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Page 2
Agenda
SMI Presentation 092016
► Introduction
► Industry trends/challenges
► SMI Overview/objectives
► Case study: SMI at a Financial Services Firm ► Business case
► Vision for Service Management Integration
► SMI readiness assessment
► SMI operating model
► eBonding
► Use cases
► Outcomes
► Lessons learned/considerations
Page 3
Introduction
Dan Stavola
Executive Director
Enterprise Service Automation
212 773 5767
► Digital Enterprise Transformation
leader in EY Financial Services
Office
► Over 24 years experience in IT
operations and IT performance
improvement working with global
financial services firms
SMI Presentation 092016
Background:
► Dan is an Executive Director in Ernst & Young’s Digital Enterprise Transformation practice, where he is
responsible for the design and delivery of digital automation advisory services. As a practice leader and IT
consultant with over 24 years of experience Dan has worked with leading global financial services firms in the
design and delivery of IT performance improvement programs leveraging his deep industry knowledge and
the pragmatic application of industry standards and leading practices applied to technology enablement.
► Professional Experience
► Served as the engagement lead and principal architect of a multi-year major IT transformation program. Focused on improving IT operations performance the program consisted of current state operational assessment and baseline, rationalization of all dimensions of IT resulting in cost rationalization, operating model redesign, IT optimization across the IT organization and a governing continuous improvement program.
► Served as the engagement lead in a data center consolidation of a banking and capital markets firm acquisition. The project included pre and post merger support, rationalization of technology and investment governance as well as migration and consolidation of IT operations and application and infrastructure technologies.
► Served as the engagement lead and principal architect of a program risk management office for a highly complex data center separation for a banking and capital markets firm divestiture. The project included both project risk governance, investment protection, and post separation operational risk management
► Served as the engagement lead and principal architect for a trading platform design and resiliency assessment for a top national asset management firm. Project focused on transaction level mapping, application performance and infrastructure resiliency. The scope of the work focused on root cause analysis of major outages, performance issues and poor user satisfaction. Project outputprovided prioritized findings and recommendations across the enterprise platform.
► Served as the engagement lead on a major credit card platform development project for a global credit card company. Core responsibilities include operational readiness and stability. Worked with client development team on testing, defect resolution,production readiness and release management coordination.
► Dan is an international speaker and has brought concepts and learning to audiences through conference
speaking engagements over the last 15 years.
Page 4
IT outsourcing continues to grow but often fails to deliver
18% of 2014 IT spend was on outsourcing…(1)
… and outsourcing will continue to grow 5.8% annually through 2019(2)
… while only 32% of companies feel positively about their ability to juggle multiple vendors(3)
Between 40%–70% of outsourcing ventures fail to meet customer expectations(3)
In fact, just 52% of IT buyers would renew their
contract with their current service provider(4)
89% of companies cite the need to improve competencies and significantly raise their maturity levels to manage multisourcing successfully …(1)
(1) Gartner
(2) Research and Markets
(3) Outsourcing Institute
(4) CiscoSMI Presentation 092016
Page 5
Challenges in a Multi-Supplier Enterprise
► Increased complexity and
management overhead
► Lack of clarity into supplier
services and obligations
► Finger pointing when a service
is disrupted rather than “one
throat to choke”
► Additional enterprise risk due
to fragile processes and
reduced information
► Indecision when it comes
down to renew or extend
contracts
► Inability to exchange and
synchronize data across
different vendors
► Lack of tools to measure the
performance and values of
vendors and contracts
• Inability to monitor key assets
and manage the end to end
process
• Hand-off issues
• End users are dissatisfied even
though siloed service levels are
being met
• Supplier behaviors aren't
aligned to the required
business and IT outcomes
