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ITIL Practitioner: Agree and Define Workbook

Copyright © Notice of rights All rights reserved. No part of this book may be reproduced or transmitted in any form by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher.

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ITIL Practitioner: Agree and Define

Table of Contents 1

INTRODUCTION ......................................................................................................................... 6

2

GENERAL TERMS AND CONCEPTS .................................................................................. 16

3

INTRODUCTION TO SERVICE LEVEL MANAGEMENT.................................................. 38

4

INTRODUCTION TO FINANCIAL MANAGEMENT............................................................ 46

5

AGREE AND DEFINE .............................................................................................................. 54

5.1 MANAGING – PLAN AND INITIATE THE KEY ACTIVITIES FOR THE SLM AND FMIT PRACTICES ........................................................................................................................................... 56 5.2 MANAGING – PLAN THE EXCHANGE OF APPROPRIATE INFORMATION RELEVANT TO MANAGING THE SLM AND FMIT PROCESSES .................................................................................... 62 5.3 MANAGING – REPORT ON THE EFFECTIVENESS AND EFFICIENCY OF THE ACTIVITIES SLM AND FMIT PROCESSES ........................................................................................................................ 66 5.4 ORGANIZING – ORGANIZE THE EXCHANGE OF APPROPRIATE INFORMATION WITH CUSTOMERS, END-USERS AND SUPPLIERS ......................................................................................... 72 5.5 ORGANIZING – DEVELOP AND MAINTAIN THE PROCEDURES OF THE SLM AND FMIT....... 76 5.6 ORGANIZING – DEFINE SERVICES AND MAINTAIN SERVICE CATALOGUE ............................ 78 5.7 ORGANIZING – PREPARE THE NEGOTIATION, AGREEMENT AND MAINTENANCE OF VARIOUS AGREEMENTS (SLA, OLA, UC).......................................................................................................... 84 5.8 ORGANIZING – PARTICIPATE IN THE BUDGETING ACTIVITY ............................................... 106 5.9 ORGANIZING – PARTICIPATE IN THE DEVELOPMENT OF THE IT ACCOUNTING SYSTEM .. 110 5.10 ORGANIZING – PARTICIPATE IN THE DEVELOPMENT OF THE CHARGING SYSTEM ......... 118 5.11 ORGANIZING – PARTICIPATE IN THE CREATION OF THE FINANCIAL REPORTS ............... 128 5.12 OPTIMIZING – MONITOR AND OPTIMIZE THE SLM & FMIT PROCESSES ......................... 132 5.13 OPTIMIZING – PROPOSE SERVICE AND PROCESS IMPROVEMENTS, BASED ON RESULTS OF MONITORING AND REVIEWS .......................................................................................................... 136 5.14 OPTIMIZING – CONDUCT AUDITS OF THE SLM AND FMIT PROCESSES .......................... 146 5.15 OPTIMIZING – MANAGE THE ONGOING FINANCIAL OPERATIONS AND PERFORMANCE ... 152 5.16 OPTIMIZING – PARTICIPATE IN ONGOING SERVICE MANAGEMENT THROUGH THE SERVICE REVIEW MEETINGS.............................................................................................................................. 158 6

ASSIGNMENTS ...................................................................................................................... 178

6.1 ASSIGNMENT 1 – SERVICE LEVEL MANAGEMENT ................................................................. 180 6.2 ASSIGNMENT 2 – FINANCIAL MANAGEMENT FOR IT SERVICES ............................................ 182 6.3 ASSIGNMENT 3 – SERVICE LEVEL MANAGEMENT AND FINANCIAL MANAGEMENT FOR IT SERVICES ........................................................................................................................................... 184 7

ASSIGNMENT RESOURCES............................................................................................... 186

7.1 COMPLAINT LETTER ................................................................................................................. 188 7.2 CASE STUDY – RECE SHOE COMPANY ................................................................................. 190

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8

EXAM PREPARATION .......................................................................................................... 200

9

FURTHER READING ............................................................................................................. 214

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1

INTRODUCTION

Welcome to this “Clustered Practitioner Program” from The Art of Service.

This program is fully accredited by the globally recognized accreditation agency for IT Service Management programs – EXIN.

The program has been developed and accredited in accordance with guidelines provided by EXIN.

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The ITIL Practitioner Agree and Define is intended for professionals who will participate in managing, organizing, and optimizing, the operations of the Agree and Define processes in an IT Service organization.

Typically such organizations will have implemented, or started to implement, elements of the ITIL Framework or may be looking to make improvements in these process areas.

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The requirement to look at the provision of IT Services in a professional way is driven by a variety of factors.

Organizations understand the benefits of having Information Technology (IT) throughout their structure. However, few realize the potential of truly aligning the IT department’s objectives with the business objectives. More and more organizations are beginning to recognize IT as being a crucial delivery mechanism of services to their customers.

The starting point for IT Service Management (ITSM) and the ITIL Framework is not the technology, not the processes; it is the organizational objectives.

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The IT Infrastructure Library is a set of books/CDs with best (good) practice processes on how to manage the provision of IT services. It is the “process” part of the Service Management challenge (people, process and technology).

The core set of material is the following set of tightly coupled areas:

Service Delivery

Service Support

Security Management

Business Perspective: The IS View on Delivering Services to the Business (Vol I)

Applications Management

ICT Infrastructure Management

Planning to implement Service Management

Software Asset Management

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OGC: Office of Government Commerce (the trademark owners of ITIL)

APMG: In 2006 APMG won the tender to own the rights for accreditation and certification of the ITIL courses. EXIN and ISEB used to be independent bodies, but now sublicense through APMG.

EXIN: Stichting EXameninstutuut voor INformatica (Translation: Foundation for EXamination INformation Systems)

ISEB: Information Systems Examination Board This certification is recognized world wide!

TSO: The Stationary Office

Tool Vendors: (HP, Infra, Remedy, HEAT, etc…) provide technical solutions for customers trying to implement ITIL/IT service management.

There is no such thing as ITIL certified tools. Only people can be ITIL certified.

10


continued…

ITSMF: (IT Service Management Forum) is the only internationally recognized and independent organization dedicated to ITSM.

Accredited Vendors: (E.g. The Art of Service) Only accredited vendors can provide ITIL training.

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Foundation = understanding Practitioner = doing Manager = implementing

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This slide demonstrates the learning pathways that can be taken in developing your knowledge and skills for ITSM. The Art of Service provides world-class accredited programs for all ITIL certification levels as described above.

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What do you think caused the jump in 2000?

Y2K and the after effects of the dot com crash of the late 90s.

Microsoft also introduced MOF which is based on and adapted from ITIL but with a prescriptive Microsoft flavour. . As Microsoft is a giant player in the IT industry, their acknowledgement of the strengths of ITIL was a major influence in ITIL’s promotion.

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Notes:

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2

GENERAL TERMS AND CONCEPTS

Notes:

16


Balanced score cards (BSC) - one of the most common methods of measurement. This method uses the objectives of the organization or process to define Critical Success Factors (CSF’s).

Critical Success Factors (CSF’s) - are defined for a number of areas of interest or perspectives: customer/market, business processes, personnel/innovation and finance.

Key Performance Indicators (KPI’s) – the parameters for measuring progress relative to key objectives or CSF’s in the organization.

Process - a process is a logically related series of activities conducted towards a defined objective. Processes may define roles, responsibilities, tools, management controls, policies, standards, guidelines, activities and work instructions if they are needed.

Process Owner - a process owner is responsible for the process results. Example: The owner for the Service Level Management Process

17


continued…

Process Manager – is responsible for the realization and structure of the process, and the reports to the process owner.

Function - a team or group of people and the tools they use to carry out one or more Processes or Activities. Functions provide units of organization responsible for specific outcomes. E.g. The Service Desk function is responsible for performing activities from the other ITIL processes including Incident Management, Event Management, Request Fulfilment etc.

Vital Business Function (VBF) – a function of a business process that is critical to the success of the business. Vital Business Functions are an important consideration of all ITIL processes.

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More and more people see the importance of Processes (the primary purpose of this program is studying some of these in detail).

The Organizational Perspective issue ensures that we align the vision, strategy and goals of the business with the delivery of IT services.

The People issue is without doubt where we – as IT Service Management professionals face our greatest challenges.

Historically, the Technology considerations got most attention. Now we understand that without well defined processes we can often make inappropriate selections in this area.

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To impress stakeholders (e.g. customers, investors, personnel) your organization will have to communicate the ‘vision’ and why they should do business with you, e.g. because you are the cheapest, the most reliable etc. The vision can be communicated in the form of a mission statement (see slide). The mission statement should be a short, concise description of the objectives of the organization and the values it believes in.

The policy of the organization is the combination of all decisions and measures taken to define and realize the objectives. Implementing policies in the form of specific activities requires planning.

Realization of the planned activities requires action. Actions are allocated to personnel tasks, or outsource to external organizations.

There is a danger, that after time, the mission, objectives and policies will be forgotten by the organization. This why it is so important to measure at every stage of the organizations maturity, to ensure remedial action is taken when necessary.

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So if we accept that the objectives are the starting point for the provision of IT Services, how can we position the delivery of services and the utilization of the ITIL Framework?

The objective tree is a very powerful tool not only in showing the benefit and alignment of IT and Service Management principals to the business, but also in being able to effectively sell the concepts as well.

See if you can follow along in the following paragraphs and match the sentences to the above objective tree.

To meet organizational objectives, the organization has business processes in place.

Examples of business processes are sales, admin and financial departments working together in a “sales process” or logistics, customer service and freight who have a “customer returns process”.

Each of the units involved in these business processes needs one or more services (e.g. CRM application, e-mail, word processing, financial tools).

21


continued…

Each of these services runs on IT infrastructure. IT Infrastructure includes hardware, software, procedures, policies, documentation, etc. This IT Infrastructure has to be managed. ITIL provides a framework for the management of IT Infrastructure.

Proper management of IT Infrastructure will ensure that the services required by the business processes are available, so that the organizational objectives can be met.

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The questions raised on the left hand side of this diagram arise constantly in the process-based approach typical of modern IT Service Management. The tools to answer these questions are shown on the right hand side of the diagram.

The standards for the output of each process have to be defined in such a way that the complete chain of processes that meets the corporate objective, if each process complies with its process standard. If the result of a process meets the defined standard, then the process is effective. If the activities in the process are also carried out with the minimum required effort and cost, then the process is efficient.

Processes are often described using procedures and work instructions.

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Elements derived from the OGC – Planning to Implement Service Management.

GQM = Goals/Questions/Metrics

The first and most important question that needs to be answered is whether the “initiative” or adoption of a CSIP (Continuous Service Improvement Program) will deliver sufficient revenue/savings to justify the expense. The principle challenge is that much of the benefit cannot be quantified (eg. quality, flexibility, service satisfaction).

With regards to Risk Management we must remember that this initiative is not the only one competing for organizational budget. What is the effect on other initiatives if this IT initiative is successful at attracting funds? Also what risks will be faced after the program has begun? The salient point is that risks will always be present, so don’t attempt to eliminate them – simply get to understand them.

The Gap analysis is generally an opportunity to use “scores” to measure current and future expected levels of maturity. For example a 5 level model of maturity is defined in the OGC “Planning to Implement Service Management” text (Initial, Repeatable, Defined, Managed, and Optimized).

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Elements derived from the OGC – Planning to Implement Service Management

IT organizational maturity progresses through a variety of stages (Technology focus, Product/Service focus, Customer focus, Business focus, Value Chain).

To move from one stage to the next requires management and control over people, processes, technology, steering, attitude and changing relationships between the business and the IT organization.

