Published:
July 26 2010, 03:06 PM
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by
Robert Stroud
This article appeared in the July 2010 issue of ServiceTalk the Journal, which is published quarterly on the web and in print as a member benefit for itSMF UK members. This is one of my regular quarterly articles for the Journal. If you would like to obtain a copy of the journal please contact servicetalkeditor@itsmf.co.uk.
Service value chains: bringing governance to cloud computing
Many IT professionals claim that cloud computing - the provision of networked IT services and applications on an on-demand basis - is simply the latest focus of IT hype, existing more in the minds of industry flaks than in the average IT department. Well, is this the case or not?
I am often asked this question, and the reality is that the move towards cloud computing - in varying degrees - is happening right before your very eyes! I was speaking to the CIO of a large global financial organisation recently and he told me that he believes cloud computing is extremely real, the next evolutionary stage in information technology. But whether or not you share this enthusiastic view, you can't ignore the cloud. It is being discussed at almost every meeting I attend now, whether with IT specialists or with business representatives. So why is cloud being considered for delivery of IT services? Does it come down to speed, cost or simply easier access to business services? How does it change our perception of IT service delivery, and how does it impact us in our role as service managers?
Cloud computing presents us with a new paradigm for offering and managing IT services that are delivered through shared and often virtualized infrastructure. It allows the enterprise to leverage centralized and distributed IT systems and applications in a consistent way, and through a variety of service providers, to deliver high quality, high value IT services while lowering overall costs and increasing productivity. This in turn enables the business to better focus on core competencies.
In order to understand the impact on IT service managers, first let me clear the fog surrounding cloud terminology:
- o Public cloud External vendor or cloud supplier hosts and manages the dynamic provisioning of the IT infrastructure to support a variety of consumers' needs
- o Private cloud Internal IT configuration that enables organisations to deliver services to their users
- o Hybrid cloud A combination of public and/or private clouds used by a single organization
- o Community cloud The up-and-coming cloud environment that is dedicated to supporting a specific group or industry vertical.
Cloud computing, even with its significant benefits, may introduce new challenges without sound management and governance, and this is where best practices are critical. To correctly manage cloud-connected services, IT must focus on the quality of the service being delivered, the security of the transactions, the privacy of the information being handled, and the agreed basis for calculating cost. This is where service management plays a critical role.
Imagine that you are part of the Service Desk for a large financial organisation and you take a call complaining that the mortgage application is not processing applications online. The mortgage application is a hybrid service consisting of multiple internal components, and the approval process is dependent on the outsourced credit check with a third-party service in the cloud. The service level agreement calls for all applications to be processed within two minutes, which allows for the credit check result to be returned and an analysis to be performed on the internal customer information records. Furthermore, there may be an agreement in place as part of the service level to have additional capacity available at a third party which kicks in when certain thresholds are exceeded.
This all becomes part of the service value chain. The service value chain might have many key stakeholders including the internal IT department, end users and the business application owners, along with external service providers - all of whom have a stake in the right quality of service being delivered at the right price at the right time. Ultimately business is about serving customers, so service value chain management must not only manage and optimise the customers' experience but also ensure maximum business value. The enterprise cannot afford to have customers abandoning their mortgage applications because IT could not get credit checks processed.
In delivering services to end customers, IT managers must remain focused on maximising the service consumption experience and meeting expected service levels in terms of quality, performance and availability. In this new paradigm, the view is total alignment from the first link of the chain to the last, with every link contributing value-driven capabilities. The meeting of these expectations requires that we leverage our investment in best practices, especially in processes such Supplier Management, Service Level Management, Availability and Financial Management.
Cloud computing does represent a significant shift in how services are sourced and delivered. Cloud enables collaborative relationships with service providers who deliver capabilities and resources through the evolving service supply chain. IT organisations that do not have a clear service management strategy will NOT be in a position to exploit cloud technology effectively. The secret in delivering services within a cloud environment is ‘develop your processes first, then move on to the cloud'. That said, don't wait long or your IT world will already be cloudy and you could be running for an umbrella!