This is the same way it works for SMI Suite. A lot of organizations are suffering within their IT organization hoping it will be an temporary problem and will be solved by time. And for all that they know they are suffering, they do not know exactly where the pain is coming from. After a while they realize that  a solution is not going to fall out of the sky. To find the cause of the pain they need to report on their IT environment and processes. Luckily for them, SMI Suite can help with finding the cause of the pain so the suffering organization will be relieved.
Martin

Information cascades can have wide organizational, societal or economic impact. The unprecedented economic downturn of 2007-2009 may well indeed have been the result of an information cascade. In an article titled ‘How a Bubble Stayed Under the Radar’, published on March 2, 2008 in the New York Times, professor of Economics Robert J. Shiller exemplifies how an information cascade caused the real-estate market bubble: “even if houses are of low investment value, we may […] have two people who make purchasing decisions that reveal their conclusion that houses are a good investment. As others make purchases at rising prices, more and more people will conclude that these buyers’ information about the market outweighs their own.” He proceeds to state that “It is clear that just such an information cascade helped to create the housing bubble. And it is now possible that a downward cascade will develop — in which rational individuals become excessively pessimistic as they see others bidding down home prices to abnormally low levels.”

Within an organization, an information cascade may very well prevent change and maintain the status quo.  Processes and tools once instituted by a few are now followed and used by many. Indeed, the way things have always been done may seem the way to go. Information cascades, however, are fragile. As Sushil Bikhchandani, David Hirshleifer and Ivo Welch point out, “A little bit of public information (or an unusual signal) can overturn long-standing informational cascades. That is, even though a million people may have chosen one action, seemingly little information can induce the next million people to choose the opposite action. Fragility is an integral component of the informational cascades theory!”

The economic woes of the last couple of years have impacted IT operations in many ways by increasing the pressures on CIOs and their teams and accelerating the need for IT organizations to change, to reduce IT costs and deliver more value to the business. Could the worst international economic crisis since the Great Depression be the ‘unusual signal’ that will cause the ITSM information cascade to crumble and instigate change within IT departments?

The answer is no. Instead, within an organization, business users must gain insight into their ITSM processes and use that insight to broadcast the signal that will ultimately enable IT to reduce cost and deliver more value to the business. Westbury’s Service Management Intelligence solution enables business users to do just that. With a powerful reporting solution in their own hands, business users can battle information cascades and instigate change that will continuously strengthen the value of IT.

Arnon

Today we’re bringing you a piece from guest blogger Cornelis A. Winkler Prins of the ITRP Institute.

cor.winklerprins@itrp.com

What will the corporate IT department be like 10 years from now? I have been asking this question because the answer will tell us which information will be required by the IT manager of the future. Once we understand the information requirements, we will be able to infer the functionality that IT Service Management applications will need to offer.

Speculating about the future of IT is something I always enjoy. Whenever I get the chance, I pick the brains of IT leaders about what they see on the horizon. From these conversations, and from what I see happening around me, I have concluded that we are about to witness a gradual but major shift in the IT landscape. The forces that will be shaping our future within the IT industry are already apparent and will result in a shift that seems inevitable.

Today I would like to offer 10 predictions. Each prediction provides the basis for the next one. I hope they will invoke some debate and inspire more people to think ahead, so that we can start building solutions for the IT manager of tomorrow.

1. Most applications will be delivered as a service

This is the trigger that will gradually take us to an entirely new kind of IT department. Software as a Service (SaaS) will be the norm. This is unavoidable because the advantages are too great for both the software vendors and their customers.

In a true SaaS environment, we will no longer see traditional software hosted on a separate (virtual) server for each customer. Instead we will see a single production instance of an application. All customers will use the same instance to work securely with their own data. It will take some time for software vendors to rebuild the current applications to support this, but once they have, this will translate into enormous savings for them. When a customer reports a bug, they will be able to reproduce it very quickly. They no longer need to ask which version of the application the customer is using on which version of which operating system and on which version of with database. The vendor knows all this and has access to the log files.

The advantage for the customer is also enormous. Apart from skipping the initial steps of securing server and storage capacity, downloading the software and installing it, the customer will also get bug fixes shortly after they have been discovered. They do not need to download a patch, test it and install it. It will all be done for them. It is the responsibility of the software vendor to ensure that the production environment remains secure and responsive. If the vendor does not, all customers will be affected and the vendor’s reputation will quickly deteriorate to the point where customers will look for alternative vendors.

