Cloud
Service
Management
Written by: Roy Illsley Published July 2012 © Ovum
Executive Summary
Catalyst
Ovum predicts that between 2012 and 2015 an increasing number of organizations will deploy private and hybrid clouds and there will be greater use of public cloud services. Some cloud-based ITSM issues are obvious. An IT organization needs to have a good understanding of the IT services it provides, along with the service delivery quality levels required and the SLA targets agreed with the business. IT services will still need responsible internal owners no matter how they are delivered (as with an outsourcing model). An area in which many IT organizations will struggle is service costing: knowing the total costs of providing the IT services internally, including hidden costs and the adverse impact on the costs of other services by removing selected volume. An IT organization also needs to ensure that “apples are compared with apples” financially when making decisions relating to the cloud. It needs to understand, for example, that the price paid per month is not likely to be the total cost of ownership (TCO) for cloud-delivered IT services. Also, from an overall IT governance perspective, how will cloud be viewed in terms of risk, security, and standards compliance?
Moving IT services to the cloud, or more specifically the delivery of IT services, is not just a technology issue for service managers. As with the introduction of any new or replacement system, a change in the IT service delivery method can have an impact on end users, and IT needs to ensure that it manages the cultural implications of this. At a minimum, there will be end-user education needs to fulfill, and the potential for non-conformance needs to be managed through a mixture of communication, education, training, and senior management support. Business perceptions of the potential for degradation of service in terms of availability, speed of response, and security will also need to be managed.
Key Messages
As infrastructure components become less of a focus and the delivery of business services assumes greater management capability, the tools used must evolve to match the requirements.
Automation is a key technology in the ability to manage in cloud environments.
IT must demonstrate to the business where IT is consumed, and what the cost of this is, before organizations can move to more dynamic pricing and chargeback models.
A dichotomy exists as the new bring-your-own-device (BYOD) thinking is introducing non-corporate assets into the enterprise, which IT must be aware of and manage access rights to.
ITSM processes must be modified to accommodate new challenges of the cloud era.
CLOUD IS CHANGING THE RULES FOR SERVICE MANAGEMENT
As increased virtualization takes more organizations towards a cloud-enabled model, the management challenges change. Some of the significant aspects of this move to a cloud computing model will challenge IT’s thinking about collaboration between business and IT; internal IT structural transformation; increased use of automation; and need for robust processes that are flexible.
For example, in a hybrid environment, one where cloud is one part of the service delivery supply chain, any request must be brokered across multiple service providers. This need for cross-provider/environment collaboration extends to deployment, change, and incident management. The other element that must be
considered is that either the processes used by the different providers must be convergent or the management layer must act as the translation and transport vehicle. For example, if one service provider requires authorization to raise a request, but another only requires authorization to proceed beyond the quotation phase, then either these processes must be combined (so both authorizations are required) or the management layer must recognize the different service providers and automatically filter them accordingly. However, the biggest aspect of this multi-disciplinary environment is that the control point is shifting away from an IT supply-side to a demand-side approach (see Figure 1). The introduction of charging, or show back, enables internal customers to fully appreciate their usage (and associated costs) of IT. This allows IT demand to be managed more effectively (including encouraging internal customers to use high demand IT services at non-peak times). The other major benefit is helping to identify business-driven opportunities to either kill or cut back on existing IT services.
The whole understanding costs debate will in Ovum’s opinion become even more critical as organizations are faced with a plethora of choices for public cloud services. Only organizations that understand the cost and value equation will be able to make wise choices when it comes to public cloud services.
Charging must always add value to the business and be structured in business terms, with a level of simplicity appropriate to the corporate culture. One of the most difficult and critical requirements of a chargeback model lies in its perceived fairness: in other words, the relative success of agreeing services, and service values, with the business.
One of the key aspects of any structural re-organization that is needed to adopt the as-a-service paradigm is financial transparency: being open about the cost and value of IT services to the different lines of business departments. While many are aware of the need to change the current financial model, few are clear on exactly what approach to financial transparency is best. Ovum research indicates that financial management
Figure 1: The shift is focus from supply to demand
Source: Ovum O V U M
IT Supply
IT Demand
Influence
Management of fixed infrastructure components Provision of an infrastructure platform Delivery of fixed IT services Delivery of fixed business services (with chargeback)Delivery of dynamic business services
remains an emerging discipline with many different approaches being adopted. See Figure 2. The survey found that nearly half of those questioned were not currently using any form of financial management or chargeback, while the other half were using six main approaches: standardized charge per virtual machine (VM), tiered VM charging, measured usage per hour, average actual costs, SLA driven, and average charge per VM.
