Defining, Modeling & Costing IT Services Integrating Service Level, Configuration & Financial Management Processes In our cost driven economy IT is facing increasing pressure to account for and reduce cost wherever possible. The old axiom “You must do more with less” has never had such an impact on IT operations and support as it does today. Thousands of IT managers are being placed in a situation which forces them to defend their staffing levels against both internal as well as external threats. To address this situation, IT executives are being forced to better understand the services they are providing and to provide an accurate cost benefit analysis of why the services they offer are a better value than the services being offered by external groups who at the very least offer the promise of fixed or at least known costs. Of course, the basic requirement to do this is to have a clear definition of what services the IT organization provides, the components and resources that make up the service and what the associated costs for these services are. Understanding the scope, characteristics and costs of defined services allows for better management of the IT infrastructure as a whole. The sad fact of the matter is that very few IT organizations can articulate what they do at this level of detail. Part of the reason for this lack of information is due to the relative process maturity and integration being practiced within many IT organizations. This paper will examine the fundamental steps for: • Defining IT services • Modeling IT services in a Configuration Management Database (CMDB) • Developing service based IT costing models These activities are part of three IT processes (Service Level, Configuration, and Financial Management For IT) as documented within the Information Technology Information Library (ITIL®). While other processes have a relationship to this topic, these processes contain activities which directly related to the problem statement outlined above and will be the focus of this discussion. For more information about ITIL, visit www.pinkelephant.com. Defining IT Services It is often said that in order to improve “something” one must first define it! This is no less true when dealing with the collection of activities that IT organizations execute for their business customers. Typically when looking at an IT organizational chart one can see a rudimentary breakdown of IT services defined at the directorate or senior management level. Common names for these structures fall under the categories of: • • • • • • • • • Application Development Operations Facilitates Management IT Support Hosting Security Service Delivery IT or Architectural Planning Etc.
PinkLink – August, 2005. © Pink Elephant. All rights reserved. Learn more about ITIL by visiting: www.pinkelephant.com.
Page 1 of 13
ITIL® is a Registered Trade Mark and a Registered Community Trade Mark of the Office of Government Commerce, and is Registered in the US Patent and Trademark Office.
These structures begin to allude to the “professional” IT services which are being delivered to the customer and provide a starting point on how a certain category of services can be defined that are understood by both the business and the IT organization. While these structural names facilitate the definition of IT services they also promote a commonly held belief that IT services are silo or departmental based when this is not always the case. Much like a process an IT service typically crosses organizational and functional boundaries. A major component of Service Level Management is the definition of IT services within a Service Catalog from which Service Level Agreements are negotiated with the client. The following diagram illustrates how Service Level Management defines IT services, publishes them in a comprehensive Service Catalog and then develops Service Level Agreements based on these definitions with its customers.
The first step in the creation of...