Introduction to Service management Tutorial

1 Introduction to Service Management Lifecycle

Hello and welcome to unit one of the ITIL® 2011 Foundation Certification course offered by Simplilearn. This unit includes two lessons and provides an overview of the service management lifecycle. It will help you to provide appropriate service solutions to businesses, customers and users.

2 Principles of IT Service Management

Now let us focus on the first lesson of this unit, which is Principles of IT Service Management. This lesson covers the key concepts related to service management. It will also focus on the stakeholders associated with service management.

3 Objectives

After completing this lesson, you will be able to: •Explain the best practices in IT Service Management •Identify the stakeholders in service management •Describe service management roles and responsibilities •Explain the types of service providers

4 IT Service Management-Best Practices

IT Service Management is the implementation and management of quality IT services that meet the needs of a business. It is performed by IT service providers through an appropriate mix of people, process and information technology. IT Service Management includes best practices or processes that have been successfully followed by many organisations. Apart from the fact that they have evolved from successful innovations, best practices and open standards are widely accepted. Best practices are derived from several sources. Few such sources are: •existing public standards such as those published by the International Standards Organisation or ISO; •industry practices that are shared among industry practitioners; •academic research; and •internal experiences or an organisation’s past experiences in providing similar services.Best practices are also called public practices.

5 Public and Proprietary Practices

There are a number of reasons for preferring public practices over proprietary practices. Public practices are widely distributed among a large community of professionals through publicly available training and certification. Whereas, proprietary practices are deeply embedded in organisations. Therefore, it is difficult to replicate the same environment. Public practices are applied across many technologies and businesses. These practices are reviewed by peers and used by different parties. But proprietary practices are highly customised to support specific business needs. They are also hard to adapt or reuse. Public practices are available for free, and it is easier for organisations to hire people with the knowledge of such practices. Whereas, proprietary practice is owned by someone who will charge for it. The evolution of proprietary practices depends on the owner and cannot be guaranteed. For example, you are in the midst of an online training for a technical course and you find out that the course is not up-to-date. The organisation that developed the course is out of business. So you will be stuck paying for the course and receiving outdated knowledge.

6 Knowledge Check

Now let us do a quick recall of the concepts covered.

7 Service Introduction

We will now define a service and the teams involved in it. Service is a means of delivering value to customers by facilitating outcomes the customers want to achieve, without the ownership of specific costs or risks. Let us take an example to understand this further. Suppose an online bookstore is looking for a repository or database to store all the data related to their online book selling business. Such data can be book details and customer details. The required outcome is online sale of books. One of the activities facilitating the outcome is storage of data. The bookstore is not specialised in managing storage as an IT service. Therefore, it does not want to manage the associated costs and risks that may arise due to infrastructure, staff, facilities and so on. However, there are organisations in the market that are willing to handle the risks for a cost. These organisations are called service providers. They have the specialised knowledge and experience as well as the confidence to control the associated costs and risks. So the bookstore agrees to pay for the database service provided by the service provider under specific terms and conditions. Thus, the service provider provides value to the customer, that is, the online bookstore, by managing their database and the costs and risks.

8 Service Management

Service management is the effective, process-driven management of transforming IT resources into valuable IT services. The image shows the link that has to be preserved between the desired business outcomes and the services that service management is responsible for. Let us understand the terms used in the image. Two types of assets are used by both organisations and customers. These are capabilities and resources. Capabilities are the functions used to manage services. Capabilities are intangible assets of an organisation and cannot be purchased, but have to be developed and matured over time. They include people, knowledge, processes, organisation and management. Resources is a generic term that includes people, information, applications, IT infrastructure and financial capital that help to deliver an IT service. Resources are the tangible assets of an organisation. The resources and capabilities used by the service provider to offer services to customers are called service assets. Let us take the example of an organisation providing email as a service. This organisation needs to have hardware such as servers, routers and switches to relay emails. They should also have software such as Gmail to let users read their emails. The hardware and software mentioned here are examples of assets. Such an organisation also needs a capable team to manage these assets, and the money required to procure these assets. If the customers of the organisation do not know how to get the email service, all these assets go waste. So some of the critical underlying elements of getting an email service are how to get an email account, how to maintain it, and where to go for support if issues occur. The capabilities and resources used by the customer, to achieve business outcomes, are called customer assets. There are certain methods or processes to ensure that the delivery of services is effective. This helps to maintain a link between the desired business outcomes and the services that service management is responsible for. Now let us understand two more terms, which are performance and value. Performance is a measure of what is achieved or delivered by a system, person, team, process or IT service. Considering the example of email as a service, effective use by all users, the number of mails delivered to the intended recipients and so on are some of the performance measures of the service. Now let us define value. Value is a measure of the return on investment or benefit to a business. For example, the invention of email has led to faster flow of information and quick decision-making by businesses unlike the postal service. The result is a growth in business outcome or revenue.

