Visible Ops: Building Effective & Auditable ITIL Change Management Processes in 4 Steps: Phase One

1. Visible Ops:Building Effective & Auditable ITIL Change Management Processes in 4 Steps:Phase One Gene Kim, CTO, Tripwire, Inc.October 27, 2004

2. The Challenges • How do I simultaneously contain costs, improve security and service levels, and address regulatory compliance? • What is my first step in building an ITIL change management process? How will I know that it’s working? • What order should I tackle the ITIL process areas? • How do I attest to auditors that I have effective change management processes? • Sarbanes-Oxley Section 404 • HIPAA, GLBA, CFR11a, etc. • How do COBIT and ITIL fit together? • How do I create a good working relationship with my auditors? • What do auditors doing controls-based auditors look for? • What happens if they cannot find effective controls?

3. Agenda • Examine the high-performing IT operations and security organizations • What they all have in common • What we can learn from them • Define the ideal working relationship between IT and audit • Why auditors talk the way they do • What auditors need to see • Building auditable and effective change management processes in four steps: • Stabilize Patient • Catch & Release and Find Fragile Artifacts • Establish Repeatable Build Library • Enable Continuous Improvement

4. The Highest Performing IT Organizations… • High performance Ops and Security organizations have: • Highest ratio of staff deployed on pre-production processes • Lowest amount of unplanned work • Highest change success rate • Best posture of compliance and security

5. Common Process Areas Of High Performers • All the high-performers had self-derived the same way of working • Culture of change management • Culture of causality • Culture of compliance and desire to continually reduce variance

6. Common Traits Of The Highest Performers • Culture of change management • Integration of IT operations and security processes via problem management and change management processes • Processes that serve both organizational needs, as well as business objectives • Highest rate of effective change (approved changes, change success rate) • Culture of causality • Highest service levels (MTTR, MTBF) • Highest first fix rate (unneeded rework) • Culture of compliance and continual reduction of operational variance • Production configurations • Highest level of pre-production staffing • Effective pre-production controls • Effective pairing of preventive and detective controls

7. Causal Factors of IT Downtime Operator Error 60% System Outages 20% 5% Security Related 15% Non-Security Related Application Failure 20% Source: IDC, 2004

8. Capability Levels Organization controls the changes: • 4 - Continuously Improving • <5% of time spent on unplanned work • Change success rate is very high • Service levels are world class • IT operating costs are under control • Can scale IT capacity rapidly with marginal increases in IT costs • Change review and learning processes are in place • Able to increase capacity in a cost-effective way Changes control the organization: • 3 - Closed-Loop Process • 15-35% of time spent on unplanned work • Some ticketing / workflow system in place • Changes documented and approved • Change success rate is high • Service levels are pretty good • Server-to-admin ratio is good, but not BoB • IT costs are improving but still too high • Security incidents down • 2 - Using Honor System • 35-50% of time spent on unplanned work • Some technology deployed • You have the right vision but no accountability • Server-to-admin ratio is way too low • IT costs are too high • Process subverted by talking to the “right” people • 1 - Reactive • Over 50% of time spent on unplanned work • Chaotic environment; lots of fire fighting • MTTR is very long; poor service levels • Can only scale by throwing people at the problem Effectiveness Reactive Using The Honor System Closed-Loop Change Mgt ContinuouslyImproving Based on the IT Process Institute’s “Visible Ops” Framework

9. Why Auditors Do The Things They Do • Given enough time and resources, auditors would love to count all the beans • Go into the warehouses, open up all the containers, and inspect all the contents • Rarely does this actually happen, for obvious reasons • Instead, auditors go to the “bean counting machine” to see whether the results are trustworthy • What controls ensure that it hasn’t been subverted? • What controls ensure that the results are correct? • For a variety or reasons, auditors are shifting from substantive audits to control audits

10. IT Controls 101 • Preventative Controls • Separation of duties • Change management and authorization processes • Detective Controls • Production controls around change management and configuration management • Corrective Controls • Restoration and backup systems

11. Ideal Attestation of Controls • High performing shops typically have the highest service levels and the lowest cost of controls • Best service levels (MTTR, MTBF), lowest amount of unplanned, unscheduled work, highest server/sysadmin • Best working relationship with audit. • Least amount of time dedicated to compliance activities • Why? • They can point to their change management and governance process (preventative controls) • They can show that the processes are working (detective controls) • How? • Change management meeting minutes • Three-ring binder of change orders and verified changes