IT process maturity is best measured by using an assessment tool for a more detailed analysis. A variety of such assessments can be carried out as “selfassessments” as well as commercially available solutions.

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Elements derived from the OGC – Planning to Implement Service Management (Notice some of the concepts raised by Kotter creeping through – the fundamentals are all the same).

The starting point should not be determined on the emotions or “feelings” of an individual. The starting point will be a combination of current maturity levels of the IT organization, the IT processes AS WELL AS – overall organization priorities, IT “pain points” and process interdependencies (e.g. You cannot have Problem, without Incident Management) and other factors (including budget, available resources and current workloads).

The most important aspect of the communication plan is that it needs to be ongoing and not just given enthusiastic support at the outset of the CSIP initiative. Under the banner of managing organizational change; it simply isn’t enough to get a group of people together that have project management and ITIL skills and experience. There is a multitude of issues that have to be considered and addressed (including resistance, gaining and keeping commitment, involvement and communication).

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continued…

Cultural change is largely reflected in the leadership/management style that is prevalent/dominant in the organization. Remember that some organizations suit dominant leadership styles (e.g. Regimented organizations, such as military units). Careful role definition is required (see later section on using the ARCI model), especially when considering the allocation of new activities to existing staff (overload) or the conflict that could arise when processes are implemented across traditional hierarchical models.

As people are an integral part of the CSIP there is a need to provide appropriate levels of education, the critical element being timing of delivery. All too often we see education programs delivered only to witness a lack of follow up activity that gives the participant an opportunity to put the theory into practice.

Finally, tools. The raging debate is which comes first. Tools or process? In reality, most organizations have a variety of IT Service Management tools already. It is not the place of this program to suggest that existing tools are a wasted investment; however, the commonly accepted principle is that the processes should be supported by the tools and not the other way around.

(Service Management tools are covered later in the workbook)

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We need to use measures and metrics to help us determine a “point of acceptance” with regard to process improvements and progress of the CSIP.

CSFs are quite simply the things that we have to be able to do. They tell us in qualitative terms the basic objective for a process (eg. the CSFs for Change Management can be (a) a repeatable change process, (b) ability to deliver change quickly, (c) deliver organizational benefits via change management).

KPIs can be considered the quantitative elements of a process that give us a guide to the process efficiency (eg. the KPIs for Change Management can be (a) the number of rejected RFCs, (b) the size of the change backlog, (c) quantity of changes delivered according to RFC schedule). Note that there are generally a lot more KPIs than CSFs for a given process.

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continued…

Organizational drivers are the points that are raised by “business people” as their “wish list” for the IT department. There have been many surveys conducted over many years, but the essence of what business people want from their IT departments can be condensed down into several points. These include support business operation, facilitate delivery of electronic services, and help to deliver business strategies, enable change to match pace with required business change.

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Elements derived from the OGC – Planning to Implement Service Management

Quick wins should be used to help drive more change that is medium to long term.

Also consider what your legacy of change will be. Consider in 10 years time when all current staff have moved on or been replaced. When asked why certain activities are done the way they are – what will be the response? That is the way it’s done around here. Perhaps that could be considered a good legacy, provided that part of “the way it’s done around here” involves continual monitoring and reviews.

The real essence of a CSIP is the first word of the acronym. Continuous! The way to create continuity is to go back to the start and begin again. Remember it begins with the VISION. The vision must essentially promote business and IT alignment.

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continued…

Knowledge management is another way to ensure the legacy of the work you do is not lost. The rate of change, staff turnover, expectations of performance and market place competition are all heading in an upwards direction. With these trends the organization cannot afford not to retain knowledge and not learn from previous mistakes and lessons. The CSIP must include in its overall design elements consideration for the gathering, organizing and accessibility of data/information/knowledge.

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Most businesses are hierarchically arranged. They have departments, which are responsible for a group of employees. There are various ways of structuring departments, for example by customer, product, region or discipline.

In this type of arrangement we often see that communication is ineffective.

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A process is a logically related series of activities for the benefit of a defined objective. This slide illustrates cross functional process flows.

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EXAMPLE PROCESS

What is the Goal? To bake a cake!

What are the inputs? The ingredients (eggs, milk, flour, sugar, butter, chocolate) plus equipment such as pans, mixers etc.

What are the activities? Mix, pre-heat oven, bake, cool, decorate etc.

What are the measures? How much ingredients, how long to bake, at what temperature etc.

What are the norms? The recipe

What are the outputs? CAKE!!!!!!

As we can see the basis of ITIL’s approach to Service Management is on the interrelated activities.

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continued…

Unlike a project a process is never ending

In this example, baking a specific cake (eg. a birthday cake for Jane) is a project. The goals, activities, inputs, outputs, goals, measures and norms defined makes up the process for baking cakes.

Question: What is the process owner (eg. head chef in a kitchen) responsible for? The output of the process, e.g. the cake itself

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The ARCI model helps show how a process actually does work end to end across several functional groups.

A – Accountability (is made accountable for ensuring that the action takes place, even if they might not do it themselves).

R – Responsibility (actually does the work for that activity but is responsible to the function or position that has an “A” against it.

C – Consult (advice / guidance / information can be gained from this function or position prior to the action taking place).

I – Inform (the function or position that is told about the event after it has happened).

General Rules: Only 1 “A” per Row (ensures accountability, more than one “A” would confuse this) At least 1 “R” per Row (shows that actions are taking place)

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3

INTRODUCTION TO SERVICE LEVEL MANAGEMENT

Notes:

38


The success of SLM is very dependent on the quality of the Service Catalogue and its contents, because it provides the necessary information on the services to be managed within the SLM process.

39


Service Level Management enables:

IT effort to be focused on those areas that the business think are key

IT and Customers to have a clear and consistent expectation of the level of service required and to be delivered

The establishment and improvement of lines of communication between IT and its customers.

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Notes:

41


Notes:

42


SLA: Written agreement between a service provider and Customers), that documents agreed Service Levels for a Service.

Service Level Achievements: The actual service levels delivered to a customer within a defined life-span.

SIP: Identifies and introduces measurable improvements within a specified work area or work process.

Service Catalogue: Written statement of IT services, default levels and options.

Underpinning Contracts: Contract with an external supplier that supports the IT organization in their delivery of services.

Operational Level Agreements: Internal agreement which supports the IT organization in their delivery of services.

Service Level Requirements: Detailed recording of the Customer’s needs

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It is important SLM ensures that all internal and external parties (including end users) are made aware of the details within the SLA. This communication enables a thorough understanding of the overall aims and objectives as well as the benefits and service targets of the SLA.

All relevant services are described within the Service Level Agreement. The descriptions of each of these services should include: Key Business Functions Deliverables

All other relevant information to describe the service and its scale, impact and priority for the business.

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According to the ITIL framework which of these documents should be developed first? Why? Service Catalogue. You need to know what you can do first, and then we can map the customer requirements to the Service Catalogue.

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4

INTRODUCTION TO FINANCIAL MANAGEMENT

Notes:

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Notes:

47


Using FMIT to provide services with cost transparency (e.g. via service catalogue) clearly understood by the business and then rolled into the planning process for demand modeling and funding is a powerful benefit.

48


3 Fundamental Activities Budgeting: Predicting the expected future requirements for funds to deliver the agreed upon services. IT Accounting: Enables the IT organization to account fully for the way its money is spent. Identify costs by Customer, by service, by activity. Charging (optional activity): Required to bill the Customers for the services supplied to them.

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Service Recording – the assignment of a cost of entry to the appropriate service.

Cost Types – these are higher level expenses such as hardware, software, labor, administration etc

Cost Classifications – there are also classifications within services that designate the end purpose of the cost. This includes classifications such as:

1) Capital/Operational – this classification addresses different accounting methodologies that are required by the business and regulatory agencies.

2) Direct/Indirect – this designation determines whether the cost will be assigned directly or indirectly to a consumer or service. Direct Costs are charged directly to a service since it is the only consumer of the expense. Indirect or shared costs are allocated across multiple services since each service may consume a portion of the expense.

Cost Units – a cost unit is the identified unit of consumption that is accounted for a particular service or service asset.

50


continued…

Fixed/Variable –The strategic issue around this classification is that the business should seek to optimize fixed service costs and minimize the variable in order to maximize predictability and stability.

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Notes:

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5

AGREE AND DEFINE

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5.1

MANAGING – Plan and initiate the key activities for the SLM and FMIT practices

Notes:

56


It is essential that all IT departments internal to the organization understand the importance and the benefits of the SLM role and how this process in particular is integral to the success of delivering quality services to customers.

An awareness campaign is a great way to win support and advise all parties how and when they might be affected.

It is also critical that current monitoring tools and techniques are reviewed and improved as necessary to ensure there are adequate capabilities for monitoring SLA’s.

SLM will plan to review and implement Operational Agreements with internal suppliers and Underpinning Contracts with external suppliers the support SLA targets.

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In addition, at this stage, setting and agreeing Incident priority levels and escalation paths, with Customers, and internal and external providers (in conjunction with Service Desk and Problem Management) would be appropriate. These activities may be incorporated with a formal project and managed via a recognized project management method e.g. PRINCE2.

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If monitoring is not yet in place, finding metrics may be difficult. However, a customer satisfaction survey or evaluation form would be a helpful tool in gathering customer feedback. A similar procedure can be used for internal departments, end users etc. So the SLM gets an end to end perception from all parties as to how the current services are viewed.

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As with SLM, it is essential that the organization recognizes the benefits of introducing FMIT as well as the costs. Evaluation of these benefits and costs prior to implementing the systems of Budgeting, IT Accounting or Charging, will pave the way for quick implementation as customers and IT staff will be more accepting.

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5.2

MANAGING – Plan the exchange of appropriate information relevant to managing the SLM and FMIT processes

Notes:

62


The SLM process involves assessing impact of Changes upon the service quality and SLA’s, both when Changes are proposed and after they have implemented. Some of the most important targets set in the SLA’s will relate to service availability and thus require Incident resolution within agreed time periods. Therefore it is essential that SLM holds good communication links with the other processes, and plans the exchange of appropriate information to ensure their success.

An SLA without the underpinning support processes is useless, as there is no basis for agreeing its content.

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Service Level Management – The SLA specifies customer expectations and IT service obligations. The cost of meeting the customer’s requirements may have a major impact on the shape and scope of the services that are eventually agreed. FMIT liaises with Service Level Management about the costs of meeting current and new business demands, the Charging policies for the organization, their effects on customers and how the policies are likely to influence customer and user behavior. The more that the SLA allows the individual customers to request variations to service levels, the greater is the scope for (and potential benefits of) Charging for IT services but also the greater the overloads of Budgeting, IT Accounting and Charging. Capacity Management – Cost information can be used to estimate the costs of the desired Capacity and Availability of the system. In planning the Capacity it may be necessary to discuss the costs with individual customers or the organization as a whole. Data that is collected so that costs can be determined may also be relevant to Capacity assessments, e.g. staff effort, machine usage.

64


continued…

Configuration Management – FMIT requires asset and cost information that may be managed by large organization-wide systems. Configuration Management is responsible for managing the data relating to assets (C.I’s) and their attributes e.g. costs.

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5.3

MANAGING – Report on the effectiveness and efficiency of the activities SLM and FMIT processes

Notes:

66


Periodic reviews must be held on a regular basis with customers, to review the service achievement in the last period and to preview any issues from the coming period.

