Timo Hyvönen
04.11.2013
Service
Management Office
and Operating Model in Multi
Sourced Environments
Timo Hyvönen
• Master of Sciences, Production technology, Helsinki University of Technology
• Sonera Business School MBA
• ITIL Service Manager & ITIL Expert, accredited ITIL trainer, DPSM(CM), COBIT, SPICE...
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1989 Helsinki University of Technology – you have played with these ”Computers”, would you come & build us a ”network?”
1994 Manusoft – manufacturing SW development & international sales management
1997 Sonera Telecom – new business development, technology development, hype
2001 Logisware – Forest industry global IT production ( IBM)
2004 Finland Post, IT strategy program director
2005 MATERNA, ITSM consultation, ITIL trainings
2008 itSMF Finland board member
2010 Tieto-Tapiola, technology and operations, service management
2012 3gamma Finland Managing director
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At 3gamma, we believe that great business deserves great IT
3gamma short facts
Gothenburg
Helsinki
Stockholm
Malmö
Manchester
New Jersey
Bangalore
 We are an independent consultancy firm specialising in IT management
 We offer practical, results-oriented advisory and consulting services based
significant IS/IT experience
 We can assist any organization through the entire IT sourcing life-cycle,
enhancing IT effectiveness and improving operational efficiency
 We are >100 consultants in Stockholm, Gothenburg, Malmo, Manchester,
Helsinki, New Jersey and Bangalore
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Service Management Office
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Background and reasoning
Definition
Service Management Office – Project Management Office
Tasks and responsibilities in Service Management Office
Key roles
Governance
• Cases
• SMO inside traditional IT provider – shared service unit in national corporation
• SMO in multi-sourcing - retained organization structure in global corporation
• Conclusion – how do you build it
• Existing it organization
• In outsourcing situation
• Operating model
• Summary
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Service Management Office background and reasoning
 Multi-sourcing is becoming the most common ICT service model
 Usually the road has gone either through big outsourcing trials or through organic
growth where internal resources have become insufficient in number or capability.
 Especially service design and transition in multi-sourced environment require strong
disciplines for decisions – who manages or delivers new application projects, how they
are brought to operations and how they are then operated.
 Even in fully outsourced operational environments accountability of services and
operations remain within enterprise, usually the CIO office.
 SMO is a good way to ensure that this accountability can be carried.
 This presentation is based on practical experiences that have led to definition of
Service Management Office, SMO.
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Service Management Office - definition
 Service management office is a group or function within business or IT that is
accountable for defining, maintaining and especially managing standards for
service management and service management processes in the organization.
 SMO is the escalation and management point of IT services in daily operations.
 SMO ensures that the governance, legal and financial interests of enterprise are
met in continuous operations.
 SMO ensures that services are defined, continuous service operation processes
work in practice and vendors are managed according to policies defined by the
corporate, e.g. SMO itself.
 There is always a role for SMO in IT service
organization but it is particularly relevant
when parts or all of IT delivery is outsourced
to one or, especially, several vendors.
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SMO and PMO in service lifecycle
Service Catalogue
Pipeline
New business
services
Continual
Service
Improvement
3rd party
services
Project
Management
Office
Service Management Office
Service
concepts
Service
design
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Retired
services
Service
Operations
Accountabilities of Service Management Office
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ITSM process execution on operational level
Owner of ITSM Processes and development, leads continual
improvement
Setting policies & guidelines (priority definitions, change policies…)
Assuring that Corporations ITSM processes are followed throughout
retained and external organization
Accountable for ITSM toolset (ensures smooth alignment/
integration towards suppliers ITSM tools)
Accountable for Service desk function
Leads Change Management, Release Management (Chairs CAB)
ACCOUNTABILITY
Key roles in Service Management Office
 Service desk owner
 Incident Manager
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 Ensure SD is aware of all services
Set policy for incident prioritization
Verify and manage Major incidents
 Problem Manager
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 Tool owner
 Own classification, categorization,
contents of the tool
Oversight and guidance in managing
and resolving problems.
 Change manager
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Write and manage change policy
Chair overall CAB
 Release Manager
• Service Continuity Management
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• Service Catalogue and Service Portfolios
Write and manage release policy
Coordinate release roll outs
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• Service design/transition Manager
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Ensure risk and cost is balanced and that
Service continuity plans are maintained and
Ensure that the right services design and transition
work/documentation is being developed (SDP)
Drive the Lifecycle management of services
Ensure that we invest in the right places at
the right times
Retire services where beneficial to Business.
