2. Page 2
Agenda
The ITFM Journey2
The Service Definition Journey3
1 Current challenges
Q & A4
3. Page 3
Current challenges faced by clients
We often find that there are multiple executive level stakeholders with varying needs
and priorities for their IT organizations that must be understood and addressed.
► Increase the value received from IT
► Make sure IT is supporting the business strategy
► Measure and manage IT appropriately
► Use IT to improve the business
► Have a common language for communicating with IT
► Make IT a part of the team
► Demonstrate the value IT provides to the business
► Secure the resources IT needs to deliver results
► Have a place at the executive table
► A common language for communicating with business leaders
CEO/CFO
Senior Business
Leaders
CIO/
Senior IT Leaders
Stakeholders Stakeholder priorities for IT
To overcome many of these challenges, EY has developed
the ITFM journey
4. Page 4
The EY IT Financial Management (ITFM)
Journey
EY’s ITFM journey provides a clear and easy to follow path to enable the delivery of cost
effective services to the business, improve transparency and increase satisfaction.
Step 1
Current state
assessment
Step 2
Service definition
Step 3
Unit service
costing
Step 4
Metrics and
reporting
Step 5
Chargeback model
Step 6
Bill of IT
Transparency
Cost efficiency
Customer
satisfaction
Today’s Focus
5. Page 5
The EY Service Definition Journey
Provides the foundation for cost transparency
EY’s Service Definition Journey enables the creation of a robust business facing service
catalog following a logical and achievable pathway
Step 1
Current state
assessment
Step 2
Define initial
services
Step 3
Review services
with business
Step 4
Define service
levels
Step 5
Determine service
costs
Step 6
Produce and issue
catalog
Demonstrates
Value of IT
Fosters
communication
between IT and
the business
Improves
customer
satisfaction
6. Page 6
Service catalog evolution
“Don’t let perfect be the enemy of good”
1. Catalog includes improved
SLAs and unit service costs
2. Catalog includes tiered
services, resolution time SLAs,
and partial costs
3. Initial catalog includes basic
services, only response time
SLAs, not resolution times
Services are not defined or ad-
hoc definitions are in place with
few synergies
Maturity
Time
High
Low
1
2
3
4
No catalog
Basic services
and response
time SLAs
Tiered services
and resolution
time SLAs
Improved
SLAs and
unit service
costs
1
2
3
4
7. Page 7
Step 1 – Current State Assessment
Need to know where you are at before taking the next step
Level set expectations
1)What a service catalog is
2)What a service is
Key areas to focus on to determine gaps and to develop a
plan to fill those gaps
• Availability and quality of service related data for typical services
• What systems are involved for producing and storing data?
• Governance
• Who are the service providers?
• Who produces and manages the data?
• Are there any service performance metrics in use?
8. Page 8
What is a service catalog?
Benefits
1) Improved transparency
and customer
satisfaction
2) Demonstrates the value
of IT
3) Ease of service ordering
and interfacing with IT
4) Documents service
levels for each service
(SLAs)
5) Leads to more efficient
consumption of services
A single reference source for all IT services offered
9. Page 9
What is a service catalog?
A business facing document..
A communication tool to have a
productive dialogue with the
business about what services IT can
deliver to help make them successful
The foundation for any type of
allocation or chargeback process
An easy to use document to help
customers understand how to
request services, what the service
performance levels are, and what
they cost
A Service Catalog is… A Service Catalog is not…
a
X
Constrained by the current structure
of outsourcing service contracts
A detailed technical process list
that shows how to deliver IT services
A self-service portal for the
business
A leading practice framework for
defining services which can be
benchmarked
An IT Operating or Service Delivery
model.
10. Page 10
What is a service?
We will use the ITIL based definition
“Services” are a means of
delivering value to
customers by facilitating
outcomes customers want
to achieve without the
ownership of specific costs
and risks.
Another was to express this definition is to ask what is the business
requesting and willing to pay for – “host my application” instead of “I’d
like to lease a server, a place to put it, the cabling, the power, the
software, and the maintenance”
IT Service Management is focused on the design, implementation and
management of quality IT services that meet the needs of the business.
11. Page 11
What is ITIL?
