Economic realities are driving organizations to consider new options for service delivery that can help them operate cost-effectively while still driving service excellence. As they seek greater efficiencies, it no longer makes sense to have multiple layers of the same functionalities and silos that make it harder and harder to gain support. Service management is playing an increasingly important role in enterprise operational excellence, and in this article we will look at this trend from two angles: service providers leveraging ITSM by working with IT to provide improved cross-functional support, and service providers consolidating into shared service centers (SSCs).
A New Paradigm for Service
When an organization grows large enough that the personal touch is no longer possible, service organizations tend to spring up organically; before you know it, HR, benefits, payroll, finance, facilities management, security and IT are operating in silos. In many of these organizations, there are often multiple provider groups operating at the same time (like IT in each line of business, for example). The result is added cost and inefficiencies.
A majority of Fortune 500 companies address this by operating an SSC across multiple functions. The SSC concept has grown from centers that focus on consolidating one function across an organization as a cost-reduction program to offering a single, highly evolved cross-functional center of excellence that provides operational and strategic support for organizational outcomes (based on a cost per call of $25 and a five-day support week). In addition to the efficiencies and increased customer satisfaction this approach creates, consolidation gives organizations the ability to reduce costs by 15–30 percent.
To achieve the level of excellence the cross-functional SSC requires, organizations have found that they must focus on process and organize their service providers to work effectively across silos. K.P. Santosh, VP of Genpact Europe, states that a mature SSC that supports the strategic outcomes of the business combines end-to-end processes, focuses on business outcomes, and establishes a cross-functional scope and a global charter to deliver services successfully. This isn’t very different from ITSM, if you take out the “IT” and replace it with “enterprise.”
Genpact’s road map for SSC maturity looks very much like an ITIL implementation road map. In fact, ITSM best practices are uniquely suited to supporting the development of an effective SSC, providing processes that are useful to any service provider in the delivery of day-to-day support. To see this in action, let’s look at three brief case studies.
Case Study #1: Enterprise Service Portal and Shared Service Center
An automotive company’s IT department adopted ITIL to help stabilize operations and align with the business. Its IT department’s growth as a strategic partner led to a project that transformed the organization: a single web portal offering a virtual desktop that consolidated all services onto a single device. With a single toolset in use across the enterprise, they were later able to centralize all back-office services (accounting, contracting, and financial services) into a single SSC supporting close to 400 dealership franchises, consolidating both staff and tools in the process.
Later, when the organization found that the SSC couldn’t manage its workload because of frequent dealership calls to specialists, it turned to the IT organization for help. A local service desk was created to support the SSC. This service desk used all the same processes and tools as the IT service desk, and it partnered with the IT service desk, desktop support, application, and security administration teams, utilizing the same toolset and passing calls to one another as needed, forming a virtual enterprise support desk and using ITSM best practices.
Case Study #2: University Shared Service Center
A university established a SSC for standard business support functions and the IT service desk (pending an IT consolidation). It automated request fulfillment via an IT service catalog, even though IT was not its primary role, and successfully applied ITSM processes in a non-IT implementation. This approach enabled the organization to use consolidated processes and tools for any/all service providers within the enterprise, and the success of this effort led to the creation of SSCs throughout the state-wide university system.
Case Study #3: The Enterprise Request Catalog
Similar to the second case study, this health insurance company standardized request fulfillment and tools across several internal service providers. Now, all onboarding, moves, and other cross-functional requests are managed through this portal, alongside standard IT service requests. The organization is also considering adding non-IT service requests for the other providers.
An enterprise-wide service catalog can be an effective tool for innovatively and consistently delivering services beyond IT. In fact, with all of the providers using similar processes and honoring the same set of service level agreements (SLAs), it can also be a great first step towards implementing enterprise service management (ESM), which doesn’t have to be limited to SSC implementations.
Getting Started with Enterprise Service Management
The benefits of consolidating processes or moving to an SSC should be immediately apparent to anyone who’s brought a new employee on board. Consider what this takes in many organizations:
- Fill out new-hire paperwork and process through management to HR
- Contact payroll to have direct deposit set up
- Call facilities and arrange desk space
- Call the help desk for phones and computers
- Contact the security desk to arrange an appointment for their photo ID
- Order supplies and business cards
- Set up their new-hire orientation with HR
- Escalate all of these tasks and track them to make sure they’re completed
It’s easy to see how the user experience could be greatly improved if they could either submit a single request that all providers could respond to, or if they could submit a request to an SSC that could take responsibility for delivering all of the services involved.