Ten years from now, we will simply not be able to comprehend how we were able to provide IT services to end-users. It will seem hopelessly complicated when we consider how hard it would be to build and maintain our own enterprise application environment.

Naturally, SaaS will eventually bring other benefits (e.g. collaboration across organizational boundaries and benchmarking), but I believe the abovementioned advantages are sufficient for software vendors to want to offer SaaS, and for customers to demand it.

2. Cloud computing will grow dramatically

Most software vendors will not have the scale or the desire to host their SaaS environments. Today most software vendors are not fully capitalizing the benefits of SaaS. They simply make a completely separate hosted instance available to each customer. It is relatively easy for software vendors to ask traditional outsources to host their applications in this fashion. Over time, however, software vendors will adapt their applications to be able to offer only a single shared production environment for each application. Traditional outsourcers will not be able to offer the same global coverage that cloud computing providers already offer today. This is a key requirement for software vendors when they start to optimize their application response times for their customers around the world. Hence software vendors will use the services offered by the largest cloud computing providers, like Amazon, Google and Microsoft.

3. Outsourcers will suffer and consolidate

The corporate IT department has already figured out that it is a pain to provide processing power and storage capacity for all the enterprise applications. Many large corporations have centralized this in their datacenters to keep it manageable, others have already outsourced most of this. As more and more organizations choose to obtain applications for email, ERP, CRM, ITSM, etc. as a service, they will rely less and less on their datacenters and outsourcers as these applications will be running in the cloud.

Fortunately, there is more to corporate IT than the enterprise applications. PC support, first line support, wide and local area network connectivity, printer maintenance, etc. will secure the relevance of outsourcers in the future, but a large chunk of their business will move to the cloud computing providers. This will make the outsourcing industry even more competitive. Considering that there are literally thousands of outsourcers in the world, it is likely that we will see a wave of consolidation n this industry.

4. Smaller outsourcers will start to commit to resolution times

Historically, outsourcers have done whatever they could to avoid committing to resolving incidents within a specific timeframe. They have only committed to response times, which of course are next-to-meaningless. Worse, outsourcers even managed to ensure that their contracts include verbiage like: “…will use commercially reasonable efforts…”

To compete in the new, even more competitive, environment, small outsourcers will be willing to commit to measurable results. Eventually this will force the larger outsourcers to follow suit.

5. The term of outsourcing contracts will become much shorter

When you ask IT managers whether they are happy with their outsourcers, you typically get the sense that they are very unhappy with one or two of them, yet they have come to accept their fate. Why? Because the outsourcer was already there when they took over and the contract will remain in place for several more years. The wording of the contract is such that the outsourcer cannot be forced to improve, so they feel that there is not much they can do about it.

Outsourcers will also benefit from SaaS. It allows them to use IT System and Service Management applications and pay on a monthly basis for their usage, without any long-term commitment. They will no longer need to acquire expensive software licenses when they onboard a new customer. In the past, they had to write-off these software licenses over a period of roughly 3 to 5 years. By also separating any hardware ownership from the agreements, an outsourcer will be able to substantially reduce the minimum term of an outsourcing contract. Whether they will be able to offer their services on a month-to-month basis remains to be seen, but the outsourcer that is able to do this will certainly have a competitive edge.

6. The corporate datacenter will disappear

As the enterprise applications are slowly moved from the corporate datacenter to the cloud, the datacenters will become smaller and smaller. With network and internet connectivity already managed by an outsourcer, there is little need to maintain the datacenter facilities.

7. The IT department will no longer require specialized technical skills

The elimination of the datacenter will cause a large part of the organization’s technical IT skills to move to outsourcers and cloud computing providers. The rest of the technical IT knowhow will move in the same direction as organizations start to feel more comfortable with the idea of outsourcing. This renewed trust in outsourcing will stem from the increased willingness on the part of outsourcers to be held accountable and the new ease with which customers can switch between outsourcers when they are not satisfied.

Organizations will entrust different parts of their IT infrastructure to different outsourcers. The days when corporations would outsource all of their IT to EDS or IBM are long gone, and it is unlikely that companies will ever again put themselves in a position where they are so dependent on a single outsourcer.

The only technical skills that companies may choose to retain are those needed to develop and/or configure their core business applications from which they derive a competitive advantage, and for which a detailed understanding of the business is needed. Still, it may well be possible to only specify the functional requirements and leave the development to contractors.