SMI Presentation 092016
Page 6
Challenges when managing suppliers
Supplier 1 Supplier 2 Supplier 3 Supplier n
KPI KPI KPI KPIOutsourcing hasn’t delivered on
the promise of ROI improvement
– more value from suppliers at
lower cost
Suppliers operate and are
measured in Silos
X X X
VP
Su
pp
lier
Can’t demonstrate control of
their business
CIO
Request service Report Issue Ask a question
Services Services Services
Can’t do their job effectively
because they don’t have visibility
to services supply chain
Can’t scale service delivery and
performance in line with
business expectations
LO
B
Op
era
tor
VP
IT
1 n32
Request change
SMI Presentation 092016
Page 7
Approach to SMI – Key considerations
Organization
Governance
Performance
• Target organization will optimize cost to acquire skills and speed of implementation
• Structure organization to minimize inefficiencies, ensure accountability and realize synergies
• Design will be based on roles required to enable processes; Avoid duplicating roles and micromanagement of certain positions
• Reduce organizational complexity
• Work with the Service Providers to jointly develop optimize the organization
• Develop a strong and effective governance structure which promotes accountability
• Establish robust reporting mechanisms
• Allow the Service Providers to jointly develop and participate in governance processes
• Clearly outline the parameters within which SIAM team members perform their job responsibilities
• Build alignment and partnership between SIAM, other client functions, and Service Providers
• Enable alignment of IT operating model targets with financial objectives by developing balanced scorecards
• Define a manageable number of service levels. Make adjustments within 18-24 months as the relationship with Service Providers matures
• Build a consistent reporting structure and measurement system
SM
Iopera
tin
g m
odel desig
n p
rin
cip
les
Execution
• All critical processes consistently operating at maturity level 3 (“Managed” on the capability maturity scale)
• Move from distributed and decentralized to centralized and standardized processes
• Create processes which are focused on best practice principles (i.e. ITIL v3)
• Deliver effective and efficient IT processes with transparency
• Design processes for scalability, flexibility and sustainability
• Define the inputs, outputs, providers, receivers, activities and critical success factors of the processes
SMI Presentation 092016
Page 8
Supplier standardization - integration with supplier management/contract management
Supplier
ManagementDevelop Vision
Supplier Information
Supplier Programs
Establish Baseline
Establish Baseline Develop Vision Supplier Information Supplier Programs
► Gather information on
your suppliers
► Assess the quality of that
supplier information
► Review all sources and
points of supplier
information,
communication,
processes and
transactions
• Set Goals & Objectives
• Involve Stakeholders and
solicit feedback
• Define supplier segments,
attributes and relationship
types
• Define supplier lifecycle and
relationship phases
• Establish supplier
management metrics
• Developer supplier data
governance model with
clear roles & responsibilities
• Establish a process or
system to gather and verify
all information
• Cleanse existing supplier
information
• Compliance
• Risk
• Performance
• Sustainability
SMI Presentation 092016
Page 9
Supplier Registration
New Service Provider
Details
Foundational Information
Service Offerings
Existing New
ListSetup New
Services
In Scope / Out Of Scope
Financials
Supporting Documentation
Contact Info / Users
SLA’s
Portal Svc Catalog
Assignment Groups
Assets/Items
Operational Info Measurement
Metrics
Reporting
SMI Presentation 092016
Page 10
Service Management Integration (SMI) addresses challenges of multisourcing by focusing on the end-to-end service, instead of individual service providers
End user communications service provider
Infrastructure service
provider
Network and telecom service
provider
Application management
service provider
End user communications service provider
Information security service
provider
Facilities service
provider
Supplier governance Financial management Demand management
Coordinated, end-to-end service delivery
Standardized processes
Integrated tools (E-Bonding)
Inn
ov
ati
on
m
an
ag
em
en
t Pe
rform
an
ce
ma
na
ge
me
nt
Pro
gra
m
ma
na
ge
me
nt
Ch
an
ge
m
an
ag
em
en
tService Management Integration (SMI) is an approach for delivering services to end-users and business stakeholders through collaboration with multiple service providers. In the SMI model, a single function coordinates end-to-end service delivery across multiple services providers.
