Managed Service Buyer Checklist – part 2

The following are questions four through seven of a ten-point Q&A designed to help guide your managed or hosted service procurement process. Here are the first three buyer questions and service provider answers.

4. What is the depth and breadth of your current managed service portfolio?

• A service migration path provides the means to adapt to your growth needs.
• Service providers that are specialists may offer services through their partners.
  

It helps to have a forward-looking view of your needs when selecting a service provider. Sometimes a specialist is preferable to a multi-service provider. Otherwise, try to anticipate future service requirements, and consider giving preference to a provider with those combined skills.

5. How can I be sure you will apply the best people, processes, and tools? Is your company certified by a leading vendor, and are your offerings delivered using industry-leading technologies to meet the highest quality of service?

• Service providers have data on how they've qualified to meet standards.
• Providers are often required to attain a "qualification level" that is tiered.
  

The good service providers will achieve basic industry-standard technical certifications. The better service providers will comply with the ITIL foundation practices. The best will have passed the stringent qualifications of a service designation process that requires an independent third-party audit of their performance. They must pass rigorous annual assessments of their network operations center. Technical design and operations staff must also complete advanced training.

6. Where are your network management facilities located, and what are the hours of operation? Describe your escalation process, in the event of an outage.

• Service providers typically have both primary and backup facilities.
• Find out whom to contact when your primary support contact is not available.
  

Depending on your needs, service support during regular business hours may be enough. However, some businesses have requirements for 24-hour operation. Help desk coverage, staffing levels, and backup planning are important aspects to consider in this scenario.

7. What are the assurances for levels of availability, serviceability, performance, and operation? What is the process for remedy if and when levels aren't maintained?

• All service providers establish and maintain benchmark measurements.
• Service contracts detail the metrics, and references have results data.
  

It is now common for service providers to offer service-level agreements (SLAs) as an integral part of a service contract, where the "level of service" is formally defined. The SLA can include the common understanding about services, priorities, responsibilities, and guarantees -- sometimes specifying financial remedies as a result of failure to comply with SLAs.

Next step: The remaining Q&A will be featured in part 3. We'll also provide a link to a complete list, and an ROI calculator to help you start to build a business case.

Transforming Government Through Next Generation Technology

Governments everywhere are struggling with unprecedented challenges. They're expected to reignite a global economy in free-fall, while grappling with crumbling infrastructure, aging populations, declining quality in education and healthcare -- plus a heightened social concern about preserving the environment.

All in a budgetary environment of declining tax revenues.

Like the private sector, governments are now turning to technology to help them to improve both the delivery of government services and to promote overall economic growth.

Building 21st Century Economies
Like the waterways and highways of previous centuries, government leaders recognize they must create essential tech infrastructure to fuel innovation-led growth and prosperity. High-speed broadband is seen as a catalyst for encouraging economic development. However, meaningful services are required to stimulate demand.

For example, Germany has committed €4.6 Billion to install Telepresence capabilities throughout its schools -- to improve the quality of its education system, while reducing costs.

Similar to the access of electricity and the telephone, governments recognize the social equity of providing broadband access to everyone. Thereby using technology to improve the quality of inner-city schools, encourage more telecommuting and increase the productivity of rural economies.

Delivering 21st Century Public Services
There are significant opportunities for progressive governments to:

• Reduce Costs of Delivery – delivering online services, collaboration tools, and video, not only lowers costs to serve but enhances the overall customer experience.
• Empower Citizens – employing Web 2.0 capabilities, such as collaboration and social networking, allows citizens to more easily interact with their government.
• Improve Levels of Service – Kiosks, Telepresence units, or VoIP enabled call centers for 311 calls, raises service levels and the overall experience.
  

Creating 21st Century Governments
Both taxpayers and public servants now recognize that the business of government must evolve, and that technology plays a critical role in this transformation. Likewise, technology providers can choose to partner with governments on this journey.

Research by Cisco IBSG (the company's strategic consulting arm) reveals that the public sector has a number of unique requirements:

• Funding Models – providers must find creative new ways to pay for the new technologies, such as managed services and public-private partnerships.
• Skill Shortages – hiring freezes and lack of skills, means that governments require significant help in design, implementation and management of technology.
• Integrated Solutions – across multiple departments and levels of government, but also with not-for-profits, agencies, multiple partners and other parties.
• Innovation – the private sector can proactively bring new and innovative solutions to legacy problems -- seeding the transformation.
  