9 Service Management Practice

Now we will discuss service management practice. There is no single best management practice that fits every company. There are several sources of service management practices that fulfil the objectives of a business. The image shows some of the sources of service management practices. There are certain enablers that define how these sources may be used. The enablers help to determine the practice that can serve the purpose of any business or organisation. The employees play a key role in the organisation. The use of technology may facilitate service management. In addition to the sources and enablers, there are several drivers and scenarios that help to decide which service management practice should be chosen. Laws such as the Sarbanes Oxley Act influence the way businesses operate. Competition may also shape the way a business functions. That is because the business needs to stay competitive for its survival in the market. The customers of the business will want the organisation to operate in alignment with their needs. Thus, public frameworks and standards should not be ignored. The organisation should cultivate their proprietary knowledge based on public standards and frameworks. Coordination and collaboration across organisations become easier based on shared practices and standards.

10 Challenges in Service Management

The challenges in service management are as follows: Firstly, the nature of output in service management is intangible. Secondly, the output is hard to control, measure and validate. Thirdly, customers’ assets such as applications, processes, transactions and documents arrive based on the demand, and these stimulate service production. So demand is associated with customers’ assets. Fourthly, there is hardly any buffer between the creation of the service and its consumption by the customer. Finally, service capacity and output are of perishable nature. This means that service providers need to ensure there is a steady source of supply to satisfy customers’ demands. In addition, the supply should have consistent quality.

11 Benefits of IT Service Management

The benefits of IT Service Management are as follows: •Service provision is of high quality because people associated with it are aware of their responsibilities. •The service quality is cost-effective. •The services satisfy the demands of the customer, user and business. •The processes used are centralised and integrated with each other.

12 Stakeholders in Service Management

Let us now focus on the stakeholders in service management. A stakeholder is interested in the outcome of a service or a project. They are interested in the targets, resources and activities associated with service management. In addition, they are also interested in service management deliverables. Some examples of stakeholders are organisations, shareholders, employees, service providers, suppliers, partners, owners, consumers, users and customers. Organisation refers to a legal entity, a company or an institution that comprises resources, people and budgets. An example of temporary organisation is project and that of a permanent organisation is business. There are various stakeholders within the service provider organisation. They are the groups, teams and functions that deliver services. There are stakeholders external to the organisation as well. The customer who buys goods or services, and the end user who uses the services are external stakeholders. Even third parties such as suppliers, who provide the goods or hardware, are external stakeholders. Network services that are required to deliver IT services are also external stakeholders. Some of these suppliers are outsourcing organisations as well as network and telecom service providers.

13 Internal and External Customers

There are two types of customers for any organisation. Customers who work in the same organisation as the IT service provider are termed as internal customers. For example, the marketing department in an IT company is their internal customer because it uses IT services. If the organisation charges the department for the IT services, the payment made is considered as an internal transaction in the organisation’s accounting system. The payment is not considered as revenue earned by the organisation. Customers who are in a legally binding contract with the service provider and purchase services from the latter are termed as external customers. They are not employed by the organisation. For example, an online book seller getting IT services from an IT service provider is an external customer.

14 Internal and External Services

Now we will discuss internal and external services. Services delivered to business units within the same organisation are called internal services. Whereas, services delivered to an external organisation are called external services. The concepts of internal and external services are explained further with an image. In the image, the IT department is providing services to business units which belong to the same organisation. Such services are known as internal services. For example, the sales department is an internal customer using the CRM services provided by the IT department. The same IT department is providing services to the customers who are external to the organisation. These services are considered as external services. Let us further understand the facts related to internal and external services. Internal services support activities within an organisation but external services result in business outcomes. It is vital to link the internal services to the external services. It helps in measuring the business outcomes. It also enables you to measure the ROI or Return on Investment.

