End-To-End IT Services Explained

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The key takeaways are that end-to-end IT services allow IT to focus on business outcomes, obtain flexibility and efficiency, stage transitions to reduce risk, empower service managers, and streamline IT planning and governance.

A service provides ongoing delivery and enhancement of functionality to support an activity, unlike a project which is a point-in-time effort. Services support activities and may include several applications or technologies, while projects deploy specific technologies.

End-to-end IT services directly support business capabilities by providing all required technology, processes, information and support. They allow IT to be both responsive and efficient through streamlined decision making and support for standardized and innovative services.

Information Technology Practice

CIO Executive Board

End-to-End IT Services Explained


A Primer for IT Leaders

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TABLE OF CONTENTS
1. What is a service? 2. How do end-to-end IT services differ from other services? 3. What is driving interest in end-to-end IT services? 4. What does the transition path look like? 5. How can CEB help IT leaders transition to end-to-end IT services?

This document provides an introduction to end-to-end IT services. It is also available in PowerPoint form so that it can be customized for specific audiences. If you are already familiar with end-to-end IT services as a concept and want more detailed implementation guidance, please refer to the following resources:

The Path to End-to-End Services study Restructuring for Responsiveness study Maturity Diagnostic for End-to-End Services The Define End-to-End Services engagement

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

A service provides ongoing delivery and enhancement of functionality to support an activity.


Before defining end-toend IT services, it is useful to understand the key characteristics shared by services of any type. This is in contrast with a project, which is a pointin-time effort to build new functionality. Projects and services often coexist in the same organization.

1. WHAT IS A SERVICE?
Distinguishing Between Projects and Services

Project Point-in-time effort to build new functionality

Service Ongoing management and enhancement of functionality

Deploys a specific application or infrastructure technology (i.e., ERP or network) and related business change

Supports an activity (i.e., customer onboarding or collaboration) and may include several applications or infrastructure technologies

Led by a project manager who moves on to a new project when the current project goes live

Led by a service manager who has ongoing responsibility

Metrics that focus on project delivery (schedule, budget, scope)

Metrics that focus on service performance (quality, cost, volume, value-delivered)

Projects and services can (and often do) coexist. Organizations may be selective in defining services, or functionality may be built as a project and managed as a service.

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

End-to-end IT services use many of the service management concepts pioneered in Infrastructure and expand them to IT as a whole.
As such, end-to-end IT services address the limitations faced by infrastructure services. Infrastructure services and end-to-end IT services can coexist.

2. HOW DO END-TO-END IT SERVICES Differ from OTHER SERVICES?


Evolution of Service Management
EnterpriseWide

Multifunctional Shared Services Combines IT and non-IT resources required to deliver a specific business outcome

Limitation: Needs strong CEO support and extensive organizational change.

End-to-End IT Services
Organizational Reach

Multifunctional shared services have different origins and usually emerge outside IT.

IT-Wide

Packages all the technologies, processes, and resources across IT needed to deliver a specific business outcome

Infrastructure Services Partially realigns the infrastructure team around service lines

Limitation: Infrastructure services alone cannot drive business outcomes or solve business needs.

Service Catalogs Defines service lines (technology bundles that business partners can understand and compare)
2001
CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

Infrastructure Only

Limitation: A definitional exercise only; no change to IT structure or governance and so doesnt improve delivery performance or responsiveness to business needs. 2011 Time 2016

2006

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

An end-to-end IT service directly supports one or more business capabilities by providing all the technology, information, and IT support required.
A business capability is an activity that results in a specific, measurable business outcome. Services can be defined as a single level 1 capability or several more granular level 2 or 3 capabilities. In total, IT may offer 10 to 20 end-to-end IT services.

EXAMPLE OF AN END-TO-END IT SERVICE


Hypothetical Example of an End-to-End IT Service for Budgeting and Planning

Business Capability (Level 1)

Budgeting and Planning Definition: Build and manage an annual budget and operating plan. Business Outcomes:

Budgets and plans are completed efficiently and on time. Budgets and plans accurately estimate financial outcomes. Investments are directed at strategic priorities.