SMO process governance
Strategic
Governance
Board
Process integration
Governance Board
Operational Governance
Board
x number of processes
Vice President level
Not for processes. Included in supplier governance board.
Strategic direction and issues
Business plans and budget
Client Director level.
Retain: Process owners.
Supplier: Representatives responsible for all processes from all suppliers
• Review process change proposals from Operational governance board.
• Process maturity rating,
• Review of Process KPI
• Escalated issues or questions regarding multiple processes
Process Lead level.
Retain: Process lead
Supplier: Process accountable or process team manager
• Review of process maturity and Process KPI.
• Review process improvements
• Process change proposal from Supplier
Pyramid of business relationships
External
Client director
Retained
BA owner
Business
Business department manager
Account manager
Portfolio manager
Business unit manager
Application delivery
manager
Demand manager
Business Demand Manager
Project manager
Operations manager
Process leads
Security manager(s)
Project Manager
Application Service Manager
SMO
Service management office
Security CoE
Business project manager
Product manager
Practical experiences
 Case: resourcing and structure in traditional IT organization
 Case: resourcing and structure in modern multi-sourcing
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Case: SMO resourcing and structure in traditional IT org.
 Shared service unit for mid size corporation
 Traditional ICT management model
 Application Development
 Application Management
 Operations Management
 400 people, 70 in operations
 Challenge: define services, implement processes
 Response: allocate service and process roles = SMO
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Case example: SMO organization in traditional IT company
Adequate authority or
sponsorship from
board level
Managing
Director
Admin
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Technology
Development
Architecture
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Application
Development
140
SMO lead
Application
Maintenance
Service
Operations
Servers – WAN –
MF - Middleware
ICT Technology
Operations
User
Services
Desktops,
Mobile, Printing
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Customer Service
Service Desk
Solution Support
Case example: SMO organization in traditional IT company
SMO lead
Application
Development
Application
maintenance
Release
Manager
ICT Technology
and operations
Catalogue
Manager
Problem
Manager
Technology
Development
Architecture
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Configuration
Manager
ITSM Tool
Management
Service
Operations
Servers – WAN –
MF - Middleware
User
Services
Desktops,
Mobile, Printing
Incident
Manager
Change
Manager
Customer Service
Service Desk
Solution Support
Role profiles, background
 Configuration manager
 SMO lead
 Server manager and expert
 Experienced people manager
 CMDB certified
 ITIL Expert with long ITSM experience
 ITIL Expert
 Incident manager
 Release manager
 Customer service expert
 Application project manager
 ITIL Foundation
 ITIL Expert
 Problem manager
 ITSM Tool management
 Middleware senior expert
 Operations manager
 ITIL Expert
 ITIL Expert
 Change manager
 Technical experts responsible for
 Mainframe application specialist
configuration (ITIL Foundation)
 ITIL Expert
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Senior, committed people with long ITSM experience
Will and ability to adapt ITIL in practice (ITIL Expertise)
Mostly part time roles – time specifically allocated for process management work
Accountability assigned and assured
Case: Global corporate, modern multi-sourcing
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60000 employees
3 continents
24/7
IT main areas
 Operation
 Research & Development
 Sales
 Admin
 Full outsourcing 2000  now multisourcing with SMO
 Selected vendors for application management, development,
infrastructure, service desk…
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Organization example
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CIO
BRM
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Customer
Service
Management
(Delivery
accountable)
30
Service
Portfolio and
Lifecycle
management
(Service
Introduction,
Design)
Information
Management
CIO Office
Architecture
Q&C
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Service
Management
(Process
accountability
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Application
maintenance
(Appl.
Accountability)
Reference model
65000 employees
3 main geographies
This is the central org for
outsourcing mgmt
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Infrastructure
Service Delivery
Application
70
development
(Project delivery
accountable)
Infrastructure
(Collaboration)
(EUC)
Infrastructure
Infrastructure
(Network)
Infrastructure
(Hosting)
Operations
Research
Sales
Admin
Operations
Research
Sales
Admin
Service Management Office work-flow
Retained
Service Management
Incident Lead
Problem Lead
Change / release
Training & Tool
(MIM)
Problem
Problem
Manager
Problem
Manager
Incident
Manager
Training and
knowledge mgmt
Change
Change
Manager
Change/
Manager
release Mn
Manager
Tools config and
design
Owning, Managing and using processes and tools
IM
PM
KM
CM
RM
TOOL
CMS
ESP
Users of processes and tools
AM supplier
AD supplier
IM team
IM team
PM team
PM team
Change team
Change team
Infrastructure
(Hosting)
Infrastructure
Infrastructure
IM, PM and CM
team
(Network)
(EUC)
IM, PM and CM team
IM, PM and CM team
Service Management Office
Service
management
Service desk fully outsourced.