15 Process

We will now focus on what a process is and how it is related to providing quality services. A process is a set of activities designed to accomplish a specific objective. It takes defined inputs and turns them into defined outputs. A process may include roles, responsibilities, tools and management controls required to deliver the outputs. As shown on the image, a process or an activity within a process is initiated by a trigger. A trigger may be the arrival of an input or any other event. For example, the failure of a server may trigger event management and incident management processes. The central box in the image indicates the elements of a process. As mentioned earlier, a process is a set of activities with established procedures and work instructions. So it has to be measured and then improved with the help of metrics. A process may include roles and responsibilities to carry out the activities involved in it. The process control section in the image shows various entities to control the process. The Process Owner governs and controls the process. He is accountable for the effectiveness and efficiency of the process. Processes, once defined, should be documented and controlled. A process is organised around a set of objectives with process controls. The lowermost section in the image indicates the process enablers that are the requisites for a process. Resources and capabilities are required to deliver, control and manage the process activities. They also help to produce the required process outputs. A process produces various outputs including process reports and reviews.

16 Process Characteristics

All processes have the following common characteristics: Firstly, processes are measurable. Managers want to measure cost, quality and other variables while the doers of the process are concerned with duration and productivity. Secondly, processes help to deliver specific results. The primary output of a process is delivered to customers and stakeholders. Finally, a process responds to specific events known as triggers.

17 Functions Related to Service Management

Now we will discuss functions related to service management. In ITIL® terminology, functions include a team of people and the tools they need to carry out one or more processes or activities. Functions are the units of an organisation, which specialise in performing certain types of work. They are responsible for specific outcomes. ITIL® 2011 defines various functions as shown in the image. The service desk of an IT organisation is the single point of contact where a business sends operational requests. Requests for changes such as relocations and installation orders are sent to the service desk. Users also make support requests and service requests such as questions on internal training or documentation. IT operations is an independent function in an IT organisation. IT operations management includes continuous activities related to IT service delivery. It also includes the control and maintenance of IT infrastructure. This ensures that IT services are delivered based on the Service Level Agreement or SLA. IT operations management has two roles such as operations control and facility management. Operations control includes job scheduling, procedures for backup and restore, processing of console management and so on. Facility management is related to managing the physical IT environment. This includes network rooms, data centre rooms, power supply and so on. Technical management is aimed at designing cost-effective technological infrastructures that can support business processes. The technical management team is involved in designing, testing and optimising IT services. It provides resources that support the ITSM or IT Service Management lifecycle. The application management function helps to manage applications for their entire lifecycle. It provides the resources for the ITSM lifecycle. Application management also plays a key role in designing, testing and improving applications.

18 How Processes and Functions Operate

A process-oriented organisation successfully aligns processes across functions. This allows the functions to maintain their effectiveness, while the efficiency of the organisation improves with the result of increased customer satisfaction. As shown in the image, the various functions such as operations and development, and their sub-functions, follow a single process that is indicated by a dotted line. While the functions concentrate on managing resources, the process focuses on service delivery. One of the techniques used to map the functions and departments to processes is the RACI model.