12. COBIT and Change Management

13. COBIT AI6: Managing Changes

14. COBIT DS9: Managing The Configuration

15. The Tragic Truth About Auditors • Auditors gravitate to where controls appear weakest • To attract the attention of auditors, have unexplained outages and lots of unexplained changes • “The top leading indicators of risk when we look at an IT operation are: poor service levels and unusual velocity of changes.” Bill Philhower

16. Visible Ops: Four Steps To Build An Effective Change Management Process • Each of the four Visible Ops steps is: • A finite project: not a ISO 9001 initiative or a vague 5-year vision • Catalytic: returns more resources to the organization than it consumes, fueling the next steps • Sustaining: process stays in place, even when the initial force behind it disappears • Auditable: supports factual reporting and attestation to process adherence and consistency • Ordered: must be done in the specified order to achieve the above • Model based on five years studying high-performing IT Ops and Security organizations • Visible Ops has been donated to the ITPI

17. Visible Ops: Four Steps To Build An Effective Change Management Process Phase 2: Catch and Release, Find Fragile Artifacts Phase 3: Establish Repeatable Build Library Tripwire protects fragile artifacts. Tripwire enforces change freeze and prevents configuration drift. Tripwire captures known good state in preproduction. Tripwire captures production changes that need to be baked into the build. Phase 1: Electrify Fence, Modify First Response Phase 4: Continually improve Tripwire enforces the change process. Tripwire rules out change as early as possible in the repair cycle. Tripwire detects change, which all process areas hinge upon.

18. Phase 1: Stabilize Patient, Modify First Response Phase 1: Stabilize Patient, Modify First Response Tripwire and IP Services

19. Issues • We have a tendency to “light and fight” our own fires • 80% of outages are self-inflicted • 80% of MTTR is dominated by asking “what changed?” • With sufficiently low change success rate, high rate of change, and high MTTR, we are spending all our time doing unplanned, unscheduled work • Best in class: 5% of OpEx is spent on unplanned work • Average: estimated around 25-45% • Changes are made without authorization, proactive scheduling, or full documentation "The most likely way the world will be destroyed, most experts agree, is by accident. That's where we come in; we're computer professionals. We cause accidents." Nathaniel Borenstein

20. Stabilize Patient • Curb the major cause of outages: 80% of outages are self-inflicted • Identify critical patients, clear everyone away from them unless they are authorized to operate • Document this new change policy: no changes unless authorized (preventative) • At this point, anyone even holding a scalpel should be viewed with suspicion

21. Electrify The Fence • We have now prescribed our first preventative change process and policy • Why do most change management initiatives fail? • What is the top audit finding around change controls? • Now we must “manage by fact” instead of “manage by belief” by electrifying the fences • No one is allowed to be inside the change fence except on the weekends • Why did Joe Bob touch the fence on Monday at 2:11am? • Document what should happen to Joe Bob: • Public shaming, take a day off, or more… “What is often overlooked is that if one person can single-handedly save the ship, that one person can probably single-handedly sink the ship, too.” -- Unknown

22. Create Change Team • Get all necessary stakeholders who can best make decisions about changes, encompassing business goals, operational risks, technical risks, etc. • Key stakeholders for us Security Lead, Ops Systems Engineering Lead, VP of Operations, Service Desk Manager, Director of Network Operations, and Internal Audit • Create weekly change management meetings mandatory for all CAB members.

23. Hold Weekly Change Management Meetings • Create a path from desired change, to requested change, authorized change, scheduled change, implemented change, verified change. • Review implemented changes and ensure that all actual changes mapped to authorized work • Enable highest change throughput for the organization, best serve business needs, with the least amount of bureaucracy possible • Weekly 15 min change management meetings are possible, with practice • Keep good records of requested changes, authorized changes, and scheduled changes

24. Change Management Guidelines • Don’t: • Don’t authorize changes that do not have rollback plans that everybody reviews • Don’t allow “rubber stamping” approval of changes • Don’t let any system changes off the hook – someone made it, so understand what caused it • Do: • Do post-implementation reviews to determine whether the change succeeded or not • Do track the change success rate • Do use the change success rate to avoid making historically risky changes “It’s not the strongest species that survive, nor the most intelligent… but the one most responsive to change.” – Charles Darwin