Service desk tool consolidation and service catalogs are effective means of beginning an ESM or SSC project. In fact, even without an overarching ESM or SSC initiative, IT can work with other service providers in the organization to consolidate tools and implement a self-service support portal. Tool consolidation alone will often result in lowered licensing costs and IT operation costs. And once the providers have been consolidated into a single tool, a single enterprise service catalog can create both cost savings and an opportunity to drive customer satisfaction and achieve service excellence by providing all associates, across the organization, with a single portal for all requests and supporting cross-functional needs, like onboarding and moves.
In a similar way, IT can work with the other service providers to build a virtual enterprise service desk simply by consolidating providers onto a single phone number, utilizing an ACD to give the appearance of a single support center while routing calls to individual departments or functions within the organization.
These two initiatives—tool consolidation and the service catalog—can be started with local executive support from IT and associated service providers within the organization; the actual consolidation into an SSC, managed by a single enterprise service desk, is a bit more complex. Not only does the enterprise service desk need to manage a variety of call types, it needs to do so without losing the benefit specialization provides to customers. Therefore, before consolidating service providers into an SSC, it’s critical that the organization has an overarching service framework to ensure there are processes in place to manage the transition to and operation of the resulting SSC. This is where dropping the “IT” from ITSM and repurposing service management frameworks like ITIL can help organizations expand beyond the traditional boundaries of support.
To be successful, there are two areas in which balance must be achieved: cost vs. quality and control vs. consolidation.
Cost vs. Quality
Many organizations are looking to cut costs when they consolidate service providers, but care needs to be taken to ensure that staff isn’t cut so low that the enterprise service desk is unable to provide the support required. There’s a vast difference between an HR call and an IT call, so a balance must be struck between having subject matter experts available and forcing change with no resulting savings.
One way to reduce costs while increasing quality is to utilize technology appropriately. Skills-based routing can be used to direct incident-related calls to specialists, while general requests can be managed by any available associate. Knowledge bases can also provide the staff with the ability to manage commonly received calls for any of the departments, passing more complex issues to subject matter experts.
Control vs. Consolidation
As the consolidation is being performed, the question of governance and controls will arise. It’s important to realize that some of the departments whose support is moving to the enterprise service desk will have legislative or corporate controls that must be considered; therefore, the visibility of certain issues and the retention of required controls must be taken into consideration. Getting the governance organization involved in the earliest planning activities is critical to the initiative’s overall success.
Organizing for Enterprise Service Management
As should now be clear, there are many approaches to ESM. If you’re asking yourself how your organization can get there, this section will lay out a road map to help you structure your organization to work toward that goal.
Establish the Strategy, Mission, and Vision
Creating a strategy, mission, and vision for your enterprise service management initiative will ensure it has a place in the organization’s overall strategic initiative, and it will help build alignment and credibility for the ESM initiative at all levels. When starting, it’s important to consider all of the activities you would commonly perform before any ITSM implementation, such as identifying the various roles that will be involved and creating an enterprise-level RACI (responsible, accountable, consulted, and informed) matrix to ensure that everyone understands their roles and the interaction between roles within the initiative. It’s also important to have a team comprised of stakeholders from all areas of the enterprise, something that may be new in some organizations, more common in others. A solid direction and documented roles and responsibilities will lay the groundwork for organizational change, even if this change is gradual.
Some organizations will be accustomed to working collaboratively, but for many this approach will be new. It’s important to identify good facilitators who can guide discussions until teams become familiar with working in this way. All viewpoints must be considered when structuring the initiative, so the end result is effective for all, not just IT.
Establish the Necessary Roles and Governance
ITIL recommends organizations create or designate specific roles to help realize the overall vision, but keep in mind that the roles you establish don’t have to be limited to ITIL. Here are some roles that you might find it helpful to have as you begin planning. Remember, these don’t need to be full-time positions; they can be part of an existing team member’s role.
Service Management Office
In ITIL 2011, the service management office (SMO) is a focal point for ITSM initiatives, and it becomes even more critical when consolidating multiple service providers in an organization. As the focal point, this team can keep cross-functional executives focused on the ways in which the consolidation initiative will help achieve the organization’s strategic goals. It can also provide a focal point for implementing ITSM best practices in all provider organizations, leveraging IT’s experience with ITSM to help train others and expand process adoption across the enterprise.
Executive Steering Committee
IT can’t make the changes described in this article without engaging executives from the organization. A steering committee comprised of executives from IT and other service providers will be able to provide ongoing direction to the SSC and review/charter projects for building new services or making changes to existing services. This group will also accountable for overall service portfolio management, which involves determining where investments will be made across the organization, including investments in the IT services needed to support the initiative.