SMI transition and transformation
Multi-vendor ecosystem without SMI
► Lack of a single point of accountability for the end-to-end service
► Service providers operate in silos. Communication and coordination is a challenge
► Inefficiencies due to lack of standardized processes and tools
► Customized processes and tools make it difficult to switch service providers
► Inconsistent supplier governance and performance management practices
Multi-vendor ecosystem with SMI:
► The Service Integrator is the single point of accountability for the end-to-end service
► Common processes are standardized and enforced. Data is shared between service providers through integrated ticketing systems, service catalog, knowledge bases, and a federated CMDB
► Service providers can be onboarded and offboarded seamlessly as business requirements change or technological advancements create new opportunities
► Consistent supplier governance and performance management practices across all vendors
SMI Presentation 092016
Page 11
Transformation Outcomes
All suppliers working to standardised, consistent processes and terminology.
Providing transparency of performance, effectiveness and efficiency.
Increasing innovation, business to IT alignment by decreasing time to market
of services and improvements.
Coordinate effort with clear accountability and reporting on a single system of record.
Effective governance and controls consistently applied so suppliers act in a cohesive and efficient manner.
Delegating addition and modification of services, centralised governance enabling a wider portfolio and skills.
SMI Presentation 092016
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Section 1 EY’s Case Study – For SMI/SIAM(“HOW”)
Page 13
The Unified Communication and Collaboration (UCC) program was launched to deliver a unified technology experience to end-users
A Financial Services Firm embarked on a mission to improve its digital capabilities to take advantage of opportunities made available by increasing use of digitalmedia in businesses and society. Unified Communication and Collaboration (UCC) was one of the programs launched under the larger digital transformationagenda to modernize the workforce by investing in end-user technologies. The purpose of UCC was to deliver a unified employee technology experience thatdrives sustainable productivity, innovation, and growth across the entire ecosystem of employees, partners, and customers. This program includes theimplementation of a third party hosted end-user technology environment and the setup of a Service Management Integration (SMI) function that coordinatesservice delivery across underlying technologies and service providers.
Background
Strategic objectives Benefits
► Enable a unified user experience that drives productivity, innovation, and growth across the entire ecosystem
► Leverage 3rd Party Hosted service provider
► Service Management Integration (SMI) across multiple service providers
► Implement ITSM Program/ Enterprise Architecture SMO to develop key ITSM capabilities
Scalability and vendor independence:
► Enable client to capitalize on UCC investments to build a solution that can scale across the enterprise.
► Onboard and offboard vendors seamlessly as business requirements change or technological advancements create new opportunities
Cost efficiency and effectiveness:
► Rapidly insource vendor capabilities that can be provided internally, resulting in cost savings
► Optimize IT spend across UCC, ITSM and SMO programs to augment value for money
Organization and process maturity:
► Enable client to leverage its investments in ITSM technology to accelerate the maturation of its internal people and process capabilities
► 3 year roadmap, 12 month phase 1 effort
► Processes in scope: Incident Management, Request Fulfilment, IT Change Management, Service Level Management
► 60,000 users
Scope and duration
SMI Presentation 092016
Page 14
In order to provide a unified technology experience, it needed a SMI function to coordinate service delivery across multiple vendors
3rd Party SMI
Client UCC Project
UCC Hosting
SP SP
Short Term
SP SP SP
Client
UCC Hosting
SP SP
Long Term
SP SP SP
Full SMI
…
3rd Party SMI
Client
UCC Hosting
SP SP SP SP SP
Partial Internal SMI
Mid Term
► Establish an internal SMI function to provide on going UCC service delivery within client UCC Project (resources owned by client UCC Project)
► Contract temporarily with external partners for other SMI resources until
► Implement eBonding for select processes
► Transition to partial in-house SMI capability
► External partners continue to provide SMI support with reduced scope
► UCC Project continues to help execute organizational change management
► Transition to full SMI capability in-house
► A dedicated in-house function manages and coordinates operations across vendors
(Months 0-6) (Months 6-12) (Months 12-24)
SMI Presentation 092016
Page 15
A rapid readiness assessment was performed to identify and prioritize gaps in key capabilities
