Are you Off-Sure about your IT Service Desk?

No matter the economic climate, or indeed within which industry they operate, organisations are constantly seeking to lower the cost of IT while also trying to improve performance. The problem is it can often seem impossible to achieve one without compromising on the other and in most cases, cost cutting will take prevalence, leading to a dip in service levels.

When things get tough the popularity of off-shoring inevitably increases, leading many decision-makers to consider sending the IT Service Desk off to India, China or Chile as a convenient solution financially – low-cost labour for high-level skills is how offshore service providers are advertising the service.

In reality things are not so straightforward. The primary reason for off-shoring is to reduce costs, but according to experts average cost savings only tend to lie between 10-15%, and what is more, additional costs can be created – research shows, in fact, that they can in some cases increase by 25%.

Hidden costs, cultural differences and low customer and user satisfaction are reasons which have made nearly 40% of UK companies surveyed by the NCC Evaluation Centre change their mind and either reverse the move – a phenomenon known as ‘back-shoring’ or ‘reverse off-shoring’ – or think about doing so in the near future. Once an organisation decides to reverse the decision, however, the process is not trouble-free. Of those who have taken services back in-house, 30% say they have found it ‘difficult’ and nearly half, 49%, ‘moderately difficult’. Disruptions and inefficiencies often lead to business loss, loss of client base and, more importantly, a loss of reputation – it is in fact always the client and not the provider which suffers the most damage in this sense.

Data security is another great concern in off-shoring. An ITV news programme recently uncovered a market for data stolen at offshore service providers: bank details and medical information could be easily bought for only a few pounds, often just from call centre workers. Of course information security breaches can happen even in-house, caused by internal staff; however, in off-shoring the risk is increased by the distance and the different culture and law which exist abroad.

Not a decision to be taken lightly, then. Organisations should realise that the IT Service Desk is a vital business tool and while outsourcing has its advantages, if they do it by off-shoring they are placing the face of their IT system on the other side of the planet, and in the hands of a provider that might not have the same business culture, ethics and regulations as they do.

So before thinking about off-shoring part or the whole IT department, organisations would be wise to take the time to think about why their IT is so expensive and what they could do to improve it, cutting down on costs without affecting quality, efficiency and security and moreover, not even having to move it from its existing location.

Here are some measures organisations could take in order to improve efficiency in the IT Service Desk while at the same time reducing costs:

Best practice implementation

Adoption of Best Practice is designed to make operations faster and more efficient, reducing downtime and preserving business continuity. The most common Best Practice in the UK is ITIL (Information Technology Infrastructure Library) which is divided into different disciplines – Change Management, Risk Management, Incident Management to name but a few.

ITIL processes can be seen as a guide to help organisations plan the most efficient routes when dealing with different types of issues, from everyday standard operations and common incidents up to rarer events and even emergencies.

Whilst incident management seems to be easily recognised as a useful tool, other applications of ITIL are unfairly seen by many as a nice to have. But implementing best practice processes to deal with change management, for example, is particularly important: if changes are carried out in a random way they can cause disruptions and inefficiencies, and when a user cannot access resources or has limited use of important tools to carry out their work, business loss can occur – and not without cost.

Every minute of downtime is a minute of unpaid work, but costs can also extend to customer relationship and perhaps loss of client base if the inefficiencies are frequent or very severe.

Realignment of roles within the Service Desk

With Best Practice in place, attention turns to the set-up of resources on the Service Desk. A survey conducted by Plan-Net showed that the average IT Service Desk is composed of 35% first-line analysts, 48% second line and 17% third line. According to Gartner statistics, the average first-line fix costs between £7 and £25 whereas second line fixes normally vary from £24 to £170. Second and third line technicians have more specific skills, therefore their salaries are much higher than the ones of first line engineers; however, most incidents do not require such specific skills or even physical presence.

An efficient Service Desk will be able to resolve 70% of their calls remotely at first line level, reducing the need for face-to-face interventions by second line engineers. The perception of many within IT is that users prefer a face-to-face approach to a phone call or interaction with a machine, but in reality the culture is starting to change thanks to efficiency acquiring more importance within the business. With second-line fix costing up to 600% more, it is better to invest in a Service Desk that hits a 70% rate of first-time fix, users for the most part will be satisfied that their issues are fixed promptly and the business will go along way to seeing the holy grail of reduced costs and improved performance simultaneously.