Program Management Office
This role, common to many organizations with strong project management disciplines, can be essential. While it’s important to maintain the SMO to further service management efforts, it’s also important to have the project management office (PMO), which can focus on program and project delivery (ensuring that all service providers work together to achieve a common goal). It’s critical that these two teams—SMO and PMO—work closely together.
Governance
These roles will need to have a certain degree of authority in order to succeed, and this authority will derive from the organization’s policies and procedures related to governance. As departments are consolidated into an SSC, governmental and corporate compliance must be ensured. It’s therefore important that the organization formalize a governance structure to support the initiative.
As these policies and procedures are established, it’s imperative that you gain buy-in from all areas of the enterprise and ensure that training is provided so that people understand the new model and are able to follow established procedures. It’s also important to make sure that governance doesn’t become bureaucracy and impede progress. The framework you establish must promote agility and ensure quick engagement for urgent projects that must delivered on a tight deadline. In other words, don’t allow the process to become the problem!
The role and governance planning effort should include the following activities:
- Document accountability. As mentioned before, creating a RACI matrix that establishes each role’s accountability is critical for the program’s long-term success.
- Document the controls that govern specific activities and their impact on the consolidated organization.
- Document special security requirements that need to be implemented in the management tool to ensure that only authorized personnel are able to see data that is subject to these controls (e.g., HIPAA , the requirements for which may affect the procedures for handling benefit calls and requests). At the same time, provide training to reduce the need for certain controls (e.g., training all staff members to handle HIPAA-sensitive calls and requests).
Create or Align Processes to This Model
Once the structure has been created, the heavy lifting can begin. ESM initiatives require a certain level of maturity. Typically, to be ready for this step, IT should have already implemented the operational processes found in ITIL (or other complimentary frameworks) and be working towards implementation of the entire lifecycle. IT needs to reach this level of maturity before seeking buy-in and commitment for the ESM initiative among the organization’s executive staff. If the organization wants to consolidate before IT is mature enough to support the needs of the initiative, organizations can to external consulting organizations to provide that expertise.
This is a good time to perform a maturity assessment and start using ITIL’s seven-step improvement model as a guide to get the organization as a whole to the next level. Once the assessment is complete, the SMO can create the improvement project plan and make the necessary process improvements. Remember, many of these processes were created in for IT, and you’ll need to adjust them to work for other service providers in the organization.
Assess Your Tools
At some point, the tools used to manage an ITIL or ITSM implementation will need to be expanded for use in new areas and by other service providers. This process may require additional configuration or, in some cases, complete replacement (when the tools cannot serve the enterprise).
As part of the ESM initiative, the organization can implement a single service catalog that serves the entire enterprise, simplifying the request processes. This approach will also enable the organization to streamline fulfillment across the enterprise and provide a consistent service experience. The tools consolidation can also provide effective management reporting for all internal service providers (a single tool instead of multiple tools, depending on the service provider).
Create and Manage the Pipeline
At this point, with a formal organizational structure, processes, and catalogs in place, the organization should have everything it needs to execute the ITIL lifecycle, from strategy to continual service improvement, as the SSC is built and optimized. Throughout this process, implementation and improvement projects will need to be evaluated and prioritized to ensure that all of the independent functions continue to support the need of the organization as its industry matures. Thus, in addition to managing organizational change across the enterprise, the organization needs to be able to manage an enterprise service portfolio pipeline.
Initiating Change and Moving Forward
Many of us have used ITSM to break down the functional silos in IT, only to find that the organization is nothing more than a large collection of silos across the enterprise. Bringing service management to the enterprise can go a long way toward breaking down these silos and enabling service providers to align and integrate their services, delivering a far better result to the organization. Where executives look to the SSC for cost savings and operational efficiencies, the providers themselves have an excellent opportunity to break down the walls and begin operating as a team, without any organizational change.
IT can easily kick-start this process by implementing an enterprise service catalog. Even if the initial entries are joint requests like onboarding and moves, and even if projects must be undertaken to integrate non-IT applications, it’s worth the effort to begin consolidating support. The rest will come over time. IT can be the change initiator that moves the organization forward.
Phyllis Drucker is an ITIL-certified consultant and informational leader at Linium. She has more than twenty years of experience in the disciplines and frameworks of IT service management, as both a practitioner and consultant. She has been a member of itSMF USA since 2004, serving in a variety of capacities, including volunteer, board member, and operations director. Since 1997, Phyllis has helped to advance the profession of ITSM leaders and practitioners worldwide by providing her experience and insight on a wide variety of ITSM topics through presentations, white papers, and articles.