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The ROI of Problem Management
“Achieving tangible benefits through better process and analysis”
Jim Blayney
Director Product Marketing
Diego Jimenez
Senior Solutions Consultant
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 2
ROI of Problem Management
Agenda
What is the “Problem?”
Key Problem Concepts & Functions
Overcoming Common Pitfalls
Key Benefits
Realising Tangible Benefits
Poll Question #1
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 4
The Problem Management Process
(according to ITIL® v3)
A `Problem' is an unknown underlying cause of one or more incidents
The goal of Problem Management is to reduce the number and severity of
incidents and problems on the business
The proactive process identifies and resolves problems before
incidents occur
What is the “Problem?”
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 5
The Problem Management Process
(according to HDI 2012 Survey)
In 2012, 43.5% of HDI
respondents follow ITIL
for Problem
Management
Percent who followed ITIL® process in 2011 and 2012:
2011 2012
Availability Mgmt. 9.9 10.2
Capacity Mgmt 11.2 9.6
Change Mgmt 56.4 53.1
Configuration Mgmt 28.6 24.2
Financial Mgmt. 6.4 4.3
Incident Mgmt 68.7 63.5
Problem Mgmt 46.2 43.5
Release Mgmt 20.6 20.3
What is the “Problem?”
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 6
What is the “Problem?”
Problem Management is one of the least understood of the processes in
the ITIL framework
Problem Management is (arguably) the most valuable process in the ITIL
framework
Process typically not defined in detail
Never enough resources allocated to make the process fully effective
Requires effective communications between related “silo” groups and
departments
Normally confused with Incident Management
Problem Management
Understanding Key Concepts
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 8
Formalize Problem Management processes and measurements
to ensure consistency and rigor for root cause analysis and issue prevention.
Understand the process of how issues discovered by event management tools
get filtered into the IT service desk tool, and look to automate the process.
Employ end-user satisfaction surveys in conjunction with cost analysis and
Operational metrics to obtain a comprehensive understanding of IT service
desk performance.
Problem Management Recommendations
(according to Gartner*)
* Gartner 2008 Data Center Conference Polling Gives Insights Into IT Service Desk Maturity
Problem Management: Key Concepts
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 9
Goal:
• Efficiently and rapidly
resolve minor and
major service
disruptions
Business Benefits:
• MTTR can be reduced
• FCR rates can be
improved
• Service and response can
be optimized with
prioritization based on
impact to the business
User
Rapid
Resolution
Service Desk
A Knowledge Base
exists for resolutions
and efficient incident
handling
New Incidents
matched with
related Incidents
Policies, Procedures &
rules for registering
Incidents
Formal
Incident
Capture
Escalation
procedures
facilitate
efficient &
timely
resolution
Incidents are assigned a
category, priority, impact &
urgency
Incident Management: Key Concepts
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 10
Goal:
• Eliminate the cause
of recurring and
related service
disruptions
Business Benefits:
• Incident volume is
reduced
• Faster resolution of
Incidents
• Service availability
increases
• Shift from reactive to
proactive delivers
higher value service
Service Desk
Resources with
required resolution
skills are assigned to
determine root
cause
Policies, Procedures &
rules for relating
Incidents to Problems
A Problem is
defined to be the
underlying cause
of 1+ Incidents
Incident data is
routinely analyzed to
identify patterns of
recurring incidents
Problems are
eliminated through
resolution of Root
Cause
IT & Business
Customer
Known Errors are identified
and documented
Problem Management: Key Concepts
Problem Analysis:
• Kepner Tregoe
• LEAN 5 D’s
• 5 why’s (simple, low
level problem solving)
• Why – Why and six
serving men
Root Cause Analysis:
• What is the RCA
Root Cause
Resolution
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 11
Activities of Problem Management
The Reactive & Proactive prevention of Problems
•“Problem”
•A condition identified from multiple incidents exhibiting common symptoms, or from a single
significant Incident, indicative of a single error, for which the cause is unknown
Problem Control
•“Problem Control “
•is the activity performed to identify the root cause, which CIs are at fault and to provide
information and advice on Workarounds to the Service Desk
Error Control
•“Known Error”
•A condition identified by successful diagnosis of the root cause of a problem, when it is
confirmed which CI is at fault and a workaround has been identified
•Managing Known Errors through the process of resolution
Problem Reviews
Management Information for Decision Support
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 12
How do I know if I have a Problem?