From a recent survey carried out by Forrester for TeamQuest Corporation, it appears that 50% of organisations normally use two to five people to resolve a performance issue, and 35% of the participants are not able to resolve up to 75% of their application performance issues within 24 hours. Once you calculate the cost of number of staff involved multiplied by number of hours to fix the incident, it is not difficult to see where the costly problem lies. An efficient solution will allow IT to do more with less people, and faster.

Upskilling and Service Management toolset selection

Statistics show that the wider adoption of Best Practice processes and the arrival of new technologies are causing realignments of roles within the Service Desk. In many cases this also involves changes to the roles themselves, as the increased use of automated tools and virtualised solutions mean more complex fixes can be conducted remotely and at the first line. As this happens first line engineers will be required to have a broader knowledgebase and be able to deal with more issues without passing them on.

With all these advancements leading to a Service Desk that requires less resource (and therefore commands less cost) while driving up fix rates and therefore reducing downtime it seems less and less sensible for organisations to accept off-shore outsourcing contracts with Service Level Agreements (SLA’s) that guarantee a first-time fix rate of as little as 20% or 30% for a diminished price. It seems the popularity of such models lies only in organisations not being aware that quality and efficiency are something they can indeed afford – without the risk of off-shoring.

The adoption of a better toolset and the upskilling of first-line analysts, especially through ITIL-related training, will help cut down on costs and undoubtedly improve service levels. However while it will also remove the necessity to have a large amount of personnel, especially at higher level, the issues with finding, recruiting and training resource will still involve all the traditional headaches IT Managers have always faced. With this in mind it can often be prudent to engage with a service provider and have a co-sourced or managed desk that remains in-house and under internal management control. Personnel selected by an expert provider will have all the up-to-date skills necessary for the roles required, and only the exact number needed will be provided, while none of the risks associated with wholesale outsourcing, or worse, off-shoring, are taken.

Improving IT infrastructure and enhancing security

Improving efficiencies in IT does not begin and end with the Service Desk of course. The platform on which your organisation sits, the IT infrastructure itself, is of equal importance in terms of both cost and performance – and crucially, is something that cannot be influenced by off-shoring. For example, investing in server virtualisation can make substantial cost savings in the medium to long term. Primarily this arises from energy saving but costs can also be cut in relation to space and building and maintenance of physical servers, not to mention the added green credentials. Increased business continuity is another advantage: virtualisation can minimise disruptions and inefficiencies, therefore reducing downtime – probably the quickest way to make this aspect of IT more efficient in the short, medium and long term.

Alongside the myriad of new technologies aimed squarely at improving efficiency and performance sits the issue of Information Security. With Data Protection laws getting tougher due to the new 2010 regulations, forcing private companies to declare any breaches to the Information Commissioner who has the right to make them public, and facing them with fines up to £500,000, security is becoming even more of an unavoidable cost than ever. Increased awareness is needed across the entire organisation as data security is not only the concern of the IT department, but applicable to all personnel at all levels. The first step in the right direction is having a thorough security review and gap analysis in order to assess compliance with ISO 27001 standards and study any weak points where a breach can occur. Then workshops are needed to train non-IT staff on how to deal with data protection. Management participation is particularly important in order to get the message across that data safety is vital to an organisation.

Taking a holistic view of IT

Whatever the area of IT under scrutiny, the use of external consultancies and service providers to provide assistance is often essential. That said, it is rare to find an occasion where moving IT away from the heart of the business results in improvements. The crucial element to consider then is balance. Many organisations, as predicted by Gartner at the beginning of this year, are investing in operational rather than capital expenditure as they begin to understand that adoption of the latest tools and assets is useless without a holistic view of IT. When taking this methodology and applying it to the Service Desk it soon becomes apparent that simply by applying a Best Practice approach to an internal desk and utilising the new technologies at your disposal, the quick-fix cost benefits of off-shoring soon become untenable.

Pete Canavan, Head of Support Services

This article is featured in the current issue of ServiceTalk

Is your IT Service Desk future proof?