End-to-End IT Service

Budget and Planning IT Service Provides all the technology, information, and IT support needed by Finance and business unit managers to prepare and manage annual budgets and operating plans (but does not mean that IT does the budgeting and planning itself)

Other Examples

Customer onboarding Knowledge sharing and collaboration Acquisition/divestiture Employee development

For more examples of end-toend IT services see the service definition repository at www.cio.executiveboard.com.
CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

An end-to-end IT service packages together all the IT people, processes, technology, and information needed to support a business capability.
The service is designed and delivered using resources that cut across ITs functional towers (e.g., Applications, Infrastructure).

EXAMPLE OF AN END-TO-END IT SERVICE (Continued)


Hypothetical Example of an End-to-End IT Service for Budgeting and Planning (Continued)

End-to-End IT Service (Owned by a Service Manager)

Budget and Planning IT Service

Sample Functionality Enter budget data. Review and approve. Track actuals.

Provide regular reports.

Create dashboards.

Shared Apps and Infra (Owned by a Central Apps and Infrastructure Team)

Budgeting Application

ERP

BI

Hosting, Storage, and Network

Benefits of an Endto-End IT Service

1. Reduced Complexity for Business Leadership: Business leaders know who in IT is responsible for supporting a given business capability and understand what IT does for them and what it costs. 2. Fast, Flexible, Business OutcomesDriven Responses from IT: Service managers have the necessary business relationships and domain knowledge and control over the technologies and IT resources involved. 3. Preserves Central IT Efficiency: IT remains centralized.

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

Fifty-four percent of CIOs expect to have at least some end-to-end IT services by the end of 2012.
Almost two-thirds of CIOs have moved beyond siloed infrastructure or application services. Many of the organizations in the 54% are experimenting with end-to-end services and few have moved entirely to this model.

END-TO-END IT SERVICES HAVE EMERGED RAPIDLY


Change in IT Service Models Over Five Years
Percentage of Organizations Offering Type of Service

17% 32% 9%

12% 8%

10% 11%

9% 20%

No Formally Defined Services Multifunctional Shared Services End-to-End IT Services Infrastructure/Apps Services

11% 36% 27%

41% 54% 51%

30%

38%

39% 25% 20%


FY 2013 (E)

FY 2009

FY 2010

FY 2011

FY 2012 (E)

n = 151.
Source: CIO Executive Board IT Budget Benchmark, 2011.

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

The shifts predicted by CEB in The Future of Corporate IT, combined with globalization and economic volatility, are driving rapid changes in demand for IT.
IT leaders long-standing goal of being fast and efficient is under renewed stress. CIOs have tried many other organizational and governance models but find that none offer the combination of flexibility and efficiency required.

3. WHAT IS DRIVING INTEREST IN END-TO-END IT SERVICES?


Analysis of Changes to Demand in IT

Business Partner Demands

Whats Driving Change

How IT Must Respond

1. F  ast, Innovative, User-Centric IT

Information over process drives large numbers of small, fast changing projects. Business partner responsibility leads to a new relationship with IT. Consumerization changes end-user expectations for IT.

Rapid time to market for small and/or experimental initiatives Help for business partners going it alone Metrics for business growth

2. E  fficient, Standard, Global IT

Economic volatility drives the need for cost-efficiency and variability. Globalization makes enterprise standards setting harder. The cloud offers an alternative to internal provision.

Standardized global delivery Market comparability Metrics for business efficiency and quality

IT must do both.

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

Demand to deliver greater flexibility and efficiency together creates multiple pressure points within traditional IT organizational models.
Six functions within IT find themselves under strain as simultaneous demands for responsiveness and efficiency require more distributed decision making, prioritization, and execution. Given the breadth of the changes required, partial or incremental solutions will not be enough.

PRESSURE FOR CHANGE ACROSS IT


Six Pressure Points on the IT Organizational Model

IT Finance CIO IT HR

High Degree of Pressure to Change Medium Degree of Pressure to Change

Business Relationship Managers

Applications Development

Infrastructure Shared Services

5
PMO

6
Business Relationship Managers Maintenance and Enhancement

Enterprise Architecture Vendor Management

Business Relationship Managers

Integration and Configuration

Information Risk

Business Relationship Managers Often become powerless intermediaries

Integration and Configuration Still immature function Not set up to manage the volume of small projects Infrastructure Shared Services Not structured to support rapid, iterative enhancements Incomplete cost transparency

PMO Most project prioritization moves to service lines Project management methodologies ill suited to small projects Enterprise Architect Architecture defined for each service Slow to respond to requests for variation

Applications Development Insufficiently agile Teams not structured to manage many small projects

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

10

The end-to-end IT services model is flexible enough to provide speed and efficiency.
IT needs a model that can provide fast user-centric IT and efficient standard global IT without requiring wasteful parallel structures and governance.

