What happens when your budget remains flat, your requisitions are frozen, but your workload continues to rise? This is the scenario many IT organizations face as they march into the financial uncertainty of 2009. As you approach this situation there are two choices:

• Continue along with business as usual, facing the realization that, despite your best efforts, you are not going to be able accomplish everything you need to.
• Work on efficiency: Prioritize work efforts; clearly define services and service level commitments; and streamline processes. 

I would not be surprised if there is some skepticism associated with the second point. If you’re IT organization is very mature, chances are you are already operating at a high level of efficiency. But if you are like many IT organizations that struggle with constant demands and everyday firefighting,  there can be significant, measurable gains by examining and refining your overall approach to delivering services.

For organizations immature in ITIL and IT service management (ITSM) disciplines, the opportunity for improvement in efficiency and cost reduction can be significant. Gartner’s analysis of two large organizations showed the implementation of process improvement and good practices as I described below led to a six to eight percent reduction in operating cost. There was also an associated reduction or redeployment of operating staff between 15% and 20% with consistent or higher levels of service.

Prioritized Work Efforts

Active management of your portfolio of services and the related portfolio of projects can help to assure that you have:

• Aligned your services and work efforts with the business.
• Appropriately categorized the high level business objective for transformation, growth and sustaining initiatives.
• Understand the projected cost of both service delivery and project delivery.
• Identified the risks and benefits of new or sustaining initiatives. 

Armed with this information, you have a mechanism for prioritizing services and projects. With this level of service and project intelligence and transparency, it is easier to make agile, objective, informed, and necessary adjustments to workload. Saving time in decision making for IT strategy groups can save money. More importantly, the cost savings associated with avoiding poorly informed decisions can be significant.

Clearly Defined Services and SLAs

In order to prioritize your services and actively manage your service portfolio, you must have well-articulated service definitions that are understandable to, and agreed upon by, the business. Accompanying this must be clearly defined service levels.

Understanding services and service levels can:

• Assist in understanding the cost of service delivery, e.g., higher service levels will always mean higher cost.
• Provide a mechanism for discussing realistic, required service levels with the business so they can be adjusted for ROI or business value. 

Often organizations that operate without formal service level commitments or even a fundamental knowledge of service level requirements provide levels of service that are misaligned with customer needs. Providing levels of service below what customers require results in customer dissatisfaction. Providing higher levels of service than what customers require can result in overspending due to over-provisioning of resources, technology or external services. This is a more subtle, but no less significant issue when you are trying to control spending.

Knowing what is really required, agreeing and committing to service levels and designing and maintaining services appropriately can assure both customer satisfaction and spending aligned with business needs. Of course, maintaining these services to the appropriate levels of availability, capacity and overall support requires active control service management processes.

What happens when your budget remains flat, your requisitions are frozen, but your workload continues to rise? This is the scenario many IT organizations face as they march into the financial uncertainty of 2009. As you approach this situation there are two choices:

• Continue along with business as usual, facing the realization that, despite your best efforts, you are not going to be able accomplish everything you need to.
• Work on efficiency: Prioritize work efforts; clearly define services and service level commitments; and streamline processes. 

I would not be surprised if there is some skepticism associated with the second point. If you’re IT organization is very mature, chances are you are already operating at a high level of efficiency. But if you are like many IT organizations that struggle with constant demands and everyday firefighting,  there can be significant, measurable gains by examining and refining your overall approach to delivering services.

For organizations immature in ITIL and IT service management (ITSM) disciplines, the opportunity for improvement in efficiency and cost reduction can be significant. Gartner’s analysis of two large organizations showed the implementation of process improvement and good practices as I described below led to a six to eight percent reduction in operating cost. There was also an associated reduction or redeployment of operating staff between 15% and 20% with consistent or higher levels of service.

Prioritized Work Efforts

Active management of your portfolio of services and the related portfolio of projects can help to assure that you have:

• Aligned your services and work efforts with the business.
• Appropriately categorized the high level business objective for transformation, growth and sustaining initiatives.
• Understand the projected cost of both service delivery and project delivery.
• Identified the risks and benefits of new or sustaining initiatives. 

Armed with this information, you have a mechanism for prioritizing services and projects. With this level of service and project intelligence and transparency, it is easier to make agile, objective, informed, and necessary adjustments to workload. Saving time in decision making for IT strategy groups can save money. More importantly, the cost savings associated with avoiding poorly informed decisions can be significant.

Clearly Defined Services and SLAs

In order to prioritize your services and actively manage your service portfolio, you must have well-articulated service definitions that are understandable to, and agreed upon by, the business. Accompanying this must be clearly defined service levels.

Understanding services and service levels can:

• Assist in understanding the cost of service delivery, e.g., higher service levels will always mean higher cost.
• Provide a mechanism for discussing realistic, required service levels with the business so they can be adjusted for ROI or business value. 