You know you’ve got a Problem when......
Can’t match the Incident to an existing Problem and/or Known Error
Analysis of Incident data indicates you have “recurring” Incidents
Incident Analysis shows Incidents not been matched effectively to the correct
Problems or Known Errors
Analysis of events or symptoms from the IT Infrastructure indicates an
underlying Problem that could potentially lead to Incidents
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 13
Problem Control - Activities
Problem Identification and
Recording
RFC and Problem
Resolution and Closure
Problem Investigation and
Diagnosis
Problem Classification
Problem
Tracking &
Monitoring
Problem Control
Problem
Management
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 14
Error Control - Activities
Error Identification and
Recording
Error Assessment
Record Error Resolution
Close Error
&
Associated
Problems
Error
Tracking &
Monitoring RFC
Change Implemented
successfully
Error Control
Problem
Management
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 15
Outputs from Problem Management
Typical actions and outputs resulting from
Problem Management include:
• Raising an RFC
• Providing feedback regarding testing, procedures,
training and documentation
• Initiating Customer education and training
• Initiating Service Support staff education and
training
• Ensuring adherence to Problem and Incident
Management procedures
• Process or procedural improvement
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 16
Can you identify “high impact” recurring Service
events that are costing the organization a
substantial loss in terms of dollars?
Problem
Management
Designated Problem Management Resources: Create a specialty-trained
Problem Management Team
Unique Problem Management Toolset: Separate Incident and Problem
Management Process Tools
Incident Resolution Knowledge Base
CMDB: Build Problem Management around a centralized CMDB so IT can
track known errors against the affected CI and associated Business service
ITIL-based Problem Management
Problem Management
Identifying Common Pitfalls
Polling Question #2
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 19
Lack of proper Skill / Training
No adoption top to bottom
No measurement to show improvement
Incident bouncing
No objectives. Don’t have specific targets
Constraint by framework imposed
Reactive problem not under control – Trying to do proactive mgmt
No problem methodology – not enough why’s
Identifying common pitfalls
Problem Management
Key Benefits
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 21
Problem Management - Benefits
Improved Problem Solving Skills / Resolution
• The Problem Management process is based on the concept
of learning from past experience
• The process provides the historical data to identify trends,
and the means of preventing failures and of reducing the
impact of failures, resulting in improved User productivity
Improved First Call Resolution (FCR)
• Problem Management enables improved FCR of Incidents at
the Service Desk
• Improved Knowledge Management database containing
Incident resolution and Workaround data integrated within
the workflow automation of the Support toolset
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 22
Problem Management - Benefits
Improved IT service quality
• Problem Management helps generate a cycle of rapidly increasing IT
service quality
• High-quality reliable services are good for the business users of IT
• Improved Service provision and System stability is good for the
productivity and morale of the IT team
Incident volume reduction
• Problem Management is the key to reducing the number of Incidents
that interrupt Services
Permanent Solutions
• There will be a gradual reduction in the number and impact of
Problems and Known Errors as those that are resolved stay resolved
The ROI of Problem Management
Realising Tangible Benefits
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 24
Problem Management – Key Metrics
Percentage of Incidents defined as Problems
Number of Incidents related to Problems
Number of Problems and Known Errors created - by status, service, impact, category
Number of Known Errors created
Number of Problems by CI
Number and impact of Incidents occurring before the Problem is resolved and closed
Number of Workarounds or temporary solutions provided
Number of Problems outstanding and expected resolution time
Number of RFC’s issued
Resolution times with respect to Service Level Requirements
Problem Management - Time Investment by Period
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 25
Problem Management
Savings Potential How is it Realized?
