6.2 - Key Principles and Models

5.1 Learning Unit 05 - Service Strategy, Governance, Architecture and ITSM Implementation Strategies

Welcome to learning unit – 5. This unit will focus on Service Strategy, Governance, Architecture and ITSM Implementation Strategies. The purpose of this learning unit is to explore various aspects of service strategy as they relate to the business, and the overall implementation of IT service management (ITSM). Specifically, it will provide an overview of corporate governance of IT, a service management system, the relationship between ITSM and enterprise architecture and the relationship between ITSM and application development. Let us go ahead and learn more about Implementation Strategies. The next slide will explains us the objectives of this learning unit.

5.2 Learning Unit Objectives

The Objectives of this unit is to help us learn about: •Understand the concept of Governance, Management, IT Governance •Learn How does Service Strategy relate to Governance •You will also learn the 3 Main Activities in Strategy Policy - Evaluate, Direct, Monitor •How organization will be Using Strategy to achieve balance •What are the various Types of Service Management Implementations •Identify the Service Management Assessment, its Variables for the implementation. •What are the contents of Project Charter? So Let us proceed to the next slide and learn more about these individual topics in detail.

5.3 Service Strategy - Governance

Let us start with understanding the first concept of Governance. Governance is the single overarching area that ties IT and the business together; am services are one way of ensuring that the organization is able to execute that governance. Governance is what defines the common directions, policies and rules that both the business and IT use to conduct business. Many IT service management strategies fail because they try to build a structure or processes according to how they would like the organization to work instead of working within the existing governance structures. Changing the organization to meet evolving business requirements is a positive move, but project sponsors have to ensure that governance of the organizations recognizes and accepts these changes. Failure to do this will result in a break between the organization’s governance policies and its actual processes and structure. This results in a dysfunction organization, and a solution that will ultimately fail. What is governance? Corporate governance refers to the rules, policies and processes (and in some cases, laws) by which businesses are operated, regulated and controlled. These are often defined by board of directors or shareholders, or the constitution of the organization; but they can also be defined by legislation, regulation, standards bodies or consumer groups. Governance is important in the context of service strategy, since the strategy of the organization forms a foundation for how that organization is governed and managed. This figure shows how governance works to apply a consistently managed approach at all levels of the organization - firstly by ensuring a clear strategy is set, then by defining the policies whereby the strategy will be achieved. The policies also define boundaries, or what the organization may not do as part of its operations. For example, stating that IT services will be delivered to internal business units only, and will not be sold externally as an outsourcing company would. The policies also clearly identify the authority structures of the organization. This is indicated in how decisions are made, and what the limits of decision-making will be for each level of management. The plans ensure that the strategy can be achieved within the boundaries of the policies. Let us now move on to our next slide and discuss the difference between Governance and Management.

5.4 Difference between Governance and Management

In our last slide, we discussed the concept of Governance. This slide explains the Difference between Governance and Management Governance is performed by governors. Governors are concerned with ensuring that the organization adheres to rules and policies; but even more, that the desired end results are being achieved in doing so. Management is performed by executives and people who report to them. Their job is to execute the rules, processes and operations of the organization according to the governance policies, and to achieve the strategies defined by the governors. Managers coordinate and control the work that is required to meet the strategy, within the strategy, within the defined policy and rules. The executive ensures that governance and management are aligned. The figure shows the role of managers relative to the activities of governance. Now, we will learn about the Governance Framework and IT Governance in the next slide.

5.5 Governance Framework and IT Governance

The Governance Framework is categorized and structured set of documents that clearly articulate the strategy, policies and plans of the organization. ISO/ IEC (Pronounce as I-S-O/ I-E-C) 38500 outline the following six principles that are used to define domains of Governance: •Establish responsibilities •Strategy to set and meet the organization’s objectives •Acquire for valid reasons •Ensure performance when required •Ensure conformance with rules •Ensure respect for human factors Now let us understand what is IT Governance? IT Governance does not exist as a separate area. Since IT is a part of the Organization, it cannot be governed in a different way from the rest of the organization. ISO / IEC 38500 refer to corporate governance of IT and not IT Governance. What is normally called IT Governance is usually a matter of the CIO (Pronounce as C-I-O), or senior IT Managers, enforcing corporate governance through a set of applied strategies, policies and plans Let us now understand, how is corporate governance of IT defined, fulfilled and enforced?

