Enterprises Rethink Service Management Strategy

As financial services, manufacturing, healthcare, pharmaceutical and government sectors build out their intranets and extend internal networks outside their firewalls, they could be setting an example for the telecom world in terms of how operational expenditures can be improved through operational efficiencies—while improving services and mitigating outside costs around security, viruses and ensuing regulatory requirements.

Realizing past mistakes of buying technology for technology’s sake, enterprise IT organizations are now focusing on technologies that directly impact the business and consequent margins. For that reason, there is an upturn in spending in business process automation, which is leading to a “jobless recovery” as revenues increase because worker productivity is on the rise.

Enterprises that previously suffered from sticker shock when looking at inventory management automation are now automating network management, provisioning and inventory capabilities as FAB (fulfillment, assurance and billing) principles are hitting the enterprise in much the same way they did in telecom.

Changing Mindset

Unlike telecom providers, which stand to profit from the delivery of services over their networks, enterprise IT organizations seem to have nothing to gain, even though they are responsible for everything that touches employees’ computers and communications devices. Enterprise IT organizations get bogged down with responsibility from the tremendous amounts of due diligence necessary to document intellectual property changes resulting from constant churn as chunks of employees come and go with acquisitions and consolidations.

One CIO at a major bank, speaking off the record, admitted that his IT organization spent as much as 80 percent of its time fighting integration woes—in attempts to integrate data from acquisitions—and the remaining time caring for and feeding existing networks, systems and applications rather than building innovations and automating.

But now, enterprise IT organizations are beginning to think of the network in terms of services and how they matter to each line of business (LOB). “Rather than organize along various islands of technology, IT organizations are beginning to create catalogs of services, whether email, employee portals or payroll processing, and paying attention to those that mean most to the bottom line,” says Bill Emmett, senior solutions manager for Hewlett-Packard’s OpenView product.

That means traditional network management systems vendors trying to integrate order management, network inventory, auto provisioning, fault management and billing are extending or partnering to offer what has been coined business service management (BSM). BSM solutions encompass network, user, supply chain, change, service and security management capabilities, and all major players in the space, including IBM’s Tivoli software, HP and Concord Communications, are focusing on BSM to link IT services to the business. By looking at services as a whole, rather than just at individual devices, BSM strategies offer enterprises a means for building dashboards or consoles that show IT components as they relate to business processes. Having an end-to-end view expedites the ability to see problems and either manually deploy people to fix a physical problem, or locate areas where self-discovery and self-healing software can be implemented.

“When managing a NOC or operations security center, enterprises want a dashboard for a view of specific external partners or internal end users so they can see any duplicate events and work toward greater operational efficiency,” says Pierre Coyne, director of marketing for Micromuse. “Then they can see how infrastructure is related or how ATMs connect in branch offices to deliver online

banking capabilities.”

That has led to a push to integrate performance management, change management and provisioning for more comprehensive BSM. Where change management software helps automate configuration of devices as service portfolios evolve, managing those service portfolios falls under the realm of service management.

“The components of end-to-end BSM include the end-user experience, which links to performance management and service assurance,” says Frank Kettenstock, vice president of product marketing at Concord Communications, which offers network management, inventory, and cost/chargeback mechanisms for allocating costs to cost centers. It has a three-step approach for BSM, involving mapping of IT services to business processes, measuring end-user experiences, and managing the network, systems and application infrastructure.

“That three-pronged approach will replace the traditional three-silo approach involving the network, the data center and service delivery components in traditional network management,” says Kettenstock.

Already, industries such as banking are aggressively implementing BSM principles, as evidenced by the momentum in Asia, Europe and now the U.S. of the IT Infrastructure Library (ITIL), a framework under ongoing development within the IT Service Management Forum. Most BSM solutions boast of aligning their IT operations software to the best practices defined by the ITIL, which define how service management should be applied within specific organizations that rely on internal IT departments.

“You have to go beyond network management and get into managing exchange servers, storage facilities and applications—not only with internal employees, but supply chain customers,” says Steve Wojtowecz, director of strategy for IBM’s Tivoli line of products.

