ITIL Service Design : From ITIL 2011 the SLM process should include ITIL Service….

ITILITIL Service Design : From ITIL 2011 the SLM process should include ITIL Service….

Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 107 Care should be taken that SLM does get implemented in such a way that it becomes too focused on agreements and contracts being developed.

The underlying goal still remains to ensure consistency and clarity in the quality of IT service delivery and to provide an effective channel for customers to negotiate and communicate with the IT organization. 6.3.2 Scope Service Level Management provides regular communication to the customers and business managers of an organization in relation to service levels.

SLM represents the IT service provider to the business and the business to the IT service provider.

In this context, Service Level Management may seem to be in conflict with Business Relationship Management.

This is not the case because Business Relationship Management establishes the relationship framework in which Service Level Management works within.

Often times, the BRM will be involved in all customer discussions related to service levels.

Service Level Management is responsible for develop the warranty aspect of the service.

Business Relationship Management is responsible for both the utility and warranty aspects.

Lastly, Business Relationship Management is grounded in the strategic service, while Service Level Management is grounded in the operational service: both will connect tactically. The activities of Service Level Management are designed to manage the expectation and perception of the business, customers, and users and ensure those expectations and perceptions are matched by the quality (warranty) of service delivered by the service provider.

The primary tools for doing this is the documentation and negotiation of Service Level Requirements used to develop Service Level Agreements (SLAs) for all existing services and managing those SLAs to meet agreed targets and quality measurements. From ITIL 2011, the SLM process should include (ITIL Service Design, page 107): • Cooperation with the Business Relationship Management process – This includes development of relationships with the business as needed to achieve the SLM process objectives. Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 108 • • • • • • • • • • ITIL® SERVICE OFFERINGS AND AGREEMENTS CERTIFICATION KIT—THIRD EDITION Negotiation and agreement of future Service Level Requirements and targets and the documentation and management of SLRs for all proposed new or changed services Negotiation and agreement of current Service Level Requirements and targets and the documentation and management of SLAs for all operational services Development and management of appropriate OLAs to ensure that targets are aligned with SLA targets Review of all supplier agreements and underpinning contracts with supplier management to ensure that targets are aligned with SLA targets Proactive prevention of service failures, reduction of service risks, and improvement in the quality of service, in conjunction with all other processes Reporting and management of all service level achievements and review of all SLA breaches Periodic review, renewal, and/or revision of SLAs, service scope, and OLAs as appropriate Identifying improvement opportunities for inclusion in the CSI register Reviewing and prioritizing improvements in the CSI register Instigating and coordinating SIPs for the management, planning, and implementation of service and process improvements 6.3.3 Value to the Business There are many benefits from both the customer and IT organization’s perspective to having an effective Service Level Management process in place.

Some of the tangible benefits include: • • • • In addition to these, here are some of the intangible benefits of Service Level Management: • Develops the trusted relationship between the IT organization with its customers and business Consistent interfaces to the business for all service-related issues Agreed service targets and required management information provided to business Mechanisms for providing feedback on the cause of any breach to the targets and detail the action taken to prevent the breach from recurring Reliable communication channels for customers Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 109 representatives • • • Improved understanding and insight as to the actual and potential offerings that can support business processes Improved customer satisfaction as a result on consistent communication and reporting methods Improved clarity and understanding as to the performance of IT services and how budgets and money are being utilized — activities Service improvement opportunities for inclusion in the CSI register and for later review and prioritization in conjunction with the CSI manager SIP: an overall program or plan of prioritized improvement actions, encompassing appropriate services and processes, together with associated impacts and risks The service quality plan: documenting and planning the overall improvement of service quality Document templates: standard document templates, format and content for SLAs, SLRs, and OLAs, aligned with corporate standards: • SLAs: a set of targets and responsibilities should be documented and agreed within an SLA for each operational service • SLRs: a set of targets and responsibilities should be documented and agreed within an SLR for each proposed new or changed service • OLAs: a set of targets and responsibilities should be documented and agreed within an OLA for each internal support team • • • • • Reports on OLAs and underpinning contracts Service review meeting minutes and actions: all meetings should be scheduled on a regular basis with planned agendas and their discussions and actions recorded and progressed SLA review and service scope review meeting minutes: summarizing agreed actions and revisions to SLAs and service scope Updated change information, including updates to RFCs Revised requirements for underpinning contracts: changes to SLAs or new SLRs may require existing underpinning contracts to be changed or new contracts to be negotiated and agreed 6.4.5 Critical Success Factors and Key Performance Indicators Critical Success Factors are a function of the organization’s objectives for the process.

