Recession Shifts IT Service Management Into Fast Lane

The recession has helped convince companies to adapt IT processes to help cut costs and improve service delivery to internal users.

While the recession has prompted many companies to put IT projects on hold, MasterCard Inc. moved ahead with plans to create an IT service management program aimed at improving service delivery and cutting costs.

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The large IT operation at MasterCard, which processes 22 billion transactions a year, includes individual groups managing data in multiple business units. Those departmental IT operations had developed their own processes for handling such things as IT incidents and software changes.

While the separate processes and tools used by individual units were working, MasterCard moved to change the philosophy a couple of years ago.

First, MasterCard hired Burlington, Ont.-based IT consultant Pink Elephant to help evaluate its IT services. Then the consultant designed company-wide standard IT incident, problem and change management processes based on the Information Technology Infrastructure Library (ITIL).

Once work on the processes was completed, MasterCard trained its employees to use them , established a consolidated service desk, and adopted IBM's Tivoli and Maximo tools to manage the company's services and assets.

Diane Pickler, business leader for MasterCard's IT service management effort, said that among other things, the new processes are providing users with improved incident data. They are helping users determine whether hardware or code is causing a problem, which helps IT personnel "make some decisions to really improve the efficiency of the whole company," she said.

Harley-Davidson Motor Co. is similarly developing IT service management processes for use across its global organization. IT officials say the processes are uniformed and repeatable and can probe for the root cause of problems.

"If something breaks, we want to understand how something is fixed," said Ronda Kiser, the senior manager for system management services at Harley-Davidson.

Officials from MasterCard and Harley-Davidson were among those explaining their companies service management approaches to an audience at an IBM conference last week that focused on its integrated service management tools. And while these users had adopted IBM tools, the trend underlying their adoption extends across vendors.

What may be most striking about the IT service management business is just how resilient it has been during the current recession, said Mary Johnston Turner, research director for enterprise system management software at IDC.

For instance, IDC projects that worldwide revenue from sales of change and configuration management software grew by 3% in 2009 to $4.1 billion. IDC forecasts that revenue in the catgory will grow by 5.6% in 2010. Revenue generated by problem management software, which includes service desk systems, increased by 4.2% in 2009 to $4.2 billion, IDC added. Problem management software revenue is projected to increase by 5.9% in 2010.

By contrast, Gartner Inc. said his week that 2009 worldwide server revenue declined 18.3% from the year earlier.

Evelyn Hubbert, a senior analyst at Forrester Research Inc., said IT service management adoption has accelerated as IT operations move to meet or improve service level agreements. IT organizations "are being asked to do the impossible - be more efficient and effective with less money and add additional technologies (such as virtualization) to reduce cost even more," said Hubbert.

The service management programs can also help IT departments better show their worth to lines of businesses considering the use of software-as-a-Service and cloud computing products. Competition with cloud and SaaS technologies means that IT departments have to show, precisely, how the cost of their services compares with those external providers, said Hubbert.

Hubbert said IT organizations "need to establish some order." At this point, that order has become ITIL, which provides agreed upon, common sense processes that can manage incidents, problems and changes "in such a way to take the guess work out and to become a functioning group," she said.

The need for order has also prompted the adoption of service catalogs that provide the businesses with details on IT services, costs and associated service levels agreements.

ITIL can also help increase a company's IT automation capabilities. In the case of Harley-Davidson, the company has incorporated autonomic tools that can manage software problems without the need for human intervention, speeding problem resolution.

Improving uptime and reliability was the overarching goal in IT service management adoption at Sisters of Mercy Health Systems in St. Louis, which operates 26 acute care hospitals, two heart hospitals and other facilities, Michael Zucker, director of IT operations.

When Sister of Mercy's made the decision to move electronic health records, the business wanted to ensure that the systems and processes supporting those records were "highly available," said Zucker.

The health records went live in January, 2008.

"The way we facilitated high availability was through IT service management," he said.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld . Follow Patrick on Twitter at @DCgov , send e-mail to pthibodeau@computerworld.com or subscribe to Patrick's RSS feed .

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This story, "Recession Shifts IT Service Management Into Fast Lane" was originally published by Computerworld .

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