Team to diagnose
Problems before they impact the business
Integrated Incident, Problem and Knowledge
Toolset that supports ITIL best practice
Increased First Call Resolution
Elimination of underlying problems
reducing Service impacting Incidents
Recurring Incidents Avoided
Incident Handling & Time Reduced
Outbound Calls Avoided
Business Service Interuptions Avoided
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 26
ROI Example - Baseline Metric Examples
L1 Staff 14 FTE $50K Salary
L2 Staff 8 FTE $56K Salary
Service Desk Manager 3 FTE $85K Salary
L1 Resolution Rate 63%
L2 Escalation Rate 46%
Annual Incident Volume 10,000
Average Callback length 2 minutes Cost / Call: $0.50
Small Business System Outages 30 per year 30 Minutes
Medium Business System Outages 25 per year 45 Minutes
Large Business System Outages 6 per year 30 Minutes
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 27
Problem Management Input
Recurring Incidents Avoided
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 28
Problem Management ROI Tab
Incident Handling Time Reduced
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 29
Problem Management ROI Tab
Out-bound Call Avoided
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 30
Calculating ROI
Business Service Interuption Avoided
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 31
$2,334 / year or $7K 3 year ROI
Savings Area Potential ROI
$3,125 / year or $9K 3 year ROI
$8,500 / year or $25K 3 year ROI
$25,000 / year or $75K 3 year ROI
Recurring Incidents Avoided
Incident Handling Time Reduced
Outbound Call Avoided
Business Service Interuption Avoided
Calculating ROI
Total Savings in first year: $53,969
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 32
Intangible Benefits
ROI does not always have to be expressed in financial terms
Survey, survey, survey…
ROI Expressed in intangible benefits such as:
• increased satisfaction of their users
• improved perception of service, etc.
Don’t forget about Customer Satisfaction
©2012 FrontRange. All rights reserved. Proprietary & Confidential. 33
Summary
Key Take-aways:
People, Process & Technology
• Measure
• Identify
• Analyze
• Assess “ROI”
• Implement
• Communicate
Questions?
Thank You!
For more information please find us at
www.frontrange.com

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The ROI of Problem Management

  • 1. The ROI of Problem Management “Achieving tangible benefits through better process and analysis” Jim Blayney Director Product Marketing Diego Jimenez Senior Solutions Consultant
  • 2. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 2 ROI of Problem Management Agenda What is the “Problem?” Key Problem Concepts & Functions Overcoming Common Pitfalls Key Benefits Realising Tangible Benefits
  • 4. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 4 The Problem Management Process (according to ITIL® v3) A `Problem' is an unknown underlying cause of one or more incidents The goal of Problem Management is to reduce the number and severity of incidents and problems on the business The proactive process identifies and resolves problems before incidents occur What is the “Problem?”
  • 5. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 5 The Problem Management Process (according to HDI 2012 Survey) In 2012, 43.5% of HDI respondents follow ITIL for Problem Management Percent who followed ITIL® process in 2011 and 2012: 2011 2012 Availability Mgmt. 9.9 10.2 Capacity Mgmt 11.2 9.6 Change Mgmt 56.4 53.1 Configuration Mgmt 28.6 24.2 Financial Mgmt. 6.4 4.3 Incident Mgmt 68.7 63.5 Problem Mgmt 46.2 43.5 Release Mgmt 20.6 20.3 What is the “Problem?”