The most recognized and trusted source of leading
practice in Service Management is the ITIL framework
► Information Technology Infrastructure Library
(ITIL) – created in 1980s by the British
government
► ITIL is used by organizations worldwide to
establish and improve capabilities in Service
Management
► ITFM is a key ITIL process found in the
Service Strategy section of the framework
12. Page 12
Step 2 – Define services
Guiding principles will help keep the design process on track
Service catalog guiding principles
Standard services: The service catalog should only contain standard
services for ease of ordering, fulfillment, measuring, and pricing
Number of services: 20 to 30 business facing services is preferred
The service catalog should focus on ‘What’ services the business wants
from IT
‘How’ IT delivers the services does not need to be exposed to the business
(Don’t confuse services with the tools and processes used to deliver them)
The catalog should be written in a language that non-technical people can
easily understand
It’s a living document. Services can be added, removed, or modified in the
future
13. Page 13
The EY reference framework for structuring
the service catalog – focused on “The What”
The What
(Service Offering & Service Performance)
The How
(Service Delivery)
Service Portfolio
(Employee
Enablement)
PC
Email
Telephony Technology
Service Tiers
SLA’s
Availability
Response Time
Tools
Infrastructure
Service Tier 2
(Silver)
Service Tier 3
(Bronze)
Service Tier 1
(Gold)
Delivery Model
(Logical grouping of
services offerings)
(Discrete services
provided to a customer )
(Service performance
expectations)
(Delivery of one service)
(Core technologies and tools to deliver
service)
Services Service Performance
People
Processes
14. Page 14
1. End User
Computing
Incident
Management &
Desktop Spt.
Service
Requests
PC Hardware
Provisioning
PC Software
Provisioning
2. Application
Support
Enterprise &
Bus.
Applications
3. Collaboration &
Communications
Audio & Web
Conferencing
Collaboration
Platforms
Email
4. Application
Hosting
Application
Hosting
Infrastructure
Website
Hosting
Database
Management
5. Technology
Infrastructure
Data Network /
Connectivity
6. Other
Services
Business
Process
Automation
Virtual Desktop
Special Events
Support
Mobile Phone
Telephony
Video
Conferencing
Cloud Services
Step 2 – Typical categories and services
These can be customized for your particular company
15. Page 15
Step 2 – Service definition components
► Each service in the catalog will include the following sections:
1. Description of Service
► What’s provided?
► What’s not provided?
► Levels of service?
2. Recent Changes
► How is the service different from last year?
3. How to Order
► Who is authorized to order?
► Where to go?
► Who to call?
► Additional info?
4. Cost of Service
► How is it priced?
► Unit of measurement?
► Major cost drivers
5. Usage Reporting
► What will be included?
► Frequency?
6. Service Levels
► What to expect?
► How we’ll report?
► What to do if service is not meeting
expectations?
►
7. Managing Consumption
► Consumption Tips
Priority Definition
Emergency
Day to day operations cannot continue or external
agreements cannot be honored until resolved
High
Day to day operations negatively impacted, but a
workaround is in place.
Medium Not critical to business operations
Normal Low impact or low urgency
16. Page 16
Step 3 - Review proposed services with the
business
Develop a set of proposed services based on industry
leading practice that are relevant for your company and
business customers
20 – 30 business facing standard services is preferred
Review these proposed services individually with the
technology leaders of each business unit
This is an opportunity for IT to listen and to
strengthen relationships with the business
Based on the feedback received revise these services and
agree to a final review once the service catalog is drafted
17. Page 17
► Develop Service Level Agreements (SLA’s) for each service that
focus on what the business needs
► Sometimes this can be done with one SLA, which is perfectly acceptable, since
the business may not be accustomed to any SLAs.
► Develop initial SLAs which serve as the starting point for review
and discussion with the business
► Revisions are to be expected as SLAs are a negotiation between the service
provider and the customer
► Increased SLAs usually result in increased costs
► In terms of specific performance levels that each service area /
owner will commit to, base them on what is CURRENTLY
ACHIEVABLE
► Trust with the business is built by setting and meeting performance
commitments (SLAs). Setting unrealistic SLAs that are missed in the first few
months will only damage the credibility of the IT organization
Step 4 – Define service levels
Key Points to Consider
18. Page 18
Note: “Downtime in Minutes” does not account for scheduled downtime. Availability will be calculated on a monthly average basis.