Organisations across all sectors have more than realised that the unstable economic climate has brought along an increased need for flexible solutions, not only in the case of downsizing but in upsizing the business as well. While some companies are still struggling with budget cuts, others are looking at growth or re-expansion in the near future; regardless, both have reason to consider an improvement of their IT Service Desk with the help of the right service management solutions, in order to obtain a number of efficiencies. An efficient service desk can reduce IT-related costs, improve customer satisfaction and make business operations smooth and responsive – however, these outcomes cannot be reached by using an off-the-shelf solution which is only fit for present conditions. Organisations should adopt a solution that can remain solid and efficient both in the case of downsizing and cutbacks due to a recession, and as it replicates and extends to a new business dimension in the medium term as the company grows, something everyone is wishing for now that the economy seems to be slowly recovering.

As Best Practice identifies, people, processes and technology are all factors that need to be looked at and adjusted in order to obtain an IT Service Desk which is both flexible and scalable, and if the desk is or is to be managed by a third party contracts with service providers need to be seriously scrutinised to ensure they provide the organisation with a solution which is scalable regardless of the economic climate.

With regard to toolsets, although it might be cheaper to purchase a standard, fixed, one-size-fits-all solution, this might bring along extra costs in the long run if it does not allow easy amendments or any at all. You may be surviving with a tool which currently has limited functionality; however, what happens when the user base grows or the Services offered expand and the system has no ability to be adapted or requires extensive and costly professional services to deliver changes? These software solutions should be chosen and implemented keeping scalability in mind – they should not only be fit-for-business and ITIL-aligned, but fit-for-growth as well. It is important to immediately assess if a tool allows that sort of flexibility and, moreover, if there are the appropriate skills within the organisation to carry out any adaptation. All service management tools within the market place are aligned to Best Practice – they have to be, otherwise they cannot compete. However, some are more aligned than others. Any organisation considering selection should be clear about their specific requirements and their internal capabilities for development of the toolset moving forward and thus provide agility and alignment to the specific needs of that organisation, both today and in the future.

As for the process side of things, Best Practice in itself does not represent a barrier to flexibility; on the contrary, when correctly applied, it offers the means to carry out all operations smoothly and allow the business to up and downsize in the most efficient way. With a mature level of Change Management in place, as well as a good understanding of availability and capacity management, any alteration to business and IT dimension will be accomplished without causing significant disruptions and inefficiencies, which can cause problems such as data and financial loss, low customer satisfaction and poor credibility in the market. The trick is treating the Service Desk exactly as you would treat infrastructure, adapting processes that you could apply for instance to a server that needs to undergo some changes to the whole Service Desk.

For what concerns staffing, in-house or outsourced, if downsizing can present contractual issues that can slow down the process or make it more difficult and not really cost-efficient (from redundancy processes to TUPE or any financial binds resulting from contracts with providers), upsizing might present challenges as well. For a company with an internally managed Service Desk, defining contracts, finding the right skills and training personnel results in a significant investment of time and money. If the organisation is growing quickly, might be a lag regardless of personnel being in-house or outsourced: it might take some time to find the right candidates who are appropriately skilled, especially if they are required to hold a specific qualification such as the MCSE (Microsoft Certified Systems Engineer); if the organisation chooses to employ staff with lower skills, it might take some time to train them and get them to the desired level, not to mention it might cost as much as hiring staff with higher skills. It is becoming more prevalent to utilise a specialist third party and therefore delegate the responsibility and hassle, as they often have access to a wider pool of competent workers or have ‘floating’ staff readily available for the purpose, but it is important to stipulate a contract beforehand that makes it clear if immediate availability is a priority over skills, whether the client is required to pay for training when it is necessary, and how flexible the supplier is in regards to number of personnel – is it possible to lose ten analysts or acquire another ten without fines or surcharge and within a reasonable time frame? One challenge facing a lot of organisations as we climb out of the recession is the extension of Service hours at no or minimal extra cost as the business strive to deliver increased flexibility to their customers and distinguish themselves from their competitors.