ONE MODEL FOR ALL DEMAND


How the End-to-End IT Services Model Flexes to Meet Diverse Demand

Demands on IT 1. F  ast, Innovative, User-Centric IT

How IT Must Respond Rapid time to market for small and/or experimental initiatives

How End-to-End IT Services Meet These Needs Service managers have the relationships and domain knowledge to understand changing demand. Service managers have the authority and resources to rapidly iterate on service design. If required, the service can focus narrowly on integration and vendor management advice. The service is designed to support growth. The service manager is incentivized on growth. One standard service is offered globally. Service cost and performance are transparent and defined in market-comparable terms. Service managers closely track external offerings. The service is designed to support efficiency and quality. The service manager is incentivized on efficiency and quality.

Help for business partners going it alone Metrics for business growth

2. E  fficient, Standard, Global IT

Standardized global delivery Market comparability

Metrics for business efficiency and quality

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

11

The transition to endto-end IT services is complex and risky, so organizations typically follow a gradual migration starting with service definition.
A gradual transition is typically phased across two to three years.

4. WHAT DOES THE TRANSITION PATH LOOK LIKE?


Transition Path to End-to-End IT Services
Typical Transition Path

1.  Define End-to-End IT Services Create definitions and performance measures for each end-to-end IT service.

2.  Develop Service Managers Identify and develop full-time service managers.

3.  Realign Governance to Services Redesign IT governance (strategy, budgeting, portfolio management, architecture) to support service development and delivery.

4.  Reorganize Along End-to-End IT Services Align IT resources and reporting lines to services.

Indicators of Maturity at Each Phase of the Transition

IT offers services that include all the infrastructure and apps needed to deliver a specific business outcome. IT measures the business outcomes enabled by each service.

Service managers have a full-time role. Service managers are responsible for delivering business outcomes (not just infrastructure services).

The organization has a service architecture role or responsibility. Governance processes have been streamlined to give service managers more autonomy. IT reports and/or recovers the costs of each service.

Dedicated teams support each service manager.

Use the Maturity Diagnostic for End-to-End Services to assess the maturity and impact of each step in the transition. To learn more, visit https://cio. executiveboard.com/Members/ Benchmarking/Maturity_ Diagnostic_for_End_to_End_ Services.aspx.
CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

12

To manage end-to-end IT services effectively, service managers must have authority over service-related IT planning, portfolio management, and delivery processes.
Service managers who depend on influence as their primary means of driving decisions usually fail to improve satisfaction with the cost, quality, and composition of their services. The service manager role is designed to oversee the planning, cost, and performance for a service across functional silos within IT. This requires the ability to direct investments and set performance targets across those functional boundaries.

DEVELOP SERVICE MANAGERS


How the Service Manager Role Changes with End-to-End IT Services

End-to-End IT Services

End-to-End IT Service Manager


Develops service strategy from demand forecasts and business partner engagement Has direct authority over planning, portfolio management, and delivery processes related to a given service Sets service prices and owns service-line profit and loss Makes cost and capability transparent to business partners

Nature of Service Definitions

Infrastructure Service Manager

Manages assets aligned by infrastructure towers Tactical role focused on incident, problem, event, and configuration management Little involvement in strategy

Infrastructure Services Low Degree of Responsibility for Resource Allocation


CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

High

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

13

End-to-end IT services have a greater impact on planning and prioritization than on daily operations.
Both business partners and IT staff will be impacted by these changes. CIOs will need to sustain change management efforts within IT and with business partners.