8. The new IT professional manages agreements

Organizations will attract a new kind of IT specialist. They no longer need this person to manage a local area network, configure a new server, or install an application. These skills have moved to the outsourcers and cloud computing providers. The new IT professional will need to be able to negotiate and manage the agreements with the outsourcers and the business users.

9. IT will again be managed by the Finance department

In the early days, the Finance department was responsible for IT. Back then they were the largest consumer of IT, so it made sense. Slowly other departments also started to rely on IT services to continuously improve quality, efficiency and predictability. At the same time, IT became more and more complex. The finance people no longer understood what these IT people were talking about. Eventually Finance was happy to grant IT its independence.

In the years to come, the Finance department will realize that they are better at negotiating and managing agreements than the IT department is. When this happens, we will see the responsibility for the IT services move back to the Finance department.

10. Dependence on IT Service Management reporting will increase dramatically

The IT manager of tomorrow will need to negotiate changes when service level targets are not being met, when costs need to be reduced, and when functionality needs to be adapted to meet new business requirements. Negotiating and managing agreements requires different information than managing technology. The information that this IT manager requires will focus on service levels and the financial aspects of service provision. This information is as important to IT managers within outsourcers as it is to their peers who work for their customers.

What does this mean for IT Service Management applications? They need to be able to provide data that can be trusted by outsourcers, their customers and auditors. This data needs to be structured so that it will be possible to measure not just the level of service provided to the business, but also the level of service obtained from the outsourcers and software vendors.

One might argue that IT managers already require this information today. I totally agree. It seems, however, that until the responsibilities for the technical and operational complexities are removed from the corporate IT manager, this person will not be able to focus sufficiently on the service levels and service costs to make these the key requirements for selecting an IT Service Management solution. This may explain why it is still so incredibly hard, if not impossible, to extract this information from today’s leading IT Service Management applications.

Cor

Obviously, the reckless pattern of costs savings has lead to huge gaps in IT processes. Especially the maintenance of IT applications has been hit hard during the recession. In the last 9-12 months almost all companies have reduced the contracts with consultants dramatically, IT services have been outsourced and support and maintenance contracts not renewed. On top of that, internal IT resources have been cut back or reorganizations have taken people away from maintenance projects. But also new, innovative IT projects have been postponed. I’m pretty sure everyone can think of one project this year that was already approved but never executed or was killed during implementation.

However, since our gurus allows us to see some light at the end of the tunnel (which could easily be a train coming towards you from the other site of the tunnel!), what should be the recommendations for IT executives?

Allow me to come with some suggestions:

1. Fill out the gaps of your IT processes by implementing new processes, new application to support the processes and by hiring resources in critical spots
2. Gain competitive advantage by updating your website with new features such as: news feeds, newsletters, event calendars, case studies, photo galleries, customer support features, product catalogs, blogs, social networking capabilities, and SEO improvements.
3. Invest in the future by hiring young, talented people and by training the employees that kept your business running for the last 12 months.

Just some suggestions. Let me know your ideas.

Floris

Common themes that accompany the (planning of the) implementation of HP Service Manager include the sensible improvement goals around:

• Business and IT alignment
• Quality of IT services
• Transparency of IT services to IT customers

Given the above themes it is therefore surprising to see that getting the right information out of your HP Service Manager implementation is often an afterthought. Or as one seasoned ITSM consultant put it, ITSM reporting is often dealt with as the ‘red-headed step child’ of any ITSM implementation. “We’ll deal with that when we get to it” however by the time you ‘get to it’ you’ve got your hands too full to properly address the issue.

At Westbury we are constantly running into customer scenarios where all the focus is aimed at getting HP Service Manager up and running and yet reporting often seems to be an afterthought. Interestingly enough, that same ‘red headed step child’ suddenly becomes of utmost importance the moment HP Service Manager’s live date approaches . The reasons are obvious:

• At a minimum IT wants to provide at least the same reports as existed before the move to Service Manager
• Additionally IT managers & supervisors need insight to better oversee, drive and improve the performance of the various support teams and services they provide
• Going forward the IT department would like to prove its value by objectively demonstrating improvement in the delivery of IT services
• Customers  of IT will demand insight into the delivery of IT services and will require increasingly more in-depth reporting from IT

We in roles of ITSM are being asked to do more with less and to improve the delivery of IT services to our customers. This means we have to be smarter as to how we go about this. Let’s all agree that it is not about what we put into the ITSM processes and tools, rather it is about what we can get out of it.

Be smart, look at the overall picture.

David