Particular attention should be focused on each breach of service levels to determine exactly what caused the loss of service and what can be done to prevent any recurrence. It may be necessary to review and re-agree service targets, e.g. if the service level was or has become unachievable. If the loss of service was caused by a failure of a supplier or internal support group, it may be necessary to review the Underpinning contracts and/or the Operational Level Agreements.

We will look at Service Review Meetings in more details later (Optimizing section).

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Notes:

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Notes:

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Senior IT executive committee reports should contain similar information. There may also be valuable information found in any external efficiency and effectiveness reviews or from auditors, as they may contain details of progress followed up from previous reports.

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5.4

ORGANIZING – Organize the exchange of appropriate information with customers, end-users and suppliers

Notes:

72


Service Level Management is not about providing a cushion for customer complaints or a process for passing blame around and avoiding responsibility.

Successful Service Level Management depends on the nature of the relationship between the customer and the service provider. When mutual benefits exist within the relationship, agreements and motivation are easier to manage and maintain. This provides the cornerstone for a successful partnership based on a managed services environment.

Service Level Managers should aim to build partnerships with customers built on a shared vision or strategy that unites them in their goal for attainable and successful managed services.

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They key indicators of successful Service Level Management are the continuous successful mapping of services to the ever changing customer requirements, the sustained provision of services, and a mutually beneficial customer/provider relationship under the umbrella of a shared strategy.

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5.5

ORGANIZING – Develop and maintain the procedures of the SLM and FMIT

Notes:

76


The Service Operating Procedures (SOP’s) are recorded in a document that details every business activity and process.

It is essential to document company procedures. Especially for organizations who are working towards, or working to maintain, compliance with governance standards such as ISO 9000 or more recently ISO /IEC 20000. These standards require organizations to document all operating procedures.

As there is a great deal of planning that is required before SOP’s can be organized, SLM will play a leading role in this process.

Unlike the Service Catalogue, which is written using business language as it is a customer facing tool. The SOP’s are written from a technical and managerial perspective.

SOP’s can be used as benchmarks for performance reviews, training aids, or in the case of quality standards, a starting point for improvement.

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5.6

ORGANIZING – Define services and maintain service catalogue

Notes:

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The Service Catalogue contains all information on services currently available to customers. The SLM uses this customer facing tool to document, coordinate, maintenance and refer services.

79


In defining the services the organization actually provides, a hierarchy of services will generally emerge as the basis for the Service Catalogue.

Service Catalogues can be integrated and maintained as part of the organizations Configuration Management Database (CMDB). This approach enables each service to be identified as a Configuration Item (CI) and linked to those Incidents and/or Requests for Change (RFC’s) which are associated with the CI or service.

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Notes:

81


Notes:

82


As organizations grow and develop their IT infrastructures, so do the complexities of what services are provided and which customers utilize each service. To gain clarity of the services being provided and the customers of each, it is recommended that a Service Catalogue be produced. Often produced as part of the ITIL Service Level Management deployment, the Service Catalogue drives organizations to ask the basic questions “What is a service?” and “What services do we actually provide?.

This is not an easy question as most organizations focus on the technical infrastructure often confusing a ‘service’ as perceived by the customer - with an IT System. In most cases, one IT service can comprise of several services which in turn are made up of one or more IT systems.

The key to defining IT services is to relate the customers ‘business processes’ to supporting services. At the customers business unit or departmental level, you will find business processes and procedures that when mapped reflect the most important day-to-day activities of the business unit or department. It is these established and defined business processes which are supported by IT services.

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5.7

ORGANIZING – Prepare the negotiation, agreement and maintenance of various agreements (SLA, OLA, UC)

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Determining and documenting a true set of service level requirements which can then be made into a SLA is far from simple.

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Service Level Agreements allow customers to be flexible and ask for changes or additions to the services currently on offer. These changes and additions are complex and need to be managed by the SLM, to ensure their workload is coordinated effectively and efficiently.

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Evaluating the customers perceived value of services is a worthwhile, yet often overlooked activity in Service Level Management. Ascertaining the customer’s current perception of services provides a baseline to:

measure the effectiveness of Service Level Agreements yet to be negotiated and agreed as part of the SLM process; and

assist in determining which services to address first.

To gain the full three-sixty degree view, perceptions should be gathered and evaluated at both the User and Management levels within the Customer community and the Service Provider.

Marlene Blaszczyk is the co-founder of the internet site "Motivating Moments".

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It is important SLM ensures that all internal and external parties (including end users) are made aware of the details within the SLA. This communication enables a thorough understanding of the overall aims and objectives as well as the benefits and service targets of the SLA.

All relevant services are described within the Service Level Agreement. The descriptions of each of these services should include:

Key Business Functions

Deliverables

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Add your comments below for each SLA type:

1. Service Based:

Benefits:

Challenges:

2. Customer Based:

Benefits:

Challenges:

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continued…

3. Multi-Level Based:

Benefits:

Challenges:

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A good example of a service provided by external providers is desktop break-fix support.

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Customer expectations are based on perceived values of services. Deciding what are ‘reasonable’ expectations and targets for services at the same time as establishing customer’s current perception of service levels can reap many benefits. Most times, Customers do not have a clear understanding of their needs so assisting in determining their needs is a valuable service. In the process, expectations may be set or adjusted to correspond to known service capabilities.

Both customer perceptions and expectations may be determined through interviews, surveys, conversations or other collection methods.

The fact is customers ‘can’ be unrealistic about their expectations. More often than not, IT service providers are saying ‘yes’ to delivering services based on unrealistic or excessive demands by customers. Although the service provider may be well intentioned in agreeing to these demands, inevitably the outcome is not – ‘poor customer service’.

Gaining a common understanding between the customer and service provider(s) of the customer’s service expectations and the providers’ capability is fundamental to the expectation management process.

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These are the SLM activities broken into 2 cycles:

What are the outputs for each activity ?

Define:

Specify:

Negotiate:

Monitor:

Report:

Review:

Evaluate:

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E.g. Customer calls and explains that they have requirements for certain types of services. We refer to our Service Catalogue to see if we provide these or not. If we do, we can IDENTIFY the service name and then move into the CONTRACT stage with the customer. If the service doesn’t exist then we need to more clearly DEFINE the customer requirements. Note: in the DEFINE stage we may uncover new services that are not part of the current Service Catalogue or require modifications to existing entries in the catalogue/spec sheets. We do not re-create the Service Catalogue and Spec Sheets each time we go through the activities of SLM. The Service Catalogue and Spec Sheets are created once and then modified (this relates to the “Mods to” in the slide above).

In the CONTRACT stage we create our OLA, UC’s and SLA’s as required.

Reviewing the Service Level Achievements is part of the MONITOR stage.

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continued…

In the REPORT stage Service Level Reports are about specific SLA’s. Remember that a report does not need to be a written document – it can be a series of numbers, a “health meter” or other form of representation.

Finally in the REVIEW stage the Service Quality Plan helps us to define the SLM activity. How the process works and how it should interact with other process areas. The SQP is like a central point for the Service Manager to define their view of the entire ITSM approach.

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5.8

ORGANIZING – Participate in the budgeting activity

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It is also the means of delegating control and monitoring performance against predefined targets. It is paramount that budgets are effectively integrated within the organization and the managerial responsibility and accountability is matched and communicated in an efficient way.

As all spends affect profitability, it must be recognized that decisions about investment in IT Services and the integrated management IT Accounting discipline can help provide the competitive edge necessary for survival of an organization.

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Types of budgeting:

Zero-based budgeting (Start from scratch)

Incremental budgeting (Takes last years expenditure into account)

When could you use each type?

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The final budget agreed for an IT organization may include financial disciplines imposed by the organization, including:

Limits on capital expenditure

Limits on operational expenditure

Limits on variance at any point in time, between actual and predicted spend

Guidelines on how the budget must be used

An agreed workload and set services to be delivered

Limits on expenditure outside the organization or group of organizations

Agreements on how to cope with expectations.

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5.9

ORGANIZING – Participate in the development of the IT Accounting System

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The basic IT Accounting principles and implementation (why do it, what to do and who it affects) are common to all business processes. But the details of what to cost and how to cost it depend upon the type of service being provided. IT Accounting can be very complex and if implemented at too high a level of detail, may cost more than the benefits realized. The IT Accounting system described below should enable an organization to:

Track actual costs against budget

Support the development of a sound investment strategy which recognizes and evaluates the options and flexibility available from modern technology.

Provide cost targets for performance and Service Delivery.

Facilitate prioritization of resource usage.

Make day-to-day decisions with full understanding of the cost implications and, therefore, the minimum risk.

Support the introduction (if necessary) of Charging for IT Services.

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Costing models are used to analyze the incurred costs for IT service provision.

Costs can be identified as:

Capital: Applying to the business assets of the IT organization

Operational: Resulting from the day to day running of the IT organization

Fixed: Do not vary with resource changes

Variable: Vary based on a factors such as time or usage

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Based on previous Cost Model (by customer), you can calculate the costs for a specific service. The basic approach is similar: Identify all Direct costs Attributable directly to the service being analysed, (e.g. Any dedicated hardware, software, staff or contracts) Apportion the Indirect Costs Such as IT Infrastructure shared used by multiple services Adjust the total to allow for Unabsorbed Costs Such as IT management, buildings or administration This must be the same uplift figure calculated for the whole model, or used from the Costs-by-Customer Cost Model.

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FYI

http://ids.csom.umn.edu/faculty/kauffman/courses/8420s98/Project/TCO/tco.gif Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. They deliver the technology-related insight necessary for clients to make the right decisions, every day, from CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, work with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,800 associates, including 1,200 research analysts and consultants in 75 countries.

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5.10 ORGANIZING – Participate in the development of the Charging system

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Such a system controls IT Service costs and influences the proper use of IT resources, so that these scarce resources are used in the manner that best reflects business need. To calculate the charge for providing IT Services internally, or between (or to) subsidiaries, an organization must decide, prior to implementation, what it is hoping to achieve. One key factor is to analyze the motivational aspects of Charging, considering both the effects upon the provider and the customer of the service. The objective is to optimize the behavior of both parties in achieving the organization’s aims.

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Charging Policy (ie decision to charge) set by the business, not IT.

Examples of charging policies based on:

Cost Price = calculated cost

Cost-plus Price = calculated cost + % to cover for aspects like R&D and training

Going rate Price is comparable with other similar internal departments’ costs (e.g. price per seat)

Market rate Price matches that what is charged by external suppliers

Fixed price A set price is agreed (for a set period of time) with the customer (e.g. customer does not pay for the full development costs of software, but an agreed part ie negotiated contract price)

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continued…

Charging policies should be: Simple Customers should be able to understand the policy and Influence their spending

Fair Charges should recover the costs without biasing any ONE customer

Realistic: The cost of implementing charging should not exceed the benefits

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Simple: The overheads of Cost Management must deliver the benefits of an improved overall cost-effectiveness without the bureaucracy commonly associated with IT Accounting for costs.

Fair: The system must be fair and realistic, services which are not cost-effective need to be reviewed and hard decisions taken. Each business should pay the same money for the same service.

Realistic: Anomalies in the charging system will be exploited by businesses. The charging mechanisms must be designed to achieve optimal behavior.

The image of the IT Service organization is likely to change; they may be seen initially as demanding money without providing the required service, as having become bureaucratic and focused on trivial accounting. To limit this risk, IT organization considering the implementation of charging should:

Publicize the program and work with the businesses to define charging policy Ensure that Service Level Agreements are in place and representative of actual service.

Ensure that the benefits are quantifiable and demonstrable.

