When you plan a family vacation, chances are that your family members living together would travel on the same flight to reach their destination. Then you might rent one car to drive from the airport to the hotel together. You wouldn't generally have your daughter on one flight, your son on another, and so on, and then have to worry about how they all got to the hotel. You would end up blowing the family vacation budget, and probably temporarily lose a family member in the process. Most people wouldn't even consider organizing a family trip in such a haphazard and expensive way.
Like the family vacation, are your business customers sharing IT resources as a "family," or are they procuring and utilizing resources independently? Are individual or departments running multiple instances of different software packages that deliver the same types of services?
As the old adage goes, "Sometimes less is more." You can increase the value of your IT organization while also maintaining or reducing IT spending by eliminating such costly redundancies through the adoption of a shared-service provisioning model.
What are shared services? The term has multiple definitions in the IT industry, but the definition found on Wikipedia is in line with the thoughts of most experts and analysts:
"Shared Services refers to the provision of a service by one part of an organization or group where that service had previously been found in more than one part of the organization or group. Thus, the funding and resourcing of the service is shared and the providing department effectively becomes an internal service provider."1
Many businesses have, over time, multiple ERP systems (e.g., Oracle, SAP, etc.) across the enterprise, due to acquisitions or as a result of business units creating their own IT systems and support. Most likely, each business unit experiences a different level of service depending on how much money it had to spend on its particular implementation. Moreover, exchanging data between the systems for consolidation and reporting purposes can be time consuming and potentially error prone. In addition, the aggregate cost of running these multiple systems is generally higher than the combined business value delivered, due to redundancies in hardware, software, and administration/operation resources.
Consolidating these systems into a single, shared service enables you to leverage economies of scale while also providing a consistent level of service across the enterprise. A shared services program can improve service quality and delivery to multiple business departments across the enterprise at a reasonable cost, as opposed to each department providing its own iteration of the same service. Typical examples of redundant services include help desks, email, and Enterprise Resource Planning (ERP) systems.
The following are 4 steps to launching a shared services initiative:
1. Understand the Services
To get started in shared services, begin by getting a clear understanding of the services upon which your business customers rely to run the business. Some of these services may be provided by IT today and some may not. When identifying these services, make sure to think about them from the perspective of business outcome, not underlying technology. Otherwise, you may miss out on opportunities for consolidation. For example, consider an enterprise with a single instance each of Exchange, Lotus Notes, and Google Mail. Although there is only one instance of each application, they are all providing the same business services: communication and collaboration. These become the shared services to be consolidated. The underlying technology is secondary to the business objective.
2. Bring Your Delivery Platform Up to Date
A critical element in delivering shared services is to deliver them as efficiently as possible. You can accomplish this goal by standardizing your delivery platform and then looking for opportunities to modernize it.
Begin by identifying the various delivery environments in place for your target services and evaluating them against your strategic platform architecture. If you don't have strategic platform architecture, now would be a good time to define one.
Your target architecture should enable you to deliver a consistent quality of service while also adjusting to accommodate differing levels of service across the enterprise. Technologies such as virtualization and private/public clouds can be leveraged to achieve this objective.
More and more hardware technology vendors are providing integrated network, system, and storage platforms. Cisco, for example, has delivered its Unified Computing System (UCS), which provides a "one cable in, one cable out" experience for administrators. Solutions such as this allow system engineers to build the private cloud and virtualized environments that facilitate the efficient delivery of shared services.
Additionally, the correct application architecture can greatly contribute to effective shared services. Applications ideally should be architected to provide multitenancy. This allows core or supporting functions of a service to run as a single instance, while multiple application instances can run with the processes, customizations, and data being isolated and secured from each other.
3. Establish Comprehensive Management
In addition to the appropriate technology, effective delivery of shared services requires ongoing comprehensive management of that technology and the associated processes. Specific management components that should be in place include the following:
Service Catalog Management - The service catalog describes to your customers the services that are available and the Service Level Agreements (SLAs) to which those services conform. Ensure that all shared services are documented and publicized through the service catalog.
Self-Service Request Management - One of the major obstacles to customer acceptance of shared services is the perception that service responsiveness will be compromised. An effective service request management process supported by a self-service portal will enable consumers of services to request the service that they want, when they want it, with minimal interaction with the service desk. Additionally, many of these types of service requests can be automated, further enhancing the end-user experience and improving the perception and acceptance of shared services.
Configuration Management - To facilitate system consolidation, an ongoing understanding of the relationship between technology components and the resulting service is critical. Ongoing configuration management, supported with a well-maintained configuration management database (CMDB), provides the centralized "system of record" necessary to sustaining the shared services.
Event Management - To maintain high levels of service availability, IT must proactively manage service events in an effort to prevent them from negatively affecting service availability. Proactive monitoring enables the IT-operations function to identify early indicators of performance or availability issues and initiate corrective action before the service is adversely affected.
4. Make Business Service Management Your Foundation
As previously stated, the goal of shared services programs is to provide consistent service quality and delivery to multiple business departments across the enterprise. Implicit in this goal are the objectives of delivering business-critical services and achieving cost efficiency.
These objectives form the underlying principle of Business Service Management (BSM), a comprehensive and unified platform that simultaneously optimizes IT costs, demonstrates transparency, increases business value, controls risk, and assures quality of service. BSM simplifies, standardizes, and automates IT processes, so you can efficiently manage business services throughout their lifecycle - across distributed, mainframe, virtual, and cloud-based resources. BSM helps to provide a clear understanding of the services offered while also promoting increased simplification, standardization, and automation.
Effective shared service delivery requires process standardization. The multiple process models that may have been in place prior to consolidation will need to be reconciled into a single, consistent approach. A framework, such as the IT Infrastructure Library® (ITIL®), is a good starting point for achieving process consistency.
While going through your consolidation exercise, use this chance to simplify the resulting processes and then look for opportunities to automate as many as those processes as possible. Finally, leverage technology solutions that support your standardized processes and enable the areas of automation you've identified.
In today's economic environment, your IT organization faces increasing pressure to remain competitive and deliver business value, especially as more services are being offered through the cloud. Shared services can help you improve both the quality of the services delivered and the bottom line - thereby increasing business value. A BSM approach is your starting point for the adoption of a shared services delivery model. By managing IT based on business priorities, your IT organization is already well on its way to leading your business "family" toward a more efficient and cost-effective consumption of IT services.
About Bill Emmett
Bill Emmett, Senior Manager in BMC's Strategic Marketing Organization, has been a practitioner, innovator, and marketing leader in the IT management software industry for nearly 15 years. He has been a part of BMC since 2008, where he leads the Thought Leadership team. Additionally, he is responsible for developing and articulating BMC's overall message, Business Service Management, to the market. Before joining BMC, Emmett held R&D, strategy, and marketing leadership positions at HP Software.
About Atwell Williams
Atwell Williams is a Solutions Architect within BMC Software's Office of the CTO, where he focuses on ITIL and other best-practice frameworks for improving IT processes. Williams consults with customers on how best to derive value from their technology investments. Additionally, he works closely with the BMC development organization to ensure that BMC's solutions continue to solve real-world customer problems. In both capacities, he brings a unique combination of IT process expertise (having served as an ITIL instructor and being ITIL Foundation, Practitioner, and Service Manager Certified) and real-world IT experience (having served as director of service management in BMC's internal IT organization). Prior to joining the Office of the CTO, Williams was an ITIL instructor and education manager within the BMC Educational Services group. Before joining BMC, Williams was a partner with PricewaterhouseCoopers (PwC).
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