On top of all this, to obtain successful resizing of the IT Service Desk it is essential that there is a good communication flow between the business and IT. It is in fact only through working together and with a holistic mind-frame that the IT Service Desk is able to move from being just a tactical tool to acquiring a strategic function that can create business value, and be active part in an organisation’s ride to success.

 

 

Pete Canavan, Head of Support Services

Find this article on Fresh Business Thinking: http://www.freshbusinessthinking.com/business_advice.php?CID=3&AID=6064&PGID=1

Doing more with less: an opportunity to learn

Budget reduction teaches organisations to prioritise – a lesson to be learnt not only by the public sector.

The recently announced budget has not been kind to public sector IT, just as expected. Large cuts mean that most technology projects will have to be shelved, but this does not make the level of performance the sector is craving for impossible to be reached – on the contrary, budget reduction is the kind of incentive that drives organisations to prioritise and to seek efficiencies, focusing more on operational, rather than capital expenditure. This does not apply exclusively to the public sector, of course: many private companies are struggling with similarly tight purse strings, so there is a lesson to be learnt for them as well from such challenging circumstances. 

Quick-fix plans which consist of simply reducing the number of personnel and only purchasing tools to replace the most obsolete assets are unlikely to represent the best way to preserve, let alone increase efficiency. With most operations nowadays recognising that IT forms the backbone of the organisation, it is clear that a wiser roadmap must be designed. Clear-sighted organisations, then, will have a strategy which sees them realigning roles and improving skills within their IT department, implementing relevant Best Practice processes and adopting tools and technologies that can help towards reducing overall operating costs while improving efficiency, such as virtualised servers and automated service desk management software. Scoping and planning is vital in order to design a strategic solution that is bespoke, fit-for-purpose and scalable, hence fit not only for present conditions but the medium term as well, and to demonstrate clearly what cost efficiencies a well-balanced mix of people, process and technology can achieve. 

In terms of staffing, it seems that many IT Service Desks lack the skills and tools to deal with most of the calls at first-line level, and therefore become overburdened with an unnecessary (not to mention costly) number of second-line engineers, which are also, because of their more ‘flexible’ nature, often slower in dealing with incidents. An up-skilling of first line support in conjunction with Best Practice procedures and the adoption of automated software which can deal with simple and repetitive incidents such as password resets may take the level of first-time fix from as little as 20-30 per cent to 60-70 per cent. This means that a smaller total number of support personnel are needed, especially at second line, and that the business will be remarkably improved, with incidents taking less time to be resolved, resulting in a more efficient service for users.

Best Practice implementation is a key component in this cost-effective innovation project. The adoption of procedures based on a discipline such as ITIL (Information Technology Infrastructure Library) will help any organisation function in the best possible way. The processes described by ITIL deal, among others, with the management of incidents, risks and change. The latter is of particular relevance: to deal with any alteration to the system, be it small or large, without causing inefficiencies, disruptions and consequently business or client loss it is important to have a mature level of Change Management already in place.

Because of the difficulty of accepting change and truly understanding this new way of working, ITIL-based experiential learning sessions are an important aid in delivering the discipline so that change can effectively happen, and to guarantee active participation of all staff taking part in the training. This should not only be limited to people that are directly affected, but extend to management who equally need to embrace the importance of best practice.

Another smart innovation that takes the idea of ‘doing more with less’ in its most literal form is that of virtualisation. Through virtualising both the desktop and server environment cost savings from a reduction in user downtime and further improvements in levels of remote (and therefore first line) fixing can be substantial, not to mention further benefits seen in terms of reduced server maintenance costs (from personnel to energy consumption).

The steps to take may appear quite clear and straightforward, but current in-house skills, resources and experience might not be enough to deal with such innovation and, as a result, many organisations will need the expertise of a service provider. With regards to the public sector, the cheapest outsourcing option, commonly seen as offshoring, may be automatically ruled out due to information security issues. However, security concerns private organisations as well, especially ones which withhold information that is extremely sensitive, such as law firms and banks. These particular companies cannot risk the loss of reputation, not to mention a hefty fine that can follow a breach of the Data Protection Act by a non properly-trained employee or a non-secure service provider.