3 desks covering 24x7 globally
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Incident
Management
(Process and MIM)
Problem
Management
Change / release
Management
Incident
Manager
Problem
Manager
Change and
Release Mgr
Tools
Management
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Tools Training,
Knowledge
Tool design,
Config
Service Desk
Service Managers
Manage all processes and tools.
Manage service desk
Make sure all processes are followed by the suppliers. Operational in MIM
Service Portfolio and Lifecycle – part of SMO
Most people working with Service design and transition
Service Portfolio and
Lifecycle management
Service Design
and Transition
Service
Introduction
Management
Service Continuity
Management
Service Catalogue &
Portfolio
Management
Service
Introduction
Manager
Service Continuity
Manager
Service Catalogue
& Portfolio Mgr
Manage Transition of new services and keep track of existing services.
Service lifecycle management
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How to plan and implement SMO
 Assure leadership and sponsorship
 Top management must want this
 Find correct people to roles
 Senior experience
 Passionate, ready to work
 Ensure capability
 ITIL Training
 Process implementation competence
 Be patient
 Educate organization
 Iterate processes – ”why did you not log that change”
 Especially configuration management takes time – start with one service (80-20)
 Communicate new ways of work
 Customers, Users
 Employees, Suppliers
 Set minimum requirements on suppliers in processes
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When to plan for SMO in outsourcing
Traditional implementation:
Desicion &
Vendor
Selection
Contract
Negotiations
Transition to
Vendor
Design & Implement Retained
Organization
Optimal implementation:
Design new
Service model
Select Services
to be
Outsourced
Design Retained
Organization w/ SMO
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Desicion &
Vendor
Selection
Contract
Negotiations
Transition to
Vendor
Implement Retained
Organization
Define services – they will not change. Build CMS.
Business
process
Business
process
Business
process
Business support services
 Service Portfolio Management enables business to make sound decisions about
Biz 1
Biz2
Biz3
Biz4
Biz5
Biz6
investments
 Service decisions are based on clear business cases to demonstrate ROIs
Business IT and end user services
 Business customers are able to understand service content exactly to evaluate value of
Biz-IT 1
Biz-IT 1
Biz-IT 1
Biz-IT 1
Biz-IT 1
Biz-IT 1
service
and identify
new possible
business opportunities
 Efficient
communication
& business requirement understanding
to1seek
Biz-IT 1
Biz-IT 1
Biz-IT 1 (no need
Biz-IT
CMS
”hidden” information from IT support staff)
 IT’s role
seen as a service provider where IT brings added value for business services
Supporting
services
 Datacenter
Possibility forApplication
IT to manage
IT
business better Databases
dev
Networks
Application maint
 cost and budget allocations
 reduces operational costs when services are provided within required SLA for capacity & availability
 Enables evaluation of delivery efficiency with other sourcing alternatives
CMDB
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CMDB
CMDB
CMDB
CMDB
Example organization, operating model and processes
BRM
Communications
Incident/request info
Change info
…
Strategy
Applications & Infrastructure
Architecture
Quality and compliance
Major incident coordination
Problem coordination
Change coordination
Configuration management
Lifecycle, Continuity, Catalogue
Incident responsibility
Problem responsibility
Change responsibility
Capacity responsibility
Availability responsibility
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Service Management Office in Multisourced Environment Summary
Application
development
Application projects
PEOPLE
Application development
PROCESSES
Application
operations and
maintenance
Process and operational accountability
Services and projects
Vendor coordination
Common service model
Video conf &
neg. rooms
Office printing
AD-DNS ym
Virus control
E-mail
Load
balancer
Firewall
Storage
Servers
Proxy
Databases
TOOLS
Workstations
LAN
Local support
Service desk
Data centers
End user services
Service desk
Newco Inc
SMO
Infrastructure
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Mobile
Service desk
Solutions
Business apps
Integration
…
Application maintenance
Service desk
ACCOUNTABILITY
Contact information
Timo Hyvönen
Managing director
3gamma Oy
Sentnerikuja 2
FI-00440 Helsinki
+358 50 3748371
timo.hyvonen@3gamma.com
www.3gamma.com – www.itil.fi
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Phone +358 50 3748371
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