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No Charging: Calculating and circulating to managers full details of costs for providing each business’s IT Services. 2. Notional Charging: As above, but including details about how much the IT organization would charge, should a charge back system be operated without applying transactions to the financial ledgers. 3. Full Charging: As above, but applying transactions to the financial ledgers.

Often the first two options above lead to the introduction of Full Charging. Whatever approach is followed, the presentation of the information to the customer must be simple, understandable and honest.

Notional Charging is useful when a Charging system is being introduced for the first time. Notional Charging allows the IT Services organization to gain experience and time to correct errors in the Charging formulae or cost recovery plans and familiarizes customers with the concept of being charged for using IT resources. Notional Charging is not recommended for long-term use unless the organization does not intend to move to a real Charging system, because the incentive to become cost conscious is lessened when money does not change hands.

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continued…

If Full Charging is introduced, the organization must ensure they are able to manage cash flow. If a bill is only paid annually, the organization may have to account for the gap between revenues and expenditure in the same way that a separate company would have to manage its cash flow.

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Charging for IT Services is seen as a method of:

Forcing the business divisions to control their own User’s demands.

Reducing overall costs and highlighting areas of service provision which are not cost effective.

Allowing the organization to match service to justifiable business need, through direct funding.

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Benefits of each model:

Accounting Cost Centre: Focuses AWARENESS on costs

Recovery Centre: Recognition of TRUE costs by customers

Profit Centre: Commercially OPERATED alternative to external

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5.11 ORGANIZING – Participate in the creation of the financial reports

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In addition to the documents covering IT operational procedures, User manuals should be developed covering learning, references and User guide for IT Finance Management and staff.

There are benefits to implementing a system without proper and complete documentation to help customers and support personnel. E.g. to complement their training, particularly when the system involves accounts procedures that may be unfamiliar to staff outside the Finance department. The complexity of the support documentation varies depending on whether the Customers is the IT Accounting team, the Service Desk or a business Customer. It would be vital to cover:

How and when IT management and customers management will be informed of costs

How IT Accounting data is to be collected

How the Charging system works and what pricing structures are to be used

How budgets are monitored between bills

How accounts are to be settled

Who is responsible for policing the IT Accounting system and producing reports, bills etc

How and when auditing takes place

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continued…

What contingency options are in place

How errors in billing will be handled

What Change control is applied to the IT Accounting system.

This analysis and design deliverables should be retained as detailed support documents.

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Customers usually expect IT Services to manage this without additional cost, but there may be no IT budget available. The likely effect is a stretching of resources, which impacts all service levels; hence SLM must be involved in any decisions to provide chargeable service in excess of agreed budgets.

As no IT organization can actually afford to just stop, it is critical that the FMIT tracks customer budgets to be able to identify over-runs before they occur.

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5.12 OPTIMIZING – Monitor and optimize the SLM & FMIT processes

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Periodic reports should be issued to customers a few days in advance of the SLA reviews, so any queries or disagreements can be resolved ahead of the review meeting. This stops the meeting from being diverted by such issues.

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The resources required to produce and verify reports should not be underestimated. It can be extremely time consuming and if reports do not reflect the customers own perception of service quality accurately, they can add insult to injury.

SLM will take into account the specific reporting needs and automate production of these reports, so far as possible. The extent, accuracy and ease with which automate reports can be produced should form part of the selection criteria for integrated support tools.

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5.13 OPTIMIZING – Propose service and process improvements, based on results of monitoring and reviews

Notes:

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An example of mismatching is where the a number of reported service failure and the customers still feel positive about things because they may feel satisfied that appropriate actions are being taken to improve things.

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Yes/Why Questions:

Implementing effective and efficient Service Level Management should produce “Yes” answer to each of these questions.

If the answer is no: If the answer is “No” to any of these questions, the very next question that should be asked is “Why?”

From this we can investigate where the process is deficient and begin a plan for improvement. Communicating this to the business also gives them a better understanding of the complexity of providing the services and more importantly allows the business to be actively involved with assessing the costs, risks and plausibility of will be needed in order to bridge the gap.

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continued…

If the answer is yes: If the answer is “Yes” to any of these questions we should sill ask ourselves “Why?”

From this we can communicate to the business the reasons we were successful and thereby market the value of IT to the business.

Remember: Communication, communication, communication.

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5.14 OPTIMIZING – Conduct audits of the SLM and FMIT processes

Notes:

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Rules for measurements and metrics If you don’t measure it, you can’t manage it. If you don’t measure it, you can’t improve it. If you don’t measure it, you probably don’t care. If you can’t influence it, then don’t measure it.

Attempts should be made to monitor Customer perception on the important ‘softer’ issues through:

Telephone perception surveys

Periodic questionnaires

Satisfaction survey handouts

User group meetings

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Periodic reviews of the IT Accounting and Charging systems should check they are working effectively. They also ensure that FMIT is continually reviewing the system and that all identified deficiencies are corrected at source to prevent recurrence. Audits may be performed by internal staff or by external auditors. In both instances audits are intended to confirm that FMIT and the supporting personnel are adhering to defined procedures. FMIT should perform their own audits and checks to reassure management that the systems runs properly and is policed effectively. Independent audit should confirm this and also provide comparison with other organizations.

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There can often be a trade off between capital investment and running cost expenditure. Capital investment decisions are essentially longer-term decisions, therefore it is more difficult to hold management responsible for such decisions.

However, because the performance of a manager is often measured on the effective and efficient use of resources within a budget period (perhaps once annually), there are only a limited number of ways of holding them accountable for investment decisions. This is where sound Investment Appraisal procedures can be an essential factor for a successful organization.

From the viewpoint of the Business Manager: IT investment and the supply of IT Services is the same as any other planned expenditure or allocation of resource in that it is measured in terms of its contribution to the effective, efficient and economic achievement of business goals. It must enable the business to determine whether the returns would be better from a new IT system or from increased advertising.

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5.15 OPTIMIZING – Manage the ongoing financial operations and performance

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The day-to-day operation of the IT Accounting system includes both the production of cost and Charging data and the checking of its accuracy.

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Changes at agreed SLA reviews must also be reported. SLA changes are normally aligned to annual budget negotiations but IT Services Management may delegate to SLM the powers to vary SLA’s within agreed bounds during the year.

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Workload Variances: Detailed in the organizations SLA’s should be statements about what happens if a customer’s workload exceeds (or falls below) agreed levels. The statements should include situations where a) Spare Capacity is available b) Spare Capacity is not available. IT organizations usually have a margin of Capacity in addition to forecast. It is likely that increased Capacity will be provided, if available, and the IT services organization will negotiate uplift in charges for the next IT Accounting period if the usage continues. The organization as a whole may need to consider whether a customer is allowed to continue to use excess resources to the detriment of other customers. Every case is likely to require a management decision and mechanisms must be in place to cater for such problems.

Cost Variances: Costs for Cost Units are the basis of the budgeted costs of IT Services. If they have been miscalculated, they affect the overall recovery of costs (i.e. Charges) and this has to be addressed by recalculation ASAP. If there has been some change in the expenditure required to purchase or maintain the IT Services, it may be possible to pass this on to the customer, with their agreement. Particularly if the costs are clearly attributable to a single customer; an example of this might be increases in software or hardware maintenance.

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continued…

Revenue Variances: Although the organization may decide to run the IT Services at a profit, it is possible that monitoring reveals either too great a profit or a shortfall. Where too much revenue is generated the cause must be identified and justified or corrected; unless absolutely necessary the charges must not be altered. Some of the reasons for generating excessive revenue include: a) workload has grown faster than forecast and flexible Charging has resulted in increased charges, although sufficient Capacity was available without the IT organization incurring additional costs b) customers are being forced to buy more IT resource than they anticipated possibly because there is insufficient Capacity or inefficient service c) charges really excessive.

Where the problem is identified as a poor service, the underlying cause must be identified. When workload growth is the problem, forecasts must be revised and it may become necessary to make a case to procure additional capacity.

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5.16 OPTIMIZING – Participate in ongoing service management through the service review meetings

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The SLM process must be ‘owned’ in order to be effective and achieve successfully the benefits of implementation. This does not mean it should be undertaken by a single person, unless that is appropriate within the organization. However, if the role is split, it is important to avoid giving tasks to people in ‘fire fighting’ type roles, as they will not be able to mange the majority of the required tasks pro-actively.

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Fundamentals for effective Service Level Management SLAs should be compact documents; a description of the agreements between the customer and the service provider should not take more than 20 pages. SLAs should give the IT service provider the freedom to alter the content of their services; only the scope and boundaries should be pinned down in an SLA. (The customer and IT service provider agree upon the outcome of the services, not the content)

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This includes staff directly working in these areas and Operations or other staff involved in the data collection. Some of these tools are also required for other Service Management processes. Once costs are visible, the demand for some services may fall. This results in reduced revenue but is not really a cost of implementation, as it is in the organization’s interest to identify and reduce use if IT resource.

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6

ASSIGNMENTS

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6.1

Assignment 1 – Service Level Management

You will complete the following tasks relating to Service Level Management over the course of the day, culminating in a presentation that will summarize your knowledge learnt and throughout the day. You will need to use the associated case study in responding during these tasks and for the final presentation. You will act in the role of an external consultant who is assisting the organization described in the case study in implementing the Service Level Management process. Task a) Develop Proposal • Create a definition for Service Level Management that would easily be understood by management staff who have little or no IT experience. • List 5 benefits that introducing Service Level Management would bring to the organization. Be sure to make clear reference to elements of the case study. Task b) Design Process Workflow Diagram Design the Service Level Management process using a workflow diagram. You can use any convention you wish in creating this diagram to show the flow of activities that need to occur. A low level example of a process workflow diagram is shown below:

Task c) Create Service Catalogue Using the case study, define the IT services discussed as they should be described in a Business Service Catalogue. Task d) Develop SLA template Create an SLA template, listing all the headings used and topics covered within an SLA suitable for the organization. Also decide which SLA structure would be most appropriate for the organization described in the case study. Task e) Define SLM Roles & Responsibilities Fill out the RACI model diagram below that defines the roles and responsibilities of different groups in the described case study for the Service Level Management Process. Assume that Service Level Management and Financial Management has been implemented at this time. To focus your efforts, chooses one particular IT service that is being delivered and supported by the IT organization.

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List relevant IT functions or customer departments across the top

Define (Service Catal.) Refine (SLRs) Agree & Negotiate Monitor Report & review Evaluate (SIP)

Task f) Develop Service Improvement Programme for customer: Rece Using the information found within the case study, develop some ideas that could be utilized as part of a Service Improvement Programme for the Point of Sale IT Service. Task g) Final Presentation Acting as an external consultant, you are required to deliver a presentation to the CIO and managing directors who are considering implementing Service Level Management. Your presentation will need to include: • A brief description of Service Level Management • What are the goals of SLM? • What are the activities that are performed? • Who will be involved? • What are the benefits that would be delivered to the organization? • What challenges may be faced and how would these be overcome? • Conclusion

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6.2

Assignment 2 – Financial Management for IT Services

You will complete the following tasks relating to FMIT over the course of the day, culminating in a presentation that will summarize your knowledge learnt and throughout the day. You will need to use the associated case study in responding during these tasks and for the final presentation. You will act in the role of an external consultant who is assisting the organization described in the case study in implementing the FMIT process. Task a) Develop Proposal • Create a definition for FMIT that would easily be understood by management staff who have little or no IT experience. • List 5 benefits that introducing FMIT would bring to the organization. Be sure to make clear reference to elements of the case study. Task b) Create a Charging model that is fair and realistic to be implemented with Rece shoes. In addition consider the potential challenges and risks that will need to be considered. Your findings will need to be included in Task D – Final Presentation. Task c) Final Presentation Acting as an external consultant, you are required to deliver a presentation to the CIO and managing directors who are considering implementing FMIT. Your presentation will need to include: • A brief description of FMIT • What are the goals of FMIT? • What are the activities that are performed? • Who will be involved? • What are the benefits that would be delivered to the organization? • What challenges may be faced and how would these be overcome? • Conclusion

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6.3

Assignment 3 – Service Level Management and Financial Management for IT Services

You will complete the following tasks relating to Service Level Management and Financial Management for IT Services. You will need to use the associated case study and accompanying complaint letter to organize your final presentation materials. You will act in the role of the newly appointed Service Level Manager. Task a) Read and discuss the issues raised within the case study and especially within the complaint letter. Task b) Organize a letter responding to the customer complaint letter, addressing all the issues and explaining how you intend to improve the current service, with specific and realistic targets. Task c) Prepare a memo for the IT Organization as a whole detailing the improvements you want to see implemented on a day to day basis, with regard to communication and responsibilities etc. In addition, this will need to include any relevant information for specific process managers, with regards to their responsibilities in meeting the improvement targets.