1. Unreliable 2. Informal 3. Developing 4. Managed 5. Optimized
SMI Maturity Model
Current State
Strategic Direction
Performance Management
Contract Management
Service Lifecycle
Management
Financial & Business Case Management
Risk & Compliance Management
Governance &Program
Management
Continuous Improvement
1.0
2.0
3.0
5.0
Target State (2016)
4.0
The SMI Maturity Model enabled the client and EY to quickly assess the maturity or core capabilities required for SMI. Key capabilities include:
Strategic direction Performance management Contract management Service lifecycle management Financial and business case management Risk and compliance management Governance and program management Continuous improvement
We created a readiness checklist with critical improvements that must be completed prior to UCC go-live
Additionally, a transformation roadmap was designed to raise internal capability maturity and position the client for insourcing the UCC SMI contract
SMI Presentation 092016
Page 16
The SMI operating model defined the scope of the SMI function and its interaction with client stakeholders and service providers
SMI Tools and Reporting
Service Management Integrator (SMI)
Govern SMI
Value Governance Risk Governance Governance Reporting Strategy Management Portfolio Management Relationship Management Demand Management Performance Management Contract Management IT Financial Management
Manage SMI
Services
Demand
Services
Demand
Services
Demand
Se
rvic
e P
rov
ide
rs
Ap
plica
tio
n
Ma
na
ge
me
nt
Ve
rizo
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etw
ork
Ho
stin
g
EU
C
serv
ice
p
rov
ide
r
Clie
nt
Te
ch
no
log
y a
nd
Op
era
tion
s
UCCServices
• Application Support
• Service Desk
• Infrastructure Support
• Supplier Management
IT F
un
cti
on
s
Bu
sine
ss Fu
nctio
ns
RetailBanking
CorporateComms
Human Resources
Corporate & Institutional
Banking
Asset Management Group
Realty Services
Marketing
Internal Audit
UCC Demand
Run SMI
Event Management Incident Management* Request Fulfillment * Problem Management
Continuous Improvement &
Innovation
Em
plo
ye
e
Te
chn
olo
gy
Se
rvic
es
Service Catalog Management Service Level Management* Capacity Management Service Continuity Management Information Security Management Supplier Management
Transition Planning and Support Service Validation and Testing Change Management* Knowledge Management Release and Deployment
Management Service Asset and Configuration
Management
Infr
ast
ructu
re
Se
rvic
es
Te
chn
ica
lS
erv
ice
sT
ran
siti
on
S
erv
ice
s
Finance
ResidentialMortgage
RiskManagement
Legal
ClientVendors
The Service Management Integrator functions as the “managing agent” over all other service providers in the client UCC environment. The Service Management Integrator will implement and run an ITIL based service framework that oversees the UCC supplier(s) ecosystem. It will also collaborate with Service Providers to present cohesive end-to-end services to the client employees.
SMI Presentation 092016
Page 17
eBonding enables exchange of ticketing and other IT Operations data between SMI and service providers. Being scalable, it allows additional UCC products or services to be added with minimal disruptions to the UCC service delivery model.
The client’s ServiceNow and service provider’s ITSM system were configured to exchange incident, change, request, and service level data.
ServiceNow’s robust SOAP APIs and web services enabled rapid integration with service providers
ServiceNoweBonding
Service Provider 2Ticketing Tool
Product 1
Product 2
Product 3
Network ServicesClient SMI
Service Provider 3
Ticketing Tool
Product 1
Product 2
Product 3
Internal SMI Function
Service Provider 1ServiceNow
Lync
SharePoint
Exchange
UCC Product X
UCC
New Service Provider or Product
ServiceNow’s robust integration and reporting capabilities, combined with its leading IT service management functionalities, enabled the client to quickly integrate with service providers
SMI Engine/Queue
SMI Presentation 092016
Page 18
Use case: Incident management in a SMI ecosystem
End User calls the Service Desk with an incident.
The Service Desk representative creates an incident ticket in ServiceNow
Web services / SOAP APIs/ REST
Incident attributes are exchanged between the client and the vendor’s IT service management systems using web services or SOAP APIs
A ticket is generated in the vendor’s incident management tool, and is populated with incident information from ServiceNow
Problem managementEvent
management
Change management
Service asset and
configuration management
Other processes
Customer interface management
Incident diagnosis and resolutions
Incident request monitoring and
tracking
Service affecting events
CI information
Service CALLS/REPORTS
Incidents requiring RCA
RFC requests
Incident management
Service level management
Incident SLAs
Service level management
SLA reports
Incident management workflow is initiated in the vendor’s Incident Management system. Tickets are routed as per the workflow until they are resolved.