Key Performance Indicators are designed to support the Critical Success Factors.

KPIs should be monitored and used as evidence in supporting opportunities for improvement. Below is a list of sample critical success factors and key performance indicator to provide a sense of Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 145 how service level management can be measured.

The actual development of CSRs and KPIs by the organization should be performed with careful consideration on the organization’s needs.

These examples can be found in ITIL Service Design, page 122. • CSF: Managing the overall quality of IT services required both in the number and level of services provided and managed • KPI: Percentage reduction in SLA targets threatened • KPI: Percentage increase in customer perception and satisfaction of SLA achievements, via service reviews and customer satisfaction survey responses • KPI: Percentage reduction in SLA breaches caused because of third-party support contracts (underpinning contracts) • KPI: Percentage reduction in SLA breaches caused because of internal OLAs • CSF: Deliver the service as previously agreed at affordable costs • KPI: Total number and percentage increase in fully documented SLAs in place • KPI: Percentage increase in SLAs agreed against operational services being run • KPI: Percentage reduction in the costs associated with service provision • KPI: Percentage reduction in the cost of monitoring and reporting of SLAs • KPI: Percentage increase in the speed and of developing and agreeing appropriate SLAs • KPI: Frequency of service review meetings • CSF: Manage the interface with the business and users • KPI: Increased percentage of services covered by SLAs • KPI: Documented and agreed SLM processes and procedures are in place • KPI: Reduction in the time taken to respond to and implement SLA requests • KPI: Increased percentage of SLA reviews completed on time • KPI: Reduction in the percentage of outstanding SLAs for annual renegotiation • KPI: Reduction in the percentage of SLAs requiring corrective changes (for example, targets not attainable, changes in usage levels) • KPI: Percentage increase in the coverage of OLAs and third-party contracts in place, while possibly reducing the actual number of agreements (consolidation and centralization) • KPI: Documentary evidence that issues raised at service and SLA reviews are being followed up and resolved • KPI: Reduction in the number and severity of SLA breaches Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 146 ITIL® SERVICE OFFERINGS AND AGREEMENTS CERTIFICATION KIT—THIRD EDITION • KPI: Effective review and follow-up of all SLA, OLA, and underpinning contract breaches 6.4.6 Example Service Level Agreement The multi-level based SLA is usually preferred by IT as it allows a single document to cover a single service for all end users of that service.

It means less administration time spent in negotiating different documents with different customers and less time spent on worrying about accommodating different requirements among users. SLA Information Areas to Address Description of the “agreement” Comments/Examples Brief description of the contents of this SLA Note: the SLA will cover only ONE IT Service but end users from many areas.

Use this section simply as an Executive summary.