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7

ASSIGNMENT RESOURCES

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7.1

Complaint Letter February 24, 2009

Dear Sir or Madam: I am writing to complain about the lack of communication and general support from your organization. I recently received a report, sent from your office, that I assume was intended to update me on the current status of our Service Level Agreement. I have been unable to ascertain any helpful information from this report as it written with a technical ‘IT’ focus and not a customer focus I had expected. My current view is that I am spending a lot of money, but have little idea what I am paying for. In a recent meeting, I was informed that the previous issues that have affected the targets agreed within the SLA had been identified and improvements would be implemented ASAP to avoid further dissatisfaction. However, since this meeting I have had no further communication with regard to any improved services or, more importantly, what they have cost. I have attempted to call on several occasions, but have been unable to make any progress as every member of staff I have spoken to seems to repel accountability and responsibility. As I am sure you are aware, the retail operations of this company are essential to our continued success and growth. Without the support of the IT division we are left floundering and unable to satisfy our customer needs. I am sure that you will agree that this is not the service we signed up for, and would like to hear your thoughts on this current performance. I expect a response in writing ASAP.

Sincerely,

Mrs G. Rumpipants Retail Operations Manager

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7.2

Case Study – RECE Shoe Company

Business Case Study RECE Shoe Company Global Conglomerate ITIL Practitioners Case Study V1.0

Rece Couture Shoe Design For the love of craftsmanship

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Introduction Rece Couture Shoe Company of London, England, is a privately owned shoe company, founded in 1994. Rece has grown rapidly to become one of the leading shoe retailers of the world. During recent years Rece has expanded substantially to reach in 2004 the third most favoured designer shoe label. The company has also expanded the product line with the introduction of an accessory line. Such spectacular growth has been achieved internally and not through acquisition or merger. Rece is a company that has major operations centres in New York, Paris, Milan, Hong Kong and Melbourne, as well as 150 retail outlets worldwide (Rece stores and concessions in major department store locations). In addition, Rece operates an online store with the capacity to accept in excess of 5000 online orders per day. Rece provides an unparalleled service network via dedicated own offices throughout the world and remains a truly independent and private Company able to respond quickly to market changes and implement long term plans, without unnecessary interference or delay. With a streamlined management structure in London, England, Rece has become a leading customer focused and cost effective global retailer, their first class craftsmanship is favoured by international stars and elegant women worldwide. Officers & Employees CEO: Claire Enever (co-founder and president) Creative Director: Angela Miller Group Managing Director, Finance and Administration: Paul J. Rizzo, Group Managing Director, Commercial and Consumer: Bernard Scholl Group Managing Director, Retailing Business Solutions: Cecile Yelland Group Managing Director, International Shipping: Anton Chirac Group Managing Director, Employee Relations: Rebecca Cartwright Group Managing Director, Network and Technology: Anwar Sadat Group Managing Director, Sales and Marketing: Steve Birch Group Managing Director, Press and Public relations: Carla Scott Group Managing Director, Convergent Business: Rachael Alfonsin Group Managing Director, Legal and Regulatory: Pien Ch'iao 2007 Employees: 13,840 1-Year Employee Growth: (7.7%) Headquarters: Level 42, 76 Oxford Street, London, England

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Vision Rece vision is to enhance its position as the leading designer shoe design and retailer in the world. To realise this vision and prepare for competition, Rece has adopted a four-part growth strategy, entailing: ¾ Optimising returns from the ‘classic’ products and services throughout the world ¾ Developing and delivering value-added services via an online interface and extended accessories line. ¾ Transforming our corporate culture and improving productivity ¾ Extending our global scope The Rece Organization The organization is virtually identical at each of the head offices. For example, each head office will have the following departments: ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾

Marketing and Sales Design and Manufacturing Retailing and Logistics Shipping and distribution Customer Services Maintenance Legal Accounts Department Human Resources ICT Department

Each manager for the listed departments will report directly to the director of that that local office. The CEO of the company and her managing directors are located in Head Office in London, England. Logistics The logistics department’s main responsibility is to ensure that all goods being shipped by sea or land are loaded to the appropriate carrier. This is to ensure that Rece can fulfil their obligations regarding paid orders from their customers. The logistics department works very closely with both the Sales and the Manufacturing departments. The logistics departments will organise the loading and consignment of the goods, but it needs to also ensure that appropriate crews have already been notified and that there is an availability of transport. The Sales, Manufacturing and Logistics departments work closely together. As a result of the complexity of the relationship a number of business process issues can

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arise. In the event that it becomes difficult to ascertain the nature or the solution for the issues, the Logistics department will be given priority to manage the issue to resolution. The Logistics department will therefore have the final authority in these decisions. Maintenance The Maintenance department is responsible for maintaining and stocking the necessary parts for both road and air transport. The primary objective is being responsible for the state of repair of the delivery road vehicles. Rece operates a number of large container workshops around the world, so that maintenance can be carried out more efficiently. Sales The sales department is responsible for obtaining orders for international company chains and stores requiring Rece concession stock. They are also responsible for the online orders made via the Rece website. Rece operates a total of 350 dedicated sales offices across the entire globe, and employs approximately 8,000 sales staff. Because of such a large volume of people each regional head office will have a Sales Director which will look after the sales offices within that region. Accounts Department The Accounts Department takes care of the head office's financial accounts, including the management of the accounts payable and accounts receivable ledgers. The Accounts Department also takes care of the payment of salary to staff members and any contractors. There will also be small Accounts Departments at each key location across the globe. The managers of these departments will report directory to the manager at the head office for that region. As a general rule, there is not more than four Accounts Departments per region. The Accounts Departments work very closely with the Sales Departments. The Sales departments will interface into the computer systems controlled by the Accounts Department. Human Resources The Human Resources department is the department, involved in the recruitment, selection and discharge of personnel and in human resource management. For example, each head office employs a company doctor and a psychologist, who provide medical and mental assistance to employees.

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Rece sees this function as being critical to their organization. Sales, Design and some Manufacturing staff are required to travel on a regular basis, sometimes at short notice for extended periods of time. This can place a serious strain on staff and their families, and as a result Rece wishes to ensure the well being of its staff members as it is recognises that they are integral to the organization. Rece does this through medical and mental assistance programs, and by offering generous product discount and annual leave packages. ICT Department Each head office around the world employees a small team of IT personnel to help deliver and support IT Services for their specific regions. For all intents, these groups run fairly autonomously, having their own support teams, including their own Service Desks. However, in London, there is a central ICT Department that provides IT Support for all the store and online requirements. The Rece information systems General The computerisation of Rece’s information systems has not been fully completed at this stage. However, there are certain aspects that can be considered fairly mature. A large part of the financial accounts of the entire Rece organization have been computerised. Due to the geography that exists between the various head offices, there had been identified a need for a virtually identical computerisation standard at these offices. However, unfortunately a large part of the handling of orders and planning processes has not been as well computerised as possible. This is generally due to local constraints being enforced by the relevant government organizations within the various regions that Rece operates. Resolution of this is being seen as a key aspect of the success of the Rece organization. Systems FINANCE is the information system used by the Accounts Department to prepare financial reports. FINANCE contains modules for accounts receivable, accounts payable, salary records and book keeping. After an order is completed, the relevant invoices are created automatically. The payments to suppliers of shipping and payments to providers of specialist maintenance are also made by means of this system.

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Due to the need for various head offices to comply with the local laws regarding finances, the FINANCE system has evolved to be the most diverse system in the organization, being virtually different at each head office. PAYPOINT is the companies’ point of sale system. This is ready for an up date. The technology being used is out of date and not to the standard represented by the company, who want to be state of the art but at the right cost! STOCK is the Rece Inventory Management system. It holds list of goods and materials themselves, held available in stock by a business. The inventory is held in order to manage and hide from the customer the fact that manufacture/supply delay is longer than delivery delay, and also to ease the effect of imperfections in the manufacturing process that lower production efficiencies if production capacity stands idle for lack of materials. FOCUS is the companies CRM system that manages their relationships with customers, including the capture, storage and analysis of customer, vendor, partner, and internal process information. There are three aspects to the FOCUS system: • • •

Operational - automation or support of customer processes that includes the company sales or service reps Collaborative - direct communication with customers that does not include the company sales or service reps Analytical - analysis of customer data for a broad range of purposes

Currently the third aspect of Analysis is not used effectively. General Systems There is also a general suite of applications, mainly Microsoft, with some Lotus Notes, which includes an e-mail, word processor, spreadsheet application, appointment calendars & scheduling software and the Human Resources applications... These suites of applications are offered via local networks. The links between local networks and the links between desktop computers are completely transparent to the users. This software is stored centrally on the main servers within the ICT Department in London, which allows remote users to download them as needed. However, each head office around the world, local versions are kept as this allows for easier management of the local standard operating environments. Hardware Each of the head offices uses a series of UNIX based servers for capturing and recording their information. These servers have direct data links back to the head 195


office in London, where the information is then stored on a central mainframe. The mainframe is equipped with disk and tape storage facilities. However, across the organization the network structure is fairly similar at each of the head offices. This allows for easier deployment of applications across the entire organization. Additional Infrastructure Information The wide area network has been outsourced. The outsourcer in this situation is managing and coordinating the leasing of the necessary network infrastructure. The outsourcer is responsible for providing monitoring information regarding the availability of the wide area network. The cost of the organization maintaining the WAN infrastructure was considered too great. However, recently it is being seen by the organization that the infrastructure may not be as stable as proposed and are looking at the IT Departments to manage this in a more structure manner. This has resulted in incomplete transactions being fed back into the central mainframe, potentially costing the organization millions of dollars. IT Organization Due to the diverse nature of Rece, there are a number of IT Departments. However, policy and objectives for IT are created and managed from the London office. London is seen as the central IT Department. However, autonomy is provided to the other head offices to manage, deliver and support IT Services as they need. As such, each head office has a Chief Information Officer (CIO), who reports into the Group Managing Director, Network and Technology. All CIO’s have a monthly video conference call, with a bi-annual face to face meeting. At the bi-annual meeting, strategy and policies for Information Services and Information Technology are discussed and agreed upon. This meeting is chaired by the Group Managing Director, Network and Technology. In addition to this, there are regular consultations between the head offices regarding technical matters. Telephone and e-mail are the means most commonly used for this with the occasional video conference. There is however a general consensus amongst the senior IT Managers that the IT functions within Rece could probably contribute more to the business objectives of the company. However, they still all agree that in general terms the deployment and organization of its IT resources is reasonably good: •

