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Home > CIO News > Service portfolio management: Helping IT get back to business |
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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:
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, associate 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 seem to be the early adopters 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 team facing with the business manages SPM, according to Nilesh Patel, director of infrastructure service management . 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 track project lifecycle. And the goal of SPM is to work with the business to see what's coming and helping the business understand the value of services IT provides." 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.
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 use specific tools to manage the workflow around their service catalogs. Patel's IT organization uses newScale's Service Catalog solution. "We are moving our services to newScale to make the defined services actionable and allows us to enforce process," said Patel. "We define the services, who are the owners, price associated and put them [the services] in our service catalog. NewScale's product handles the workflow to make sure the recipient receives their service – for example whether it's employee relocation like Move, Add Change (MAC) process." Other providers of service catalog tools include Hewlett Packard, Digital Fuel, Service-Now 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 Karen Guglielmo, Executive Editor, or follow her on Twitter @kgugl.
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