32. What is the Service Value Potential?
The service value potential of a service has three components. The first is the portions that can be attributed from various chart of account (COA) entries to a particular service. These amounts can be categorized as Operational/Capital, Fixed/Variable and Direct/Indirect. The challenge with this apportionment method lies in the unit basis used for charging that is used for each element.
For example, if we consider Hardware, Software, Accommodation, salaries and maintenance as typical “cost types” there needs to be an agreed basis that costs are assigned to particular services (this could be CPU cycles, or license counts, hours worked, supplier invoices, etc.). Any number of units may be appropriate from across the whole COA range. The checksum lies in how close all the service baseline costs are to the entire COA spectrum.
The second component is the marginal value that a service adds to a customers assets. That is, how better off is the customer from having access to the service than if they didn’t have access. The marginal enhancement value is a combination of UTILITY value and WARRANTY value. Such values are typically very difficult to derive through scientific reasoning; but some attempt must be made to derive the value AND then to use that method consistently during the lifecycle of the service.
The third component of Service Value is the consumption variability. This, element is an allowance that has to be catered for should the demand for the service fluctuate for any reason. Unlike the marginal enhancement value, the consumption variability can be partially extrapolated from historical information, but there also needs to be a predictive analysis component as well.
This service valuation analysis may not result in an ability for a service provider to recoup the entire service value from a customer, but it does help (apart from any agreed profit margin) demonstrate to a customer the elements they should take into account when looking at services they utilize. It also becomes a very useful tool if you are in negotiation regarding the potential for a Managed Service solution.
35. What is the relationship between SLA, OLAs and Underpinning contracts?
Service Level Agreements (SLAs) are agreements made between the IT Service Provider and the internal customers of an organization. They represent the negotiated and agreed levels of service delivery that the business requires.
SLAs are supported (or underpinned) by two other agreement types. These other two agreements are not for the eyes of the customer has they relate to how the service will be delivered that has been agreed in the SLA.
The OLA is an agreement within the IT department. It is an assurance that each responsible area associated with the delivery of a service is aware of their part in delivering that service.
The Underpinning contract is the same concept, but it is made between the IT Service Provider and a third party organization.
36. I need a short ITIL v3 summary
ITIL® v3 – A turning point in history
The IT Infrastructure Library (ITIL ®) current version is replaced by an upgraded, revitalized and sharpened version. ITIL® v3 includes 5 “core publications” covering all Service Management issues. There will be supporting collateral providing information on vertical industry application, as well as frequent updates and developments.
ITIL® v3 allows us to build on the successes of v2, enabling us to take Service Management even further. Where v2 mentioned ‘alignment’, v3 pushes total integration - From strategy to satisfied customers, from lifecycles to ecosystem. ITIL® v3 is v2 supercharged.
ITIL®v3 is also completely supportive of v2, meaning that v2 customers will not be left in the dark ages of service management. v3 is based on v2 – It is an improvement, but at the same time it replaces v2. Certain elements such as “lifecycle management” are emphasized, and ITIL® v3 is based on 5 core titles:
Service Strategy - That deals with aligning business and IT so that each brings out the best in the other. It ensures that every element of the Service Lifecycle is focused on customer outcomes and relates to all the companion process elements that follow.
Service Design - Provides guidance on the production and maintenance of IT policies, architectures, and documents for the design of appropriate and innovative IT infrastructure service solutions and processes.
Service Transition - Guidance and process activities for the transition of services in the operational business environment. It covers the broader, long-term change management role, release and deployment practices, so that risks, benefits, delivery mechanisms and the support of ongoing operational services are considered.
Service Operation - Explains and details delivery and control activities to achieve operational excellence on a day-to-day basis.
Continual Service Improvement - Focusing on the process elements involved in identifying and introducing service management improvements, this section also deals with issues surrounding service retirement.
ITIL® v3 also comes complete with supporting collateral, such as Complementary material.
This material will enable ITIL® to address more vertical markets and industries, e.g. public sector, financial services. It will also provide the venue for rapidly changing guidance. The material will take the form of detailed glossaries, process maps, and mappings to governance and other frameworks.
This material will allow a vehicle for more frequent and recent updates and information.
So what does all this mean for the end user/adopter of the current ITIL?
The current certifications for any ITIL® course remain valid under v3. You may decide that you wish to ‘upgrade’ your certification to include v3 subject matter. These options will become available in the future.
One of the key improvements to ITIL® v3 is the inclusion of a Knowledge Management system. Knowledge bases such as the CMDB and Known Error Databases have been expanded on, to highlight on the principles of moving from simple data collection, to extracting information from data – in effect, deriving knowledge from information and wisdom from knowledge.
A Change in Focus
Aiden Lawes, CEO of the itSMF, proposes, “We should be striving for integration, not alignment. I do not believe that there is no such a thing as an ‘IT service’ anymore; rather there are business services, which are wholly or partly enabled by technology. This means that those responsible for managing technology components need to understand exactly what end-to-end business processes are underpinned by them, and the scale and importance of those processes to the overall operations and goals.”
What Lawes suggests is that there needs to be an ‘ecosystem-view’ of an organization from everyone’s perspective. Everything is indeed already integrated, and what ITIL® v3 will enable service managers to do is map out this ecosystem effectively and serve it diligently and in the best interests of all – A sort of ‘harmonized’ best-practice.
ITIL® is a Registered Trade Mark, and a Registered Community Trade Mark of the Office of Government Commerce, and is Registered in the U.S. Patent and Trademark Office
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