Communication internationally is regular with good information and results 196


• •

Head Offices are communicating well The technical infrastructure has been extensively documented by each head office

London London uses a Fujitsu 8500 series mainframe as its central computer. The mainframe serves as a way of centralizing all the data from the other various head offices. The mainframe has approximately 3000 GB of disk storage. Due to the large nature of the organization, it was determined that there also needed to be a development mainframe, although scaled down in size. At this stage the organization does not have a testing mainframe and as such, most of the testing is carried in the development environment. The remote head offices can access the mainframe via deployed client applications and for some specific uses, via the World Wide Web. Sales Offices The following IT components have been installed at each local sales office: • Personal Computers • Operating System: Windows 2000 • No CD ROMs • No Floppy Disk Drives • Pentium III – 500Mhz • At least 1 Server – • Operating System: Windows 2000 Server This allows individual sales offices to enter shipping orders into the system, as well as create and distribute information via email for their local regions. This is seen as a key aspect, as each sales office is responsible for generating their revenue. General – Other Head Offices At certain times and for certain parts of the infrastructure, development and maintenance of this is contracted out to various suppliers with whom a maintenance agreement has been signed. At this stage Rece does not have any reciprocal arrangements with any other company in the event of a disaster. The IT Organizational structure of each of the head offices is as follows: • Regional IT Manager – Overall Manager for the specific region • Network Manager - Local Area Network infrastructure

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• • • •

Project Manager - who is responsible for testing and coordinating any modifications to the systems and solving small problems Service Desk - manager specialising in the management of the service desk representatives and dealing with IT Incidents Desktop Manager – responsible for managing co-ordinating the roving engineers. Change Control Co-ordinator

In addition to this, there is a group of roving engineers who travel their local region and are trained to solve the most commonly occurring problems independently. If he/she is unable to do this, the head office is contacted. The call will then be routed through to the local head office, if resolution is not possible then the assistance of suppliers who are able to solve the problems are called in. Policy The current services delivered by Rece are under pressure. With the opening up of global trade agreements, customers are placing greater and more stringent demands on Rece’s services. The biggest requirement coming from the customers is an assurance of accurate delivery. In a lot of instances, goods have taken longer to deliver due to incorrect distribution because of badly written consignment sheets. Consequently, some goods have travelled further than needed or been lost in transit. Unfortunately the manner in which data regarding orders is currently being processed makes it virtually impossible to adequately respond to the needs of the customers demanding accurate delivery. The Group Managing Directors are seeing certain opportunities arise within the global community which they wish to capitalize on. As a result of this they have formulated the following objectives: They have formulated the following objectives: •

Information regarding an order or freight must be supplied to all the offices, for which such information may be important within one hour, 24 hours a day.

•

A better system must be developed to ensure logical distribution, i.e. last on, first off scenario

•

Allow customers to connect to the network in a secure manner so that they can submit orders electronically and request information regarding freight that is under way

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•

The maturity of the organization has been increasing and as such the Managing Directors believe it is time to allow the various offices to operate more independently, implying a direct responsibility for the financial results of each head office.

•

Provide and develop a better interface for Land Freight to communicate better. This will help ensure better transfer of goods for Rece’s customers, providing more accurate delivery.

Given the above objectives and Rece’s existing Information Technology, the Managing Directors believe that with its present level of technology within the IT Infrastructure they will be able to meet its objectives. However, the management, delivery and support of the IT Services may require some restructuring. There is a belief that third parties will be increasingly called upon to help manage and implement planned projects. This option raises a number of alarms with regards to cost and security issues. The Managing Directors believe the talent exists within the organization and will be looking for them for recommendations. The IT Departments across the various head offices see the reliance on external suppliers as a direct threat to their job security.

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8

EXAM PREPARATION

QUESTION 1 As the financial controller for the IT Department of a large organization with who would you normally negotiate with regarding the amount of funds required for the IT Service Delivery budget? a) b) c) d)

Service Level Manager Financial Capacity Process owner Chief Business Accountant Customer or customers

QUESTION 2 How can Service Level Management use data from the incident register at the service desk? Service Level Management uses this data: a) To draw up reports about the number and nature of incidents in a certain period b) To determine the availability of an IT service, on the basis of the number of incidents resolved c) To draw up the Service Level Agreement (SLA) d) Together with other data to work out whether the service level agreed upon has been achieved QUESTION 3 Consider the following statements: 1. A service level agreement (SLA) is an agreement in which the measurable levels of service delivery are documented. 2. A service level agreement (SLA) guarantees the users the most important applications will always be available. Are these two statements correct? a) b) c) d)

Only the first Both Only the second Neither

QUESTION 4 Which two processes along with Service Level Management are used to instigate a Service Improvement Program (SIP)?

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a) b) c) d)

Availability and Problem Problem and Capacity Continuity and Availability Incident and Financial

QUESTION 5 With regard to ITIL Financial Management, we are interested in a variety of costs. All but one of the following are costs we are interested in tracking. Which one is not a cost of interest? a) b) c) d) e) f) g)

Meeting costs External service costs Hardware costs Accommodating costs Transfer costs Software costs People costs

QUESTION 6 Which of the following best describes the service catalogue? a) Service user guide b) Sales catalogue c) A document, internal to the IT department, containing all key information of all services offered d) A document containing key information of all services offered by the IT department QUESTION 7 As the Financial Manager for your IT organization, you want to demonstrate the effectiveness of the IT accounting systems established. Which of these elements would demonstrate the effectiveness of the IT accounting systems? a) The actual costs for every budget item can be accurately tracked b) A reduction in the number of budget variances and adjustments c) The IT financial objective of either break-even or profit is being met

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QUESTION 8 An important consideration in Change approval is the financial impact assessment of the Request for Change (RFC). As the Financial Manager, you have been asked to participate in approving RFCs. The financial approval of an RFC indicates that the cost of a Change has been assessed and that it meets one of two criteria. The first is that it meets the costbenefit criteria. What is the second criterion? a) The estimated costs are within approved budgetary limits b) The return on Investment (ROI) has been demonstrated and approved c) All cost types have been identified and their cost estimates have been approved QUESTION 9 One day, one of your colleagues in the Technical Management department hears about your activities as the Service Level Manager in relation to SLAs. He says he can record the SLAs in the chosen Service Management tool. He shows you an entry screen for SLAs. Which of the following fields does not belong here? a) All components (CIs) on which the service depends b) Response and repair time of incidents c) Start and end date of the agreement QUESTION 10 According to ITIL best practice, which of the following information should NOT be included in an SLA? a) A description of the services covered b) Performance incentives/penalties c) Contact details for underpinning contract providers QUESTION 11 You are an external consultant asked to make a recommendation on the Service Level Management Process. Your client currently has no formal SLM process in place and you are asked to perform the first steps to make it a little bit easier for the new Service Level Manager. (Interviews for this role are scheduled to commence in 2 weeks time). What is the first thing you need to do?

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a) Evaluate the customer’s current perception of the service levels b) Gather documented evidence of Service Contracts, agreements and MOUs c) If you can’t measure service delivery metrics, it is really difficult to convince the customers of the value of the services. So first step is to implement monitoring tools. QUESTION 12 In recent discussion it has been decided that Desktop Publishing be a part of the Service Catalogue. No agreements have been reached at all yet for this service. In fact, for the sake of convenience you have simply omitted this service from the Service Catalogue. When you discuss this with the branch directors, you hear all kinds of different opinions on the direction things should go with DTP. Good agreements on development and operations are not yet possible. Which other service activity can Service Level Management offer? a) advice on policy and planning b) delivery of hardware and software c) calculation and charging of costs QUESTION 13 The goal of Financial Management for IT Services for an in-house organization is: "To provide cost effective Stewardship of the IT assets and resources used in providing IT services." Which of the following statements is also an aim of Financial Management? a) To assist management decisions on IT investment by providing details business cases for changes to IT services b) To help deliver a cost effective and sustained level of availability that enables the business to satisfy its objectives c) To help eradicate poor service in line with business or cost justification QUESTION 14 According to ITIL Best practice, which of the following would NOT be considered a proper Cost Type? a) External service costs b) Payroll costs c) People costs

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QUESTION 15 As the Service Level Manager, you want all parties to make clear agreements on periodic batch processing, for reports that the IT department is to produce concerning the XYZ service. You examine the following service parameters: frequency, simultaneous users, time completed, method of distributing reports. Do you use all the above service parameters in the SLA? a) No, not frequency b) No, not simultaneous users c) Yes QUESTION 16 For the Personnel department, there is a functional relationship between the department at head office and the departments in the individual branches. The Personnel Department System (PDS) service is to be used by all branches too. You want the agreements that you make and record to be supported by all the interested parties. With whom do you agree the contents of the SLA? a) Both head office and the branches. They are the users of the service. It is not only about hierarchical authority. b) With the board of management. It wants to be strategically involved. If it agrees, the rest will have to conform to it too. c) Only with the head office. It is the owner and determines how the system is to be. In view of the functional relationship, the working method is imposed on the branches. QUESTION 17 The senior management of your organization is concerned about the time, effort and costs that are required for setting up a Service Catalogue (SC). In order easily justify the cost and effort of an SC you make the suggestion that the Service Catalogue be created in conjunction with a Business Impact Analysis (BIA) due to be performed in a few weeks by Availability Management. Which of the following statements best justifies the cost and effort of creating a Service Catalogue in conjunction with a Business Impact Analysis?

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a) It will allow better understanding of the 3rd parties required to keep services running and therefore ensure a better level of service. b) Creating the Service Catalogue in conjunction with a BIA ensures that the most important services to the organization are covered first and therefore the first SLAs created will be on business critical services. c) It will foster a better relationship between the ITIL process managers and lead to better overall service delivery through a better understanding of outside factors and internal issues of delivering services. QUESTION 18 The Service Catalogue is finished and has been accepted, and there is a structure and set-up for SLAs. You have a fair idea of what IT now delivers. Now it is necessary to conclude SLAs for each service and with each department. You want to prepare your meetings properly with the departments, in order to achieve clarity in the Service Level Requirements. What form does such a meeting take? a) You formulate a number of open questions in order to steer the meeting. You want to leave the customers to talk as much as possible and say what they think is important. b) You want concrete agreements, so you prepare a comprehensive list of detailed questions c) Everyone has a PC at home and knows quite a bit already about IT. The more the customer specifies QUESTION 19 As the Service Level Manager in your organization, it is your responsibility to measure the effectiveness and efficiency of the process. Following is a list of KPIs that you've come up with so far: 1. Number SLAs signed 2. Number of SLA breaches 3. Number of OLAs 4. Number of UCs 5. Number of incidents for each service 6. Percentage availability of the services Which of these are correct KPIs for the SLM process? a) None of them are correct – they are not defined in a smart way. You can’t measure them per time unit b) 1, 3, 4 are process KPIs; the others are delivery KPIs c) All of the KPIs are correct

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QUESTION 20 Service Level Agreements (SLAs) allows each individual Customer flexibility in requesting variations to Service Levels. Which one of the following is a negative effect if too many variations to the Service Levels of a Service resulted from this flexibility? a) An increase in the number of Change Requests to be assessed b) An increase in the number of SLAs to be managed c) An increase in the overall Service Level Management workload QUESTION 21 Mr. Savage wants you to put together a Service Catalogue for the services that the IT department currently provides. You start by identifying the services provided by the IT department. For this purpose you have meetings with the heads of the IT Management departments. Each of them has his own views on how the services should be described in a Service Catalogue. What is the correct concise description for the service to Personnel? a) Making available and maintaining the PZS application, version 2.1.5, running on server XYZ under MVS b) Undertaking service support and delivery processes for the PZS application and all components on which this application depends c) Supporting the provision of information for personnel management with the aid of the automated information system PZS QUESTION 22 As part of the implementation of Service Level Management, you are asked to create a clear role definition of the process manager role, as opposed to that of the process owner. You have identified the following responsibilities: 1. Create Service Catalogue 2. Develop, negotiate and agree SLA's, OLA's and UC's 3. Produce regular reports on service performance 4. Organizes Service Level Review process Which of the following are additional responsibilities?