  • 6. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 6 What is the “Problem?” Problem Management is one of the least understood of the processes in the ITIL framework Problem Management is (arguably) the most valuable process in the ITIL framework Process typically not defined in detail Never enough resources allocated to make the process fully effective Requires effective communications between related “silo” groups and departments Normally confused with Incident Management
  • 8. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 8 Formalize Problem Management processes and measurements to ensure consistency and rigor for root cause analysis and issue prevention. Understand the process of how issues discovered by event management tools get filtered into the IT service desk tool, and look to automate the process. Employ end-user satisfaction surveys in conjunction with cost analysis and Operational metrics to obtain a comprehensive understanding of IT service desk performance. Problem Management Recommendations (according to Gartner*) * Gartner 2008 Data Center Conference Polling Gives Insights Into IT Service Desk Maturity Problem Management: Key Concepts
  • 9. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 9 Goal: • Efficiently and rapidly resolve minor and major service disruptions Business Benefits: • MTTR can be reduced • FCR rates can be improved • Service and response can be optimized with prioritization based on impact to the business User Rapid Resolution Service Desk A Knowledge Base exists for resolutions and efficient incident handling New Incidents matched with related Incidents Policies, Procedures & rules for registering Incidents Formal Incident Capture Escalation procedures facilitate efficient & timely resolution Incidents are assigned a category, priority, impact & urgency Incident Management: Key Concepts
  • 10. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 10 Goal: • Eliminate the cause of recurring and related service disruptions Business Benefits: • Incident volume is reduced • Faster resolution of Incidents • Service availability increases • Shift from reactive to proactive delivers higher value service Service Desk Resources with required resolution skills are assigned to determine root cause Policies, Procedures & rules for relating Incidents to Problems A Problem is defined to be the underlying cause of 1+ Incidents Incident data is routinely analyzed to identify patterns of recurring incidents Problems are eliminated through resolution of Root Cause IT & Business Customer Known Errors are identified and documented Problem Management: Key Concepts Problem Analysis: • Kepner Tregoe • LEAN 5 D’s • 5 why’s (simple, low level problem solving) • Why – Why and six serving men Root Cause Analysis: • What is the RCA Root Cause Resolution
  • 11. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 11 Activities of Problem Management The Reactive & Proactive prevention of Problems •“Problem” •A condition identified from multiple incidents exhibiting common symptoms, or from a single significant Incident, indicative of a single error, for which the cause is unknown Problem Control •“Problem Control “ •is the activity performed to identify the root cause, which CIs are at fault and to provide information and advice on Workarounds to the Service Desk Error Control •“Known Error” •A condition identified by successful diagnosis of the root cause of a problem, when it is confirmed which CI is at fault and a workaround has been identified •Managing Known Errors through the process of resolution Problem Reviews Management Information for Decision Support
  • 12. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 12 How do I know if I have a Problem? You know you’ve got a Problem when...... Can’t match the Incident to an existing Problem and/or Known Error Analysis of Incident data indicates you have “recurring” Incidents Incident Analysis shows Incidents not been matched effectively to the correct Problems or Known Errors Analysis of events or symptoms from the IT Infrastructure indicates an underlying Problem that could potentially lead to Incidents
  • 13. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 13 Problem Control - Activities Problem Identification and Recording RFC and Problem Resolution and Closure Problem Investigation and Diagnosis Problem Classification Problem Tracking & Monitoring Problem Control Problem Management
  • 14. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 14 Error Control - Activities Error Identification and Recording Error Assessment Record Error Resolution Close Error & Associated Problems Error Tracking & Monitoring RFC Change Implemented successfully Error Control Problem Management
  • 15. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 15 Outputs from Problem Management Typical actions and outputs resulting from Problem Management include: • Raising an RFC • Providing feedback regarding testing, procedures, training and documentation • Initiating Customer education and training • Initiating Service Support staff education and training • Ensuring adherence to Problem and Incident Management procedures • Process or procedural improvement