5.6 How is Corporate governance of IT defined, fulfilled and enforced ?

Although IT governance is not separate from corporate governance, it is important that IT executives have input into how corporate governance will specify how IT is governed. This is usually achieved by establishing an IT steering committee, also called an IT steering group. The purpose of the steering committee is to establish how IT will comply with and fulfill corporate governance. In addition it also represents how IT works with other business units to help them comply with corporate governance. An example of the IT steering group in relation to other governance bodies is shown in the figure. The name and specific roles of each of these groups may differ from organization to organization. Let us go to the next slide to learn about, how service strategy relates to governance?

5.7 How does service strategy relate to governance ?

Strategy management for an internal IT service provider will be overseen by the CIO and the IT steering committee. Again in larger organizations, this might be a dedicated function reporting to the CIO. The service portfolio is also an integral part of fulfilling governance, since the nature of services, their content and the required investment are directly related to whether the strategy is achievable. The current and planned services in the service portfolio are an important part of strategy analysis and execution. Financial management for IT services is also a critical element of evaluating what investment is required to execute service strategies, ensuring that strategies are executed within the appropriate costs, and then measuring whether the strategy was achieved within the defined limits. Demand Management provides a mechanism for identifying tolerance levels for effective strategy execution. Each strategy approved by the governors must include the boundaries within which that strategy will be effective. Business relationship management is instrumental in defining the requirements and performance of services to Customers. This makes it possible for those customers to comply with corporate governance in their organizations. In the next slide, we will learn about setting the strategy, policies and plans.

5.8 Setting the strategy, policies and plans

Defining strategy, policies and plans is a rigorous process, and consists of three main activities: evaluation, directing and monitoring. Although the governance process itself is out of the scope of this publication, it is helpful to provide an overview, and to demonstrate the links between service strategy and governance. This Figure highlights the main activities of governance. Governance needs to be able to evaluate, direct and monitor the strategy, policies and plans. These activities can be summarized as follows. Evaluate stage refers to the ongoing evaluation of the organization’s performance and its environment. These evaluations will include an intimate knowledge of the industry, its trends, regulatory environment and the markets the organization serves. The strategic assessment is typical of the type of input that is used in this evaluation. Items that are used to evaluate the organization include: •Financial performance Service and project portfolios Ongoing operations Escalations •Opportunities and threats •Proposals from managers, shareholders, customers etc. •Contracts •Feedback from users, customers and partners. The next slide will explains the direct stage activities.

5.9 Direct - Activities

Direct activity relates to communicating the strategy, policies and plans to, and through, management. It also ensures that management is given the appropriate guidelines to be able to comply with governance. This activity includes: •Delegation of authority and responsibility •Steering committees to communicate with management, and to discuss feedback (also used during ‘evaluate stage’) •Vision, strategies and policies are communicated to managers, who are expected to communicate and comply with them •Decisions that have been escalated to management, or where governance is not dear. Now, we will discuss the concept of Monitor stage Areas in the next slide.

5.10 Monitor - Areas

In this activity, the governors of the organization are able to determine whether governance is being fulfilled effectively, and whether there are any exceptions. This enables them to take action to rectify the situation, and also provides input to further evaluate the effectiveness of current governance measures. Monitoring requires the following areas to be established: •A measurement system, often a balanced scorecard •Key performance indicators •Risk assessment •Compliance audit •Capability analysis, which will ensure that management, has what they need to comply with governance. Let us now move on to our next slide where we will learn about Establishing and Maintaining a Service Management System.

