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Ian Clayton Principal Service Management 101 LLC. A Manifesto for Cloud-relevant Service Management. The Consequence of Hybrid Cloud Computing on Service Management Practices. Highlights: The economic imperatives driving Cloud adoption

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A Manifesto for Cloud-relevant Service Management


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    1. Ian Clayton Principal Service Management 101 LLC A Manifesto for Cloud-relevant Service Management The Consequence of Hybrid Cloud Computing on Service Management Practices Highlights: The economic imperatives driving Cloud adoption The elements of a service management system and provider organization The impact of Cloud upon the system and organization How to adapt your service provision model to incorporate cloud options Based upon the USMBOK

    2. Introduction • In this session we shall explore: • The economic and management imperatives driving cloud computing, the common cloud options • The perspectives, scope and content of the ‘service management manifesto’ • The elements of a service management system and service provider organization from both the ITIL® and USMBOK® perspectives • The impact of Cloud upon the system and organization, and specifically key practices, processes, roles, policies and artifacts • How to adapt your service provision model to incorporate cloud options • A six-step method for ensuring your service management initiative remains cloud relevant A basic primer on Cloud Computing based upon US Federal Government definitions.

    3. Cloud 101: Introduction • The ‘Cloud’ was originally a metaphor for the Internet, the area outside of your own network • Cloud computing has many diverse definitions, summarized, the Cloud is an on-demand self-service Internet infrastructure where you pay-as-you-go and use only what you need, all managed by a browser, or application. • Cloud computing is broken up into multiple segments represented by the Cloud Pyramid and including: • Cloud Infrastructure • Cloud Platforms • Cloud Applications • Analyst firm IDC says cloud services will outpace traditional IT spending over the next five years and will represent $44.2 billion by 2013 – its huge business!

    4. The US Federal Government Does and Defines Cloud Computing With an IT budget of more then 70 billion dollars a year, the US government represents the largest IT consumer on the planet With this kind of money at stake, the influence the US government imposes is enormous and directly influences how we as an industry both define and use the cloud The National Institute of Standards and Technology (NIST), a non-regulatory agency of the United States Department of Commerce with a mission to promote U.S. innovation and industrial competitiveness, has prepared definitions on behalf of the US Government for Cloud Computing It is expected these definitions will be the de facto standard the entire US government will be given – for more information visit: http://csrc.nist.gov/groups/SNS/cloud-computing/.

    5. The NIST Cloud Definition Framework Deployment/Delivery Models Hybrid Clouds Community Cloud Public Cloud Private Cloud Software as a Service (SaaS) Platform as a Service (PaaS) Infrastructure as a Service (IaaS) Service Models Essential Characteristics Source: NIST Massive Scale Resilient Computing On Demand Self-Service Common Characteristics Homogeneity Geographic Distribution Broad Network Access Rapid Elasticity Virtualization Service Orientation Resource Pooling Measured Service Low Cost Software Advanced Security

    6. The Management Imperative“Address One of My Problems!” Today's economic climate is causing management to tighten budgets and re-prioritize projects It is acting as an accelerant for management expectations of the benefits from investing in a service management initiative All investments are subject to greater scrutiny, with projects being reprioritized and non-performers shelved, or abandoned, perhaps permanently Initiatives must complete and deliver on their promise, or a specific subset of deliverables, within a 30, 60, or 90-day period.

    7. Why ‘Cloud’ Makes the Business Pulse Race • Some of the more common benefits attributed to Cloud Computing include: • A more agile and responsive IT investment decision-making process • Greater alignment of IT investments with business goals • Paying only for what you use, a new generation of ‘service economics’ • Even more rapid, utility styled request and deployment of information services • Greater scalability in all ways, linking real-time demand and utilization with planned capacity – ‘just in time service’ • Higher quality of service, less downtime caused by non-standard or inconsistently architected and designed infrastructures • More cost effective use of all types of technology resources, including human • Annual savings in hardware, power and human labor costs • Environmentally friendly ‘green IT out of a box?’ • THE AVAILABILITY OF VIABLE OFFERINGS!

