If you have not yet viewed Part 1 of this two-part series, click here to read “Determining the Business Value of IT Services”.
The primary purpose of an IT Service Catalog is to communicate how IT can help the internal and external business community do their jobs. A successful IT Service Catalog allows the business community to understand the value that IT delivers answering the questions,
“What does IT do?” and “How well does IT do it?”
Creating an IT Service Catalog also addresses three of the most emotional words in the IT vocabulary – “IT Business Alignment.”
The concept of creating an IT Service Catalog was introduced by the IT Infrastructure Library (ITIL) Version 3 framework. The ITIL V3 IT Service Strategy book defines best practice for IT Service Management (ITSM). ITIL defines an IT Service Catalog as a “structured document” that categorizes technology services provided to the business community.
ITIL V3 books and experts recommend that creating an IT Service Catalog defines:
- a strategic view of the inventory of all available IT services,
- what IT organizational areas are responsible for promoting and managing the delivery of services, and
- what processes and workflows can be improved and/or automated to make service delivery more relevant to the business community, and at a scalable cost.
The ITIL V3 framework defines a service as:
“a means of delivering value to the business community by facilitating outcomes they want to achieve, without the ownership of specific costs and risks”.
An IT Service Catalog, sometimes also referred to as the IT Service Portfolio, is the bundling of an IT organization’s people, processes, and technology-based capabilities into physical and logical services that are meaningful, measurable and valued by the business community.
Over the past few years, the IT Service Catalog has gained significant acceptance among CIOs that are being challenged to achieve greater IT simplification of the IT capabilities they provide to the business community.
In some cases, CIOs are also being asked to:
- show greater cost transparency about IT spending, and
- map IT spending to the objectives and goals of the business community regarding value or contribution toward business goals and growth.
Oh yes, and by the way,
- kindly define and explain each IT service,
- what is the planned capacity and utilization of services by the business community, and
- identify services’ business value in terms of commonly understood business language.
The IT organization will create operational efficiency or business growth by simplifying the value and measured utilization of technology. Simplifying IT goes far beyond adopting an on-demand Amazon style concept: first naming technology capabilities as services in an IT Service Catalog, and second, placing these services in a web portal for the business community to make requests – just like customers do when purchasing books from Amazon or music from iTunes.
To ensure that customers receive IT capability as a valued service, the IT Service Catalog team must define these technology capabilities, measured in terms of meeting company profitability objectives via collaboration of service and business. They must also explain how they are able scale costs to match changing market pressures.
These pressures, and others, are what drive CIOs to offer innovations to the business, powered by the convergence of previous technology capabilities, such as cloud, mobile, and on-demand services.
So, before I provide details about how you create an IT Service Catalog, let me share some of our experiences – that is, if you are considering such a project.
- I recommend that you first ask and answer the following questions.
- Your answers to these questions will better enable you to develop a clear and measurable IT Service Catalog of orderable services that includes a mature fulfillment strategy for the delivery and support of these services.
Here are the questions – and some guidance to help you:
How are specific technology-based capabilities related and deployed to fulfill orderable service items in the IT Service Catalog?
To answer this question, do an in-depth review of the orderable service and the structure of the related fulfillment services necessary to achieve the business customer’s desired performance, productivity, and/or revenue objectives.
The payoff for this effort? You’ve defined your services’ fulfillment strategy.
What is the desired value as a result of IT simplification?
To answer this question, develop an IT service fulfillment strategy that illustrates value to the business community from these two perspectives, at least:
- Will this help with IT spending optimization?
To optimize the cost of IT capabilities, monetize them to determine what dollars can be reallocated for business growth opportunities or reallocated within IT to stabilize spending while providing greater performance and service to the business community.
- How does IT simplification improve business agility?
By simplifying the technology environment it will actually increase the agility of the company by enabling a path to use newer technologies.
What IT Services are driving the most value, and what is the best cost?