5.11 Establishing and Maintaining a Service Management System

Governance works to apply a consistently managed approach at all levels of the organization. Areas of specialization and processes within the organization are managed by management systems. As per the definition from ISO 9001, management system is a system to establish policy and objectives and to achieve those objectives. A service management system (SMS) is used to direct and control the service management activities to enable effective implementation and management of the services. Processes are established and continually improved to support delivery of service management. The SMS includes all service management strategies, policies, objectives, plans, processes, documentation and resources required to deliver services to customers. It also identifies the organizational structure, authorities, roles and responsibilities associated with the oversight of service management processes. The adoption of a SMS should be a strategic decision for an organization. The SMS, its processes and the relationships between the processes are implemented in a different way by different service providers. The design and implementation of the SMS will be influenced by the service provider’s needs and objectives, requirements, processes and the size and structure of the organization. The SMS should be scalable. For example, a service provider may start with a simple situation that requires a simple SMS solution. Over time, the service provider may grow and require changes to the SMS, perhaps to cope with different market spaces, the different nature of relationships with customers, organizational changes, new suppliers or changes in technology. In the next slide, we will discuss on the IT Service Strategy and Business.

5.12 IT Service Strategy and the Business

The concept of service strategy and the business has been covered to some extent in previous learning units, but the components have been summarized and repeated here for reference. Aligning the IT service strategy with the business is an important exercise that involves both parties. Successful strategies are typically anchored top to bottom in the business vision, mission and core values. The overarching IT service strategy and underpinning service provider strategies should be examined and validated with the business to ensure that, they serve the desired business outcome. Let us now move on to our next slide. Examining the IT service strategies at a more detailed level allows for the organization to be ‘fit for purpose’ and ‘fit for use’, which ultimately translates to value in the form of business outcomes. We have discussed the IT Service Strategy and Business in this slide. The next slide explains the concept of Using Strategy to achieve balance.

5.13 Using Strategy to achieve balance

Building an overarching IT service strategy that is underpinned by a set of more targeted service strategies can require some careful consideration and planning. It often includes objectively considering a service’s current state, future state, competition, opportunity, risk and, most importantly, talking with the business. A good assessment of the effectiveness of a given service in supporting the overall business outcome and strategy is to evaluate how it impacts the balance of the organization. These are discussed in detail in ITIL Service Operation and also explained in the figure here. This might include a review of current investments, successes, failures, volumes, trends, costs, values etc. Achieving a perfect balance here is not only unlikely; it may be unbalanced by design. For example, the leadership team in a start-up organization may have greater appetite for risk than that of the market leader. Therefore, adjusting the balances should be done intentionally and be fully supported by the business. The service providers cannot lose sight of the overarching IT strategy, their position as an integrated business partner or their role of supporting the overall business vision and mission. In the next slide we will look at the concept of Integrated Patterns in IT Service Strategy and the Business.

5.14 IT Service Strategy and the Business - Integrated Patterns

Alignment of IT strategies with the business is something that should be done with the business leaders. IT leadership can contribute intelligence about technology trends, open market services, opportunities, risks and threats but, in the end, the IT strategies should represent the business they serve, and should be understood and agreed to by the business. One method for creating and evolving these strategies is to create an IT steering committee with representation from the business, IT, enterprise architecture and governance. Examining the business value of IT services and aligning IT strategies helps FT begin to think about services in the context of value creation rather than components, technology and organization. Now IT service providers can begin to retool and think about all of the potential service options rather than just the ones built or provided internally. IT can begin to transition away from specific technology discussions with the customers to value-based discussions anchored with the desired business outcome. When IT becomes an integrated strategic business partner, it starts to seek out the best possible solution for the business even if that means recommending a service provider other than itself. In the next slide, we will discuss the IT Service Strategy and Application Development.

5.15 IT Service Strategy and Application Development

IT strategy and service strategy are both directly linked with application development in a number of different areas. The IT strategy combined with the underpinning service strategy Lifecycle will serve as a primary feed into governance at application development. Decisions such as build vs. buy can also be influenced by IT strategy and the service strategy Lifecycle. One of the main activities within t service strategy Lifecycle is the classification of service assets. A well-defined service strategy combined with service asset classifications can empower business and leaders to make informed decisions without being intimately familiar with every aspect of a given service. Application development teams should maintain alignment with service strategy by incorporating it into individual product line strategies and internal development efforts. While service strategy is created to drive the fulfillment of the desired business objectives, application development plans should be aligned to support service and IT strategy. In a sense, the application development strategy will have its own 4 Ps of strategy (perspective, position, plans and patterns) but it derives the overall direction from the service and IT strategy. This can also play a key role in helping the organization achieve the appropriate balance of innovation vs. operations. The next slide will explain the concept of the Types of Service Management Implementations.

