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ITIL - Delivering Real Value in a Downturn: Three Fast Steps to Service Value

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Table of Contents

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Executive Summary

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Overview

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Three steps to Service Value Management

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Mobilize the hit squad

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ITIL - Delivering Real Value in a Downturn

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Table of Contents Executive Summary

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Overview

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Three steps to Service Value Management

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Mobilize the hit squad

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Copyright Notice

Š Copyright Axios Systems 2009. The information, which is contained in this document, is the property of Axios Systems. The contents of the document must not be reproduced or disclosed wholly or in part or used for purposes other than that for which it is supplied without the prior written permission of Axios Systems.

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Executive Summary Gartner prepared a worst-case scenario for its 2008 and 2009 forecasts that showed worldwide IT market growth dropping from the previous forecast of 8.9 percent to 7.3 percent in 2008 and from 5.8 percent to 2.3 percent in 2009. Understanding how your organization will be impacted by the slowdown will let you adapt without overreacting. Even in the midst of dire financial news, there are opportunities for IT to maintain service quality and deliver improved value to customers. IT Service Management (ITSM) provides some great opportunities to save on costs and also demonstrate value. ITIL projects normally involve a lot of discussion and ‘culture change,’ which can be a euphemism for managing political situations—this also takes considerable time. The downturn—and the inevitable need for review and cost-cutting—provides a good opportunity to bypass all of this and implement change rapidly. This can bring about significant results as people band together in a united front to survive the current market challenges.

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Overview We can all feel the reach of the current financial crisis—either through seeing the value of our investments fall, price increases, or more potently, the ever increasing unemployment figures. In November 2008, the US reported a 500,000 increase in unemployment and the UK unemployment figures recently in December 2008 rose to 6 percent. Some sectors such as financial services have witnessed devastating cuts in staff, hastily organized mergers, or ultimately companies failing. It is clearly a troubling time and a global problem that will take some time to resolve. Generally, all the questions that are asked—often suddenly in a crisis—can be answered using one of the key principles in Service Management (i.e. the understanding and definition of what services, and associated benefits, are actually delivered by IT). ITSM is concerned mainly with managing cost, quality and risk. So, if an organization has gone through the process to define and prioritize its services (not just systems), then it will be well-prepared to identify which services and components are business-critical, and which ones are not.

“ITIL has a role to play in driving short-term cost optimization initiatives throughout the IT function. It’s about the visibility and understanding that ITIL adoption delivers and how that provides organizations with the clarity needed to embark on a significant cost-cutting program while ensuring that such cuts can be implemented within a governance and control framework to mitigate associated change-related risk.” From a report by Gartner’s Rod Addy

This may seem obvious, but many organizations do entitled, “Cost Optimization: Three ITIL Processes Can Play an Important not actually understand this concept. The nature of Role,” published January 19, 2009. IT support and delivery is technology-focused, often inefficient and not properly understood in relation to its value to the business and the customers it supports. The issue also extends through the complexity of systems now in use, and it has become increasingly difficult to identify which parts of an IT estate are actually business-critical.

The net result of this is that, (1) the IT organization’s risk is exposed in the business, and (2) the IT organization is in a very poor position to make the right decisions regarding cost-cutting that it will inevitably be asked to make. Also, there is constant new hype and pressure around the opportunities for efficiency and cost savings through such concepts as ‘virtualization’ and ‘cloud computing.’ As always, these things require and involve a lifecycle of time, understanding, preparation and investment for success, and many IT people don’t have that luxury.

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Now, more and more, the focus is to cut and reduce costs, do ‘more with less’ and continue to maintain expectations on service. A key question to answer is: Where can we make savings and what should we leave well alone? It is a simple enough ‘double’ question, but if you can answer it, then you will be in a good position to support your organization during the downturn, through trimming costs, maintaining service quality and managing risk.

“ITIL is essential for aligning IT services with the business and providing full transparency [of] our IT operations.” Arab Bank, Basil Abdel Nabi – Deputy Head of IT

The Good News Certainly organizations that have fully embraced ITIL, with advanced maturity across ITIL disciplines, will be well-situated to make good cost-cutting decisions at this time. They will also find it easier to push back on cost-cutting where necessary as they will have established a mature and common understanding of IT service value. Their customers will appreciate better value and benefits of key IT services and be less likely to remove or downgrade these unless absolutely necessary. In a difficult situation, there is always the temptation to ‘panic-buy,’ which could ultimately lead to outsourcing that may not deliver the cost savings and service levels initially expected. This could be avoided if service value is known and communicated by all parties. Even organizations that are not fully committed to the ITIL approach can use some simple and inexpensive techniques based on ITIL principles in response to the financial situation and current demands. There are three simple steps to demonstrating business value from IT services, which can help organizations avoid the disasters of inappropriate outsourcing and unnecessary cost-cutting—all of which can contribute to setting minds at ease throughout the IT department. The downturn can be used and seen as an opportunity for change and development—particularly if there have been issues identified but not resolved for some time. The downturn creates an environment where all political and personal issues must be put to one side and everyone pulls together for the greater good— often for self-preservation. www.axiossystems.com


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The strategic elements and decisions around these three steps can be worked through within just a few days. Most of the other activities can be put in place within weeks, if given the appropriate levels of support. Use the three-step guide as a comfort-factor health check if you are already working with a service-value agenda. If not, then it can be used to quickly get you up to speed and identify the steps you need to take: (1) (2) (3)

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ITIL - Delivering Real Value In A Downturn: Three Fast Steps To Service Value