Ovum expects the number of approaches being tested or actually used will peak in 2012 or early 2013, and then coalesce on a smaller number of the most practical/pragmatic/useful approaches. SLA driven, average charge per VM, and tiered VM charging are currently the most popular, with 34% of users stating they are using them. The other approaches all have less than 6% of users. However, the survey only asked CIOs, and Ovum expects interest in financial management models to be a joint initiative between IT and line of business units. Those that appeal to IT currently may therefore not be the approaches that ultimately succeed.
Figure 2: Chargeback usage
Source: Ovum O V U M
Dev-Ops originated with operations as a means of streamlining and improving the effectiveness of operations in the face of increasing workload. Traditionally operations had the time to deal with application stability, risk, and performance issues separately from infrastructure management and procurement tasks. This changed with the adoption of Agile practices in development at one end, resulting in increased deployment frequency, while at the operations end the trend towards cloud and virtualization speeded up and lowered costs relating to hardware procurement.
While financial management or chargeback deals with the external (or customer efficiency) costs of IT, Dev-Ops is an internal movement that is looking to improve IT effectiveness and efficiency. While some of the leading vendors have been talking Dev-Ops for a number of years, only a few such as HP have demonstrated that they are serious about improving the working relationship between these two different sections of the IT department. While we applaud this movement, it is not a “silver bullet”; the biggest problem remains the cultural position of both dev and ops teams, and to change this requires HR involvement and a policy (that is actually enforced) of staff rotation and movement between the different IT teams. The integrated tools will help as staff can use a single process and be able to access all relevant information.
Ovum expects the Dev-Ops movement to make some progress in the next few years, but believes the key will
management/development toolsets. As organizations move to using cloud computing principles for the delivery of business services, the need for automated release management will become a necessity and not a “nice to have”. This requirement can be demonstrated by the quicker cycle times demanded in cloud computing. Organizations must recognize that circumstances will dictate the need not to follow a single process; rather they should adopt a flexible multi-process approach that is defined by the risk and business significance aspect. For example, rigorous ITSM procedures would be required for any business significant change currently, while in other cases less rigorous procedures that are more highly automated are needed where user demand and business risk permit. As the technologies improve, the number of releases considered unsuitable for automation will reduce, but this does not mean that currently all release should be automated. Rather, organizations should gain knowledge and experience of automated release management for non-critical services so that they can progress on the automation maturity curve as and when needed. Another key aspect of Dev-Ops is the need for both teams to share a common goal. Currently, development are measured on the ability to deliver change to the business, while operations are measured on the service availability. These two measures are not compatible and exacerbate the Dev-Ops conundrum; consider the necessity of balancing automation and speed of release versus risk (especially to business-critical applications or services). Essentially, not all releases are the same.
Cloud computing and the everything-as-a-service paradigm is creating the perspective that IT is no more than five clicks of a mouse. This view masks the complexity and risk of using off-site services, and has created the “shadow IT” phenomena. The challenge for the CIO is to incorporate this new approach into the IT strategy and then establish how it can provide solutions within the overall objective. Many believe that this challenge is less about technology and more about the organizational politics and culture; specifically, business unit (BU) heads seeing as-a-service solutions as business services and not IT. With cloud computing, organizations are effectively being freed from the shackles of internal IT, which to a BU head enables a greater degree of flexibility. However, with this new multi-sourcing world of IT the challenge is to select those IT sources that match the characteristics of the workload. Many in the industry see cloud computing as a threat to the IT department, but far from translating CIO to be "career is over"; Ovum believes that CIOs will become "chief integration officers".
Cloud is driving the need for more inter-departmental collaboration as well as inter-company collaboration. This will require any service desk to adopt greater use of social media and new tools. Current management thinking, and most tools, are siloed, focused on the process, and do not look to emerging trends such as social media. Figure 3 shows the consolidated results of the Ovum management survey and it is clear that the "just good enough" management theory has its roots firmly in the mid-sized and SME sector, while large enterprises do not consider the current tools to be overly complex. This may be a reaction to the recent recession in which mid-sized organizations lost key members of staff in IT management roles that they could ill-afford to lose, resulting in smaller teams with greater responsibilities, but without some key specialist knowledge. While large enterprises were not immune to these staff losses, the impact was less pronounced as they could at least maintain a core of knowledge.
The survey indicated that mid-sized organizations were less concerned about the lack of skills than any other sector. Ovum believes that the answer to this conundrum (mid-sized companies most concerned that management tools are too complex and least concerned about the lack of IT skills) can be answered by the response to the question on data. Mid-sized companies reported that they were drowning in a sea of data, which Ovum believes they attribute to the complexity and over-engineered solutions used for management. In other words, they believe that the current set of tools are designed to provide large enterprises with the information they need to understand the business impact of IT, and not designed for smaller organizations that currently see IT as merely a support activity to the business. This view is supported by the responses to the question of lack of visibility into business impact, which was considered by mid-sized organizations as mostly unimportant. While this may reflect the current reality, it is about to change as mid-sized organizations
will look towards IT as the driver of innovation and hence be more central to business strategic intent. One of the observations that can be made from this research is that organizations that are looking for simpler management approaches are also looking to cloud service providers as a way to reduce the management complexity and cost.