5.16 Creating a strategy for Implementing SM Processes - Types of Service Mangement Implementations

Types of service management implementation: There are almost as many strategies for service management as there are organizations that have implemented it. However, they typically conform to one of four patterns, based on the current situation of the organization. This section is based on ideas from Strategic Selling. Even keel mode: Even keel’ is a sailing term used to describe a sailing boat that is in calm weather and does not need any special techniques or tactics to move forward. Winds are favorable and sailing is straightforward. Decision makers feel that their organizations are well managed and on track to meet their organizational objectives. Although there may be some minor difficulties within IT, these are not significant enough to initiate any projects aimed at changing the way IT is managed. The appropriate service management strategy in these cases is to continue to focus on CSI and ensure that the organization continues to grow good service management practices over time. The appropriate strategy for service management |s the same as the performance projected by the organization’s leaders, in other words, IT should continue to do exactly what is in the existing plans. Next is the Trouble mode: These organizations have recognized that there is a significant weakness or problem with the way in which IT is managed. This is usually seen in repeated outages, unreliable changes, customer dissatisfaction, capacity shortages, uncontrolled spending etc. Whatever the symptom, decision makers understand that they need to take significant action. Initially they might have invested in some short-term fix that has not been successful, and now recognize the need for a more comprehensive management approach. Third mode is the Growth mode: Organizations in growth mode have made a strategic decision to improve or change the organization significantly over the planning period. For example, they might be expanding into new markets, establishing new lines of business or improving the performance of the organization as a whole. The organization’s strategy recognizes that IT is part of the solution to achieving this level of growth. Decision makers will look for a comprehensive/strategic approach, such as IT service management, to achieve this growth. Fourth is the Radical change mode: These are organizations that are going through a fundamental change as an organization -for example, they might be outsourcing IT or going through a merger or acquisition. These projects are similar to those for organizations in growth mode, with two major differences: The first phases of the project (assessment, planning, designing and implementing the solution) all need to happen very quickly. This is followed by a long and intensive program of entrenching the new practices into the new organization. The project is managed by a small group of people who may not disclose the details of the project until an appropriate time, usually around the implementation phase. This demands a less participative implementation style and makes it difficult to ensure that the requirements are comprehensive and accurate at operational levels. Moving on to the next slide, let us see the graphs representing strategies for organizations.

5.17 Strategies for Organization's

Strategies for Organization’s: Figure 5.9 illustrates an organization in growth mode. The organization’s strategy requires a significant improvement in IT’s performance (the colored line). The IT service management project team needs to define an approach in which all service management processes and functions are deployed to the appropriate levels over time. Figure shows that there is a time lapse between the definition of the organization strategy and the IT service management implementation, set the strategy, prepare resources etc. Figure 5.10 illustrates the type of strategy required for organizations in radical change mode. The actual change is preceded by a significant amount of preparation activity. This often goes beyond planning and includes the actual implementation of key processes such as service portfolio management and business relationship management and functions such as a new financial management function for restructured organization and services. Figure 5.7 illustrates the appropriate strategy for organizations in trouble mode. This diagram shows the IT service management strategy will focus on building a solution that solves the immediate problem and moves the organization out of trouble. For example, I the problem is unreliable changes, the project will focus on building a centralized change management process, configuring and implementing the appropriate tools, and ensuring that all IT personnel are trained to use the new processes and tools. Figure 5.8 illustrates the pattern of repeated trouble. Over time, IT reacts to a series of problems, using service management to fix each one. The overall impression of the organization is that IT service management does not address all their requirements and in fact has been making the organization progressively worse. In addition, IT loses credibility at an increasing rate. In the next slide, we will define a Vision and Mission for the SM Implementation.