    8. The Open Cloud Manifesto • The purpose of the Open Cloud Manifesto is to “… initiate a conversation that will bring together the emerging cloud computing community (both cloud users and cloud providers) around a core set of principles” • The document discusses: • What is Cloud Computing and why it isimportant • Challenges and barriers to adoption • The goals of an Open Cloud • Guiding principles for an Open Cloud • For more information visit the website: • www.opencloudmanifesto.org

    9. “Mirror Mirror on the Wall…” • The benefits of Cloud mirror those suggested as resulting from an IT Service Management or ITIL® project, while mugging ITSM for its benefits, Cloud exposes a number of failings in the traditional ITSM approach: • The sheer glacial speed of progress and delivery of tangible business benefits • The often veiled commitment of specialized, scarce resources to a long-term effort • A lack of support from the application and systems management functional groups • A failure to properly integrate business continuity, security, facilities management and capacity planning disciplines • The inability to relate customer activities to consumption of IT resources • The lack of stakeholder support in ITSM as a value creating initiative • Cloud reminds us the business need has not changed and what is wanted is a demand driven, pay as you go, utility styled approach related to specific business outcomes.

    10. For Now.. a Hybrid Cloud • Cloud service providers may struggle to accommodate highly customized applications and IT may baulk at migrating sensitive systems • Likely result is many IT organizationswill face the challenge of managing a hybrid cloud infrastructure over the next 2-3 years • Meanwhile, cloud computing is busily establishing a next generation of service management ‘best practices’, involving: • Subscription based offerings • More agile service agreements • An order-fulfillment provisioning model • Federated design of the service management system that spans dueling silos and the total customer experience • All the while the cloud options will have to tackle the emerging service experiential economy, where the customer experience matters most, successful outcomes aside.

    11. The (Universal) Service Management Manifesto™ • The purpose of the service management manifesto is to clarify the definition of service management and what it means to differing constituents • Like the open cloud manifesto the intent is to initiate a conversation that will bring together the service management community on a universal basis around a core set of principles • The manifesto has five perspectives: • The customer perspective, representing consumers or products and services • The provider perspective, for service providers • The professional perspective for individuals working within service industries • The vendor perspective for suppliers to service organizations • The community perspective, for organizations such as trade and professional associations, representing the industries, organizations, and individuals involved in the consumption and provision of the products and services.

    12. The Service Management ‘Cloud’ Elements The Service Management System The Service Provider Organization The Service Provider Provisioning System Source: USMBOK The service management system has two discrete but co-designed elements: the provisioning system and the organization Apart from security and data governance, Cloud Computing poses a number of major challenges to any organization active, or considering a service management initiative

    13. The natural tendency of organizations to think ‘Inside-Out’ Firstly, it’s a natural tendency and common for most organizations to look inward at what work they do – to think inside-out Inside-out thinking places a greater emphasis, sometimes total, on how the work is performed, its efficiency, productivity, and the product quality This is especially true if the organization is detached or insulated from its end customers, a monopoly, the economy is healthy, and the operational environment stable Performance measures are more focused on the work performed by the service provider, processes, or technologies than on customer outcomes Unfortunately, ‘inside-out’ thinking is commonly associated with a failure to think customer, to understand why the work is performed, and to fail to associate the benefits of a project or initiative with customer results and satisfaction levels.

    14. 7 Signs You are Failing Your Customers (and You) – and may be ‘inside-out’ Key service staff are unable to state easily, clearly and briefly who the customers are, what we do for them, and the basis for customer satisfaction The view of the customers, what they care about, and how you serve them, differs significantly across the organization When compared, more time is spent on internal issues, processes and conflicts than on discussing the customer outcomes and needs Few of your decisions are explicitly driven by customer needs You have trouble adapting to normal variations in the customer operations and get blindsided by changes in strategy and behavior You are trying to apply one rigid practice or process framework to all customer situations You do not know how your efforts relate to the interests and desired results of your customers? 