You need to simplify to achieve innovation, and to add converged technologies at lower costs. Too often, within the business community, you see just one technology concept being applied at an unsustainable cost. When you deploy new technologies such as cloud, mobile, analytics and social, you drive business community innovation.
Now, back to the topic at hand. Creating a structured fulfillment IT Service Catalog makes the IT simplification easier and actionable. Doing this provides the details and clarity necessary to understand the relationships and dependencies of services, and be able to predict how services align to your infrastructure and the business community.
A structured fulfillment IT Service Catalog contains information about service:
- request processes, and
- availability and capacity.
This IT Service Catalog is typically complemented with the capability for the business community to order services – Amazon style.
To define the services for your IT Service Catalog, you need to know both your business community (the customers and users), and the value that your service delivers, based on the business community perceptions and expectations.
For details about how to define the value of IT services, read Part 1 of this blog series, titled “Determining the Business Value of IT Services”.
When you define your services for the IT Service Catalog, and start with a review of your Service Desk incidents or problem tickets. Creating an IT service catalog will be a very challenging and long project, with limited CSI (continual service improvement) measurements and analysis capability.
A properly constructed IT Service Catalog starts and ends with clearly aligning IT to the business. In almost every case using this approach, we have observed the added benefit of facilitating a significant change in the perception of IT in the business community – from a reactive break-fix department to that of a highly reliable and cost-effective service provider.
Over the last few years, we have seen a wide range of IT Service Catalog initiatives – from the very successful to flat-out failures. From this broad spectrum of experiences and hard-won wisdom, we have developed the following best practice.
Even though the services defined are unique for every company, the approach and resulting benefits are unsurprisingly the same.
When you use our “S.M.A.R.T.” approach, along with our automated SaaS (Software as a Service) solution, called SUM™ (Service Utilization Manager), you can quickly – within weeks – create a structured fulfillment IT Service Catalog.
Strategy – Create a structured fulfillment “strategy” for greater IT effectiveness. A strategy that delivers the controls, constraints, and critical success factors that govern achievement of ITSM objectives, and implementation and management of ITSM vendor tool suite:
- process improvements and workflow automation projects,
- measureable service delivery, usage and support activities, and
- CSI (continual service improvement) measurements and analysis.
Measurable – Identify “measurable” IT service metrics. Services where the IT organization and service owners can monitor service utilization by the business community, and can be used to determine showback/chargeback cost effectiveness. Create measurable metrics that the business community will understand as contributing value to achieving their expected outcome and is scalable by them to meet the velocity of changing business objectives.
Actionable – Define the “actionable” steps required by the IT and other organizations to fulfill each service request. Define and document approval steps, escalation steps, rate tables, rules and controls, exceptions, and required functional groups. This can be the most challenging part, but is necessary prior to launching any type of process improvement or workflow automation project using any of the ITSM tool suites and platforms.
Relevant – Identify “relevant” IT services in terms of understandable and valued business community language. For example, when you are promoting the name of the IT service to the business community, and they ask you to explain what it means or the value it delivers, go back to the drawing board. At a minimum, each service that is documented in the IT Service Catalog should contain:
- a description of the service,
- instructions for the request,
- key steps for approval and fulfillment processes, and
- any service level information that is effective in setting expectations.
Transparent – Define “transparent” service relationships and costs. Know not only the related and dependent services, but also the cost and associated assets. Also, define the unit cost of each service. Providing this level of transparency requires a repeatable allocation method to consistently communicate service-cost vs. service-usage relationships to the business community.
Using the S.M.A.R.T. approach helps the assigned IT Service Catalog creation team to avoid the following most common obstacles encountered when defining services.
- Rogue projects,
- Underutilized technologies,
- Who owns the cost and risk,
- Lack of perceived service value,
- Who are the users of the services,
- Creating too many services, and
- How to quantify service capacity and demand.
Our SMART approach and SUM™ Solution allows IT Service Catalog teams to comply with tight budget objectives and to work smarter, not harder.