Managed Services offers a proven way to help transform government for the 21st Century. However, service providers will need to recognize the unique needs of the public sector and to partner with the champions of progress, to address their most pressing challenges.

About the author: Stuart Taylor is a Director in Cisco IBSG. Stuart leads thought leadership and engagements with key Service Providers in managed services. He has over 15 years of experience focused on strategy, corporate development, business unit strategy, M&A and operational improvement with large mobile and wireline operators and high technology clients.

IT Financial Management - Now is the Time

I've heard many excuses, during my years as an ITIL consultant, as to why a client did not want to start IT Financial Management -- the business is not ready, we don't have the tools, we don't know where to start, etc.

However, in these troubling economic times, it is imperative that IT adopts IT Financial Management in order to respond to the increasing pressure to reduce costs.

IT can reduce costs through service-based cost transparency and charge-backs. This method does not mean IT is a profit-center; it just means that IT is educating the business on the cost to provide the services.

With this knowledge, the business can adjust their consumption to better manage their budget and ensure spending is aligned with the value of the service they are receiving. Contrast this with a nebulous IT overhead charge which does not incent the business to use scarce IT resources wisely.

A Roadmap to IT Financial Management
The secret to successfully starting IT Financial Management is to develop a roadmap with increasing levels of maturity.

For example, in Phase 1, pick four to five key services for consumption based costing, e.g. number of servers, storage consumed, network bandwidth consumed, etc., then allocate the remaining costs (i.e. Service Desk, data center operations, etc) as a surcharge against this base price. In Phase 2 and subsequent phases, continue to expand the number of services covered by consumption-based charge-backs.

Another dimension of maturity is the approach to charge-backs. In Phase 1, you may want to just publish costs (i.e. cost transparency with no dollars changing hands). In Phase 2, you may want to provide invoices that show consumption and a hypothetical charge-back amount but stop short of consummating the transaction.

Finally, in Phase 3, implement the actual charge-backs. This gradual approach will allow the business to adapt and prepare for a new way of interacting with IT.

By establishing and communicating a roadmap, you can start IT Financial Management today and be better positioned to manage the IT budget.

About the author: Reg Lo is the VP of Technology Solutions at Third Sky Inc. He has over 14 years of IT consulting experience in ITSM/ITIL consulting, research compliance and healthcare, and custom solutions. He is a frequent speaker at itSMF and HDI events and a contributor to "The Forum", the offical newsletter of itSMF USA.

The Quest for IT Service Management Excellence

In the highly-charged economic environment facing organizations today, competition is fierce and any competitive advantage needs to be identified and maximized to ensure survival.

Increasingly Business Technology service providers, whether internal or external, are reaching out to the growing discipline of IT Service Management (ITSM), particularly as expressed in the "IT Infrastructure Library" or "ITIL (®)" to provide the critical competencies needed to create that competitive advantage for their organization.

ITIL recognizes the need for IT departments to think of themselves as Service Providers to their business, providing technology-based services that are critical to the mission of the larger organization. In support of this mission they must, like their own suppliers in turn, meet challenges such as:

• Providing services that are selected and positioned correctly for their internal "market"
• Delivering real value to the business to ensure satisfaction and value
• Working efficiently to maximize the value received from resources and capabilities
• Prioritizing investments to manage and grow the function, in sync with their market
• Adopting and adapting flexible work methods, and support service provisioning in an ever-changing business and technology environment.
  

The good news is that ITIL provides guidance on industry-tested approaches to addressing all these challenges and more. The ITIL v3 core guidance is organized around a service lifecycle, with a set of five books describing guidance on each of the five phases or stages: Service Strategy, Service Design, Service Transition, Service Operation and Continual Service Improvement.

To spread the word on ITIL specifically and ITSM in general, a global practitioner organization has grown up in the form of the IT Service Management Forum or "itSMF" with an International body as well as national chapters across the world.

Members actively share ideas and develop the methods of ITSM through national conferences, regional events, and the work of local interest groups and specialty interest groups.

itSMF takes an important and active role in the development and maturity of the actual content of ITIL, contributing many authors, reviewers and leaders to continual improvement of the materials and qualifications programs.

In future posts we'll explore ITSM practices and how they can be applied to the challenges of service provisioning and service excellence.

About the author: An IT Service Manager and ITIL v3 Expert with over 20 years of experience in service industries, Ms. Hunnebeck is the VP of ITSM Vision & Strategy at Third Sky Inc. Her passion for improving how we work led Ms. Hunnebeck to IT Service Management from a background of process consulting, training and Service Management systems consulting.