    15. Manifesto: What is “Service Management”? Service management is a systematic method for managing the provision of services to customers at a known quality and cost Service management ensures the desired results and customer satisfaction levels are achieved cost effectively Service management is a means by which the customer experience and interaction with our products and services is managed Service management is also a transformation method for any organization that wishes to operate as a service provider organization The origin of service management is in product management Service management concepts and methods are universally applicable to any industry, including information technology (IT).

    16. Manifesto: Service Management requires… The adoption of a service perspective to the planning of product offerings and allocation of resources The embedding of a service subscription, consumption and provision logic in the management approach A focus on the desired customer relationship and successful customer outcomes required by customers A commitment to being operated and managed as a ‘service (provider) organization’ A matching of the quality of service, and its cost of provision, to customer requirements and objectives Understanding points from which service can be accessed, managing the ‘service encounter’, and designing how services are supported A system and organization for the fulfillment of ‘service requests’.

    17. What is IT Service Management (ITSM)? The origin of the term is generally unknown, but it has been in mainstream use during the 1990s, historically it has been associated with the introduction of, or improvement of existing IT operational practices through the adoption and adaptation of industry ‘best practices’ ITIL® defines ITSM as, “The implementation and management of quality IT services that meet the needs of the business…” Wikipedia defines IT Service Management as, “a discipline for managing information technology (IT) systems, philosophically centered on the customer's perspective of IT's contribution to the business…” IT Service Management is also the term commonly used to describe the process centric effort of transforming an IT organization from one focused on managing the IT infrastructure, to managing the provision of information system services.

    18. The Promise of IT Service Management (ITSM) “The startling and inconvenient truth about many IT Service Management projects is that they fail the sponsoring IT organization and the customer” “Given the record so far, it is highly likely that without a major outside-in thinking ingredient, the emerging refreshed ISO 20000 standard will continue to propagate an inside-out approach and result in a similar failure” Ian Clayton, Principal, Service Management 101.

    19. The Cloud Discussion is a ‘Darwinian Event’ for Traditional ITSM The Cloud discussion polarizes ITSM theorists and differentiatesthem from pragmatic practitioners Proponents of familiar ‘must-have’ ITSM artifacts, such as service catalogs and configuration management databases (CMDB)are either strangely quiet, or forming committees designed to ensure inter-operability To compound matters, few if any ITSM training classes have adapted their curriculum to include Cloud concepts Some of the most vocal ITSM evangelists are soliciting ideas rather than leading their peers through this latest metamorphosis Have no doubt, the option of Cloud Computing represents a ‘Darwinian Event’, causing management to rethink the value of an ITSM initiative, and to reassess an investment in existing ITSM qualification schemes and inflexible frameworks, such as the IT Infrastructure Library®.

    20. What is a Service Management System? The service management system represents all the operational and administrative elements required by a service organization to respond to market opportunities and customer needs The system’s purpose is to enable the cost effective design, development, offering, contracting, provisioning and support of quality assured services The goal of a service management initiative is to establish and sustain a service management system The journey to a service management system requires the transformation of an organization and adaptation of ‘best practices’.

    21. Service Management System Fundamentals • The service management system should answer a number of question: • How the service provider decides which customer communities to serve • What governance will be used to ensure the voices of the customer, provider and regulators is heard, and documented properly as service requirements • How services will be marketed to each community • How an existing or prospective customer can request service • How requests for service are fulfilled • How the design, development and provision of services is funded • What key roles are required to manage the provision of service • How performance will be measured and managed from a results achieved, and satisfaction level perspective • How the service provider plans will be aligned with those of customer • What transformation method will be used and how will the provider continuously improve.