Additional information required?
Incident is updated with status changes and comments from the vendor’s incident response team
Typical Incident management attributes exchanged:• Caller• Configuration item• Priority• Status
• Short description• Incident state• Subcategory• Additional comments
Bi-directional information flow
Yes
No
User and/or Service Desk representative provides additional information
Customer and/or Service Desk representative receives notifications with incident status and other updates
Service Desk representative updates the incident with new information
Vendor’s incident response team reviews incident information
User receives resolution confirmation
Incident is updated with status changes and comments from the vendor’s incident response team
Ve
nd
or
Incid
en
t M
an
ag
em
en
t S
yst
em
Clie
nt
/ S
erv
ice
In
teg
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r In
cid
en
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an
ag
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en
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yst
em
Information Exchange Layer enabled by eBonding
SMI Presentation 092016
Page 19
Use case: Metrics and reporting in a SMI ecosystem
Web services / SOAP APIs
Reporting attributes are exchanged between the client and the vendor’s IT service management systems using web services or SOAP APIs
Typical reporting attributes exchanged:• SLAs• Metrics / KPIs• Reports• Thresholds
Vendor # 1
Hosting Services
Metrics/Data
• Current and historical data• Short description• Trends
Vendor # 2
Network Services
Metrics/Data
Vendor # 3
Application Services
Metrics/Data
Inso
urc
ed
/
Ou
tso
urc
ed
Se
rvic
e
Inte
gra
tor
Key features of reporting capabilities:
• Service Integrator is responsible for end to end reporting, aggregating, analyzing, and summarizing, rolling up data from service providers into reports
• Service Integrator will have access to various metrics from service providers and in certain cases access to raw data
• Vendors are expected to track and communicate metrics and data to the Service Integrator within timeframes dictated by client reporting requirements
• This will include
• SLA/OLA/UC compliance metrics
• Performance, availability and Capacity metrics
• Ad-hoc requests
• Vendors are expected to be flexible and accommodate changes in list of required data attributes
• SMI reports will include
• SLA/OLA/UC end to end reports
• Investigation reports
Service Integrator defines reporting requirements based on client’s needs
Service Integrator generates periodic or ad hoc performance reports and dashboards
Ve
nd
ors
Clie
nt
reta
ine
d
IT o
rga
niz
ati
on
/
En
d u
sers
Information Exchange Layer enabled by E-Bonding
Metrics and reporting database
Reports and dashboards are reviewed with the client
End users Business and IT stakeholders Retained IT organization
SMI Presentation 092016
Page 20
Desired Outcomes
Scalability
and vendor
independence
The proposed vision allows the client to capitalize on it’s investments to build a solution that can scale across the enterprise. The client would be able to onboard and offboard vendors seamlessly as business requirements change or technological advancements create new opportunities
Business
SIAM
Off board outdated technology and vendors
New Services
Onboard and integrate new services and vendors
Cost efficiency and
effectiveness
The proposed SIAM roadmap would allow the client to rapidly insource vendor capabilities that can be provided internally, resulting in cost savings. Also, the client would be able to optimize IT spend across multiple programs to augment value for money
Organization and
process maturity
The proposed vision would allow the client to leverage its investments in ITSM technology to accelerate the maturation of its internal people and process capabilities to meet their business objectives.
Immature organization and processes
Mature organization and processes
SIAM
IT Operations IT Operations
ITSM
SMO & SIAM
SMI Presentation 092016
Page 21
Putting it all together
Integration of people, process, and technology provide for a well balanced solution
Evolution of the IT capability in a multi-sourced environment is critical to the success of an organization
The ability to quickly build, integrate, automate, and scale is difference between success and failure
ServiceNow provides the enterprise with the ability to perform in a seamless manner
Standardization of multi-sourcing; Realization of value and dependency; Knowledge
Management
SMI Presentation 092016
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Section 2 Considerations & Lessons Learned
Page 23
Specific Capabilities – Vendor Considerations
Service DeskService Desk General, Incident, Request Mgmt.., Problem Mgmt.., Access Mgmt..
