecture, she has worked directly with CIOs to articulate and implement IT Strategy and Governance in a variety of industries. In the past several years she has been implementing ITIL Service Delivery and Service Support processes and is currently a candidate for ITIL Service Management Certification.
Trestle Group Research is committed to providing thought-provoking research and practical insights into such topics as corporate strategies, regulatory issues and global trends in sourcing. Their research enables organizations to maximize benefits from sourcing initiatives. Trestle Group Research is part of Trestle Group, an international management consultancy firm specialized in sourcing. Trestle Group works with companies to help develop sourcing strategies, locate the right location/service provider and support the implementation of the appropriate sourcing model.
What is ITIL?
In summary, ITIL is a customizable framework of IT processes used for delivering and supporting IT services. IT services are defined as one or many IT infrastructure components. This definition represents a business perspective and not necessarily an IT one. ITIL is built on a process-model view of controlling and managing operations. It addresses the structure and skill requirements for an IT organization by defining and presenting a comprehensive set of management processes and procedures. There are 11 ITIL processes comprising both IT Service Support and Service Delivery. They are:
Service Support
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Service Desk (a function, not a process)»
Configuration Management»
Incident Management»
Problem Management»
Change Management»
Release ManagementService Delivery
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Service Management»
IT Financial Management»
Availability Management»
Capacity Management»
IT Service Continuity ManagementSecurity Management is also considered vital but exists outside of the Service Support and Service Delivery processes.
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What is the Relationship between ITIL and Outsourcing?
ITIL is a framework of IT Service Delivery and Support processes. This framework must be customized and adapted to the organization itself. ITIL is a major component of IT Governance along with several complementary frameworks (COBIT, CMM, Six Sigma, etc) and management roles/responsibilities. Thus the implementation of ITIL also represents a significant IT Transformation effort for an organization. Industry analysts such as Forrester have stated:
“After 15 years, the IT Infrastructure Library (ITIL) is finally becoming the de facto standard methodology for internal IT service delivery processes. The final breakthrough will come in early 2005, when ITIL finally makes the shift from describing service delivery processes—the ‘what’—to helping organizations actually implement these processes and measure service quality –the ‘how.’ Widespread adoption of ITIL best practices by internal IT departments will follow through to 2008.” (Forrester) [1]
There are increasingly more reasons for implementing frameworks and specifically ITIL. First, frameworks help bring about a level of consistency and the ability to measure performance. Secondly, there are increased regulatory pressures mandated by the Sarbanes-Oxley Act, Basel 2 and SAS-70. Additionally, there is the desire to bring more structure and rigor to IT, which has long been thought of as more of an art form rather than a science.
ITIL focuses specifically on IT operations with the goal of improving the quality of IT service delivery and support. Service Support measurements of this quality include: faster incident resolution times allowing for reduced business impact; proactive identification and resolution of problems thereby reducing the number of incidents; and consistent control and management of changes brought into the infrastructure thereby reducing the number of change-related incidents and disruption to the business. Service Delivery improvements include improving system availability; agreeing and measuring service levels with the business users; anticipating and planning for and the timely procurement of infrastructure capacity; and ensuring business continuity.
When you consider these issues, many are also issues central to an outsourcing arrangement or to the management of a service delivered by a third party. ITIL can serve as the framework for managing the relationship with a managed service provider. It can be used as a differentiator in RFPs as managed service providers are selected. Moreover, the discipline garnered from implementing ITIL which helps to align all of IT to the business is the same discipline required to maintain a good solid outsourcing relationship. Frameworks such as ITIL also provide a common language and understanding of problems and issues as they arise. Lastly, if you consider that an organization’s IT Service Delivery and Support processes are clearly defined, documented and aligned with the business and the IT organization, this information can be readily used in successfully aligning the outsource provider more efficiently and effectively.
Steps to Implementing ITIL to Address Outsourcing
ITIL implementations require knowledge of the “pain points” of an organization, a strong understanding of the business requirements for IT Services, as well as an understanding of the organization’s culture and its employees. It also goes without saying that strong knowledge of and experience with the ITIL processes is crucial. By understanding what processes should be implemented first along with their dependent processes, an organization can make the best use of its resources to ensure success for both ITIL and Outsourcing efforts.
A recent research article from Forrester mentions:
“Knowing more about what is and isn't working in sourcing deals can help arm clients (and forward-thinking providers) with a map of what generally works and doesn't work in sourcing deals. Forrester's latest data shows that outsourcing clients are generally satisfied except in two major areas —
the outsourcers' ability to manage change and implement innovation in the client environment.” [2]
Many companies beginning ITIL implementations start with Service Desk, Incident Management and Problem Management. Taking into account Forrester’s comment above relating to the issues surrounding outsourcing, it would seem equally important to plan for the implementation of Change Management, Release Management and Configuration Management. These three processes are tightly coupled and dependent on each other. For example, implementing Change Management without the corresponding Release Management process could have significant business impact. Implementing Change and Release Management processes without Configuration Management doesn’t allow you to identify incidents or problems related to infrastructure components. Nor does it help to identify where innovation introduced into the infrastructure has been the cause of an incident due to its dependency on another infrastructure component.
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Benefits and Obstacles in Implementing ITIL
Many of the following benefits of implementing ITIL would seem obvious: increased alignment with the business understanding of an IT Service; Service Level Agreements which are aligned with Operational Level Agreements and Underpinning Contracts (agreements between disparate IT groups, including outsource providers); faster incident resolution time while minimizing business impact; proactive problem management; identification of troublesome infrastructure components to improve system availability; and fewer incidents resulting from unmanaged change introduced into the infrastructure. Some indirect benefits of implementing ITIL might include:
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Improved resource utilization»
Improved availability and reliability of business-critical IT services»
Justification of the cost of service quality»
Providing services that meet business, customer and user demands»
Improved IT services while reducing delivery costsThe list goes on and on. One might ask why isn’t every company implementing ITIL?
The list of obstacles and barriers to the successful implementation of ITIL are at least as long, if not longer, than the benefits. It takes a major effort to manage such a transformation effort changing the nature of the way an entire organization works. These obstacles should not be taken lightly as there are many stories of ITIL implementations which take too long or fail completely.
Here are a number of the most common reasons ITIL implementations fail:
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Lack of a clear, shared vision and strategy»
Lack of management commitment and support»
Lack of resources»
Trying to do too much too quickly (big bang vs. phased approach)»
ITIL resources are not empowered to remove obstacles»
Short-term gains not identified nor realizedConclusion
ITIL is not only an effective tool for managing internal IT service support and delivery processes. It can serve as a framework for managing the relationship with an outsourcing service provider. In fact, it can assist with all phases of the relationship including initial qualification of the outsourced provider (are they ITIL-certified, do they have auditable processes) as well as the ongoing Service Level Agreements (SLA’s) ITIL articulates the concept of Operational Level Agreements (with internal IT groups) and Underpinning Contracts (with external providers). ITIL provides a common language for both the client and the service provider staff. ITIL can also influence the organizational structure of the internal IT teams and how these functions align with the needs of the business. Understanding this alignment is crucial to understand before conducting pricing, contract and service-level negotiations with an outsource provider. And finally, the day-to-day interactions amongst the internal IT staff, the internal business client and the outsource provider staff can benefit greatly when there is a common language and common goal.
[1] Mendel. ITIL’s Final Breakthrough: From ‘What’ to ‘How’. Forrester Research, available at www2.cio.com/analyst/report2843.html, August 2004
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