The old adage “you have to manage what you collect” can be turned on its head; you cannot manage what you do not know. However, it is also important to create efficient processes by identifying and cutting out things such as under-utilized capacity, over-provisioning, unnecessary process steps, system defects, superfluous data handling, and redundant wait states. For most organizations obtaining an accurate inventory of assets is a critical first step required before they can think about improving operational effectiveness (OE). However, having a list of assets is only part of asset management process. Once an organization has a complete (or as close to complete as possible) view of its assets then these need to be categorized and sorted. The rise of BYOD as an approach to increasing employee productivity is an appealing concept, but creates a problem for IT. Effectively they are being asked to manage personal devices they do not control, or even have visibility of, and how these can access corporate services. This requires more than asset management; it requires a deeper understanding of the context of a service so decisions can be made based not on the device but on where the user is, how they are connected, and what they want to do.
This approach is very organizationally dependent, as each industry has its own set of regulations and methods of accounting for assets and managing security. The general principle for any approach is to create a map where assets have a one-to-many relationship with activities and services. The objective is to isolate those assets that have the least number of relationships (if any), and those that have the most. Then by defining business rules on things such as cost/value, age of equipment, and number of users, these assets can be placed in different categories. The result is to generate a matrix showing where any rationalization program can begin. Most start with the so-called “low-hanging fruit” (those easiest to identify) yielding the biggest wins. But organizations must not stop there. It is important to complete the rationalization exercise so that subsequent stages of the journey can be taken.
Figure 3: Challenges with management tools
ITSM processes must adapt to be more flexible and be federated to a wide audience; otherwise, service delivery in the cloud will look just the same as service delivery from on-premise, with no benefit to the client. This more federated approach to what has traditionally perceived to be IT's roles and responsibilities looks set to increase in popularity as the growth of self-service and simpler user interfaces means the CEO can achieve a more flexible business with reduced IT support charges. This may appear as an appealing concept, but unless the devolving of work to the line of business users is accompanied with the responsibility then IT will still be expected to provide the backstop, or to pick up the pieces when things go wrong. We anticipate that to support this greater devolution, IT must adopt more automation and have the roles and responsibilities clearly articulated so every line of business manager understands the consequence of any actions, and the cost of correcting any errors.
Analysis
The HP difference
HP believes virtualized environments and cloud computing will soon be the norm in the enterprise IT space, and has been making aggressive investments across its software and services portfolio to incorporate these computing paradigms. It has been releasing product upgrades every six to nine months. HP has a large and diverse service organization, capable of providing extensive implementation support to enterprises. In order to meet the individual needs of its customers, HP offers a variety of services, which include maturity assessment, implementation, consulting, training, application and process outsourcing, process review and improvement advisory, and custom implementations. With an extensive partner network, HP offers comprehensive implementation and consulting services to SMEs and mid-market enterprises.
Executive Scorecard (XS) strategy, which includes cross IT visibility and transparency, becomes more critical than ever. XS provides performance analytics and insight across IT based on rolling up KPIs in a balanced scorecard approach. ITSM (Service Desk and Asset Management) are essential sources of the KPIs. Related to deployment in cloud environments, we’ll specifically look at HP’s request management, service catalog, knowledge management, and asset management capabilities. Good processes for incident, problem, service level, change, and release management are important for hybrid environments across physical, virtual, private, and public clouds.
The HP Service Manager Request Management module automates the user request process, from the initial acceptance of the request through to fulfilment and the updating of the corporate CMDB or configuration management system. It employs the ITIL-defined technical service catalogue to streamline request, quote, ordering, and fulfilment processes, which reduces the overall cost of IT request and fulfilment services. In addition it provides full support for ITIL v3 service design processes and delivers against service-level management and service catalogue management, which are core ITIL v3 service design processes.
The HP Service Manager Service Catalog module provides a Web 2.0-based service portal to manage and automate the complete service request lifecycle. It can make IT more efficient by streamlining and automating the processes of offering IT goods and services to users and processing and fulfilling their orders. The module supports the creation and publication of both business and technical services. Service managers can define the service lifecycle for each service, including service terms, entitlements, SLAs, resource requirements, workflow procedures, and retirement activities. It enables IT to properly set users’ expectations about what they can acquire, how long it will take to receive it, and what they will receive. Employees have an easy-to-use and cost-effective method for requesting and acquiring the IT goods and services they need to discharge their responsibilities.
