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Services from the Consumer Perspective
A common sense approach to IT/Business alignment
Copyright 2014 Thavron Solutions, LLC
Credentials
• Me: Nan Braun• CEO Thavron Solutions• nbraun@thavronsolutions.com/ @thavronsol / http://thavron.com/blog• Corporate IT – many roles- “hands” on to BRM to architecture• CTO, ontological modeling • Director, TBM Practice
• You?
Copyright 2014 Thavron Solutions, LLC
Catalog & Asset
Management
Service Costing &
Billing
Product & Project
Management
Supplier / Vendor
Management
Service Portfolio
A Framework for Business Service Success
Copyright 2014 Thavron Solutions, LLC
Financial LifecycleProduct Lifecycle
TM
Catalog & Asset
Management
Supplier / Vendor
Management
IT Service Management
Copyright 2014 Thavron Solutions, LLC
IT Component CatalogIncident management
IT Service CatalogIncident Prevention
Business Service CatalogCustomer Experience Management
IT as a Service Provider
Copyright 2014 Thavron Solutions, LLC
IT as a Service Provider
Copyright 2014 Thavron Solutions, LLC
IT as a Service Provider
Copyright 2014 Thavron Solutions, LLC
The Customer Experience : Then
Copyright 2014 Thavron Solutions, LLC
IT ? Here there be Dragons…
Copyright 2014 Thavron Solutions, LLC
The Customer Experience : Now
Copyright 2014 Thavron Solutions, LLC
What does this mean for customer experience?
Copyright 2014 Thavron Solutions, LLC
Service Costing mistakes that break the customer experience:
• Billing Consumers on actual costs when cost drivers are not scale-able
• Service units that are difficult to manage• IT Component Services vs. Business Services• Services with bad proxy allocations to the business• Pass Thru SLAs
Copyright 2014 Thavron Solutions, LLC
COST MODEL DEPENDENCIES THAT DO NOT SCALE
Copyright 2014 Thavron Solutions, LLC
Here is what the customer is expecting….
Copyright 2014 Thavron Solutions, LLC
$750/month
Here is what the customer is expecting….
Copyright 2014 Thavron Solutions, LLC
$600/month
So when this happens…...
Copyright 2014 Thavron Solutions, LLC
$750/month
And then this happens.….
Copyright 2014 Thavron Solutions, LLC
$650/month
This should not be a surprise.
Copyright 2014 Thavron Solutions, LLC
How can this happen?
Copyright 2014 Thavron Solutions, LLC
$650/month
$600/month
VS.
PC Service Cost Modeling
Copyright 2014 Thavron Solutions, LLC
GL Account 6879099
GL Account 6879123
GL Account 6879224
Service Desk
OnSite Support
PCs
PCXX23PCXX34PCXX45PCXX56PCXX67
PC Service Cost Modeling
Copyright 2014 Thavron Solutions, LLC
GL Account 6879099
GL Account 6879123
GL Account 6879224
Service Desk
OnSite Support
PCs
PCXX23PCXX34PCXX45PCXX56PCXX67
1: 1 per PC
PC Service Cost Modeling
Copyright 2014 Thavron Solutions, LLC
GL Account 6879099
GL Account 6879123
GL Account 6879224
Service Desk
OnSite Support
PCs
PCXX23PCXX34PCXX45PCXX56PCXX67
1: every up to 10 PCs
PC Service Cost Modeling
Copyright 2014 Thavron Solutions, LLC
GL Account 6879099
GL Account 6879123
GL Account 6879224
Service Desk
OnSite Support
PCs
PCXX23PCXX34PCXX45PCXX56PCXX67
Tickets of type “PC” spread evenly
Or This Can happen……
Copyright 2014 Thavron Solutions, LLC
Joe’s Windows Server : $400/month
Sue’s Windows Server : $400/month
Pat’s Windows Server : $400/month
Or This Can happen……
Copyright 2014 Thavron Solutions, LLC
Joe’s Windows Server : $600/month
Pat’s Windows Server : $600/month
TCO Service Costing:
Copyright 2014 Thavron Solutions, LLC
GL Account 68790992
GL Account 68791234
GL Account 68792244
DataCenter
Storage
Server hardware
SoftwareGL Account 68792254
Physical Server TCO
Virtual Server:
AAJoe123AASue225AAPat334$1200
$400/each
TCO Service Costing:
Copyright 2014 Thavron Solutions, LLC
GL Account 68790992
GL Account 68791234
GL Account 68792244
DataCenter
Storage
Server hardware
SoftwareGL Account 68792254
Physical Server TCO
Virtual Server:
AAJoe123
AAPat334$1200
$600/each
Exposing Actual Costs to Consumers is Dangerous
• Not all Cost components are on a 1:1 ratio• Unit rates are the most important number for a consumer• If you are doing showback or chargeback, calculate the
Consumer cost based on a fixed unit rate- not on actual costs. • Variance is for INTERNAL IT “run the business” decisions- not
for exposure to the external consumer.
