ITSM (Part9: Component 7 - Service Level Management)

Today's topic is very important: Service Level agreement (SLA) which comes under CSI (Continual service improvement) phase.

CSI main objectives:

? to recommend improvements in all phases of the lifecycle

? to introduce activities which will increase the quality, efficiency, effectiveness and customer satisfaction of the services and the IT service management processes.

? to operate more cost-effective IT services without sacrificing customer satisfaction

? to use suitable quality management methods for improvement activities.?

CSI mainly measures and monitors the following:

? Process compliance - Are the new or modified processes being followed?

? Quality - Do the various process activities meet their goals?

? Performance - How efficient is the process?

? Business value of a process - Does the process make a difference??

CSI uses the PDCA Cycle in two areas:

? Implementation of CSI - Plan, implement (do), monitor, measure, and evaluate (check) and adjust (act) CSI.

? Continual improvement of services and processes - This area focuses on the “check” and “act” phase, with few activities in the “plan” and “do” phase, such as setting goals.

A metric measure whether a certain variable meets its set target. CSI needs three types:

? Technology metrics - Performance and availability of components and applications.

? Process metrics - Performance of service management processes.

? Service metrics - End service results, measured by component metrics.?

Methods and techniques to check performance improvement:

There are various methods and techniques to check whether planned improvements produce measurable improvements:

? Implementation review - Evaluates whether the improvements produce the desired effects.

? Assessment - Compares the performance of a process or organization against a performance standard, such as an SLA or a maturity standard.

? Benchmark - A special type of assessment: organizations compare (parts of) their processes with the performance of the same types of processes that are commonly recognized as “best practice”.

? Gap analysis - Determines where the organization is now and the size of the gap with where it wants to be.

? Balanced Scorecard (BSC) - Includes four different perspectives on organizational performance: customer, internal processes, learning and growth and financial.

? SWOT analysis - Looks at the Strengths, Weaknesses, Opportunities and Threats of an organization or component.

? Rummler-Brache swim-lane diagram - Visualizes the relationships between processes and organizations or departments with “swim lanes”. Swim lanes are strong tools for communication with business managers, as they describe a process from an organizational viewpoint, and this is the way most managers look at a process.?

Balanced scorecard (BSC):

Developed by Robert S. Kaplan and David P. Norton as a coherent set of performance measures organized into four categories that includes traditional financial measures, but adds customer, internal business process, and learning and growth perspectives.?

IT Portfolio Management Versus Balanced Scorecard:

The biggest advantage of IT portfolio management is its agility in adjusting investments. While BSCs also emphasize the use of vision and strategy in any investment decision, the oversight and control of operations budgets is not the goal. IT portfolio management allows organizations to adjust investments based upon the built-in feedback mechanism.?

IT Balanced Scorecard:

The IT BSC, Figure 6 is a process management evaluation technique that can be applied to the EGIT process in assessing IT functions and processes. The technique goes beyond the traditional financial evaluation, supplementing it with measures concerning customer (user) satisfaction, internal (operational) processes and the ability to innovate. These additional measures drive the organization toward optimal use of IT, which is aligned with the organization’s strategic goals, while keeping all evaluation-related perspectives in balance.

How to apply the BSC to IT?

A multilayered structure (determined by each organization) is used in addressing four perspectives:

Mission:

·?????? Become the preferred supplier of information systems.

·?????? Deliver economic, effective, and efficient IT applications and services.

·?????? Obtain a reasonable business contribution from IT investments.

·?????? Develop opportunities to answer future challenges.

Strategies:

·?????? Develop superior applications and operations.

·?????? Develop user partnerships and greater customer services.

·?????? Provide enhanced service levels and pricing structures.

·?????? Control IT expenses.

·?????? Provide business value to IT projects.

·?????? Provide new business capabilities.

·?????? Train and educate IT staff and promote excellence.

·?????? Provide support for research and development.?

Measures:

·?????? Provide a balanced set of metrics (i.e., KPIs) to guide business-oriented IT decisions.

Sources:

·?????? End-user personnel (specific by function)

·?????? COO

·?????? Process owners

?Use of an IT BSC is one of the most effective means to aid the IT strategy committee and management in achieving IT governance through proper IT and business alignment. The objectives are to establish a vehicle for management reporting to the board; foster consensus among key stakeholders about IT’s strategic aims; demonstrate the effectiveness and added value of IT; and communicate IT’s performance, risk and capabilities.

Quality assurance personnel usually perform two distinct tasks:?

Quality assurance (QA):

A planned and systematic pattern of all actions necessary to provide adequate confidence that an item or product conforms to established technical requirements. QA helps the IT department to ensure that personnel are following prescribed quality processes. For example, QA will set up procedures (e.g., ISO 9001-compliant) to facilitate widespread use of quality management / assurance practices.?

Quality control (QC):

The observation techniques and activities used to fulfil requirements for quality. QC is responsible for conducting tests or reviews to verify and ensure that software is free from defects and meets user expectations. This could be done at various stages of the development of an application system, but it must be done before the programs are moved into production. For example, QC will help to ensure that programs and documentation adhere to the standards and naming conventions.?

Critical Success Factors (CSFs):

Elements essential to achieving the business mission. KPIs following from these CSFs determine the quality, performance, value, and process compliance. They can either be qualitative (e.g. customer satisfaction surveys), or quantitative (e.g. costs of a printer incident).

Critical success factors for CSI include:

? adoption by the whole organization, including the senior management

? clear criteria for the prioritization of improvement projects

? technology to support improvement activities

Deming Cycle:

SLM mission:

To maintain and improve IT service quality through a cycle of negotiating, defining, and managing level of IT services and instigating actions to eliminate poor services. It is a bridge between customer and IT department. It ensures the balancing of demand and supply of IT services.?

SLM Keyword:

Committed quality of service?

SLM scope:

·?????? Customer IT relationship

·?????? Relation with internal IT department

·?????? External supplier and IT relationships?

SLM objective:

·?????? Maintain and gradually business aligned IT service quality.

·?????? Define internal and external service targets

·?????? Review ongoing improvements of service levels

·?????? Review agreement and contract?

SLM responsibilities:

·?????? Provide and maintain service catalogue

·?????? Understanding SLRs (service level requirements) from customers.

·?????? Negotiate, agree and draft the service level

·?????? Ensuring OLAs and UCs are in place. (See explanation of this after this topic)

·?????? Creating service specification sheet

·?????? Planning the service quality

·?????? Monitor, review and report the actual service levels against targets

·?????? Review all agreements and contracts against changing business needs

·?????? Make service improvement plans

·?????? Customer relationship management

·?????? Proactively improve service levels.?

What is OLA and UC?

A support contract agreed between the customers and the Service Desk.

Operation Level Agreement (OLA): A support contract agreed between the internal IT departments (e.g., Network Management and IT Operations).

Underpinning Contract (UC): A support contract agreed between the Service Desk and external suppliers.