There are many sources of both tacit and explicit knowledge across an organization, and the HP Service Manager Knowledge Management module is a platform on which an organization can start to centralize disparate corporate knowledge so that it can be easily accessed by IT staff. This reduces the dependence on specific individuals, and increases overall knowledge and the speed of service desk response and resolution. The HP Service Manager Knowledge Management module can accurately and in real-time triage, then route, escalate, or resolve customer incidents using a powerful, fully integrated run book automation tool via a link within the knowledge article.
The HP Service Manager Enterprise Suite provides a convenient and cost-effective means of acquiring all of the capabilities listed above. The Enterprise Suite provides of all the HP Service Manager modules and end-user capabilities.
HP Asset Manager provides the fundamental capability needed so that an organization can measure and communicate the value IT provides to the businesses it supports. The need to establish a true organizational picture of the financial situation of investments in IT assets is just one reason HP Asset Manager should be used.
HP Asset Manager software also provides a simple, standardized way to manage software license compliance. While HP Asset Manager Chargeback provides visibility into the financial impact of IT support and services. Business units can use the information to modify their usage of IT services, particularly by adopting different service levels that can have a direct impact on costs. Ovum considers this is a very useful tool that business units can use to alter the IT cost levers to match business market dynamics.
In Ovum’s opinion, HP is one of only a few vendors that can deliver true service portfolio management capabilities, with functionality that allows for the "portfolio management of services" rather than the more easily achieved "management of the service portfolio." This is accomplished by leveraging the capabilities of HP Project and Portfolio Management Center to compare the cost of IT service provision with delivered business value, identifying the IT services that deliver the greatest business value, and recognizing the opportunity to kill off those that deliver too little.
HP has both a SaaS and on-premise solution that is fully interoperable, which means organizations can move between on-premise, hosted, and back to on-premise without any costly migration or remediation effort. Figure 4 shows how HP compares to the market in the recent Ovum ITSM vendor comparison report. HP scores well on the Technology scale, achieving top ratings in all components except SLM. HP offers integration options with a wide range of third-party products, providing enterprises that have existing ITSM investments with a non-disruptive option to bring missing capabilities on board. Its web services API is a critical component of this strategy. Additionally, HP provides Connect-It, which offers various out-of-the-box integration options between HP Service Manager and third-party applications. HP also has a stated “web everything” strategy, focused on augmenting web client performance and usability through advances in solution architecture and design. Ovum believes HP is an established market leader in the space and should be shortlisted by enterprises looking to adopt ITSM, and particularly if an organization is looking to adopt cloud computing.
Figure 1: ITSM Extended Decision Matrix
Source: Ovum O V U M
Source: Ovum O V U M
Customer benefits
Beyond the foundational capabilities
The common feedback from HP customers was that they had moved beyond the foundational capabilities required in a service management solution. For HP customers, this was described as integrated monitoring, event, incident, problem, and service management. This movement was driven by the shift to adopting some cloud, or cloud-like, delivery principles. All of these customers reported that incremental value from this foundational layer was difficult to justify, and the customer demand was for increased user self-service via a service catalogue. The customer learning was that to meet this demand any service management solution must provide the following features and capabilities.
Automating change and request management
A mid-sized retailer reported that by deploying HP Operations Orchestration to HP Service Manager’s Request Management enabled it to reduce average request handling time from 17 hours to less than 20 minutes, with the associated average processing time being reduced from ten minutes to less than one minute.
A large bank also reported that by adopting a change pre-approval process for more than 70% of its change requests and combining that with adding Service Manager’s Change Management to HP Operations Orchestration, it reduced change-processing time by more than a factor of ten.
Improving the approval process
HP customers reported that when the automation of change and request management was applied to the entire approval process, more benefits became apparent. A large healthcare provider in North America
reported that using HP Service Request management enabled it to reduce the time taken to acquire new hardware or software by 75%, which had a knock-on effect of reducing the request backlog by 70%. Echoing this, a global fast-moving consumer goods company reported that by focusing on the service catalog it measured that it had delivered the top five services in the catalog 19% faster, and overall it reduced IT service costs by 12%.
Company Profile
Table 1: Contact Details
Corporate headquarters 3000 Hanover Street Palo Alto, CA 94304-1185 US Tel: +1 (650) 857 1501 Fax: +1 (650) 857 5518 www.hp.com UK headquarters Amen Corner, Cain Road Bracknell, Berkshire RG12 1HN
UK
Tel: +44 (0)870 013 0790 (from UK) Tel: +44 (0)207 949 0300 (from outside UK) Fax: +44 (0)1344 363 344 Email: [email protected] Source: HP O V U M Ovum Europe Mortimer House 37-41 Mortimer Street London W1T 3JH, UK +44 20 7551 9000 [email protected]
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