There is a solution, though, where cost-efficiency can be achieved at the same, or a lower price than an in-house solution. As predicted by analysts in the sector, it is probable that many organisations will be more and more driven towards adopting a managed service solution in the next couple of years. With Managed Services, Service Desk management is taken care of by a third party, often in the office premises, and while personnel and procedures are left in the hands of the provider the organisation still retains ownership of assets and power over data, particularly important when information withheld within the system is sensitive and cannot risk leakage or loss.

It is not uncommon to achieve cost savings of 15 per cent or more when compared to a similar, in-house option, saving organisations money and improving the overall functioning of operations, in turn creating more business opportunities and enhancing the users’ ability to maximise productivity.

When it comes to innovation and change, and especially when that may involve reductions of any kind, it might be true that a view from the inside is not likely to be the most objective. With that in mind, working with a specialist partner would seem to be the most logical conclusion; however, doing more with less is far more likely to be attainable in the long term if management visibility and control is retained internally to ensure IT is kept close to the heart of the organisation at all times. Balance, it seems, is key to success.

 

Jerry Cave, Director

This article features on the BCS website and in the BCS Service Management e-newsletter: http://www.bcs.org/server.php?show=conWebDoc.35420

Microsoft System Center Service Manager 2010: a credible challenger in the Service Management software market?

After 3 years in beta, Microsoft is expected to launch System Center Service Manager (SCSM) sometime this year. Long-time Microsoft watchers will know that the company often “drip feeds” new markets with product information before products are ready as a way of generating interest.  This has the added benefit, from Microsoft’s perspective, of creating uncertainty and potentially delaying buying decisions for competing products.  But a 3-year beta is unusual even for Microsoft, and is largely explained by the company deciding that the product needed a ground-up rewrite after feedback from early tests to improve performance and integration.

Although an official release date has not been published, organisations are already starting to reflect upon the consequences of Microsoft entering a sector which is currently served by relatively small-sized, niche software companies.  Whilst BMC Remedy and HP Service Manager compete for very large installations, there isn’t really a stand-out market leader in the general Service Management software market, but rather a small group of vendors offering specific, focused products.

Microsoft expects, and frankly needs to compete across the breadth of any market it enters. And here, Microsoft’s standard approach is at odds with what most buyers have come to expect.  Microsoft’s competitors in the Service Management software market most commonly use a sales model where they sell directly to the customer and provide related services such as installation, configuration assistance, customisation and training as well as the software. Microsoft has never used this model.  Instead, it invests heavily in product marketing but sells through its partner network – which in the UK amounts to tens of thousands of IT service companies and resellers of all shapes and sizes, which in turn get their product from a distributor.

In choosing new Service Management software, companies frequently go through a tender process to ensure that they choose the most suitable product at the best price.  But here, Microsoft is at an immediate disadvantage.  A customer who wants to include Microsoft’s product in its tender will have to find a suitable partner to deal with, and may find there are multiple Microsoft partners who want to compete for the sale. And whereas niche vendors can genuinely offer an end-to-end solution including after-sale support which plugs directly into the software vendor, anyone considering Microsoft’s offering will be wary of the fact that they will potentially have multiple layers of support to deal with if they want answers or fixes to problems.

Of course, Microsoft can afford to compete on price as they do in other markets.  But the software cost in changing Service Management products is only one part of the overall cost of transition.  And whilst Microsoft is likely to tout its close integration with other System Center products as a key selling point, it has the major disadvantage in the UK market in that the product does not align with the Information Technology Infrastructure Library (ITIL), but rather the Microsoft Operational Framework (MOF).  This in itself would be enough to see the product discounted in many tender processes. In a blog entry, a Microsoft employee points to ITIL licensing costs as the main reasons for the lack of ITIL alignment, which is rather curious for a company of Microsoft’s resources.

All things considered, can Microsoft convince potential customers that the multi-tier sales and service model is better, and will it win the market by selling cheaper? It is hard to believe the Service Management savvies will be easily convinced – Service Management software is a big investment not only cost-wise but especially because it is the heart of the support process, which it orchestrates. In such a peculiar market, where quality, reliability and ease of adoption are more important than price, Microsoft will have to work hard to win any form of trust, let alone take control of the market.

 

Adrian Polley, CEO