5.18 Implementation Strategy - Defining a Vision and Mission for the SM Implementation

The planning team should be very careful to take the organizational vision and strategy into account as they develop the vision and mission for the service management process implementation. This section deals with the vision and mission for the service management process implementation, not for the entire organization. It may well be that the vision of the organization will change if the project is successful, but that is something that needs to be handled by the organizational executives as part of a separate exercise. One of the most common ways of developing a vision and mission is to conduct a workshop with key stakeholders. The outcome of the workshop is to have a vision statement that each individual is prepared to support and that they can explain convincingly. This seems to be fairly simple, but in reality this is probably one of the most difficult things to achieve. Every person in the workshop has their own opinion about what is wrong and how to solve the problem. In the beginning stages of the workshop it is not uncommon to find that every person there believes that the other people are the ones with a problem, and he or she has just been asked to attend to give the rest of the group the benefit of their experience! A good vision statement has four main purposes The clarify the direction of an initiative To motivate people to take action that moves the organization to make the vision reality To coordinate the actions of different people or groups To represent the view of senior management as they direct the organization towards its overall objectives Let us now move on to the next slide on Steps for defining vision and mission.

5.19 Defining the Vision and Mission - Steps

In our last slide we discussed about Defining a Vision and Mission for the SM Implementation. This slide explains the concept of Defining the Vision and Mission – Steps. Let us understand these steps one by one. Step 1 - Where have we come from? Vision and mission statements do not occur in isolation. There has to be a reason for the team getting together to discuss the need for IT service management. The first phase of defining a vision and mission is to understand the events and dynamics that have led us to this point. This part of the workshop documents the factors that have led to this meeting. These could include: •Significant events •Key people, actions and decisions •Environmental factors •Locations (e.g. is this relevant to a specific site or does it relate to multiple sites?) Step 2- Assessing the context: In this section of the workshop the team will attempt to capture all relevant environmental factors that could influence what the vision and mission will be. Ideally, the assessment should have been conducted and will have identified most of these areas; however, it is still necessary for the team to consider these areas when defining the vision and mission. Whereas the previous section focused on what happened in the past, this section focuses on what could affect the future. These factors could include: •External environment: •Technology •Economic •Political •Legislation •Internal environment: •Business plans and objectives •Political •Financial •Requirements expressed by any stakeholders or potential stakeholders. Step 3-Situational analysis: This part of the workshop is an extension of the previous one, except that here the review what other organizations have done in the area being considered. Potential inputs to this discussion are: •Projects undertaken by a competitor •Case studies •White papers •Industry research (e.g. benchmark reports). Step 4 is Define the possibilities: Now that the analysis has been completed the workshop becomes creative. In this step, the team is asked to imagine a future state in which the issues in the previous three steps have all been dealt with. This part of the workshop is likely to result in all kinds of ideas and suggestions, often uncoordinated and in no particular order. It is important to note that that this is not the step where the vision and mission are defined. This is where the team has free rein to imagine Step 5 is restating values, policies and guiding principles: After Step 4 the team will be fairly excited about the vision that is emerging. One of two things can happen at this point: The team could get carried away by their enthusiasm and start creating a vision that is not feasible or practical. Some members of the team, realizing this, may start to negate the visions of other members, resulting in a kind of team despondency - and a vision that is not ambitious enough. Step 6 is stating the vision and mission (getting agreement): The facilitator will now work with the group to define the vision and mission statements. This is normally done in two steps: Summarize the vision and mission themes and merge the themes into vision and mission statements. We will now understand the Service Management Assessment in the next slide.