Other than ITIL, work within the World Wide Web Consortium and Organization for the Advancement of Structured Information Standards (OASIS) is taking place to devise structured information processing to facilitate an end-to-end view of networks. “Last-mile carriers who don’t have open standards, such as small, local carriers with proprietary stuff, won’t survive in the long-haul,” says Wojtowecz, contending that bigger players are constantly working toward heterogeneous support. “At a minimum, IT has to understand open standards. If you build a proprietary fiefdom, then your skill set is not open and ultimately you won’t be needed once acquired by a company whose IT strategy is open,” he says.

Consequently, management companies are aggressively pursuing integration through partnerships, so they can build modular suites of products through open integration interfaces intended to enable enterprises to merge data into their products, as well as integrating management information as Web services.

“There’s only so much tools can do; if you automate bad processes, efficiencies gained are questionable,” says Emmett. “We believe the ITIL-based consulting competencies will improve workflow and our ability to make improvements. Reiterative best practices will help integrate network elements to people.”

The organization is pushing to extend its customers’ user bases out to IT, so that workflows are automated by putting the same forms and fields on Web-based forms. “Through drop-down menus, enterprises make sure the correct values and data are in place before provisioning services,” says Greg Trexler, business manager with Ace-Comm, whose NetPlus handles cost management for the U.S. Army and other large institutions. “We are pre-integrating workflow management with order entry and inventory systems.”

Prioritizing Through SLAs

In the past, management companies’ biggest competitors were usually internal IT organizations, but more and more, IT is recognizing its core competency should be industry-specific applications. They are realizing that horizontal infrastructure can be bought off the shelf so that the latest and greatest can be plugged in and tailored to their specific industry’s needs.

For that reason, SLA management will become extremely important, especially with the trend toward outsourcing frame relay and ATM services to other service providers, as well as outsourcing, in some cases, the complete management of IT infrastructure to companies like Unisys, General Dynamics, EDS and CSC.

“That means enterprises have even more partners with whom to get into finger-pointing when problems arise,” says Kettenstock.

As a result, enterprises will need to centralize SLA information into a single repository so that data can be easily accessed and broken down for service management purposes, giving them insight into their networks, systems, applications and storage capabilities.

“Enterprises have to be able to figure out how to define service levels with respect to applications and the user community,” says Emmett. He adds that enterprises are now starting to bill internally for the amount of service dedicated to each LOB. “The delivery of something as seemingly innocuous as email or employee portals or payroll processing can mean tremendous operational costs when providing access and storage capabilities for thousands or tens of thousands of internal employees. A line of business with 100 people should not be charged as much as one with thousands that consumes far more megabytes,” he adds.

That means enterprise IT heads have to learn to work with that lifecycle so that they can meet objectives, cross-charge, and change SLAs as services are added and removed from production.

There is no debate, however, about the fact that security management has become the top priority for all enterprises. For that reason, many enterprises are galvanized to look at BSM for automation of security management of users’ identities and access profiles—for both internal employees and supply chain partners. Because regulatory and security requirements dictate that enterprises need to be able to identify what users subscribe to what services, and which internal and external employees had access to customer information, there must be strong user management principles in place. “You have to be able to prove to agencies that you comply with rules around access,” says Wojtowecz. “If an enterprise determines marketing can have access to customer credit cards, but not email addresses or income levels, or that sales can look at Social Security numbers but not bank account numbers, IT has to have strong user management principles.”

That means management solution providers must be heavily involved with the assembly of substantial IT infrastructure, whether databases, hubs, or routers, and have the ability to extend infrastructure to a business-driven level. “Enterprise IT will have manage things in a business context, which again comes back to mapping services to the user base,” says Wojtowecz.

Enterprises must seek out management vendors that do more than focus on just the network technologies, but also at improving processes and governance concepts. “You build efficiencies only once you define the IT processes you want to propagate and the rules that IT and users will follow. Then, when people have a clear understanding of what IT can and cannot do, you can build technologies around what really matters to the business,” says Emmett. Then enterprises can align daily operations management in the context of the business services in a secure manner.