Timo Hyvönen

04.11.2013

Service

Management Office

and Operating Model in Multi

Sourced Environments

Timo Hyvönen

• Master of Sciences, Production technology, Helsinki University of Technology

• Sonera Business School MBA

• ITIL Service Manager & ITIL Expert, accredited ITIL trainer, DPSM(CM), COBIT, SPICE...

• 1989 Helsinki University of Technology – you have played with these ”Computers”, would you come & build us a ”network?”

• 1994 Manusoft – manufacturing SW development & international sales management

• 1997 Sonera Telecom – new business development, technology development, hype

• 2001 Logisware – Forest industry global IT production ( IBM)

• 2004 Finland Post, IT strategy program director

• 2005 MATERNA, ITSM consultation, ITIL trainings

• 2008 itSMF Finland board member

• 2010 Tieto-Tapiola, technology and operations, service management

• 2012 3gamma Finland Managing director

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At 3gamma, we believe that great business deserves great IT

Stockholm Malmö

Gothenburg

Bangalore

Helsinki

Manchester

New Jersey

3gamma short facts

We are an independent consultancy firm specialising in IT management

We offer practical, results-oriented advisory and consulting services based significant IS/IT experience

We can assist any organization through the entire IT sourcing life-cycle, enhancing IT effectiveness and improving operational efficiency

We are >100 consultants in Stockholm, Gothenburg, Malmo, Manchester, Helsinki, New Jersey and Bangalore

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Service Management Office

• Background and reasoning

• Definition

• Service Management Office – Project Management Office

• Tasks and responsibilities in Service Management Office

• Key roles

• Governance

• Cases

• SMO inside traditional IT provider – shared service unit in national corporation

• SMO in multi-sourcing - retained organization structure in global corporation

• Conclusion – how do you build it

• Existing it organization

• In outsourcing situation

• Operating model

• Summary

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Multi-sourcing is becoming the most common ICT service model

Usually the road has gone either through big outsourcing trials or through organic growth where internal resources have become insufficient in number or capability.

Especially service design and transition in multi-sourced environment require strong disciplines for decisions – who manages or delivers new application projects, how they are brought to operations and how they are then operated.

Service Management Office background and reasoning

Even in fully outsourced operational environments accountability of services and operations remain within enterprise, usually the CIO office.

SMO is a good way to ensure that this accountability can be carried.

This presentation is based on practical experiences that have led to definition of Service Management Office, SMO.

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Service Management Office - definition

Service management office is a group or function within business or IT that is accountable for defining, maintaining and especially managing standards for service management and service management processes in the organization.

SMO is the escalation and management point of IT services in daily operations.

SMO ensures that the governance, legal and financial interests of enterprise are met in continuous operations.

SMO ensures that services are defined, continuous service operation processes work in practice and vendors are managed according to policies defined by the corporate, e.g. SMO itself.

There is always a role for SMO in IT service

organization but it is particularly relevant

when parts or all of IT delivery is outsourced

to one or, especially, several vendors.

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SMO and PMO in service lifecycle

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Retired services

3rd party services

Service design

Service Operations

Pipeline Service Catalogue

Service concepts

Continual Service

Improvement

New business services

Service Management Office

Project Management

Office

Accountabilities of Service Management Office

ITSM process execution on operational level

Owner of ITSM Processes and development, leads continual

improvement

Setting policies & guidelines (priority definitions, change policies…)

Assuring that Corporations ITSM processes are followed throughout

retained and external organization

Accountable for ITSM toolset (ensures smooth alignment/

integration towards suppliers ITSM tools)

Accountable for Service desk function

Leads Change Management, Release Management (Chairs CAB)

ACCOUNTABILITY

Key roles in Service Management Office

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Problem Manager • Oversight and guidance in managing

and resolving problems.

Change manager • Write and manage change policy • Chair overall CAB

Release Manager • Write and manage release policy • Coordinate release roll outs

• Service design/transition Manager • Ensure that the right services design and transition

work/documentation is being developed (SDP)

• Service Continuity Management • Ensure risk and cost is balanced and that

Service continuity plans are maintained and

• Service Catalogue and Service Portfolios • Drive the Lifecycle management of services • Ensure that we invest in the right places at

the right times • Retire services where beneficial to Business.

Incident Manager • Set policy for incident prioritization • Verify and manage Major incidents

Service desk owner

Ensure SD is aware of all services

Tool owner

Own classification, categorization, contents of the tool

SMO process governance

Strategic Governance

Board

Process integration Governance Board

Operational Governance Board

Vice President level

Not for processes. Included in supplier governance board.

Strategic direction and issues

Business plans and budget

Client Director level.