25. Spectrum: Managing Change • Don’t expect to be doing “closed loop” change management right out of the chute – awareness is better than being oblivious, managed is better than unmanaged! • Spectrum • Oblivious to change: "Hey, did the switch just reboot?" • Aware of change: "Hey, who just rebooted the switch?" • Announcing change: "Hey, I'm rebooting the switch. Let me know if that will cause a problem." • Authorizing change: "Hey, I need to reboot the switch. Who needs to authorize this?" • Scheduling change: "When is the next maintenance window - I'd like to reboot the switch then?" • Verifying change: "Looking at the fault manager logs, I can see that the switch rebooted as scheduled." This is what SO-404 requires! (Preventative and detective controls)

26. Create Trusted Authorized Work Queue and Change Calendar • Create a work ticketing system that contains all the authorized work that went through the change management process • Create a change calendar (Forward Schedule Of Change) that the change manager uses to coordinate resources, manage risks, etc.

27. Modify First Response (1/2) • The key to a catalytic change management process is that it must return value back to the organization • Decrease MTTR, dominated by 80% where people ask “what changed?” by integrating change management process into problem management • Whenever problem managers are mobilized, have all authorized changes and actual changes in the work ticket The Microsoft MOF study showed that their best in class customers rebooted their servers 20x less often, and also had 5x fewer “blue screens of death.”

28. Modify First Response (2/2) • Eliminate change as early as possible by identifying the assets directly involved in the ticket and auditing them against their configuration baseline for the last 72 hours. All changes found are attached to the ticket. • If no changes are found the circle is widened to include changes made to infrastructure supporting the target systems. “Grant me the Serenity to accept the things I can not change, Courage to change the things I can, and Wisdom to know the difference.” – Dr. Reinhold Niebuhr (excerpt from the Serenity Prayer)

29. Phase 1: What You Have Built • Documented correct path from desired change to authorized change, scheduled change, implemented change, and verified change • Created documentation that the process is working • Returning value back to IT Ops by reducing MTTR, increasing change success rate and effective change throughput

30. What To Show The SO-404 Teams • Change governance and management processes • Meeting minutes of the change management meetings • Authorization processes • “Three ring binder” of stapled items: • Authorized work order • Change report on infrastructure showing correct changes made • Signature of change manager verifying correct implementation of change

31. What To Show The Auditors • List of all outages and unscheduled downtime • Change management metrics • Change rate (per week) • Change success rate • MTTR, MTBF • This would make most auditors breathe a sign of relief

32. Visible Ops: Four Steps To Build An Effective Change Management Process Phase 2: Catch and Release, Find Fragile Artifacts Phase 3: Establish Repeatable Build Library Tripwire protects fragile artifacts. Tripwire enforces change freeze and prevents configuration drift. Tripwire captures known good state in preproduction. Tripwire captures production changes that need to baked into the build. Phase 1: Electrify Fence, Modify First Response Phase 4: Continually improve Tripwire enforces the change process. Tripwire rules out change as early as possible in the repair cycle. Tripwire detects change, which all process areas hinge upon.

33. Release Time to provision known good build # turns to a known good build Shelf life of build % of systems that match known good build % of builds that have security sign-off # of fast-tracked builds Ratio of release engineers to sysadmins Controls # of changes authorized per week # of actual changes made per week Change success rate # of emergency changes # of service-affecting outages # of “special” changes # of “business as usual” changes Change management overhead Configuration variance Resolution MTTR, MTBF % of time spent on unplanned work Which Metric Do You Want To Improve? Phase 4

34. Why Is Unplanned Work Such A Good Indicator? # of productionchanges failed change %or unauth changes mean timeto repair % of time spenton unplanned work = X X Average: 35-45% of OpEx spent on unplanned work! Impact: late projects, rework, compliance issues, uncontrolled variance, etc…

35. What Affects These Variables? # of productionchanges mean timeto repair % of time spenton unplanned work failed change %or unauth changes = X X Behaviors that increase change success rate:• Effective change testing • Effective risk review when approving changes • Effective identification of change stakeholders • Effective change scheduling Behaviors that decrease MTTR:• Culture of causality: desire to rule out change first in problem repair cycle • Effective change management process that can report on authorized and scheduled changes • Ability to distinguish planned and unplanned outage events • Effective communications around scheduled changes • Effective monitoring of infrastructure for production changes Behaviors that reduce unauthorized changes:• Culture of change management • Management ownership of change process • Effective monitoring of infrastructure with detective controls to enforce change process • Management use of corrective action when change processes are not followed