5.20 Service Management Assessment

Once the organization knows what type of strategy it needs to follow, it is necessary to do an assessment to confirm the strategic approach and define a more detailed service management implementation strategy. Assessments based on checking compliance are different from those that are based on a maturity model of some kind. This section examines some of these differences and considers the circumstances under which each should be used. It also looks at some hybrid assessment approaches. Compliance-based assessments are aimed at evaluating whether an organization meets some type of external criteria or not. These criteria could be in the form of standards (e.g. ISO/IEC 20000), proprietary frameworks, legislation or methodologies. Compliance-based assessments might be helpful in defining an implementation strategy for service management processes if a strategic objective is compliance with a particular standard. In other cases, however, these assessments are more useful as tactical assessments to identify non-compliance and remedial action. Maturity Based Assessments evaluate where an organization is located on a journey from one state to another. They usually start with a base state of zero and end at a state of 5. Comparison of compliance and maturity based assessments: some similarities between compliance and maturity based assessments are as follows: Both measure the organization according to a pre-defined set of specifications and standards. Both are structured, and require rigorous and extensive programmed questioning to determine the organizations position, often using standardized questionnaires. Both are repeated on a regular basis to determine the effect of changes in the organization Exception Based Assessments: compliance and maturity based assessments are both based on measuring the organization against an external or best practice. An exception-based assessment accumulates evidence of business failures caused by poor service management and uses these to justify a deeper analysis. So far we discussed about the Service Management Assessment, let us understand its Variables in the next slide.

5.21 Service Management Assessment - Variables

A good assessment will enable the team defining the implementation strategy for service management processes to understand the variables that can make or break the success of the project. These variables form the basis for the rest of this section and can be summarized as follows: External reference: An ITSM (Pronounce as I-T-S-M) project or program will usually refer to an external reference as a guideline - in the same way as a driver would refer to a map to ensure that they are on the correct road. Most assessments are tied to a specific standard, framework, reference model or methodology. Understanding that no assessment is objective is an important step in a successful ITSM implementation. Even ITIL-based assessments tend to vary in how best practice is interpreted. The stakeholders: Everyone has a different perception about what needs to be done. In addition, regardless of what an assessment recommends, the stakeholders will decide how to move forward. Often this is done in the worst possible way - as people pay lip service to the assessment results while working behind the scenes to promote their own agendas. The existing situation: The assessment will not be conducted in a sterile environment. Some ITSM processes may be in place already, and this will impact the findings and recommendations of the assessment. The assessment should also be used to challenge preconceived ideas about how effective the current situation is. Other projects: Several ITSM projects have failed simply because they did not take into account that there were other projects competing for budget, people and executive support. Organizational dynamics and objectives Experience has shown that the solution that is eventually deployed rarely looks anything like the original plan. There are a number of reasons for this, including the following: ITSM is not widely understood and supported in many organizations - it’s often seen as an internal IT project. Of course this is not true - ITSM is dependent on a complex set of relationships and processes, many of which are controlled by other groups in the organization. Changes in the external environment should also be noted a good example of this was the introduction of Sarbanes-Oxley legislation. Many projects changed direction and scope as soon as this legislation was announced. The type of assessment that is available there are a number of assessments in the market, ranging from short and inexpensive self-assessments, to complex, detailed and expensive investigations. The team should be careful to evaluate which assessment will yield the best result for their current situation. A complex, detailed assessment is overkill for an organization just starting out on their ITSM journey, whereas a high-level self-assessment will not be suitable for an organization looking for detailed guidance on how to implement a specific subset of processes. Let us now learn the Objective for Implementing Service Management in the next slide.

5.22 Objective for Implementing Service Management

Using assessment outputs to define objectives: One of the most obvious inputs for defining the objectives of the project is the assessment report. Once the assessment has investigated the current situation, interviewed all stakeholders and examined relevant artifacts, it will be possible to provide a good idea of what needs to be done. The assessment can help the team to identify where to start, what needs to be done and in what sequence. Thus the assessment is a valuable tool to determine the scope and objectives of the project. There are many ways to use the assessment report, but most involve the following steps: •All issues or gaps and recommendations are listed - usually in a spreadsheet •The issues are weighted (using a value of 1 to 10 or high, medium, low etc.) according to: •Their current impact on the organization Setting and managing objectives: The vision statement and the assessment results will indicate the desired outcome of the service management process implementation and a strategy on what gaps or obstacles exist that prevent that outcome from being achieved. The objectives of the project will indicate how the outcome will be achieved. By this stage defining the objectives should be quite straightforward, but it is important not to assume that everyone understands or accepts them. For this reason, it is mandatory that all stakeholders play a role in defining or signing off on the objectives. Planning for risk management: Depending on the scope and complexity of the service management implementation strategy, the team may need to have a separate plan to deal with the identified risks. This plan will become part of any overall project plan that is part of executing the strategy and will be reviewed at regular control points. Some projects will assign an individual to monitor and manage the risks associated with the project. In general, though, it is the project manager’s responsibility to ensure that risks are identified and that measures are put in place to mitigate them. Usually the project team will jointly identify and document the risks, including the potential impacts and, if known - the probability of the risk occurring. Managing risks: Once the risks have been assessed and documented, together with their action plans, the risk management plan must be reviewed regularly to ensure that appropriate actions have been taken and are working as expected. It is important to note that any of the risks may change status throughout the project. For example, we may have totally avoided a risk, or a mitigation action is so successful that the risk is downgraded or even retired. On the other hand, a situation may arise which may cause some risks to become more probable, thus increasing their ranking. The next slide we will look at preparing a business case.

