Improving IT Service Delivery

A Model Based on Practical Experience

Why are so many customers unhappy with the quality and cost of IT service delivery? Are things really so bad, or are we seeing a symptom of poor communication between IT service providers and their customers? This note argues that communication can be vastly improved by the use of meaningful Service Level Agreements (SLAs) supported by a Service Catalogue that shows the customer the range of options available to them in a language that is acceptable to a business manager.

The principles outlined here have been used in many companies in Europe and the Americas, and have produced a number of measurable benefits:

-  Increased service quality 
-  Reduced cost
-  Improved customer satisfaction 
-  Ability to benchmark

What are customers saying?

Our research has shown that these questions encapsulate the feelings of many customers, and they are struggling for a way in which the questions can be addressed.

• Why can’t I see a clear relationship between what I use and what I pay?

• Why can’t I get straightforward, effective, consistent and reliable service and support?

• Why does it have to cost so much?

There is a sense of frustration behind these questions. Why does it all have to be so difficult? Why can’t it all just work? Why is it so expensive when it doesn’t work well anyway?

We believe that IT Service Providers are working harder and harder to satisfy their customers, but are meeting the same customer frustration time and again. Are the Service Providers incompetent, and incapable of meeting the needs of their customers? Our work has shown that generally this is not the case - there are customers with genuine business needs and capable service providers anxious to meet the needs. What is missing is an alignment between the business needs and the way in which IT services are being provided.

Meaningful Service Level Agreements

A key to achieving an improved alignment is to establish meaningful Service Level Agreements (SLAs) between IT and their customers. We have all seen SLAs, and we have all seen them not working! Most SLAs are rather sterile statements referring to technology availability. They say little about the real business needs, e.g. the LAN will be available for 99% of the working day. There is far more power in an SLA that reflects a real conversation between the customer and IT, that lays out the likely future business directions, and its uncertainties, and spells out the demand on IT that will be needed to meet these directions. Then both IT and the business community can be clear on the intended way forward and what needs to be done to get there.

Seems so simple doesn’t it? So why aren’t SLAs like this commonly in place today? We believe that a vital element is the process to develop and implement an IT Service Catalogue. This must clearly express, in business not IT language: the IT options that are available; the unit price for each option: the accountabilities which will be accepted: and the guarantees for service performance.

A simple example

A service in the IT Catalogue will almost invariably be the provision of a standard desktop device (PC or MAC). The catalogue would define this in terms of the utility that the customer needs to meet the business objectives, and so the definition (and price) will include everything needed to keep that desktop device functioning and meet the customer need. This will include the PC, Helpdesk, Desktop Support, LAN, WAN, standard software, management overhead, capital depreciation.

The price can be calculated by analysing and allocating the underlying cost base, and will give you a fully built-up price for a standard desktop device.

The customer then has a clear statement of what is being provided, and can sensibly discuss and challenge this. This also leaves the option for the customer to choose a non-standard desktop device, but the price would reflect the cost of this non-conformity. 
Guaranteeing Service Performance

An enormous benefit of this approach to defining SLAs supported by a Service Catalogue is that it becomes very clear as to who is accountable for what, and what the IT service providers need to do in order to satisfy the business customer. The individual accountable for the delivery of a service will need to strike Service Contracts with everyone who makes a contribution to the service. For example, the owner of the desktop service will need agreements with the Helpdesk, Desktop Support, the network group, probably with an NT or UNIX group, and several other groups. These Service Contracts are generally quite simple to prepare, but they make it crystal clear what needs to be done to guarantee service, and quickly highlights any issues or risks (e.g. lack of resources, lack of funding, inadequate monitoring tools).

Does this all work?

We have seen this working in a number of companies around the world - and it can work as well for any service discipline. The method has been used successfully for IT, Office Support, Human Resources, Legal, and several others.

But a word of caution. What matters is not preparing SLA documents, or a Service Catalogue document, or Service Contract documents. On their own they will achieve nothing. What does matter is the process that is gone through to prepare these documents and the improvement of understanding and alignment that comes from this process. We know of cases where SLAs and Service Catalogues have been produced at considerable expense but little tangible benefit - invariably because it has been a paper exercise with no real conversation or engagement between the business customer and the IT service providers.

What are the next steps?

None of the following steps requires rocket science, just plain words, practical experience, and the ability to facilitate discussions between interested parties.

Stage 1: Data Gathering & Analysis 

 Presentation to senior business management, to seek their support for the Service Level Agreement and Service Catalogue approach.

 Hold a workshop to identify the services that your customers think they buy from IT.

 Identify the full range of underlying IT costs, both direct and indirect.

 Complete the cost matrix to show how the underlying costs feed into the customer facing services.

 Calculation of unit prices, and reconciliation of the cost matrix to ensure that there is complete and equitable cost recovery e.g., looking at the impact on typical customer departments.

Stage 2: Develop and Document Performance Requirements

 Document the present “performance guarantees” within the IT department.

 Hold a workshop or series of meetings to support IT department staff in sense checking the “performance guarantees” with the customer departments.

Stage 3: Production of an IT Service Catalogue

 Prepare version 1.0 of the catalogue including service definitions, price list, cost breakdown, service accountability and performance guarantees. 

 Consultation with the IT Department to review version 1.0 and update to the accepted version 1.1.

 Consultation with the customer departments to review their demands for service and to begin setting their expectations in line with the Catalogue.

By this stage you will have reached a high level of clarity about the IT services required by the organisation, the effectiveness of current service delivery, what are the true costs of these services, and what are the expected levels of performance.

Managing the Change

The emphasis throughout the work outlined above is to fully involve the IT staff in determining:

 How well equipped is the IT organisation for meeting the performance guarantees at the specified prices?

 What needs to be done within IT to become well equipped?

 How does the quality and price of services delivered by IT compare with that delivered elsewhere?

Discussions with the client departments not only focus on performance levels, but crucially, on developing an understanding of what they get for their money (even if inter-departmental charging is not applied). This process also starts to engage them in determining the options for future spend (e.g. less on applications to free up more resource for the helpdesk).

Once you have developed a clear understanding of the current supply and demand relationships, and identified the best commercial and technical options for service provision, the change process then moves further to assist IT managers to become more influential in planning and steering the IT strategy for the organisation.

  

This article was prepared by David Hall and Bernie Vincent. Please contact us if you need help or further advice on this subject.

Tel: 01224 626699 or Email: bernie@ebusiness-gateway.co.uk 

© The Eminent Trading Company Limited 2002-2003

  

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