    22. The ITIL® Service Management ‘System’ • ITIL provides a simplistic four stage ‘lifecycle’ based system • The stages are supported by a continual improvement fifth and cyclic ‘stage’ • There is no detail or over-arching representation of how requests or incidents journey through the system • There are multiple inputs to the ITIL ‘system’, including incidents and service requests. L H H M H H M M Source: SMBOK™ Service L

    23. ITIL® ‘Processes’ Impacted by Cloud H L M H H • ITIL does not provide in core books an overall representation of how processes co-operate • The core documentation describes approximately 36 subject areas or ‘process’ candidates • The likely impact is based upon ITIL V3.0 descriptions. H H H M L H H H H H H M M M M H M H M H M M H H H H Source: SMBOK Service H H M M H

    24. Key ITIL® Artifacts Impacted by Cloud • Application Portfolio • Asset Register • Authority Matrix (RACI Chart) • Availability Plan • Back-out Plan • Business, IT Service Continuity Plans • Capacity Plan • Change Record, Schedule, emergency • Configuration Management Database • Definitive Media Library • Incident record, impact statement • Operational Level Agreements (OLA) • Patterns of Business Activity • Problem record, cause statement • Release identification, record, unit • Requirement Catalog • Security Policies and Profiles • Service Acceptance Criteria • Service Catalog • Service Contract and Level Agreements • Service Improvement Plan • Service Level Packages • Service Level requirements, Targets • Service Pipeline • Service Portfolio • Service Request (Request Fulfillment) • Underpinning Contracts

    25. The ITIL® Roles H H M M H • ITIL does not provide an overall organizational structure or ‘role continuum’ • The core documentation describes approximately 47 responsibilities or ‘roles’ • These roles include at least two that are implied • The likely impact is based upon ITIL V3.0 descriptions. H H H L M H H H H L M M L L M L M H H M H M M M H H H L Source: SMBOK Service H H H L M H H L H H L H L M

    26. The ITIL® Qualification Scheme H • The ITIL Qualification Scheme (IQS) issues certificates based upon proof of progressive knowledge of ITIL core publications • Proof is by examination • The IQS is a certificate issuing scheme • The likely impact is based upon ITIL V3.0 descriptions. M H H H L

    27. The USMBOK® Service Management System H Business Planning Framework Performance Management Framework H The Service Lifecycle H H H Customer Model Requirement Lifecycle Asset Lifecycle Support Lifecycle L H H H H H M M M L Service Request Request Lifecycle Revision Lifecycle Enterprise Model Service Model Quality Lifecycle Change Lifecycle Release Lifecycle Service Retire Event Lifecycle H Policy Framework H M Provision Lifecycle Operations Lifecycle L Service Transaction Engine SYSTEM H Governance Framework Knowledge Domains Service Customer Management Service Fulfillment Management Service Quality Management Service Delivery Management Service Operations Management Service Infrastructure Management Service Value Management ORGANIZATION

    28. Service Request: The Key Input to Service System • New Technology • Derivative Technology • Incremental Service Improvement • Derivative Market L Non-Customer Oriented Needs M Customer Interview Improvement Statement H Customer Oriented Needs and Wants L Idea Generation Source: USMBOK H Service Request Service System Service Catalog H Service Incidents Problem Statement • Improvement statement is a aggregation of: • Customer oriented needs • Non-customer needs • Idea generation • Catalog-driven service enquiries from official ‘service access points’ by authorized persons • Problem statement developed from: • Service incident records • All inputs are consolidated into a common service request format as the primary and singular input to the Service System.