36. What Do These Transformations Look Like? • Examples • Joe Judge at Adero • Ken Larson at Schlumberger-SEMA • Kevin Behr at IP Services • Financial returns of process transformations • Increased availability and decreased MTTR • Reduction of unplanned work from 50% to 5% of OpEx • Increased delivered capacity by 2x with 10% increase in OpEx • Increased delivery of planned projects that deliver higher value to the business • Fulfilled compliance and reduced cost of compliance

37. Why Do Auditors Love Continuous Improvement? • Controls are owned by the business to meet business objectives! Instead of there only to make auditors happy! • Auditors hate dragging organizations to implement controls, especially if creates grudging and literal interpretations of findings • Continuous improvement requires process and controls, to detect and reduce variance

38. ITIL and COBIT • ITIL defines the set of all IT operational processes • COBIT defines all the controls that can be wrapped around them • ITIL and COBIT are complementary and orthogonal: • Six Sigma defines how to build processes and their corresponding controls to continually monitor and reduce variance • ITIL defines the change management processes • COBIT defines the controls to ensure that the ITIL processes are auditable and effective

39. Caught in the Crossfire of Change • Rate of change is increasing with no signs of slowing Business objectives SarbOx, GLBA, CISP, etc. Distributed systems Heterogeneous environments Quality improvement Risk mitigation Service levels Staffing & Budgets

40. Getting Control of Change Preventive • Firewalls, AV, IDS • Vulnerability analysis • Identity management • Change ticketing • Help desk ticketing Process Controls Process Controls Detective • Automated change monitoring • Integration with other tools & controls • Change documentation & reporting Corrective Detective • Patch management • Provisioning • Manual inspection • Scripts • Manual inspection • Scripts • Backup/Restore • Provisioning Security • Control frameworks prescribe internal controls to enhance operational performance, security, and regulatory compliance • COBIT, ITIL, ISO17799, SAS70 Preventive Detective Corrective Change Management

41. Tripwire Change Auditing Solutions IncidentManagement ChangeManagement ReleaseManagement Enterprise Management Systems Approved Intended MgmtReports Unexpected Reconciled Verified AuditReports CMDB Actual Infrastructure Systems (Servers, Network Devices, etc.) • Actual changes are detected on production systems and reconciled with approved and intended changes • Change auditing results then flow back to change tickets, trouble tickets, audit and mgmt reports, plus configuration mgmt databases (CMDB)

42. Can You Answer These Questions? • Pick any piece of your infrastructure (router, server, firewall, etc.) • If a change is made to this device, how will you know? • How soon will you know? • How will you know if the change is good or bad? • How long will that process take? • What happens when the change is good? • What happens when the change is bad? • How do you verify that each change has been reconciled? • How do you report on all of the above? • Can you provide a historical report accounting for all changes in your environment? • This is what auditors want to know about how changes are managed in your IT infrastructure • With Tripwire, you can answer all of these questions

43. Improving Service Quality And Availability Customer: IT Services operations of a Major Energy Services company • Problem:Change management in place, but lacked enforcement • Saw changes occurring, but didn’t have the means to validate Tripwire solution: • Tripwire detects change and puts “teeth” in the process • Tracking What, When, Who, How and Why a change was made • Tripwire provides “black and white documentation” to enforce process • Increased staff efficiency, uptime, and service quality • “We used to spend 45% to 50% of our time on unplanned work. Now it’s around 5%.” • “In spite of force reductions, customers describe our services as ‘phenomenally better’ now.”

44. Get Involved! • Join ICOPL (ITPI Community Of Practice List-Serv) • http://www.itpi.org/home/icopl.php • There is now a Visible Ops Pocket Guide! • http://www.itpi.org/home/visibleops.php • We are looking for volunteers to help with our research projects. • IMCA is now online at the ITPI • http://www.itpi.org/home/imca.php • If you have a high performing organization, we want to study you!

45. Summary • Control is possible. We merely need to look at the high-performing IT organizations to confirm this. • Transformation is possible. Visible Ops is the result of years of studying high-performing IT operations and security organizations in conjunction with the ITPI • Visible Ops illustrates how interested organizations might replicate the processes of these high-performing organizations in just four, achievable steps • Gene Kim: genek@tripwire.com