Unique identifying number for the SLA (for inclusion in the Configuration Management Data Base—CMDB) • Functional role description of who is responsible for this SLA (who would participate in a review of this document?) • Representatives from customer and IT (Special tip: Avoid using names as it dates the document quickly) — ITIL® SERVICE OFFERINGS AND AGREEMENTS CERTIFICATION KIT—THIRD EDITION These elements should always be agreed when forming the agreement with the supplier, but should be reviewed when a transition is being considered and executed. The critical success factors for Supplier Management include: • • • • Protecting the business from poor supplier performance of disruption of supplied services Supplied services and targets are aligned with current business needs and targets Supplier performance does not compromise service availability Supplier and contractual issues have clear ownership and awareness 6.6.4 Triggers The supplier management process can be invoked through several events, including (Service Design, page 222): • • • • • • • • • New or changed corporate governance guidelines New or changed business and IT strategies, policies, or plans New or changed business needs or new or changed services New or changed requirements within agreements, such as SLRs, SLAs, OLAs, or contracts Review and revision of designs and strategies Periodic activities such as reviewing, revising, or reporting, including review and revision of supplier management policies, reports, and plans Requests from other areas, particularly SLM and information security management, for assistance with supplier issues Requirements for new contracts, contract renewal, or contract termination Re-categorization of suppliers and/or contracts Inputs The inputs to Supplier Management are (ITIL Service Design, page 223): • Business information: from the organization’s business strategy, plans and financial plans, and Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 183 information on its current and future requirements • • Supplier and contracts strategy: this covers the sourcing policy of the service provider and the types of supplier and contract used.

It is produced by the service strategy processes.

Supplier plans and strategies: details of the business plans and strategies of suppliers, together with details of their technology developments, plans and statements, and information on their current financial status and projected business viability • • • • • Supplier contracts, agreements, and targets: of both existing and new contracts and agreements from suppliers Supplier and contract performance information: of both existing and new contracts and suppliers IT information: from the IT strategy and plans and current budgets Performance issues: the Incident and Problem Management processes, with incidents and problems relating to poor contract or supplier performance Financial information: from Financial Management for IT services, the cost of supplier service(s) and service provision, the cost of contracts and the resultant business benefit, and the financial plans and budgets, together with the costs associated with service and supplier failure • Service information: from the SLM process, with details of the services from the service portfolio and the service catalog, service level targets within SLAs and SLRs, and possibly from the monitoring of SLAs, service reviews, and breaches of the SLAs—also customer satisfaction data on service quality • CMS: containing information on the relationships between the business, the services, the supporting services, and the technology Outputs The outputs of Supplier Management are (ITIL Service Design, page 223): • SCMIS: This holds the information needed to execute the activities within Supplier Management— for example, the data monitored and collected as part of Supplier Management.

This is then invariably used as an input to all other parts of the Supplier Management process. • Supplier and contract performance information and reports: These are used as input to supplier and contract review meetings to manage the quality of service provided by suppliers and partners.

This should include information on shared risk, where appropriate. Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 184 • • ITIL® SERVICE OFFERINGS AND AGREEMENTS CERTIFICATION KIT—THIRD EDITION Supplier and contract review meeting minutes: These are produced to record the minutes and actions of all review meetings with suppliers.

Supplier SIPs: These are used to record all improvement actions and plans agreed between service providers and their suppliers, wherever they are needed, and should be used to manage the progress of agreed improvement actions, including risk reduction measures. • Supplier survey reports: Often many people within a service provider organization have dealings with suppliers.

Feedback from these individuals should be collated to ensure consistency in the quality of service provided by suppliers in all areas.

These can be published as league tables to encourage competition between suppliers. • Change management: Supplier contracts and agreements are controlled documents and, therefore, subject to appropriate change management procedures.

When changes are proposed, the involvement of suppliers should be assessed and reflected in planning. — • ITSCM: This process works with supplier management with regard to the management of continuity service suppliers. 6.6.5 Critical Success Factors and Key Performance Indicators Critical Success Factors are a function of the organization’s objectives for the process.

Key Performance Indicators are designed to support the Critical Success Factors.

KPIs should be monitored and used as evidence in supporting opportunities for improvement. Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 185 Below is a list of sample critical success factors and key performance indicator to provide a sense of how supplier management can be measured.

The actual development of CSRs and KPIs by the organization should be performed with careful consideration on the organization’s needs.