Copyright 2014 Thavron Solutions, LLC
SERVICE UNITS THAT ARE DIFFICULT TO MANAGE
Copyright 2014 Thavron Solutions, LLC
Imagine if this happened……
Copyright 2014 Thavron Solutions, LLC
You can’t beat the price. It is only $1503 /
Horsepower per minute
Please stop reporting/charging in units customer do not control…..
• Gigacycles• LPARs• PC CPUs• Compute cycles• luns• Etc…• Gb transmitted
Copyright 2014 Thavron Solutions, LLC
How to deal with awkward consumption data:
• Unit conversion table in the model• Ignore the consumption data• Restructure the Service
Copyright 2014 Thavron Solutions, LLC
IT COMPONENT SERVICES VS BUSINESS SERVICES
Copyright 2014 Thavron Solutions, LLC
Non-TCO Service Costing:
Copyright 2014 Thavron Solutions, LLC
GL Account 68790992
GL Account 68791234
GL Account 68792244
DataCenter
Storage
Servers
DatabaseGL Account 68792254
DataCenter
Storage
Servers
Database
TCO Service Costing:
Copyright 2014 Thavron Solutions, LLC
GL Account 68790992
GL Account 68791234
GL Account 68792244
DataCenter
Storage
Servers
DatabaseGL Account 68792254
SAP
TimeEntry
Sharepoint
Servers
Applications
SERVICES WITH BAD PROXY ALLOCATIONS
Copyright 2014 Thavron Solutions, LLC
Not what you expect when shopping…
Copyright 2014 Thavron Solutions, LLC
Shoe sale today: $5/Finger
If you have to use a Proxy for consumption:
• Make it related….• At least make it scale in the same ratio as expected
consumption…
Copyright 2014 Thavron Solutions, LLC
PASS THRU SLAS
Copyright 2014 Thavron Solutions, LLC
Subcontracting
• Not all IT Services are going to be provided by your in-house team
• There are a lot of times that it makes sense to buy, not build
Copyright 2014 Thavron Solutions, LLC
Typical SLA scenario
Copyright 2014 Thavron Solutions, LLC
Outsourced Service Provider
We can deploy new
Virtual Servers in 6
hours
What goes into the Service Catalog?
Virtual Servers: “We can deploy new Virtual Servers in 6 hours”
What it actually takes to deploy a Virtual Server
Copyright 2014 Thavron Solutions, LLC
Business Request
Form
Request Received by BRM, vetted
Request Review by Architecture
Good ?No
Request put in Queue in Ops Team
OutSourced Service Provider Process
Virtual Server
Deployed6 hrs later
Yes
Bringing Business to the Center
• To align and enable the business, IT must bring the business back to the center of what they do.
• Put yourself in your customer’s shoes before releasing Service Definitions and costing to them
• Business Value = Bottom line – Business Value= Order to Cash experience + Usage Value
Copyright 2014 Thavron Solutions, LLC
Discussion
Copyright 2014 Thavron Solutions, LLC
Follow up questions? Nan Braun
nbraun@thavronsolutions.com 765.252.4509 / http://thavron.com /@ThavronSol
Catalog & Asset
Management
Service Costing &
Billing
Product & Project
Management
Supplier / Vendor
Management
Service Portfolio
Leverage ITFM info: build your platform for Success
Copyright 2014 Thavron Solutions, LLC
Financial LifecycleProduct Lifecycle
TM
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