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a) Creates utilization and performance reports b) Maintain an appropriate SLM structure for the organization c) Supports the Change Manager for emergency changes to service when they are needed QUESTION 23 Which of the following metrics is useful in assisting you to determine the effectiveness of the Service Level Management process? a) Percentage of SLAs that require changes b) Service Level Requirement to Service Level Agreement turnaround [days] c) Number of SLAs mapped to configuration items QUESTION 24 Which of the following Key Performance Indicators (KPIs) does not reflect an improvement in the effectiveness and efficiency of the Agree and Define Processes? a) Number and percent of SLAs with OLAs and UCs b) A percentage improvement in the overall duration of Service Level negotiation Meetings c) Number and percent of service targets being met QUESTION 25 In the OLAs with the IT Management departments, you have agreed to the following escalation procedure when norms are exceeded. Step 1: Examine the reason why the norm is exceeded. Step 2: Can the cause be removed promptly? Step 3a: Yes, remove cause. Step 3b: No, inform Service Level Manager. Step 4: Resume repair work. Is this procedure practical? a) Yes b) C. No, examining reason why the norm is exceeded is the task of the Service Level Manager, not the IT Management department itself c) B. No, the IT Management department must warn the Service Level Manager immediately if there is a danger that a norm will be exceeded

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QUESTION 26 You are an external consultant asked to make a recommendation on the Service Level Management Process. Your client currently has no formal SLM process in place and you are asked to perform the first steps to make it a little bit easier for the new Service Level Manager. (Interviews for this role are scheduled to commence in 2 weeks time). What is the first thing you need to do? a) Evaluate the customer’s current perception of the service levels. b) If you can't measure service delivery metrics, it is really difficult to convince the customers of the value of the services. So first step is to implement monitoring tools. c) Gather documented evidence of Service Contracts, agreements and MOUs QUESTION 27 Which of the following Key Performance Indicators (KPIs) does not reflect an improvement in the effectiveness and efficiency of the Agree and Define Processes? a) Number and percent of service targets being met b) A percentage improvement in the overall duration of Service Level negotiation Meetings c) Number and perfect of SLAs with OLAs and UCs QUESTION 28 Which of the following metrics is useful in assisting you to determine the effectiveness of the Service Level Management process? a) Percentage of SLAs that require changes b) Service Level Requirement to Service Level Agreement turnaround [days] c) Number of SLAs mapped to configuration items QUESTION 29 When estimating the costs of budget items it is important to consider all costs associated to the items in question. In addition to cost types and cost elements, which additional information should be used to properly estimate the costs of budget items? a) The cost of downtime associated with the item b) Depreciation is a key part of calculating the cost of a budget item as the "value" of an c) The depreciation amount of the item

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QUESTION 30 You have recently completed a Service Catalogue for the services that IT can provide and begin with the next step. For each service in the Service Catalogue, you want to draw up a SLA with the departments who are to use these services. You know that first you must concentrate first on a general set-up for the structure of the SLA. After meeting with your organization it is decided that for the LAN service, it is best to have an SLA that allows the least amount of duplication from customer to customer but still enough flexibility for some silos to have some customizations to critical services. This will make the consistency in the delivery of that service easier to deliver and measure. Based on this criteria, which of the following is the correct structure of SLAs to chose?

a) Customer Based SLAs b) Service Based SLAs c) Multilevel SLAs QUESTION 31 There are three departments in a company requiring IT Services: Marketing, Sales and Manufacturing. Each department is asked to contribute to the IT budget, based upon the services they require. Rather than trying to determine the actual usage of the IT Infrastructure the three departments rely upon, it was decided to group all IT Infrastructure costs into one cost called "IT Infrastructure". What would be the most feasible approach to recover the IT Infrastructure costs that is perceived to be fair, equitable and simple? a) Equally divided among all three departments b) By the number of transactions processed by each department c) By number of Users in each department QUESTION 32 In developing new services (Sales, Internet), it has subsequently become evident that the agreed service levels were hardly met at all. You put this down to shortcomings in the SLM process. Which activity are you going to improve in order to prevent this?

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a) Test the service better before delivery b) Document the service better c) Train the use of the service better QUESTION 33 You have finished the Service Level Report for the Basic Workplace service (SLA concluded with the Board of Management) and are about to distribute it. You send the report to the secretary of Messrs Duur and Reinaard. Is this sufficient? a) No, it is better to put the report on the Intranet. Each user has a workplace and therefore must be able to view the reports b) Yes, the report will be discussed in the board meeting, which is also attended by the Finance, Purchasing, Architecture and Personnel Managers. c) No, you must send the report to the branch directors at the very least. QUESTION 34 In the SLAs, you have agreed to produce a report each month on the service levels realized. Each week you receive from the Technical Management department the following information about IIS on the mainframe: Weekday Monday Tuesday Wednesday Thursday Friday Saturday

CPU Sec 293453 459320 650494 304507 905448 123654

DBTx. 23043 54594 45948 49540 49840 12110

Av. Users 32 34 20 29 36 14

Disk I/O 69596459 28382943 12939203 54954833 34393439 12548323

Which column is practicable for reporting on the service supplied to the users concerning the performance and the use of IIS? a) CPU Seconds (CPU Sec.) b) Average Users (Av. Users) c) Database transactions (DBTx.) QUESTION 35 When cost elements are identified they should be put into classifications. According to best practice what are the two minimum classifications that should be created for cost elements once they have been identified?

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a) Capital Costs and Operational Costs b) Direct Costs and Indirect Cost c) Transfer Costs and External Costs QUESTION 36 It appears that there is confusion about the level of support by IT for functional questions on the Basic Workplace (how do I use Word?). Both the users and the Functional Management staff become irritated about this and the time agreements are not met. You decided to start up a number of actions for improvement. Which of the actions below is not correct? a) Organize some training programs for users b) Review the agreements in the SLA (give more time) c) Make a list of frequently asked questions (FAQ) QUESTION 37 You are the sole Service Level Manager and you realize that you are short of time. Managing the current process in particular is a heavy burden. You hardly have any time for improvement actions. This is reflected in the service levels that are not met. How can you improve the efficiency of the current process? a) By holding a Service Review discussion only once a quarter b) By merging a number of services. This will result in fewer SLAs. c) By introducing improvements at the monitoring and reporting stages QUESTION 38 The service levels for the services to the branches are met each month, but even so the IT department is given only just a satisfactory score during the annual user satisfaction survey. This was not what you had expected. You had made clear agreements, after all. Is it clear where the cause lies? a) Yes, the Service Desk staff and the users do not speak politely to the users. This means that while the service levels are good, the feeling is not. b) No c) Yes, you must visit the branch managers more often to discuss service levels. Certain expectations are not expressed.

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QUESTION 39 In the SLA for the email service, the opening times of the service have been set from Sunday to Friday from 7.00am to 11.00pm. The marketing departments want to produce a Sunday edition of their magazine in the near future, and therefore ask to be able to work on Saturdays too. You have to adjust the service and do this by following these steps: Step 1: Determine the new or adjusted Service Level Requirements Step 2: Determine the feasibility of the demands (incl. financial consequences) Step 3: Modify the service in accordance with the desired service levels Step 4: Modify the SLA, negotiate and sign Is this correct? a) No, as the second step, the Service Catalogue must be amended b) No, the report on the service must be amended c) Yes QUESTION 40 An important consideration in Change approval is the financial impact assessment of the Request for Change (RFC). As the Financial Manager, you have been asked to participate in approving RFCs. The financial approval of an RFC indicates that the cost of a Change has been assessed and that it meets one of the two criteria. The first is that it meets the costbenefit criteria. What is the second criterion? a) The estimated costs are within approved budgetary limits b) The Return on Investment (ROI) has been demonstrated and approved c) All cost types have been identified and their cost estimates have been approved

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9

FURTHER READING

For more information on other products available from The Art of Service, you can visit our website: http://www.theartofservice.com If you found this workbook helpful, you can find more publications from The Art of Service at: http://www.amazon.com

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INDEX* A Accommodating costs 201 accountability 36, 107 Accounting 49, 60, 64, 111, 122 Accounting system 111, 129-30, 153 ACCOUNTING SYSTEM 4, 201 accounts 129, 193-4 financial 193-4 Accounts Departments 193-4 accredited vendors 11 agreements 4, 43, 73, 84, 156, 171, 200, 202-4, 208, 211 answer 23, 142-3 APMG 10 applications 195-6, 200, 206 Art of Service 6, 11, 13, 214 assets 65, 203 assignment 4, 50, 178, 180, 182, 184 ASSIGNMENT 4 audits 149 Av 210 B bake 34 Balanced score cards (BSC) 17 Basic Workplace 210-11 batch processing, periodic 204 benefits 2, 8, 21, 24, 33, 44, 48, 57, 60, 89, 91-2, 100, 111, 121-2, 129, 180-2 [1] organizational 28 BIA (Business Impact Analysis) 204-5 bills 49, 125, 129 branches 204, 211 browser 3 BSC (Balanced score cards) 17 budget items 208 budgets 26, 107, 109, 129, 131, 209 organizational 24 business 9, 18-21, 25, 30, 40, 44, 48, 50-1, 116, 119-20, 122, 142-3, 151, 195, 203, 205 Business Case Study 190 Business Impact Analysis (BIA) 204-5 business objectives 8, 196 business people 29 business processes 17-18, 21-2, 83, 111 defined 83 business processes 83 Business Service Catalogue 180 C cake 34-5 can t 147 capacity 64, 156-7, 191, 201 Capital Costs and Operational Costs 211 cash flow 125 CEO 191-2 certification 10 challenges 91-2, 181-2 change management 28 charges 119-20, 124, 156-7 charging system 4, 118, 122, 124, 129

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Chief Information Officer (CIO) 116, 181-2, 196 CI (Configuration Item) 80, 207-8 CIO (Chief Information Officer) 116, 181-2, 196 classifications 50-1, 210 client 116, 202, 208 CMDB (Configuration Management Database) 80 communication 26, 32, 40, 44, 89, 143, 184, 188 company 2, 125, 188, 191-2, 195-7, 209 company sales 195 complexity 83, 129, 142, 192 Configuration Item (CI) 80, 207-8 Configuration Management 65 Configuration Management Database (CMDB) 80 conjunction 58, 204-5 consultant, external 180-2, 202, 208 consumer 50, 191 Continuous Service Improvement Program 24 CONTRACT stage 102 cost elements 208, 210 cost information 64-5 Cost Type 50, 202-3, 208, 212 Cost Units 50, 156 costs 23, 49-50, 60, 64-5, 111-12, 115, 121-2, 124, 126-7, 129, 131, 142, 156-7, 174, 201-4, 208-9 [6] budgeted 156 calculated 120 departments 120 development 120 estimated 202, 212 people 201, 203 right 195 transfer 201 Costs-by-Customer Cost Model 115 Costs for Cost Units 156 costs of budget items 208 CPU 210 Create Service Catalogue 180 creation 3-4, 128 criteria, cost-benefit 202, 212 Critical Success Factors (CSFs) 17, 28 CSFs (Critical Success Factors) 17, 28 CSF s 17 CSIP 24, 27-8, 30-1 customer returns process 21 customer service 100 D day 112, 116, 133, 180, 182, 184, 191, 198, 202, 207-8 DBTx 210 Define Elements 24-6, 30 Define Processes 207-8 Define QUESTION 202, 204, 206, 208-9, 212 Define Service Level Agreements 87 Define Service Level Management 40, 64, 73 Define Service Recording 50 Delivering Services 9 delivery 19, 27, 29, 198-9, 203, 209-10 departments 29, 32, 57, 59, 83, 191-3, 196, 199-201, 204-6, 209, 211 deployment 196 Design Process Workflow Diagram 180

