IT organizations have found much success implementing project and portfolio management (PPM) processes to better...
By submitting your email address, you agree to receive emails regarding relevant topic offers from TechTarget and its partners. You can withdraw your consent at any time. Contact TechTarget at 275 Grove Street, Newton, MA.
align IT projects with business goals. Now, more mature organizations are adopting service portfolio management (SPM) practices to help IT provide more transparency and a better focus on the services that deliver the most value to the business.
Service portfolio management, part of version 3 of the IT Infrastructure Library, helps achieive ITIL's mission of managing the entire service lifecycle, from request to retirement. As outlined in ITIL v3, the SPM approach allows IT to focus on being a service provider to the business, offering and managing a comprehensive set of IT services.
Here is an introduction to service portfolio management -- what it is, when companies typically begin to use it, and how it interrelates with PPM:
What is service portfolio management?
SPM is one of the 14 processes within the service lifecycle approach of ITIL v3. It's defined as "the process responsible for managing the service portfolio. Service portfolio management considers services in terms of the business value that they provide."
Organizations that use service portfolio management are looking for ways to add value to the business and meet customer needs through various technology services. In turn, many IT shops that use SPM find themselves pondering a number of business-based questions they didn't ask before, such as who is the customer, why should they buy this service from us, and what are our strengths and weaknesses?
A service portfolio includes three categories of services based on the service lifecycle:
- The service pipeline: For services in the planning or development phase.
- The service catalog: Includes services that are currently deployed or ready for deployment.
- Retired services: Those that are no longer active.
When do companies typically employ SPM?
Most companies that use ITIL rarely implement the service portfolio management process first. Processes like change, problem and incident management are usually implemented first because they are quicker to set up and easier to achieve quick wins. SPM is a harder sell because it requires a greater investment in tools and resources and works best with a more mature ITIL culture
A company with a mature ITIL culture is usually one that "has adopted the concept of managing against IT services using common (across both internal and external IT groups) management processes and practices," said Troy DuMoulin, assistant vice president of product strategy at Pink Elephant, an ITIL consultancy. "It is also defined as an organization that has moved beyond the reactive operations and transition processes and begun to improve the proactive processes of service transition, design and strategy."
Companies that have a good understanding of how technology can improve business processes have more success with SPM. According to DuMoulin, financial, medical and manufacturing companies have found the most success to date in using SPM.
The importance of a service catalog
A typical service catalog includes relevant information about the various services that IT offers, including related service-level agreements (SLAs), who can make the request, how much it will cost and how long it will take to deliver. For example, a business department could request data center hosting for a new application at a price of $500 per month and expect it to be online within four weeks. A service catalog standardizes both the ordering and fulfillment process for an IT service so business users don't waste time figuring out how to get something, and IT is more productive and doesn't waste time or money by being inefficient or duplicating resources.
"Through the service catalog, there can now be a meaningful dialogue between IT and the business, what services they offer and service levels required," said Craig Symons, a vice president at Forrester Research Inc. "This also results in a more efficient and effective IT organization."
Once an organization has a service catalog, it can then begin managing its services as a portfolio. The service catalog is only one element of SPM. "The actual process of SPM is to ensure that the services can [be] and are delivered, meet the service-level criteria (SLAs), are provided in a cost-competitive way, and meet the needs of the organization," said Symons.
SPM vs. PPM
In today's economy, most organizations are doing some form of project and portfolio management. But experts agree that PPM is most effective in organizations that also follow SPM practices.
When companies use PPM without SPM, "the projects run and are delivered into an environment that's chaotic and less mature," said DuMoulin. "PPM is an output or child of SPM."
Some consider PPM the execution arm for SPM. IT uses PPM to select and implement IT projects, but not to manage them once they are delivered. Service portfolio management is an ongoing process and focuses on the entire lifecycle of a service, with an emphasis on continual service improvement.
Barclays Global Investors uses both PPM and SPM. Its project management office uses PPM and the IT group manages SPM, according to Nilesh Patel, director of infrastructure service management, enterprise technology services. Using SPM, "IT's view is really about transparency and what is coming down the pipeline into IT," said Patel. "PPM is used for project prioritization and to start and stop projects. And the goal of SPM is to work with the business to see what's coming."
For Patel, the difference between PPM and SPM is the business focus. "SPM is about working with the business," he said. "PPM could be focused on a bunch of IT projects -- but not necessarily business projects."
Tools to manage your service portfolio
One reason that SPM hasn't been more widely adopted is its expense. "There's a huge investment to be made here -- specifically, in tools for metrics," said DuMoulin.
Through the service catalog, there can now be a meaningful dialogue between IT and the business, what services they offer and service levels required.
Craig Symons, vice president, Forrester Research Inc.
To succeed with SPM, companies need to get better at measuring the performance of current services. IT organizations need tools that will provide accurate information about the availability, risks and security issues surrounding all of the services they offer.
In addition to tools for metrics, there are monitoring tools, aggregation tools and multi-domain tools. Single-domain/platform tools are used to monitor servers, networks, mainframes, databases, etc. Aggregation tools help aggregate the data from single-domain type of tools into a common system or business-service view. Multi-domain and multi-platform-monitoring tools are used to map relationships, pull in external data sources and provide a common systems/business view for users.
Some vendors offering these types of business services management or integrated IT management tools include Cognos, Mercury and Tivoli.
Some organizations, including Barclays Global Investors, use specific tools to manage the workflow around their service catalogs. Patel's IT organization uses newScale Inc.'s PortfolioCenter as well as its other service catalog solutions. "We currently use newScale to make the defined services actionable," said Patel.
"We define the services, who are the owners, costs associated and put them [the services] in our service catalog. NewScale's product handles the workflow to make sure the recipient receives their service -- whether it's application hosting, storage or ordering a laptop." Other providers of service catalog tools include Digital Fuel Technologies Inc. and Apptio Inc.
But the tool question is secondary to the process and culture changes, according to David Moskowitz, an ITIL and ITSM consultant and trainer. "The goal of SPM is to morph the organization from IT centric to business centric," he said.
Let us know what you think about the story; email firstname.lastname@example.org.