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© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Business integration
and value
APMG International Showcase (28th June 2012)
Colin Rudd
FSM, FBCS, CITP, CEng, FIITT
Service Management consultant, mentor and coach
Chairman itSMF UK
ITIL Author
IT Enterprise Management Service Ltd.
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Agenda
• What is value?
• Customers and delivering value
• Are all customers the same?
• Is all value the same?
• How should value be measured?
• The value network
• Enhancing value
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Definition of service
A ‘service’ is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Service value
• Dynamic, real-time demand and value
• Multiple delivery channels (internal / external),
deliver different value
• Output less valuable than outcome
• Value only exists when used by the consumer
• Value is carried in the relationship
• Service value varies over time
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
ITIL – Service assets
Capabilities Resources
Management
Organisation
Process
Knowledge
People
Financial Capital
Infrastructure
Applications
Information
People
(Experience, skills, (Numbers of employees) and relationships)
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Service value
Management
Organisation
Processes
Knowledge
Capabilities
Information
Applications
Infrastructure
Financial capital Resources
Service
Increase performance
Reduce risk
Performance of customer assets
Increased value and ROV
Coordinate, control and deploy
People
Asset types
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
ITIL® – The service lifecycle
CSI register, improvement actions & plans
Continual Service Improvement
Service Operation
Operational /live services Achievements
Against targets
Serv
ice
Kn
ow
led
ge
Ma
na
gem
ent
Syst
em (
SKM
S)
(In
clu
din
g: t
he
Serv
ice
Po
rtfo
lio a
nd
Ser
vice
Ca
talo
gu
e
The Business / Customers
Service Transition
New/changed services
Tested solutions
SKMS Implementation of plans
Business value
Service Design
Solution designs
Architectures Standards
SDPs
Service Strategy
Strategies Policies
Resource and constraints
Change proposals
Requirements
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Customers
• Different types of customer:
• Internal:
• Same business objectives
• IT is involved in their decision-making
• We work together to achieve common outcomes
• External:
• Different business objectives
• IT is involved in understanding their requirements
• We enable their outcomes so that we keep their
business
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Value
Money spent
Value added
Value realized
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
What does this mean for IT?
• If IT wants to demonstrate value it has to
link its services to where value is realized,
not where value is added
• If IT can not do this it will always be
viewed as ‘money spent’ not ‘value added’
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Customers and services
External
Customer
External
Customer
External
Customer External
Customer
External
Customer
Value added
Value realized
Business Unit Business Unit
IT Unit IT Unit IT Unit IT Unit
Money spent
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
What is value for you?
• Financial: increased revenue or profit
(or possibly reduced operating costs)
• Risk: reduced vulnerability
• Compliance: increased legal and regulatory
conformance
• Customer: increased quality and satisfaction
• Shareholders: increased share value or
improved image
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
IT service provider
Customers
Partners and suppliers
Services
Services
A simple value network
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
IT service provider
Partners and suppliers
Services
Services
Internal customers
Customers
External customers
Customers
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
IT service provider
Partners and suppliers
Services
Services
Internal customers
Customers
External customers
Customers
Services Services
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
IT service provider
Customers
Partners and suppliers
Services
Services
The value network
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
IT service provider
Services
Services
Partners
External
suppliers and partners
Suppliers Partners Partners Partners Suppliers Suppliers Suppliers
Partners
Internal
suppliers and partners
Suppliers Partners Partners Suppliers Suppliers Suppliers Partners
Customers
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
IT service provider
Front office
Back office
Partners
External
suppliers and partners
Suppliers Partners Partners Partners Suppliers Suppliers Suppliers
Partners
Internal
suppliers and partners
Suppliers Partners Partners Suppliers Suppliers Suppliers Partners
Services
Services
Customers
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Services
IT service provider
Front office
Back office
External
suppliers and partners
Partners Partners Partners Partners
Suppliers Suppliers Suppliers Suppliers
Internal
suppliers and partners
Partners Partners Partners Suppliers
Suppliers Suppliers Suppliers Partners
Services Services Services
Customers
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
IT service
provider
Front office
Back office
External
suppliers and partners
Partners Partners Partners Partners
Suppliers Suppliers Suppliers Suppliers
Internal
suppliers and partners
Partners Partners Partners Suppliers
Suppliers Suppliers Suppliers Partners
Services Services Services
Services
Internal customers
Customers
External customers
Customers
Services Services
Service Catalogue
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Corporate governance of IT
Business pressures
Business needs
Evaluate
Monitor
Pe
rfo
rman
ce
con
form
ance
Direct P
lan
s p
olic
ies
IT Governance
Project delivery
Service delivery
Business demand
Note: diagram based on ISO/IEC 38500
Enhance value
Invest in value
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
IT service
provider
Front office
Back office
External
suppliers and partners
Partners Partners Partners Partners
Suppliers Suppliers Suppliers Suppliers
Internal
suppliers and partners
Partners Partners Partners Suppliers
Suppliers Suppliers Suppliers Partners
Services Services Services
Services
Internal customers
Customers
External customers
Customers
Services Services
Relationships
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Relationships
The five questions:
• Readiness: Are we prepared for relationships?
• Connection: Are we willing to focus on other?
• Trust: Can we build mutual trust?
• Investment: Are we willing to invest in others?
• Synergy: Can we create a win-win relationship?
Ref: Winning with people, John C Maxwell
Good relationships are the foundation for achievement
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
The approach
• Agree the required business outcomes
• Agree the definition of value with the business
• Agree the measurement of value
• Deliver and measure delivered value
• Improve and increase value, as part of the
overall service strategy
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
New ‘cloud based’ value networks
Customers Customers Customers Services Services Services
Service Provider
Services Services Services
Customers Customers Suppliers
Services
Suppliers
Management Hub
Mgmt. services Mgmt. services Management. services
Suppliers Suppliers
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Summary
• Need to understand value from the customer
and business perspective
• Focus on value, outcome and quality, both
measurement and improvement
• Good relationships are essential in delivering
service value, both customer and supplier
• Integrate and automate to provide consistent
and accurate information
• And remember ..........
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
“Quality (value) in a product or service is not what
the supplier puts in. It is what the customer gets
out and is willing to pay for.’”
Peter Drucker
"People don’t buy products (services); they buy
the expectation of benefits“
Theodore Levitt, Harvard Business School
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Business integration
and value
© Crown Copyright 2011 - reproduced under license from the Cabinet Office
Any questions ?
APMG International Showcase (28th June 2012)
Colin Rudd
FSM, FBCS, CITP, CEng, FIITT
Service Management consultant, mentor and coach
Chairman itSMF UK
ITIL Author
IT Enterprise Management Service Ltd.