How Shared Services and Business Service Management Help You Deliver Increased Value to Your Customers
Date: Sunday , August 01, 2010
Today, practically every CIO is looking for ways to increase the value of his or her IT organization, while also maintaining or reducing IT spending. One approach that many are pursuing is the elimination of wasteful redundancies and the adoption of a shared service-provisioning model.
The goal of most shared service programs is to provide consistent service quality and delivery to multiple business departments across the enterprise at a reasonable cost, as opposed to each department providing its own iteration of the same service. Typical examples of redundant services include helpdesks, email, and Enterprise Resource Planning (ERP) systems.
Before going too far, however, it’s important to understand what is meant by ‘shared services’. The term shared services has multiple definitions in the IT industry, but the definition found on Wikipedia is in line with the thoughts of most experts and analysts. According to Wikipedia, “Shared services refers to the provision of a service by one part of an organization or group where that service had previously been found in more than one part of the organization or group. Thus, the funding and resourcing of the service is shared and the providing department effectively becomes an internal service provider.”i
For example, consider the case where an enterprise has multiple ERP systems (e.g., Oracle or SAP) across the organization due to acquisitions or as a result of business units creating their own IT systems and support. Most likely, each business unit experiences a different level of service, depending on how much money it had to spend on its particular implementation. Further, exchanging data between the systems for consolidation and reporting purposes can be time consuming and potentially error prone. Finally, the aggregate cost of running these multiple systems is generally higher than the combined business value delivered. This is due to redundancies in hardware, software, and administration or operation resources. Consolidating these systems into a single, shared service enables the company to leverage economies of scale, while also providing a consistent level of service across the enterprise.
Sounds good? If so, where do you begin?
Know Your Services
To get started in shared services, begin by getting a clear understanding of the services upon which your business customers rely to run the business. Some of these services may be provided by IT today and some may not. When identifying these services, make sure to think about them from the perspective of business outcome, not underlying technology. Otherwise, you may miss out on opportunities for consolidation. For example, consider an enterprise with a single instance each of Exchange, Lotus Notes, and Google Mail. Although there is only one instance of each application, they are all providing the same business services: communication and collaboration. These become the shared service to be consolidated. The underlying technology is secondary to the business objective.
Modernize Your Delivery Platform
A critical element to delivering shared services is to deliver them as efficiently as possible. You can accomplish this goal by standardizing your delivery platform and then looking for opportunities to modernize it.
Begin by identifying the various delivery environments in place for your target services and evaluating them against your strategic platform architecture. If you don’t have a strategic platform architecture, now would be a good time to define one.
Your target architecture should enable you to deliver a consistent quality of service while also adjusting to accommodate differing levels of service across the enterprise. Technologies such as virtualization and private or public clouds can be leveraged to achieve this objective.
More and more hardware technology vendors are providing integrated network, system, and storage platforms. Cisco, for example, has delivered its Unified Computing System (UCS), which provides a ‘one cable in, one cable out’ experience for administrators. Solutions such as this allow system engineers to build the private cloud and virtualized environments that facilitate the efficient delivery of shared services.
Additionally, the correct application architecture can greatly contribute to effective shared services. Ideally applications should be architected to provide multi-tenancy. This allows core or supporting functions of a service to run as a single instance, while multiple application instances can run with the processes, customizations, and data being isolated and secured from each other.
Ensure Comprehensive Management
In addition to the appropriate technology, effective delivery of shared services requires ongoing comprehensive management of that technology and the associated processes. Specific management components that should be in place include the following:
Service Catalog Management: The service catalog describes to your customers the services that are available and the Service Level Agreements (SLAs) to which those services conform. Ensure that all shared services are documented and publicized through the service catalog.
Self-Service Request Management: One of the major obstacles to customer acceptance of shared services is the perception that service responsiveness will be compromised. An effective service request management process supported by a self-service portal will enable consumers of services to request the service that they want, when they want it, with minimal interaction with the service desk. Additionally, many of these types of service requests can be automated, further enhancing the end-user experience and improving the perception and acceptance of shared services.
Configuration Management: To facilitate system consolidation, an ongoing understanding of the relationship between technology components and the resulting service is critical. Ongoing configuration management, supported with a well-maintained configuration management database (CMDB), provides the centralized ‘system of record’, necessary to sustaining the shared services.
Event Management: To maintain high levels of service availability, IT must proactively manage service events in an effort to prevent them from negatively affecting service availability. Proactive monitoring enables the IT-operations function to identify early indicators of performance or availability issues and initiate corrective action before the service is adversely affected.
Leverage Business Service Management
As previously stated, the goal of shared services programs is to provide consistent service quality and delivery to multiple business departments across the enterprise. Implicit in this goal are the objectives of delivering business-critical services and achieving cost efficiency.
These objectives form the underlying principle of Business Service Management (BSM), a comprehensive and unified platform that simultaneously optimizes IT costs, demonstrates transparency, increases business value, controls risk, and assures quality of service. BSM simplifies, standardizes, and automates IT processes, so you can efficiently manage business services throughout their lifecycle — across distributed, mainframe, virtual, and cloud based resources. BSM helps to provide a clear understanding of the services offered while also promoting increased simplification, standardization, and automation.
Effective shared service delivery requires process standardization. The multiple process models that may have been in place prior to consolidation will need to be reconciled into a single, consistent approach. A framework, such as the IT Infrastructure Library (ITIL), is a good starting point for achieving process consistency. While going through your consolidation exercise, use this chance to simplify the resulting processes and then look for opportunities to automate as many as those processes as possible. Finally, leverage technology solutions that support your standardized processes and enable the areas of automation you’ve identified.
Your IT organization needs to remain competitive and deliver business value, especially with the growth of services being offered through cloud computing. How can your IT organization provide services better — and at a lower cost — than the competition? One answer is through a shared services approach. By truly understanding business requirements and managing IT based on business priorities, your IT organization is already a step ahead. Leveraging a BSM approach establishes a firm foundation not only for improved business support and increased cost efficiencies, but also for the adoption of a shared services delivery model.
Bill Emmett, Senior Manager of Strategic Marketing, and Atwell Williams, Solutions Architect, Office of the CTO, BMC Software