Core SIAM – Service Integration & Mgmt..
Service Knowledge Mgmt..Central Repository AllService ManagementReference Material
Service Provider AssuranceService Level Design & Review
Service & Supplier QualityRegulatory Service Provider Compliance
IT Info Security SupportIncident & Event Monitoring, Protective Monitoring, Forensic Analysis,
Security Assurance/Accreditation, Security Incident Prevention
Service Transition Planning & SupportService Transition Planning, Project Management, Release &
Deployment Mgmt.., Transformation Delivery & Benefits Realization
Service Validation & TestingTest Planning & Design
Service EvaluationTest Environment Management
Availability Mgmt..Capacity Mgmt..Change ManagementEvent Mgmt.IT Service Continuity Mgmt.Service Asset & Configuration
Service Catalogue Mgmt.Service Level Mgmt.Standards & ArchitectureFinancial Mgmt. SupportService Provider Mgmt..
SMI Presentation 092016
Page 24
Technical Considerations
Vendor Logistics
• Define contractual SLAs and performance metrics
• Understand vendor capacity and dependency
• Determine integration frequency
• Deliver interactive Knowledge
01
Performance Impact
• Review ServiceNow instance infrastructure
• Analyze capacity for self-hosted environments
• Coordinate resources for instance dependencies (database, network etc.)
• Isolate recursive scenarios
02
Network Connectivity
• Configure firewalls and other security gateways
• Add exceptions to VPN and IP range based authentication
• Test data integrity and security
03
Disaster Recovery
• Outline outage remediation procedure
• Handle notifications
• Activate backup measures
• Reprocess failed integration
• Identify root cause
04
Client Business Processes
• Understand existing client business processes
• Develop seamless integration with service provider
05
Training,Go-Live andPost Go-Live
• Create Knowledge for future support
• Report service usage and supplier visibility
• Track resource allocation and accountability
• Iterate through considerations
.
06
Lessons Learned:
Contract Management
• Know your vendor
• Understand contractual obligations
• Negotiate changes early
• Lock down scope before starting
Project Planning
• Plan across all stakeholder groups
• Map all dependencies
• Sequence work properly
• Prioritize Day 1 vs. Day 2
Testing
• Provide traceability to requirements/features
• Define UAT with stakeholders early
• Allow time for go live testing
Operational Readiness • Have a plan
• Have a backup plan
• Have coverage for volume spikes
SMI Presentation 092016
Page 25
Lessons learned
Focus on the end-to-end service delivery, instead of individual service components
Build an integrated SMI function to coordinate service delivery across all service providers
Hold SMI accountable for the end-to-end service delivery
Define an operating model that enables service integration across the enterprise and its service providers
Establish standard service integration requirements to be adopted by all service providers
Design key processes using leading practices and standardize them across all service providers
eBonding is a key requirement for all new and existing tools. Design the eBonding architecture to rapidly
onboard and offboard service providers
Leverage the maturity of service providers support capabilities to accelerate improvements to the internal
support functions
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Section 3 Appendix – Enablers
Page 27
EY enablers used to support the our clients SMI engagement
SMI Operating Model IT process reference model SMI governance model
SMI design principlesSMI roles and responsibilities SMI job descriptionsSMI functional model
SMI Presentation 092016
Page 28
EY SMI service offerings align with ServiceNow’s Service Integration and Management (SIAM) capabilities
► SMI RFI and RFP
► SMI governance framework
► Vendor assessments
Vendor performance management
► End-to-end service level reporting
► IT service quality dashboards
Performance analytics
► Major program transformation
► Project and portfolio management
Project and portfoliomanagement
► Service costing
► IT cost transparency
► Bill of IT
IT financial management
► Enterprise service catalog
► Service catalog integration
► Service catalog management process
Service catalog
► Enterprise Service Automation (ESA)
► Service architecture design
IT operations management
► SMI operating model
► E-Bonding and service integration
► Process design and implementation
► SMI managed services
IT service management
► Integration with Enterprise GRC
► IT vendor risk management
Governance, risk and compliance
SMI Presentation 092016