REALIGN GOVERNANCE to SERVICES


How Key IT Processes Will Be Impacted by End-to-End IT Services
Impact Within IT Impact on Business Partners

Process

Nature of Impact

1. Enterprise Architecture 2. Portfolio Management 3. Strategic Management 4. Budgeting/ Funding 5. Organizational Structure 6. Skills Development 7. Value Measurement 8. Opportunity Identification

Development of service architecture skills and the use of business architecture to define services Prioritization driven by service development needs rather that by demand for a system or technology IT strategic planning that will be driven largely by the services organization and service strategy processes Funding models that will change to align with business services and costs to consumption New reporting structures for Applications and Infrastructure and the addition of service management roles Increased value of IT finance, service planning, stakeholder management, and business planning skills Enabled performance reporting and objectives aligned against business outcomes Will more closely resemble marketplace product identification processes

Significant Impact

Some Impact

Minor Impact

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

14

In a mature organizational structure for end-to-end IT services, service managers directly control resources aligned to their services and act as mini CIOs.
Shared applications and infrastructure resources are diminished and may report to the same leader. The business relationship manager role becomes streamlined, helping business units select and exploit the right services.

REORGANIZE Along END-TO-END IT SERVICES


Representative IT Organizational Structure for End-to-End Services

Office of the CIO (Strategy, PMO, EA, Security, Finance, HR)

Business Relationship Managers

Service Managers and Teams

Shared Applications and Infrastructure

Business Unit

Manages Applications and Infrastructure shared by several services One leader

Vendors Business Unit


Helps shape BU IT strategy and introduces BU leaders to service managers In global organizations, may selectively localize services

Service managers oversee vendors who support only their service. Shared applications and infrastructure team oversees shared vendors.

Teams include resources dedicated to a specific service.

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

15

5. HOW CAN CEB HELP IT LEADERS TRANSITION TO END-TO-END IT SERVICES?


CIO Executive Board Summary of Coverage

Infrastructure Executive Council

Applications Executive Council

Service Management Boot Camp

Overall services strategy, business case, and maturity path Defining services on business outcomes Overall impact on IT governance and org. structure.

Service manager role, processes and competencies Infrastructure service definitions and catalogs Impact on infrastructure governance and financial management

Changes required to applications delivery and integration processes. Impact on applications governance and organizational structure

Service manager competency assessment Experiential learning for key service manager skills.

End-to-End Services Strategy Define End-toEnd Services Develop Service Managers Realign Governance Reorganize to Services Key Resources
1 3

 ath to End-to-End P Services study Restructuring for Responsiveness study  aturity Diagnostic for M End-to-End Services Service Definition Repository  2012 Annual Executive Retreat 

Service Manager Handbook  Service Catalog Design  engagement  even Steps to Better S Service Economics study The Talent Shift study  2012 Annual Executive Retreat 

 perating Applications in an O End-to-End Services Model study  reating a World-Class C Integration Organization study

 sk your account manager A about upcoming cohorts

Full It-Wide Coverage

Coverage of Implications for a Specific It Sub Function

1 2

Governance outside and between applications and infrastructure. CIO direct reports and roles outside applications and infrastructure.

3 4

Skills, governance, and org. model within Infrastructure. Governance and organizational model within Applications.

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

What is a service?

How End-to-End IT Services Differ

Drivers of Interest

Transition Path

CEB Resources

16

KEY TAKEAWAYS
1. Refocus IT on Business Outcomes: An end-to-end IT service directly supports one or more business capabilities by providing all the technology, processes, information, and IT support required. 2. Obtain Flexibility, Efficiency, and Faster Decision Making: End-to-end IT services allow IT to be both responsive and efficient. The model streamlines decision making and supports services that require innovation and iteration, alongside services that require standardization and efficiency. 3. Stage Transitions to Reduce Risk: The transition to end-to-end IT services is complex and risky. Organizations typically follow a staged migration starting with service definition and progressing to service managers, service governance, and a service-aligned organization. 4. Empower Service Managers: End-to-end IT service managers must have authority over service-related planning, portfolio management, and delivery processes. In the most mature organizations, they control resources directly aligned to their services and act as mini CIOs. 5. Streamline IT Planning and Governance: End-to-end IT services have a greater impact on planning, prioritization, and financial management than on daily operations.

CIO Executive Board IT Practice www.cio.executiveboard.com 2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

17

Information Technology Practice

CIO Executive Board

2012 The Corporate Executive Board Company. All Rights Reserved.CIO2348512SYN

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