    29. Service Provider Organization: The Role Continuum The Role Continuum Order Fulfillment Marketing Opportunity Partnering Infrastructure and Materials Management Relationship Requirement Responsibility Regulations Quality Performance Excellence Back Office Delivery Operations and Support Customer Facing Service Infrastructure Facing The Service Management System Source: USMBOK Represents the specialized roles required to operate and manage a service organization, spanning the customer and infrastructure facing roles Mandatory role taxonomy input to a governance framework Provides context for application and ownership of operational policies, procedures, and ‘best practices’

    30. USMBOK®: Knowledge Domains & Knowledge Areas • The USMBOK contains 40 knowledge areas, corresponding to major competency (practice) • Each knowledge area leverages existing information references and in some cases credential programs • Supports skill-path, role-based curriculum • Leverages proven and universally applicable service industry methods • Spans the OI-IO Continuum.

    31. Adjusting Your Service Management InitiativeThink ‘Outside-In’ Outside-In thinking is not new, with roots in marketing management, and accepted business management theory dating back past Peter Drucker Outside-In thinking puts the interests of the customer first It ensures an explicit customer reason is in every decision, including what services to offer and the makeup of those services Outside-in cares most about successful customer outcomes (SCOs) Observe customers ‘in their own habitat’ to understand their behavior, how they think and act, and what motivates them to behave in certain ways It is in increasing use by the more successful business enterprises Many ‘quality improvement’ such as Lean and Six Sigma lack suitable outside-in thinking and are embracing it now.

    32. The Basis of Outside-In Thinking:Customer Experience, Outcomes, Satisfaction The customer, and customer experiences matter most because quality goods and customer satisfaction are commoditized Customer satisfaction leads to loyalty and advocacy Loyalty lowers costs and is increasingly necessary to be competitive. The best way to drive loyalty is to create consistently compelling and authentic experiences for the customer To design these experiences, we need a new skill set, a new way of understanding people, and of understanding our customers This understanding enables us to design things that are meaningful and valuable to people, helping them achieve their desired results, outcomes We must not start by designing products and internal processes, and start designing experiences. We must design services from the outside in.

    33. 6-Step Method to Ensure Your Service Management Initiatives Remains (Cloud) Relevant • Organizefor customer relevant service management • Recognize, respect and picture customers and their end customers • Manage the customer’s total service experience • Deliver personalized service • Foster a customer community and manage the entire customer lifecycle, from satisfaction, to loyalty and advocacy • Engage in Continuous Innovation and Improvement

    34. Summary • Remember - Customers are in control in a service economy • Cloud Computing remains an emerging and maturing option for a service provider • As yet it is not subject to any standard definition or regulation – caveat emptor (buyer beware) reigns • Cloud places a significant emphasis and impact on key areas: • Security and data governance • Understanding your successful customer outcomes and required relationship • Managing service provision and the total customer experience • There is, and will continue to be a major impact on education and professional qualifications (certificates, certification and credentials) - CHECK.

    35. Upcoming Events • Outside-In Service Management Foundations™ • San Diego, Solana Beach , October 25-26 2010 • USMBOK Foundations™: • San Diego, Solana Beach , October 27-29 2010 • Launch of three online website services, @ Oct 12: • Service Management University™ • Service Management Connections™ – professional community, ‘Yahoo:Answers’ • Service Management Manifesto™ • Certified Service Management Professional (CSMP)™ • San Diego, Solana Beach November 15-29 2010 • For classroom training discounts and news on upcoming website services gotohttp://www.servicemanagement101.net and register for free • Or call Ian on +1 (858) 461-1253

    36. The Guide to the USMBOK Publication • By registering for this webinar you receive a $50 discount off the list price of the Guide to USMBOK book • The Guide is a ‘Rosetta Stone’ for service management, codifying and connecting: • Universally applicable concepts and methods for any service management initiative • Elements of a service management system • Key roles in a service organization • Your promotion code is ‘GUIDE50’ • A companion publication is the USMBOK Lexicon.

