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How you can transform your service catalog to focus on business value

I ran a workshop recently to help the IT organization in a bank redefine their services. They had contacted their HP account team to say that they needed help defining “business services”, because all their IT services were currently quite technical and they knew that it would be better to have a more business-focused service catalog. This blog describes how I helped this particular organization, but you may find that some of the ideas will work well for your situation too.

 

The IT department had already done a lot of work on a “business service definition” project but was not sure how best to proceed. We agreed that I would spend a few days with them, reviewing the project and making suggestions for the next steps.

 

The service catalog they had created defined one IT service for each application. Some applications were only used by a single business unit, but others contributed to many business processes across the whole bank. The IT department had defined a standard SLA format and created SLAs for many of these applications. This was taking a long time, as there were more than a thousand applications. The SLAs for these services had quite technical targets, and this led to a potentially enormous amount of reporting, which would be of limited value to the customers.

 

Although the IT department knew that they wanted to define “business services”, they weren’t sure what this would involve, since the only services that they were aware of were based on supporting the applications, for which they were already defining SLAs.

 

We looked at a simple model that I sometimes use to help IT organizations think about the difference between an application and an IT service, but this still didn’t help them to see how they could improve their service definitions, since they felt that most of the additional components were generic across all their services.

 

 IT Services are more than technology.png

 

 

The IT organization had a number of business relationship managers who seemed to really understand their customers. These BRMs clearly understood what the customers did and what was important to them. This was the vital information that we needed to resolve the situation. The bank had a number of business units, and each of these business units ran many business processes. Each business process relied on one or more of the applications. The BRMs had identified the major business processes and started mapping these to the applications that supported them.

 

We selected one business unit where the BRM had done a good job of this analysis; this was the mortgage unit, which just had 8 significant business processes. We started to draw up a table showing which applications supported each of these business processes.

 

 

Online Mortgages

Second-Party Mortgages

Another Process

Etc.

App1

X

 

X

 

App2

 

X

 

 

App3

X

X

 

 

Etc.

 

 

 

 

 

It was at this point that we realized the simple solution to their service catalog problem. We simply needed to define a service for each significant business process. For example, there would be an “online mortgage support service” and a “second-party mortgage support service”. This simple idea has the great advantage that it means something to the business, and if we measure and report these services then we will create reports that have a real business focus. We can then review the targets in the existing SLAs to ensure that they underpin these new business services. Over time the application SLAs could be modified to become OLAs (operation level agreements – used to document an internal agreement between the IT service provider and another part of the same organization) with internal metrics that can be used to help ensure the business service SLAs are met.

 

We wanted to avoid creating a huge overhead with the new SLAs, so agreed to restrict each one to a small number of KEY performance indicators. The BRMs will talk to the customers and ask them to identify the three most important things that they want measured and reported for each business service. These will then be documented in short SLAs, and the IT department will work out how they can be measured. (See my blog titled Should an SLA define what the customer wants or what you can measure? for more thoughts about this). The IT organization will then review targets in the application SLAs to ensure that these targets are suitable to deliver the required customer outcomes.

 

On the final day of the workshop I was listening to a discussion between some of the BRMs, and one of them said,

 “I think the customer may well ask us to report the length of time from when a new mortgage advisor joins the organization to when they have been provisioned with a PC, a phone, user accounts and everything else they need to do their job. I hadn’t thought of this kind of target before, but if that is what they want then we could invest in helping to improve this”.

It was at this point that I knew they had internalized the difference between an application service and a customer-facing business service.

 

Learn more about HP technology experts and how we can help you solve your most pressing challenges today – and be ready for what’s next.

Stuart Rance
 

If you want more ideas to help you think strategically about IT services, then read some of my other blogs (most recent blog is at the end):

 

 

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Comments
Aprill Allen(anon) | ‎02-09-2013 09:43 PM

Great post, Stuart. I think this is the clearest example of service catalog I've read.

Stuart_Rance | ‎02-09-2013 09:59 PM

Aprill,

 

Thank you for the feedback, coming from the Knowledge Bird I am humbled by the compliment.

 

Thomas Reiter(anon) | ‎02-11-2013 07:54 AM

This is a very good example how to create meaningful SLA's. 

James Finister(anon) | ‎02-11-2013 09:13 AM

Stuart and I discussed this last week as part of our on-going conversations around Service Integration. In a similar situation a couple of years ago my team used OBASHI  to achieve a comparable mapping. The added complication we faced though was the complex interdependencies between business processes, products and channels themselves.

 

In a previous existence as a service level manager the related issue we came across was recognising that non IT issues can impact this sort of metric. For instance calls to set up loan applications might miss the agreed target time because the IT system is slow, but also because a lot of new staff are taking the calls. The positive outcome of this is that it led to properly integrated business and IT reports

Stuart_Rance | ‎02-11-2013 09:38 AM

James,

 

Thanks for your response. I do understand that it can be quite complex to set good targets.  Properly integrated reports of the outcomes our customers care about are useful measures, but may not be completely determined by the actions of IT.

 

My personal preference is to keep things as simple as possible, so that ordinary mortals can understand them, and to accept that our metrics and reporting may not be perfect.

Jason Druebert(anon) | ‎02-11-2013 07:16 PM

Good post as usual. More often than not when I talk to people about a Service Catalog the topic of employee onboarding comes up, as it did here. How is it that a common process that everyone has to do is so often an issue?

chuck_darst | ‎02-12-2013 07:29 PM

Stuart, a couple of questions/checks. Seems like one part of the approach was to narrow in on one specific area (the mortgage business in this case) where you could make decent progress and identify some best practices for the group to use going forward. I just wanted to check this (as opposed to doing too much at once) as it seems like an approach that has worked well in other cases I've followed. I have also heard of interative approaches working - even in this more narrowly defined context. You may not have had enough time only being on-site 2 days, but was wondering if you had further comments on iteration within establishing a service catalog.

 

Then an open-ended question. What about Service Portfolio Management? Was it embedded in the catalog work? Curious on your views here.

 

Chuck

Stuart_Rance | ‎02-12-2013 08:17 PM

Chuck,

 

These are both interesting questions.

 

Taking the easiest one first. I often break this sort of work up into a number of separate streams as this tends to help the IT organization make useful progress, and so that they can learn from the early attempts and thus improve how they work. Sometimes this is by business unit, sometimes by geography, or by types of service - it is usually obvious what would make sense for the particluar client.

 

As to the distinction between service portfolio management and service catalogue definition. This is more of a philosophical distinction than a practical one. In this case I described it as service catalogue because there was no intention to make significant investment in new or changed services, simply to change how we defined, managed and reported the existing services. I tend to think of service portfolio work as resulting in plans to create/retire/reengineer services, rather than just to improve SLAs and reporting.

 

Ashok Chand(anon) | ‎02-14-2013 01:00 AM

Good article Stuart

For readers benefit, I did a awareness presentation to a larger concrete manufacture here in Australia, and their business service catalogue has a service entry as "Risk".

Risk management was a significant business issue and they undertook due dilligence.

IT priovided many "things" to enable business to do "risk"

Stuart_Rance | ‎02-14-2013 07:15 AM

Ashok,

 

Thank you for your post. I guess this just goes to demonstrate that the concepts of value and service have to be based on how the customer sees the world. It would not have occurred to me to have a "risk" service, but if that is what the customer perceives and values then that is what should be in the service catalog.

 

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About the Author
I help clients use service management to create business value for themselves and their customers. I am a senior ITIL examiner and I have wr...
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