Availability
Monthly Downtime in
Minutes
Monthly Downtime
Percentage
100.000% 0 0%
99.995% 2.19 0.005%
99.990% 4.38 0.010%
99.950% 21.90 0.050%
99.900% 43.80 0.100%
99.850% 65.70 0.150%
99.800% 87.60 0.200%
99.750% 109.50 0.250%
99.700% 131.40 0.300%
99.650% 153.30 0.350%
99.600% 175.20 0.400%
99.550% 197.10 0.450%
99.500% 219.00 0.500%
Service Availability Matrix
To be used when setting SLAs
19. Page 19
Step 5 – Determine service costs
This typically takes 8 -12 weeks depending upon data availability and quality
Others
►Cost per server
►Cost per
application
►Cost per GB of
disk storage
►Cost per help
desk call
►Cost per PC
►Cost per
telephone
►Etc.
Remote
Services
HR FIN
Others
Sales BI
Others
Hosting
Services
Application
Mgmt.
Telecom
Services
Others
►Helpdesk
►Server mgmt.
►Voice
►WAN/LAN
►Storage
►Etc.
Cost Drivers:
►Servers
►Storage
►Applications
►FTEs
►Etc.
Labor
Maintenance
Depreciation
IT Departments Services
Cost
Pools
Service
Costs
Consumption
Drivers
EY Service Costing Framework
Linkage to
Chargeback
Service
Catalog
Usage Data
20. Page 20
Step 6 – Produce and issue the catalog
► Review a draft of the service catalog with key business
leaders and incorporate their final round of input
► By including the business stakeholders adoption use
of the service catalog will be higher since they will
feel a sense of ownership in helping to craft this
important document
► Publish a final version of the service catalog
► This can be in many forms depending on your
company
► Can reside on the home page of intranet for IT
► SharePoint
► Email a pdf to all customers of IT
21. Page 21
Peter Hidalgo, Jr
ITFM Service Leader
Senior Manager
IT Transformation
Advisory Services
Ernst & Young LLP
5 Times Square
New York, NY 10036-6530,
United States of America
Pete.Hidalgo@ey.com
Mobile: 973-223-5616
Education
West Point - USMA
BS – Engineering
Columbia University
MBA
Certification(s)
PMP
ITIL Financial Management
► Senior Manager with over 20 years of experience in I.T. Financial Management, Telecom and I.T. infrastructure,
Cost Optimization, Program Management, and I.T. Shared Services Transformation.
► Deep industry experience in managing and optimizing I.T. costs. Previous responsibilities included serving as the
Global I.T. Financial Manager for a Fortune 100 company, where he managed an annual operating budget of over
$100 million. In that role he also developed and implemented an ITIL based service costing and chargeback
process, resulting in improved client satisfaction and major, recurring cost savings.
► Currently serves as the I.T. Financial Management Service Leader within Ernst & Young’s IT Advisory practice
Relevant experience
► Assisted a Fortune 50 global manufacturing client with redesigning their current IT allocation model and
processes for over $1 billion in annual spend
► Advised a Fortune 50 pharmaceutical client with improving their IT financial management processes, cost
transparency, data management, chargeback model redesign, service owner framework, and automation
► Advised and assisted a leading media and entertainment company to transform their IT operations into a shared
services model encompassing 11 major service domains. Also assisted in the development of a data center
strategy, a WAN architecture review, and a detailed IT service cost analysis, to include the development of a
service catalog, and a chargeback model.
► Assisted in an IT infrastructure (voice, data, and data center) strategic assessment and financial analysis for a
Fortune 500 corporation, which resulted in identifying the strategies to improve network and data center
performance and availability, in addition to saving $32M - $53M over three years in IT operating expenses.
► Supported an IT Cost Optimization study for the premium spirits and wine supplier in the U.S., which addressed
their telecom and infrastructure spend. Identified annual savings of 10% to 19%.
► Advised in the strategic assessment of the voice and data networks for a Fortune 500 high tech manufacturing
firm, which resulted in a new technology direction (VOIP) and Identified over $9M in annual savings.
► Assisted in performing an IT Operations strategic assessment for a Fortune 100 manufacturing corporation,
focusing on data center consolidation. Developed data center consolidation and disaster recovery strategies, in
addition to Identifying over $5M in annual savings.
► Advised a leading medical device manufacturing company in the evaluation of their outsourced infrastructure
service contracts, resulting in overall savings of $5M - $6M, or 35% - 45%.
► Assisted a Fortune 100 consumer staples company with the assessment of their wireless telecom services
contracts, resulting in overall savings of $6M - $9M, or 45% - 55%.