These examples can be found in ITIL Service Design, page 224. • CSF: Business protected from poor supplier performance or disruption • KPI: Increase in the number of suppliers meeting the targets within the contract • KPI: Reduction in the number of breaches of contractual targets • CSF: Supporting services and their targets align with business needs and targets • KPI: Increase in the number of service and contractual reviews held with suppliers • KPI: Increase in the number of supplier and contractual targets aligned with SLA and SLR targets • CSF: Availability of services is not compromised by supplier performance • KPI: Reduction in the number of service breaches caused by suppliers • KPI: Reduction in the number of threatened service breaches caused by suppliers • CSF: Clear ownership and awareness of supplier and contractual issues • KPI: Increase in the number of suppliers with nominated supplier managers • KPI: Increase in the number of contracts with nominated contract managers 6.7 Financial Management for IT Services The discipline of financial management has, for many, been a challenging, complex, and sometimes controversial area of business, especially when it comes to managing the finances involved in the provision and support of IT services.

While arguments will always occur to debate the ‘best’ way in which money is apportioned and spent, particularly in the case of IT, difficulties arise in the effective identification of the true costs associated in designing, transitioning, operating, and supporting services.

As a result, many organizations have struggled to provide appropriate clarity regarding the way in which money is budgeted and accounted for, which, from a customer perspective, can lead to a lack of confidence and reputation in the service provider. Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 186 ITIL® SERVICE OFFERINGS AND AGREEMENTS CERTIFICATION KIT—THIRD EDITION To counter this, financial management is focused on providing both the business and IT with improved insight (in financial terms) into the value of IT services, supporting assets, and operational management and support.

This translates into improved operational visibility, insight, and superior decision-making at all levels of the organization.

When implemented effectively, Financial Management provides the understanding and management of the distance and (sometimes) conflicting perspectives between the Business Desires/Opportunities and the Capabilities of the IT organization.

It enables the business to be more IT conscious and IT to become more business aligned. Typically, most organizations will incorporate two layers of financial management.

The top layer, enterprise financial management, is incorporated for the entire organization or business.

This top layer will usually set policies and procedures which must be used consistently across the enterprise.

Financial Management for IT focuses on the fiduciary duties within the IT service organization and is typically required to adopt the policies and procedures of enterprise financial management.

The responsibilities of Financial Management for IT encompass those activities for budgeting, accounting, and charging for IT services. The IT services identified and delivered to the customer are in place to ensure that the strategic business objectives of the organization are met.

For this to happen, the IT services must be designed, developed, and transitioned into an operational environment.

Additionally, optimization of the IT service to provide greater value requires improvements to be identified, designed, developed, and implemented.

All these activities require one fundamental necessity: money.

