As a result of the current financial crisis, many businesses are in survival mode. Cash flow is the new king and businesses are trying to maintain their short-term income while cutting external expenditure. The ability to demonstrate the short and long term business value of different IT services turns IT into a partner that can help business survive the storm instead of being the passive victim of a cost-cutting exercise.
ITIL v3 provides processes much of the practices that enable IT to define, design, plan and transition new services to production operation. However, without drawing upon a formal Project and Portfolio Management approach, many organisations, struggle to demonstrate the value of IT to the business.
Few IT organisations actually operate with a separate P&L, and most do not charge for the services they provide. Without the ability of the business to actually consider the costs of maintaining IT in terms of real money, the IT organisation becomes a sort of a ‘black box’ into which funding pours and out of which flows a service that never quite meets the hype with which it is presented to decision makers.
If IT is to be integrated into the strategic business planning process, it needs to demonstrate that it can operate as a true partner to the business delivering full financial transparency.
Visionary organisations are embracing Service Portfolio Management (SPM), which extends current project portfolio management by capturing attributes of a service that encompass the associated resources, projects, applications and assets.
Service Portfolio Management (SPM) provides a deeper view into the true cost of an IT service by pulling all costs together through one platform. Organisations are more aware and in control of all their IT costs, where they are generated, whom to bill and where to iron out inefficiencies to deliver greater value where it matters. By providing companies with a 360 degree view of a service, IT and the business can see the value IT services provide.
IT organisations can make the transition to SPM by introducing four building blocks grounded in ITIL. The first is to make organisational and cultural changes to support the new processes required for SPM. Among the organisational changes are new roles such as Business Relationship Managers to ensure IT creates and delivers the services business needs.
The next building block to SPM is developing the service portfolio ―or catalogue ― of services and mapping these to the IT assets they are depend on. Each of the services must be characterised by a number of attributes, including a service definition, a service dependency model, which help derive the service cost.
Thirdly, the portfolio of services being delivered should be used to link cost to outcomes and facilitate business understanding. A well-implemented service portfolio helps determine the right mix of service offerings, negotiating service-levels with the business, tracking IT budgets and consumption. The service catalogue also a key enabler of service-based pricing so IT can produce line-item invoices relating to resource consumption to provide IT customers with ongoing visibility into budgeted versus actual spend.
The final building block of SPM is a continuous process of portfolio balancing and service optimisation: service improvement based on effectiveness and efficiency, service retirement, and new service development driven by customer needs, for example. Once you can make the connection between the relevance, value and cost of a service, you are in a position to make informed decisions around where you should invest.
The role of PPM is to provide the business value, resource cost and portfolio views to the Business Relationship Manager and IT investment team. It also provides the starting point for the development of a by service, by capturing the requirement and managing the business case before IT Service Management (ITSM) turns approved services into entries in the service catalogue.
It is clear to me that without the complimentary relationship of ITSM and PPM, effective Service Portfolio Management will remain elusive.
Posts