Retain: Process owners.

Supplier: Representatives responsible for all processes from all suppliers

• Review process change proposals from Operational governance board.

• Process maturity rating,

• Review of Process KPI

• Escalated issues or questions regarding multiple processes

Process Lead level.

Retain: Process lead

Supplier: Process accountable or process team manager

• Review of process maturity and Process KPI.

• Review process improvements

• Process change proposal from Supplier x number of processes

Pyramid of business relationships

Application Service Manager Product manager

Demand manager

Business project manager Project Manager

BA owner Business department manager

Portfolio manager

Retained Business

Business unit manager

Business Demand Manager

Account manager

External

Service management office Process leads

Application delivery manager

Project manager

Operations manager

Client director

Security CoE

Security manager(s) SMO

Practical experiences

Case: resourcing and structure in traditional IT organization

Case: resourcing and structure in modern multi-sourcing

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Case: SMO resourcing and structure in traditional IT org.

Shared service unit for mid size corporation

Traditional ICT management model Application Development Application Management Operations Management

400 people, 70 in operations

Challenge: define services, implement processes

Response: allocate service and process roles = SMO

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Technology Development Architecture

Service Operations

Servers – WAN – MF - Middleware

User Services Desktops,

Mobile, Printing

Customer Service Service Desk

Solution Support

Case example: SMO organization in traditional IT company

Managing Director

Application Development

Application Maintenance

ICT Technology Operations

Admin SMO lead

Adequate authority or sponsorship from board level

132 140 120

Case example: SMO organization in traditional IT company

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ICT Technology and operations

Technology Development Architecture

Service Operations

Servers – WAN – MF - Middleware

User Services Desktops,

Mobile, Printing

Customer Service Service Desk

Solution Support

Configuration Manager

Change Manager

Problem Manager

Incident Manager

Catalogue Manager

ITSM Tool Management

Application

maintenance Application

Development

Release Manager

SMO lead

Role profiles, background

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SMO lead Experienced people manager ITIL Expert with long ITSM experience

Incident manager Customer service expert ITIL Foundation

Problem manager Middleware senior expert ITIL Expert

Change manager Mainframe application specialist ITIL Expert

Configuration manager Server manager and expert CMDB certified ITIL Expert

Release manager Application project manager ITIL Expert

ITSM Tool management Operations manager ITIL Expert

Technical experts responsible for configuration (ITIL Foundation)

Senior, committed people with long ITSM experience

Will and ability to adapt ITIL in practice (ITIL Expertise)

Mostly part time roles – time specifically allocated for process management work

Accountability assigned and assured

Case: Global corporate, modern multi-sourcing

60000 employees

3 continents

24/7

IT main areas Operation Research & Development Sales Admin

Full outsourcing 2000 now multisourcing with SMO

Selected vendors for application management, development, infrastructure, service desk…

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Organization example

Application maintenance

(Appl. Accountability)

Application

development

(Project delivery

accountable)

CIO

Information Management

CIO Office

Architecture

Q&C

Service Portfolio and

Lifecycle management

(Service Introduction,

Design)

Customer Service

Management

(Delivery accountable)

Adm

in

Researc

h

Sale

s

Opera

tions

Adm

in

Researc

h

Sale

s

Opera

tions

Infrastructure Service Delivery

Service Management

(Process accountability

Infra

stru

ctu

re

(Hostin

g)

Infra

stru

ctu

re

(Netw

ork

)

Infra

stru

ctu

re

(EU

C)

BRM

Infra

stru

ctu

re

(Colla

bora

tion)

25 65 70 30 50 25

25 Reference model 65000 employees 3 main geographies This is the central org for outsourcing mgmt

Service Management Office work-flow

TOOL

Service Management

IM PM KM CM RM

AM supplier

IM team

PM team

Change team

AD supplier

IM team

PM team

Change team

Infrastructure (Hosting)

IM, PM and CM team

Infrastructure

(Network)

IM, PM and CM team

Infrastructure

(EUC)

IM, PM and CM team

Training and knowledge mgmt

Owning, Managing and using processes and tools

Users of processes and tools

Incident

Manager

Problem

Manager

Problem

Manager

Change

Manager

Change

Manager

Change/ release Mn

Problem

Manager

Tools config and design

Retained

ESP

Incident Lead

(MIM)

Problem Lead

Change / release

Training & Tool

CMS

Service Management Office

Service

management

Incident Management

(Process and MIM)

Change / release

Management

Problem Management

Tools

Management

Problem Manager

Incident Manager

Change and Release Mgr

• Tools Training, Knowledge

• Tool design, Config

Manage all processes and tools. Manage service desk Make sure all processes are followed by the suppliers. Operational in MIM