Usually referred to as funding, investment, or budgeting, Financial Management for IT is responsible for securing the necessary money to provide the service to the customer. — 328 H ITIL® SERVICE OFFERINGS AND AGREEMENTS CERTIFICATION KIT—THIRD EDITION hardware 26, 34, 64, 72, 192, 198, 285, 290-1, 295 human resources 50, 111, 157, 175, 193, 260-1 I IEC 11, 247, 275, 284, 301, 309, 319 implementation 14, 50, 55, 82, 108, 203, 226, 242, 244, 246, 249-50, 259-60, 268, 271, 289, 292 improvement actions 28, 119, 134, 184, 250-1 improvements 1, 21, 50-1, 76, 88, 90, 104, 106, 130, 143-4, 208-9, 224-5, 240-1, 245-6, 248-51, 25860 incident management 19, 36, 40, 58, 132, 134, 141, 143, 225, 235-6, 244, 306 incidents 41, 50-1, 72, 101, 105, 117, 132, 142, 158, 173, 180, 183, 218-19, 235, 270, 285 income 152, 188, 204, 209-10, 240, 281 industry 1, 13, 15, 20, 69, 71, 78 information 1-2, 34-5, 51-2, 60, 62-3, 69-73, 75-6, 89-90, 94-9, 101-5, 142-3, 159-60, 183, 207-9, 290-3, 298 accurate 49, 98, 134 information security management 89, 182, 256, 302-3 information technology 14, 290-2, 316 inputs 7, 9, 60-1, 88, 94, 102-4, 115, 125, 143, 165-6, 182-3, 192-3, 206-7, 220-2, 254-5, 272 instructions 2, 4, 172, 314 interact 74-6, 214 interactions 74-5, 248, 269, 299, 305 Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 329 interfaces 7, 9, 37, 53, 60, 63, 89, 98, 103-4, 145, 165-7, 170, 202, 226-7, 230, 272 internal service providers 25-6, 46, 48, 73, 166, 187, 189, 205, 209, 215, 238, 281, 290-1, 312 investments 21, 29, 47-9, 52, 67-8, 73-4, 79-81, 83-6, 88-92, 97, 105, 151, 189-90, 206-9, 240, 291 initial 91-2, 187 ISG (IT steering group) 94, 292, 316 ISO 11, 20, 247, 275, 284, 291, 301, 309, 319 ISPs (Internet Service Providers) 32-4, 291 IT Service Management (ITSM) 1, 6, 13-17, 19-20, 25-6, 35, 46-7, 66, 68, 82, 128-9, 242-4, 274-5, 292-3, 304-5, 316 items 72, 96-9, 173, 189, 192, 234 ITIL Service Design 107, 145, 182-3, 185 ITIL Service Strategy 68, 90, 167, 207-8, 220-1 K KED (Known Error database) 48, 50-1 Key Performance Indicators 7-10, 90, 104-5, 122, 132-3, 144, 167, 184-5, 208, 221, 248, 285, 305 know 96, 120, 123, 169, 214, 221, 238, 265-70 knowledge 15, 64, 94, 96, 101, 105, 130, 219, 225, 239, 249, 267, 274, 280, 298, 313 KPI (key performance indicators) 7-10, 66, 90-2, 104-5, 122, 132-3, 141, 144-6, 167-8, 184-5, 208-10, 221-2, 248, 285, 305 L layers 16-17, 112, 129, 186 Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055 330 ITIL® SERVICE OFFERINGS AND AGREEMENTS CERTIFICATION KIT—THIRD EDITION levels 46-7, 50, 67, 72, 76-7, 81, 89, 92, 106, 112, 127-9, 201, 208, 213-14, 222, 234-5 agreed 106, 289, 306 component 136, 138, 142 license 28-31, 37, 60, 70, 80, 84, 102, 125-6, 128, 131, 155, 158, 170, 174, 177, 237 lifecycle 6, 34-5, 43, 58, 64, 68, 71, 73, 92-4, 175, 216, 239, 284-5, 297-8, 303, 305-8 M maintenance 98, 115, 123, 178, 192-4, 228, 235, 289 management 14, 26, 41, 59, 61-3, 67, 74, 92, 108, 130, 134, 235-6, 239-40, 249-50, 263, 280-1 market spaces 25, 46, 56, 76-80, 86-7, 254, 267, 270, 293 existing 76, 80-1 new 77, 80-1 markets 74, 79, 82, 84, 87, 114, 181, 226, 238, 241, 252 maturity 20, 247-9 meal 27, 75, 96, 195, 284-5, 288 Mean Time to Restore Service (MTRS) 50-1, 316 Measurement Frameworks 8, 138-42 measurements 21, 51, 78, 122, 124, 129, 132, 136-40, 142, 232, 245-6, 248, 250, 268, 300, 308 medium 68, 71, 160, 163-4, 243 meeting 16, 47, 88-9, 118-21, 124, 131, 133-5, 144, 206, 210, 222, 226, 261, 263, 289, 299 menu 69, 96, 195 Metric Trees 8, 141-2 metrics 54, 61, 117, 138, 142, 149, 152, 245, 248, 250, 271, 281, 286, 288, 297, 319 Copyright The Art of Service I Brisbane, Australia I Email: service@theartofservice.com Web: http://store.theartofservice.com I eLearning: http://theartofservice.org I Phone: +61 (0) 7 3252 2055

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