    37. Ian Clayton Principal Service Management 101 LLC A Manifesto for Cloud-relevant Service Management The Consequence of Hybrid Cloud Computing on Service Management Practices Thank You – Any Questions? Ian@servicemanagement101.com Universal Service Management Body of Knowledge: www.usmbok.org My Blog at http://www.ianmclayton.com

    38. Step 1: Organize for Customer Relevant Service Management • Empower and motivate your organization to think customer first by linking compensation to customer outcomes • Create a culture where an explicit customer reason drives every decision • Focus on who you do work for, why you do what you do for them, before you look at what work you do • Use customer perceptions of your products not your own • Inspect customer interactions (moments of truth/ touch points) & reengineer • Design practices using customer scenarios (service requests) and engage customers in co-designing ideal scenarios • Service management means managing the total customer experience • Practices should be designed and streamlined using customer scenarios • Measure what matters - defines customer relevant measures then internal measures and assess degree of alignment and synchronization.

    39. Understanding the Customer • A customer (perhaps unknowingly) uses a combination of the three vital service equations and are focused on: • Achieving their desired results • Receiving personalized service that leaves them satisfied they are relevant, and that service is ‘delivered as promised’ • Consequently: • A quality process is irrelevant to the customer unless it directly effects value by helping achieve results (easier, more consistently), lowers the cost of providing the service • Process maturity is irrelevant unless the level of maturity can be aligned with the minimum, or optimum capability needed to satisfy the agreed service level objectives – or customer expectations.

    40. Step 2: Recognize, Respect and Picture Customers & their End Customers • Develop a deep understanding of how your customers do their jobs and value their time • Ground your success in knowing your customers and their successful customer outcomes (SCO) • Who is the customer? • What is the scenario? • What are the desired outcomes? • What are the conditions of satisfaction? • What are the moments of truth and metrics? • What are the related and/or supporting customer scenarios? • Remember everything your organization knows about the customer • Ensure everyone in your organization has access to a 360-degree view of the customer ‘picture’, their SCOs, service encounters and moments of truth.

    41. Step 3: Manage the Customer’s Total Service Experience • Manage service encounter and moments of truth – the customer experience • Remember, its all about customer ’DNA’ • Do not assume, alienate, abuse, annoy, abdicate • Eliminate the creation of unplanned customer interactions • Deliver a seamless customer experience across channels and touch points • In deciding what to put on your portal first, start with the most commonly requested information or transaction • Redesign your customer facing processes from a customer’s point of view • Give customers control over their experience, place requests, check status, view history, optionally trouble shoot their own problems • Make it easy for customers to do business with you.

    42. Step 4: Deliver Personalized Service • Personalize interactions with customers – walk in your customer’s shoes • Customers will... • Buy before they try, buy by the piece, mix and match • Want to reshape and repurpose goods and services, to share and co-brand • Observe people in their own habitat to understand their behavior, how they think and act, and what motivates them to behave in certain ways • Tune service encounters, touch points and moments of truth • Maintain a list of top scenarios for each customer • Custom-fit information presented and offers • Give customers the ability to design their own products • Personalized service may lead to a need for community • Recruit lead customers to co-design with you and map the ideal state

    43. Step 5: Foster a Customer Community and Manage the Customer Lifecycle Relate and group customers with common interests and needs Common needs foster community, build a community around each set of needs, line of service or service or set of successful customer outcomes Introduce and reinforce common terminology and values Help customers support other customers Design community based and relevant customer support Reward customers for being ‘sticky’, loyal and advocates Remember, customers want to be consulted about the community Communities create added value and support the satisfaction-loyalty-advocacy customer lifecycle.

    44. Step 6: Engage in Continuous Innovation and Improvement • Respect the management imperatives • Establish a continuous improvement program (not service, not process) • Continuously refine your work to make it easier for customers to do their jobs • Defines customer relevant measures then internal measures and assess whether existing practices are aligned to deliver SCOs • Experiment on a small-scale to help improve your customer understanding of your strategy • Continuously improve processes based upon customer feedback • Start the transformation with simple steps, one customer, one SCO. • Ask customers what they want, be vigilant of customer cues • Identify and address the high inertia elements of your strategy • Move from process/product centric to customer centric