Often organizations that operate without formal service level commitments or even a fundamental knowledge of service level requirements provide levels of service that are misaligned with customer needs. Providing levels of service below what customers require results in customer dissatisfaction. Providing higher levels of service than what customers require can result in overspending due to over-provisioning of resources, technology or external services. This is a more subtle, but no less significant issue when you are trying to control spending.

Knowing what is really required, agreeing and committing to service levels and designing and maintaining services appropriately can assure both customer satisfaction and spending aligned with business needs. Of course, maintaining these services to the appropriate levels of availability, capacity and overall support requires active control service management processes.

What happens when your budget remains flat, your requisitions are frozen, but your workload continues to rise? This is the scenario many IT organizations face as they march into the financial uncertainty of 2009. As you approach this situation there are two choices:

• Continue along with business as usual, facing the realization that, despite your best efforts, you are not going to be able accomplish everything you need to.
• Work on efficiency: Prioritize work efforts; clearly define services and service level commitments; and streamline processes. 

I would not be surprised if there is some skepticism associated with the second point. If you’re IT organization is very mature, chances are you are already operating at a high level of efficiency. But if you are like many IT organizations that struggle with constant demands and everyday firefighting,  there can be significant, measurable gains by examining and refining your overall approach to delivering services.

For organizations immature in ITIL and IT service management (ITSM) disciplines, the opportunity for improvement in efficiency and cost reduction can be significant. Gartner’s analysis of two large organizations showed the implementation of process improvement and good practices as I described below led to a six to eight percent reduction in operating cost. There was also an associated reduction or redeployment of operating staff between 15% and 20% with consistent or higher levels of service.

Prioritized Work Efforts

Active management of your portfolio of services and the related portfolio of projects can help to assure that you have:

• Aligned your services and work efforts with the business.
• Appropriately categorized the high level business objective for transformation, growth and sustaining initiatives.
• Understand the projected cost of both service delivery and project delivery.
• Identified the risks and benefits of new or sustaining initiatives. 

Armed with this information, you have a mechanism for prioritizing services and projects. With this level of service and project intelligence and transparency, it is easier to make agile, objective, informed, and necessary adjustments to workload. Saving time in decision making for IT strategy groups can save money. More importantly, the cost savings associated with avoiding poorly informed decisions can be significant.

Clearly Defined Services and SLAs

In order to prioritize your services and actively manage your service portfolio, you must have well-articulated service definitions that are understandable to, and agreed upon by, the business. Accompanying this must be clearly defined service levels.

Understanding services and service levels can:

• Assist in understanding the cost of service delivery, e.g., higher service levels will always mean higher cost.
• Provide a mechanism for discussing realistic, required service levels with the business so they can be adjusted for ROI or business value. 

Often organizations that operate without formal service level commitments or even a fundamental knowledge of service level requirements provide levels of service that are misaligned with customer needs. Providing levels of service below what customers require results in customer dissatisfaction. Providing higher levels of service than what customers require can result in overspending due to over-provisioning of resources, technology or external services. This is a more subtle, but no less significant issue when you are trying to control spending.

Knowing what is really required, agreeing and committing to service levels and designing and maintaining services appropriately can assure both customer satisfaction and spending aligned with business needs. Of course, maintaining these services to the appropriate levels of availability, capacity and overall support requires active control service management processes.

Streamlined Processes

Consistent, repeatable, measurable service management processes can help you to save time and money. Examples of this include assuring services are designed out of the gate to meet the functionality and service level requirements of the business (and in such a way that they are easily monitored and manageable). This requires the inclusion of expertise from the availability, capacity, security and continuity management processes for both up-front design and ongoing proactive management. Good design processes minimize downtime when new services and changes to existing services become operational and provide trickle down benefits to the operational processes used to support the services on a day-to-day basis.

Maximize your contracts through active supplier management. This includes assuring that underpinning contract service levels are being met via visibility into third-party contracts across the IT organization. Consolidate to leverage the best vendor pricing where appropriate.

Reduce risk and costs of rework or downtime associated with failed changes, through well implemented change, asset, configuration and release, and deployment processes. Assuring that these processes are appropriately streamlined for both agility and compliance or risk reduction is key to maximizing the benefit, value and cost reduction.

Efficient and effective management of assets can help to assure that the technology refresh cycle is optimized for value and minimal total cost of ownership.

Well executed incident and problem management processes can also minimize the effect and cost of down time to the organization. Streamlined troubleshooting and service restoration coupled with root cause resolution of service disruption enable quick and permanent removal of issues maximizing staff productivity and minimizing revenue loss.

Of course, it is important to note that depending on your level of maturity, it will take some time and require some up front investment to achieve results. But the payback over time should be worth it. Even for mature IT organizations, continuous improvement around prioritized work efforts, clearly defined service levels, and streamlined IT processes will continue to refine efficiencies and improve cost-effectiveness.

Valerie Arraj is principal and managing partner for Compliance Process Partners, an IT compliance focused consulting and training company that uses service management and control objectives to help organizations lay the groundwork for compliance to regulatory and governance guidelines.