5.23 Preparing a business case

The concept of the business case and its use are described in earlier units as it refers to calculating the return on investment for services. This section considers business cases in the context of defining a strategy for service management process implementations. The purpose of a business case is to demonstrate the net benefit of the project to the organization. This involves analyzing the cost of the project and then comparing it with the benefits of the project. The business case typically also contains an analysis of what would happen if the project did not go ahead. There are three main challenges with preparing a business case: Estimating the costs: The amount of work involved in a project is always an estimate, and there are very few guidelines available regarding the number and type of resources that are going to be needed for ITSM implementation projects. Some guidelines are given in the next unit, but these will vary depending on the scope of the project, how many processes are going to be implemented, whether they are going to be implemented concurrently or sequentially etc. Quantifying indirect and intangible benefits: Since ITSM processes are often concerned with ‘maintenance and control' type activities, it is often difficult to show a direct benefit to the functionality of the organization. In addition, benefits like improved staff morale and customer satisfaction are difficult to demonstrate. The business case will therefore need extra effort to link some of the indirect and intangible benefits to direct business outcomes. Obtaining accurate information about the business and IT performance: Organizations that are implementing ITSM often do not have metrics and complete historical data to help them demonstrate potential benefits. In addition, business performance data may not be available for similar reasons - or if it is available it may be confidential. In this slide we discussed about preparing a business case. The next slide will explain the concept of Project Charter - Contents.

5.24 The Project Charter - Contents

All project management methodologies use the concept of a project charter, although it is sometimes known by other names. The charter is the document that authorizes the project team to execute the project and allows the project manager to assign tasks and responsibilities to individuals on the project even if they report in to other managers. A project charter should consist of the following information: I. The project name II. The vision of the project III. A brief description of the problem being solved IV. The objectives of the project V. The names of the project team, and a brief description of their roles. VI. The name and signature of the person approving the project VII. A list of assumptions and policies upon which the project is based VIII. An outline of the key deliverables of the project, and if known, the timescales involved IX. A summary of the project requirements X. A summary of the project risks and action plans XI. The approved budget for this project There are no rules regarding the content and length of the project charter except that it should be short enough that people will actually read it. For example from experience it means fewer than five pages. Let us now look into the concept of Go or No Go – Decision -Factors.

5.25 Go or No Go - Decision - Factors

The final step of the service management process implementation strategy is to obtain agreement to proceed. If agreement is not obtained, this will require the planning team make changes if funding exists, or seek additional funding to change the strategy, or else stop the project altogether. A “go” decision for the strategy usually depends on the following factors. •A good awareness campaign •Effective communication of the vision to all stakeholders •A business case that outlines the appropriate level of benefit to the organization •A realistic assessment and communication of the threats and how they will be mitigated •A clear alignment between the project charter and the strategy of the organization as a whole In the next slide, we will discuss the summary of this learning unit.

5.26 Summary

This slide summarizes the learning unit and the topics covered. •Governance, Management, IT Governance •How does Service Strategy relate to Governance •3 Main Activities in Strategy Policy - Evaluate, Direct, Monitor •Using Strategy to achieve balance •Types of Service Management Implementations •Service Management Assessment, its Variables •Project Charter – Contents Next is the quiz section, complete it before moving to the next learning unit on Organizing for Service Strategy.

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