Service Desk

Service Managers

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Service desk fully outsourced. 3 desks covering 24x7 globally

Service Portfolio and Lifecycle – part of SMO

Service Portfolio and Lifecycle management

Service Design and Transition

Service Introduction Management

Service Catalogue & Portfolio

Management

Service Continuity Management

Service Continuity Manager

Service Introduction

Manager

Service Catalogue & Portfolio Mgr

Manage Transition of new services and keep track of existing services. Service lifecycle management

30 Most people working with Service design and transition

How to plan and implement SMO

Assure leadership and sponsorship Top management must want this

Find correct people to roles Senior experience Passionate, ready to work

Ensure capability ITIL Training Process implementation competence

Be patient Educate organization Iterate processes – ”why did you not log that change” Especially configuration management takes time – start with one service (80-20)

Communicate new ways of work Customers, Users Employees, Suppliers

Set minimum requirements on suppliers in processes

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When to plan for SMO in outsourcing

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Design & Implement Retained Organization

Implement Retained Organization

Design Retained Organization w/ SMO

Design new Service model

Select Services to be

Outsourced

Desicion & Vendor

Selection

Contract

Negotiations

Transition to Vendor

Optimal implementation:

Desicion & Vendor

Selection

Contract

Negotiations

Transition to Vendor

Traditional implementation:

Define services – they will not change. Build CMS.

Service Portfolio Management enables business to make sound decisions about investments Service decisions are based on clear business cases to demonstrate ROIs

Business customers are able to understand service content exactly to evaluate value of service and identify new possible business opportunities

Efficient communication & business requirement understanding (no need to seek ”hidden” information from IT support staff)

IT’s role seen as a service provider where IT brings added value for business services

Possibility for IT to manage IT business better cost and budget allocations reduces operational costs when services are provided within required SLA for capacity & availability Enables evaluation of delivery efficiency with other sourcing alternatives

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Biz-IT 1

Business process

Business process

Business process

Biz-IT 1 Biz-IT 1

Biz-IT 1

Business IT and end user services

Supporting services

Biz-IT 1 Biz-IT 1

Biz-IT 1

Biz-IT 1 Biz-IT 1

Datacenter Application dev Databases Networks Application maint

Biz-IT 1

Biz2 Biz5

Business support services

Biz6 Biz4 Biz3 Biz 1

CMDB CMDB CMDB CMDB CMDB

CMS

Example organization, operating model and processes BRM Communications Incident/request info Change info …

Strategy Applications & Infrastructure Architecture Quality and compliance

Incident responsibility Problem responsibility Change responsibility Capacity responsibility Availability responsibility

Major incident coordination Problem coordination Change coordination Configuration management Lifecycle, Continuity, Catalogue

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Service Management Office in Multisourced Environment - Summary

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Application development

Application operations and maintenance

Solutions Business apps Integration - …

Servers

E-mail

Load balancer

Proxy

Firewall

LAN

Storage

Databases

Virus control

Mobile

Workstations

Video conf & neg. rooms

Office printing AD-DNS ym

Data centers

Local support

Newco Inc SMO

End

use

r se

rvic

es

Ap

plic

atio

n m

ain

ten

ance

Application projects

Application development

Infrastructure

Service desk

Service desk

Serv

ice

des

k Service desk Process and operational accountability

Services and projects Vendor coordination

Common service model

PEOPLE PROCESSES TOOLS ACCOUNTABILITY

Contact information

Timo Hyvönen

Managing director

3gamma Oy

Sentnerikuja 2

FI-00440 Helsinki

+358 50 3748371

timo.hyvonen@3gamma.com

www.3gamma.com – www.itil.fi

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United Kingdom: 3gamma Ltd Silk Point, Hulley Road, Macclesfield Cheshire SK10 2LL United Kingdom Phone +44 161 219 8240

Group Head Office: 3gamma Group Drottningtorget 5 SE-411 03 Göteborg Sweden Phone: +46 31 750 95 65

Sweden: 3gamma Sweden AB Drottninggatan 92-94 SE-111 36 Stockholm Sweden Phone: +46 8 120 20 532

India: 3gamma Consulting India Private Ltd c/o Swedish Trade Council Kheny Chambers #4/2 Cunningham Road Bangalore - 560 052 India Phone: +91 80 41529100

Finland: 3gamma OY Sentnerikuja 2 FI-00440 Helsinki Finland Phone +358 50 3748371

USA: 3gamma Americas LLC 4 Rupells Road Clinton, NJ 08809 USA Phone: +1 908 894-5126

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