  • 16. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 16 Can you identify “high impact” recurring Service events that are costing the organization a substantial loss in terms of dollars? Problem Management Designated Problem Management Resources: Create a specialty-trained Problem Management Team Unique Problem Management Toolset: Separate Incident and Problem Management Process Tools Incident Resolution Knowledge Base CMDB: Build Problem Management around a centralized CMDB so IT can track known errors against the affected CI and associated Business service ITIL-based Problem Management
  • 19. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 19 Lack of proper Skill / Training No adoption top to bottom No measurement to show improvement Incident bouncing No objectives. Don’t have specific targets Constraint by framework imposed Reactive problem not under control – Trying to do proactive mgmt No problem methodology – not enough why’s Identifying common pitfalls
  • 21. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 21 Problem Management - Benefits Improved Problem Solving Skills / Resolution • The Problem Management process is based on the concept of learning from past experience • The process provides the historical data to identify trends, and the means of preventing failures and of reducing the impact of failures, resulting in improved User productivity Improved First Call Resolution (FCR) • Problem Management enables improved FCR of Incidents at the Service Desk • Improved Knowledge Management database containing Incident resolution and Workaround data integrated within the workflow automation of the Support toolset
  • 22. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 22 Problem Management - Benefits Improved IT service quality • Problem Management helps generate a cycle of rapidly increasing IT service quality • High-quality reliable services are good for the business users of IT • Improved Service provision and System stability is good for the productivity and morale of the IT team Incident volume reduction • Problem Management is the key to reducing the number of Incidents that interrupt Services Permanent Solutions • There will be a gradual reduction in the number and impact of Problems and Known Errors as those that are resolved stay resolved
  • 23. The ROI of Problem Management Realising Tangible Benefits
  • 24. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 24 Problem Management – Key Metrics Percentage of Incidents defined as Problems Number of Incidents related to Problems Number of Problems and Known Errors created - by status, service, impact, category Number of Known Errors created Number of Problems by CI Number and impact of Incidents occurring before the Problem is resolved and closed Number of Workarounds or temporary solutions provided Number of Problems outstanding and expected resolution time Number of RFC’s issued Resolution times with respect to Service Level Requirements Problem Management - Time Investment by Period
  • 25. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 25 Problem Management Savings Potential How is it Realized? Team to diagnose Problems before they impact the business Integrated Incident, Problem and Knowledge Toolset that supports ITIL best practice Increased First Call Resolution Elimination of underlying problems reducing Service impacting Incidents Recurring Incidents Avoided Incident Handling & Time Reduced Outbound Calls Avoided Business Service Interuptions Avoided
  • 26. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 26 ROI Example - Baseline Metric Examples L1 Staff 14 FTE $50K Salary L2 Staff 8 FTE $56K Salary Service Desk Manager 3 FTE $85K Salary L1 Resolution Rate 63% L2 Escalation Rate 46% Annual Incident Volume 10,000 Average Callback length 2 minutes Cost / Call: $0.50 Small Business System Outages 30 per year 30 Minutes Medium Business System Outages 25 per year 45 Minutes Large Business System Outages 6 per year 30 Minutes
  • 27. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 27 Problem Management Input Recurring Incidents Avoided
  • 28. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 28 Problem Management ROI Tab Incident Handling Time Reduced
  • 29. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 29 Problem Management ROI Tab Out-bound Call Avoided
  • 30. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 30 Calculating ROI Business Service Interuption Avoided
  • 31. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 31 $2,334 / year or $7K 3 year ROI Savings Area Potential ROI $3,125 / year or $9K 3 year ROI $8,500 / year or $25K 3 year ROI $25,000 / year or $75K 3 year ROI Recurring Incidents Avoided Incident Handling Time Reduced Outbound Call Avoided Business Service Interuption Avoided Calculating ROI Total Savings in first year: $53,969
  • 32. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 32 Intangible Benefits ROI does not always have to be expressed in financial terms Survey, survey, survey… ROI Expressed in intangible benefits such as: • increased satisfaction of their users • improved perception of service, etc. Don’t forget about Customer Satisfaction
  • 33. ©2012 FrontRange. All rights reserved. Proprietary & Confidential. 33 Summary Key Take-aways: People, Process & Technology • Measure • Identify • Analyze • Assess “ROI” • Implement • Communicate
  • 35. Thank You! For more information please find us at www.frontrange.com