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Issue of November 2005 

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Large Enterprise Forum

A ‘service’ frame of mind

Successful IT initiatives require CIOs to streamline their processes and functions, and have IT adopt a service-oriented approach with the business as its customer. by Soutiman Das Gupta

“It is not the strongest of the species that survives, nor the most intelligent, it is the one that is most adaptable to change,” said Charles Darwin. And true enough, in the current business environment which is constantly changing and evolving, any organisation has to keep adapting itself to the current scenario, and be prepared for future shifts.

Amit Chatterjee
Country Sales Manager
HP Software India

In this dynamic business environment, CIOs who treat IT as a service rather than a commodity are those who will be successful in the long run.

Service Management

Mission-critical business processes and the applications that support them are closely entwined. Few executives can perform their work without the support of IT services—whether they directly interact with the applications, or act on the basis of information derived from application services. It is thus necessary for CIOs to move to a system of IT Service Management (ITSM) in order to achieve the objective of delivering IT as a service.

“ITSM is a methodology that helps the IT department to deliver a better customer experience. It is a holistic approach, encompassing people, processes and technologies that deliver IT services,” explains Amit Chatterjee, Country Sales Manager, HP Software, India.

The Present Scenario

Bob Hayward
Senior VP & Research Fellow
Gartner Asia-Pacific

“If you look at the IT management process maturity model, most enterprise IT departments are now moving from a reactive to a proactive state. They need to move further up the maturity model into a service-oriented state,” says Bob Hayward, Senior Vice-president & Research Fellow, Gartner Asia-Pacific.

In the proactive state, the IT department’s objectives are to introduce efficiency and effectiveness. The IT operational processes are relatively mature, and the company uses tools that support defined processes.

These processes include incident reporting, operational change, asset management, real-time monitoring, performance management, data warehousing, back-up/recovery and configuration management. In most cases these tools and applications run in silos and are managed in a distributed environment.

The companies have defined process managers in each area, but they still focus inwardly upon individual components rather than on delivery of business-oriented services, process metrics and reporting.

The Service-Focussed Scenario

“In a state where the IT departments are service-focussed, the primary objective is alignment with business. CIOs will aim to bring in service delivery process engineering, and define services to improve service quality,” says Hayward.

The processes will focus on IT service definition and delivery. There will be functions such as activity-based costing, service benchmarking, end-to-end IT service configuration management with policies, and relationship and dependency mapping.

There will be service capacity management based on business demand. Enterprises will be able to provide end-to-end service level reporting, enhanced proactive processes based on business impact, process integration, and automation.

The management tools in this state will be able to offer service definition, IT service configuration, dependency mapping, end-to-end service level reporting, capacity planning, business service management, and activity-based costing.

Management Tools & Expectations

In this new state of being service-focussed, CIOs will have certain expectations from their management tools. Chatterjee explains, “The tools should be able to perform functions such as automatically discovering the IT infrastructure and understanding which resource is where. Event consolidation and correlation processes should be centralised.”

The management tools in service-driven infrastructure should also be able to automate mapping of services to underlying infrastructure. By doing this, CIOs can examine service status indicators in real time. With the help of these advanced functions, CIOs can take proactive action, conduct performance trending, and make updated reports.

Outsourcing For Efficiency

Many organisations which want to shift to an IT service delivery model can use outsourcing as a strategic means to achieve the desired benefits.

One such organisation that has used strategic outsourcing to its benefit is Hindustan Lever Limited (HLL). This FMCG giant has a turnover of around Rs 11,000 crore and a nationwide presence of manufacturing units, warehouses and offices. It has more than 250 servers and a mix of VSAT links, leased lines, ISDN and international links. Information Technology is extremely business-critical to HLL since operations, management information and business controls are heavily dependent on it.

HLL decided to go ahead with outsourcing for a number of reasons. Previously, it had a decentralised IT infrastructure managed by different support teams and several local vendors providing IT support services. This led to multiple contracts with multiple vendors, and resulted in duplication of work and wastage of resources, limited service levels, and a lack of co-ordination. Accountability was also a key problem area. Says S Narayanan, the company’s Corporate Information Security Manager, “We wanted to improve IT service quality and reliability, and reduce the cost of IT operation management.”

Seeking Other Benefits

Additionally, HLL was looking for a number of other benefits from an outsourcing relationship with HP. The company wanted to streamline and standardise IT processes by optimising the existing processes and interfaces. This would help to concentrate on strategic IT goals that support the business. The outsourcing relationship would give access to new technologies to improve efficiency and productivity.

Facing Challenges

S Narayanan
Corporate Information Security Manager Hindustan Lever

Outsourcing the services of such a complex environment presented many challenges. These were overcome with cleverly-devised strategies. To keep prices transparent and predictable, HLL entered into a five-year contract from October 1, 2002. In order to maintain flexibility, the company defined a baseline for servers, clients and helpdesk seats. Delivery tools were provisioned on a pay-per-use basis, along with exit options.

“We decided to adopt ITIL (IT Infrastructure Library) processes and tools that were ITIL-compliant,” says Narayanan.

Actual Benefits To HLL

The company was able to reduce its head-count and cost due to an inflation-proof flat pricing. There was scope to handle large changes to the infrastructure and support new technologies.

“This relationship with HP has provided consistent service levels across the units, and adherence to ITIL processes has made business more efficient,” says Narayanan.

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