216


designations 2, 50 Develop Service Improvement Programme 181 development 4, 110-11, 118, 197, 203 diagram 23, 180 Direct costs 115 Direct Costs 50 Direct Costs and Indirect Cost 211 documented evidence of Service Contracts 203, 208 documents 43, 45, 77, 79, 103, 129, 201, 210 don t measure 147 duration of Service Level negotiation Meetings 207-8 E e-mail 21, 195-6 effectiveness 4, 66, 88, 201, 205, 207-8 effort 40, 180, 204 eLearning Programs 3 email [email protected] employees 32, 191, 193 England 191-2 enrolment key 3 exchange 4, 62-3, 72 EXIN 6, 10 expectation management process 100 expectations 31, 100, 109, 211 customer s service 100 expenditure 108-9, 125, 156 expense 24, 50 experience 26, 124, 180, 182 External Costs 211 External service costs 201, 203

3

F failure, reported service 140 FAQ (frequently asked questions) 211 finance 17, 191, 194-5, 210 Financial Capacity Process 200 financial ledgers 124 Financial Management 4, 46, 182, 203 Financial Manager 201-2, 212 FMIT 4, 60, 65, 76, 149, 182 FMIT processes 66, 182 FMIT PROCESSES 4 forecasts 156-7 freight 21, 198 frequency 204 frequently asked questions (FAQ) 211 functional process flows 33 functions 18, 36, 181, 194, 196 service desk 18 G globe 193 goals 19, 34-5, 73, 181-2, 203 goods 192, 195, 198-9 Group Managing Director 191, 196, 198 growth 188, 191 H hardware costs

201

217


head offices 192-9, 204 various 194-5, 197, 199 Human Resources 193 I ICT Department 194 IIS 210 Implement Service Management 24-6, 30 implementation 60, 111, 119, 122, 167, 174, 206 incidents 80, 198, 200-2, 205 incurred costs 112 Indirect Costs 115 Information Services and Information Technology 196 infrastructure 22, 83, 115, 196-7, 199, 209 infrastructure costs 209 ingredients 34 initiative 24 instructions 2-3 Internet Explorer 3 ISEB 10 ISO 77 IT Service Management (ITSM) 6, 8, 10-11, 13, 19, 23, 27 ITIL 10, 14, 22, 202 ITIL Framework 7-8, 21 ITIL/IT service management 10 ITIL Practitioner Agree 7 ITIL Practitioners Case Study V1.0 190 ITIL process managers 205 ITIL processes 18 ITIL Service Level Management deployment 83 [email protected] 3 ITIL s approach to Service Management 34 ITSM, see IT Service Management K Key Performance Indicators, see KPIs KPIs (Key Performance Indicators) 17, 28, 205, 207-8 L LAN service 209 legacy 30-1 letter, complaint 4, 184, 188 liability 2 links 195 local networks 195 login 3 Logistics department 192-3 London 191-2, 194, 196-7 Lotus Notes 195 M mainframe 196-7, 210 maintenance 79, 84, 193, 197 managed services environment 73 management 25, 115, 129, 149, 151, 193, 195, 198-9, 204, 210 effective Service Level 171 efficient Service Level 142 implementing Service Level 181 Management department 206-7 management of IT Infrastructure 22

218


managers 12, 124, 151, 192-3, 196-7 managing directors 181-2, 192, 199 managing organizational change 26 maturity 24, 199 organizational 25 medical 193-4 meeting 64, 133, 184, 188, 196, 205-6, 209 service review 4, 67, 158 meeting costs 64, 201 metrics 28, 59, 147, 207-8 can t measure service delivery 203 measure service delivery 208 Microsoft 14, 195 mission statement 20 money 49, 122, 124, 188 N network 191, 196, 198 area 196 unparalleled service 191 norms 34-5, 207 Notes 15-16, 38, 41-2, 46-7, 52, 56, 68-9, 81-2, 93-6, 98-9, 113-14, 136-9, 158-66, 168-70, 172-3, 175-6 [22] Notional Charging 124 number 17, 28, 103, 140, 192-3, 196, 199-201, 205-9, 211 O objective tree 21 objectives 17, 20-1, 44, 89, 196, 198-9, 203 department s 8 organizational 8, 21-2 offices 188, 191, 194, 196, 198-9 OGC 24-6, 30 OLAs 4, 84, 102, 205-8 organization 7-8, 17-18, 20-1, 25-7, 43, 64, 77, 83, 107, 109, 111-12, 124-6, 156-7, 180-2, 194-7, 204-5 [18] external 20 government 194 in-house 203 independent 11 large 200 organization priorities 26 organization-wide systems, large 65 Organizational drivers 29 Organizational Perspective 19 Organizational structure 197 organizations Configuration Management Database 80 organizations focus 83 organizations maturity 20 organizations SLA s 156 organizations Agreements 109 organization s interest 174 Organizes Service Level Review process 206 outsourcer 196 P parties 57, 59, 119, 204-5 partnerships 73 payments 193-4 Payroll costs 203

219


PDS (Personnel Department System) 204 perceptions 59, 88, 100, 134, 203, 208 personnel 20, 149, 193-4, 206 Personnel Department System (PDS) 204 Planning to Implement Service Management 24-6, 30 policies 17, 20, 22, 64, 121, 196, 198, 203 charging 64, 120-2 presentation 124, 180-2 final 180-2 price 120 process-based approach 23 process complies 23 process improvements 4, 28, 136 process interdependencies 26 process KPIs 205 Process Manager 18, 184 process manager role 206 process maturity 25 process owner 17-18, 35, 206 process workflow diagram 180 processes 7-9, 17-19, 23, 25-8, 33-6, 57, 63, 73, 77, 100, 142, 200, 205, 211 defined 19 change 28 delivery 206 manufacturing 195 planning 48, 194 sales 21 work 43 Processor 3 Product/Service focus 25 professional services firms 116 profit 157, 201 program 3, 6, 19, 24, 27, 122 project 35 provision 8-9, 21, 206 publisher 2 PZS application 206 Q QUESTION

200-12

R realization 18, 20 Rece 181, 190-4, 196, 198 Rece organization 194 Rece Organization 192 RECE Shoe Company 190 Rece s services 198 recommendations 199, 202, 208 Regimented organizations 27 region 32, 193-4 local 197-8 relationship 73, 192, 195, 205 functional 204 REPORT stage Service Level Reports 103 Request for Change, see RFCs resolution 193-4, 198 resources 26, 116, 119, 124, 131, 134, 151, 157, 174, 196, 203 responsibilities 17, 36, 180, 184, 188, 192, 205-6 Return on Investment (ROI) 202, 212

220


RFCs (Request for Change) 202, 212 risks 24, 122, 142, 182 ROI (Return on Investment) 202, 212 roving engineers 198 Row 36 S Sales 181, 191-4, 209 Sales Departments 193 sales offices 193, 197 Saturdays 210, 212 SC, see Service Catalogue scope 64, 171 Server 197 servers 195 service activity 203 service asset 50 service availability 63 Service Based 91, 209 service capabilities 100 Service Catal 181 Service Catalogue (SC) 4, 39, 43, 45, 48, 77-80, 83, 102, 201, 203-6, 209, 212 Service Catalogue and Spec Sheets 102 Service Contracts 203, 208 service costs 119 fixed 51 service delivery 21, 43, 111, 200, 205 Service Desk 129, 194, 200, 211 Service Desk and Problem Management 58 service desk representatives 198 service doesn t 102 Service Improvement Program (SIP) 43, 181, 200 Service Improvement Programme 181 Service Level Achievements 43, 102 Service Level Agreement, see SLAs Service Level Agreements 44, 88-9, 122, 188, 200, 206 Service Level Management 4, 38, 64, 74, 88, 180, 200, 203, 206 Service Level Management and Financial Management 180, 184 Service Level Management process 180, 207-8 Service Level Management Process 17, 180, 202, 208 Service Level Management 181 Service Level Manager 73, 200, 202, 204-5, 207-8, 211 appointed 184 inform 207 service level negotiation meetings 207-8 Service Level Report 210 Service Level Requirement 43, 85, 205 adjusted 212 Service Level Requirement to Service Level Agreement 207-8 service levels 43, 64, 67, 100, 131, 200, 203, 206, 208-12 Service Management 4, 9, 21, 27, 158, 202 service management processes 174 Service Manager 103 service name 102 service obligations 64 Service Operating Procedures 77 service organization 7, 122 service parameters 204 service performance 206 service provider 43, 73, 88, 100, 171

221


service provision 112, 126 service quality 63, 134 Service Quality Plan 103 service reps 195 Service Review 211 service targets 44, 89 re-agree 67 service user guide 201 services chargeable 131 customer 21 electronic 29 email 212 improved 188 inefficient 157 managed 73 match 126 multiple 50, 115 quality 57 required 122 value-added 192 Customer 192 Services Management 155 services organization 124, 156 service 83 set 9, 85, 100, 120, 212 set services 109 shared costs 50 SIP (Service Improvement Program) 43, 181, 200 SLAs (Service Level Agreement) 4, 44, 63-4, 84-5, 87-9, 122, 171, 180, 188, 200, 202, 204-12 SLA s 63, 102-3, 155 slide 13, 20, 33, 102 SLM 4, 39, 44, 57, 59-60, 63, 76-7, 79, 87, 89, 102, 131, 134, 155, 181 SLM & FMIT processes 132 SLM & FMIT PROCESSES 4 SLM activities 101-3 SLM and FMIT processes 62, 146 SLM process 39, 63, 88, 167, 205, 209 formal 202, 208 software costs 201 SOP s 77 Spare Capacity 156 staff 27, 30, 60, 115, 129, 149, 174, 188, 194 staff members 193-4 standards 17, 23, 77 Step 207, 212 stock 195 study 180-2, 184 Successful Service Level Management 73 Sunday 212 suppliers 4, 57, 67, 72, 194, 197-8 external 43, 57, 120, 199 systems 60, 64, 83, 122, 124, 129, 149, 151, 194-5, 197-8, 204 T Task 180-2, 184 tasks 167, 180, 182, 184, 207 technology 8-9, 19, 25, 191, 196, 199 tools 3, 17-18, 21, 23, 27, 59, 77, 79, 174 trademarks 2

222


transactions, applying 124 Transfer Costs and External Costs

211

U UCs 205, 207-8 Unabsorbed Costs 115 underpinning support processes 63 Undertaking service support 206 users 3, 44, 59, 89, 195, 200, 204, 209-11 simultaneous 204 V variations 206 VBF (Vital Business Function) vision 19-20, 30, 192 Vital Business Function (VBF)

18 18

W Windows 197 word processor 195 world 191-3, 195 www.theartofservice.com 214 www.theartofservice.org 3

223

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