19 Roles in Service Management

Let us now discuss the key roles in service management. Two key roles in service management are the Service Owner and the Process Owner. The Service Owner is the person who is accountable for the delivery of a specific IT service. They are responsible for continual improvement and management of change affecting services under their care. The Service Owner is accountable for a specific service within an organisation regardless of where the underpinning technology components, processes or professional capabilities reside. Service ownership is as critical to service management as the ownership established for processes that cross multiple vertical departments. An example of Service Owner is the owner of a payroll service for a global MNC. This service may be delivered to employees across the globe. It can be done through a website that may be hosted in a data centre in Ireland and supported by teams in India. Irrespective of the underlying technology mechanisms and geography, the owner is accountable for the effective delivery of the service. This ensures that each employee of the MNC gets their pay on a predefined date every month. Now let us define a Process Owner. A Process Owner is responsible for ensuring that a process is being performed as agreed and documented. Following are the responsibilities of the service owners and process owners. The Service Owner is the key person to be contacted for service enquiries and issues. They make sure that customer needs are met through consistent support and delivery services. The Service Owner also identifies opportunities for service requirements. In addition, the Service Owner maintains liaison with the process owners during the service management lifecycle. The Service Owner also solicits the reports, statistics and other data required for analysis. Finally, the service owners ensure effective service monitoring and performance. Let us understand the responsibilities of the Process Owner. The Process Owner performs tasks such as: •documenting and publishing the process; •defining the key performance indicators or KPIs to evaluate the effectiveness and efficiency of the process; •engaging in process design and being responsible for it; •reviewing any proposed enhancement to the process; •addressing any issue related to the way the process runs; •making sure that the staff has the required training in the process and are aware of their roles in it; •ensuring that processes, roles, responsibilities and documents are regularly reviewed and audited; and •interfacing with the line management and ensuring that the process receives the needed staff resources. Sometimes, the Process Owner may have to perform the role of a Process Manager. The responsibilities of the Process Manager include planning and co-ordination of all activities required to carry out, monitor and report on the process. There may be several process managers for one process, for example, regional change managers or IT service continuity managers for each data centre. However, in larger organisations, the roles of the Process Manager and the Process Owner may be separate.

20 RACI Model

The RACI model is used to identify the roles and responsibilities in a process. RACI stands for Responsible, Accountable, Consulted and Informed. ‘Responsible’ refers to the people or person responsible for carrying out various tasks. The tasks imply the actual work to be performed. ‘Accountable’ refers to the person accountable for various activities. It implies taking ownership of the activities included in the process. Only one person can be accountable for each activity. ‘Consulted’ refers to the people whose opinions are sought after designing, implementing or improving an activity. These people are expected to have an influence on the activities in the process. ‘Informed’ refers to the people who are informed while executing or improving an activity. There can be only one person accountable but multiple people responsible for an activity.

21 RACI Model (contd.)

The table shows the RACI model based on the roles and responsibilities related to activities in a process. It lists some activities and shows whether the Service Owner, Process Owner, Security Manager and so on are responsible or accountable for a certain activity. It also lists the activities they are consulted for or informed about.

22 Types of Service Providers

Let us now focus on the types of service providers. According to ITIL®, an IT service provider is an organisation supplying IT services to one or more internal or external customers. ITIL® defines three types of service providers. These are type 1, type 2 and type 3 service providers. Type 1 refers to an internal service provider embedded within a business unit. The key factor here is that the IT service provider offers competitive advantage in the market where the business exists. An example of Type 1 service provider is an IT organisation within each business unit. Type 2 refers to an internal service provider that engages in offering shared IT services to more than a single business unit. Type 2 service providers cater to the needs of multiple businesses in an umbrella organisation. An example of Type 2 service provider is the internal IT services team associated with a telecom company. Such a team may offer services to the mobile and landline phone business units of the same company. Type 3 refers to an external service provider that offers IT services to external customers. For example, if an IT service provider in India offers outsourcing services to a global bank, the former is considered as an external service provider.

23 Supplier and Contracts

We will now explain what a supplier is, and follow up with the definition of a contract. ITIL® defines the term ‘supplier’ as a third party responsible for supplying goods or services that are required to deliver IT services. Commodity software and hardware vendors, outsourcing organisations and telecom and network providers are suppliers. Now let us define an underpinning contract. An underpinning contract is a legal agreement between the service provider and the supplier. The agreement between the business organisation and the IT service provider is called Service Level Agreement.

24 Knowledge Check

Now let us do a quick recall of the concepts related to roles in service management.

25 Summary

Let us summarise what we have learnt in this lesson: •Best practices are successful innovations that have been accepted and followed by organisations. •Service management helps to transform IT resources into valuable IT services. •Stakeholders are interested in the target, resources, activities and outcome of a service or a project. •The Service Owner is responsible for providing a specific service within an organisation. The Process Owner ensures that a process is performed as decided and documented. Next, we will focus on the second lesson—The Service Lifecycle.

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  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

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