summit

strategies
w w w. s u m m i t s t r a t . c o m

Six Steps
to Service
Level
Management
Success
December 2004

White
Paper
 summit
strategies

Table of
Contents
Six Steps to Service
Level Management Success

Sections Service Level Management Puts Business Priorities First .............................. 1

Six Steps to Successful SLM Implementation ................................................ 3
BMC’s SLM Portfolio Supports All Levels of SLM Monitoring ......................... 6

Figures Figure 1: Enterprise Timelines for Implementing Service Management ......... 2

Figure 2: Six Steps to Successful SLM Implementation ................................. 5

NOTE: This report is based upon information believed to be accurate and reliable. Neither Summit Strategies,
Inc. nor its agents make any warranty, express or implied, as to the accuracy of the information or the opinions
expressed. We shall have no liability for any errors of fact or judgment or for any damages resulting from reliance
upon this information.

Trademarked names appear throughout this report. Rather than list the names and entities that own the trademarks
or insert a trademark symbol with each mention of the trademarked name, Summit Strategies uses the names only for
editorial purposes and to the benefit of the trademark owner with no intention of infringing upon that trademark.

©2004. Reproduction in whole or in part is prohibited except with the written permission of the publisher.

Unauthorized use or sharing of this document is strictly forbidden.

Six Steps to Service Level Management Success | December 2004

©2004 Summit Strategies, Inc. Unauthorized use or sharing of this document is strictly forbidden.
 Executive Summary
summit
strategies

Six Steps to Service

Level Management Success

Service level management (SLM) is a set of processes and tools that tightly align IT priorities and
budgets with business objectives in real time. Implementing SLM requires CIOs and their senior
leadership teams to take a structured, modular approach to change how they track and report IT
service levels and performance. SLM strategies are enabled by sophisticated IT monitoring and
real-time analysis tools that report on the health and performance of IT resources using a busi-
ness-focused point of view.

Using SLM, IT and business leaders can better negotiate and define business-relevant service
levels. They can also use SLM data on IT performance, cost and utilization as the basis of budget
prioritization and trade-off discussions. SLM keeps IT top-of-mind with business sponsors and
increases the awareness of just how important IT is to the overall success of the business.

Most organizations start with a handful of key applications and business processes, and move
towards enterprise-wide use of SLM over time. Summit Strategies recommends a six step
approach that begins with a comprehensive readiness assessment and builds on a solid base of
IT component level monitoring capabilities. Over time, CIOs should shift the service level report-
ing emphasis from looking at the health of individual IT components to tracking the end-to-end
user experience metrics. Ultimately, SLM should be applied in an integrated manner across the
entire IT environment, allowing IT and the business to make prioritization and investment deci-
sions based on a shared understanding of how their choices will impact the total performance
of the business.

BMC’s SLM Route to Value offers CIOs a modular set of service level tracking and reporting tools
that can support this type of incremental SLM ramp up, at a pace that matches the organization’s
ability to change the way IT is managed. For customers planning to reap the benefits of BMC’s full
Business Service Management strategy, SLM should be one of their first steps, since the policies
and metrics defined by SLM are needed to drive prioritization and automation of most other IT
service management activities.

Mary Johnston Turner

mturner@summitstrat.com

Six Steps to Service Level Management Success | December 2004

©2004 Summit Strategies, Inc. Unauthorized use or sharing of this document is strictly forbidden.
 summit
strategies

White
Paper
Six Steps to Service
Level Management Success

Service Level Management Puts Business Priorities First

CIOs continue to be held to higher and higher standards for justifying their IT bud-
gets and documenting IT’s contribution to ongoing business performance. Service
Level Management (SLM) software and tools are used to collect, analyze and
report on IT performance and its contribution to the business. The information pro-
vided by SLM can dramatically improve the quality of the CIO’s relationship with
the business, help to improve the way IT staff sets day-to-day priorities, and sup-
port better alignment of promised IT service levels with the cost of IT operations.

To be successful, implementation of SLM tools need to be executed in conjunc-

tion with a strategic transformation of IT planning and operations processes.
SLM requires that IT staff shift from thinking about IT as stacks of compo-
nents, to viewing themselves as internal service providers who use integrated
IT resources to deliver business services. Depending on the organization and
its level of SLM maturity, these IT-enabled business services might be defined
in different ways ranging from:

Logical groups of IT applications and capabilities that users view as inte-

grated solutions, such as desktop connectivity and messaging services;

Business transactions that use information and IT resources spanning mul-

tiple applications, databases, and/or servers, for example, new account
activation transaction services; or

Logical groupings of business applications that together represent a key

set of business functions, such as supply chain and inventory manage-
ment services.

The most important element in defining a SLM strategy is gaining joint IT and
the business leadership agreement on the definitions of the business services
and the metrics that will be used to measure service level delivery. Most often,
companies will need to shift from focusing on IT-oriented metrics such as com-
ponent uptime or availability to business-oriented service level agreements

Six Steps to Service Level Management Success | Page 1

©2004 Summit Strategies, Inc. Unauthorized use or sharing of this document is strictly forbidden.
 (SLAs) that use business-oriented metrics such as application response time,
mean time to complete a business transaction, or lost e-mail recovery times.

Once both sides agree to SLA definitions and metrics, they must also agree that
the cost justifies the benefit and that they will fund the required budget in full. In the
past, CIOs have found it very difficult, if not impossible, to effectively link IT costs to
an associated business impact. As a result, many IT organizations were continu-
ally asked to do more without receiving adequate funding to get the job done. And,
beyond simple spreadsheets and manual data collection processes, they had few
tools available to produce the types of service level and cost reports needed to
support negotiations and tradeoff discussions with the business leadership.

Over the next several years, forward-looking CIOs plan to use SLM—and
related service management tools—to provide better, more cost-effective busi-
ness services to their end users (see Figure 1). SLM strategies provide CIOs

Figure 1 Enterprise Timelines for Implementing Service Management

Over the next three years, a majority of enterprises surveyed by Summit

Strategies expect to invest in tools to support more comprehensive service
management and operational automation.
Q. Which statements best describe your organization’s
current and future IT management software and tools strategy?

8%
18%
31%
Current (today) 19%
25%
33%
54%

7%
26%
32%
Future (1-3 years) 36%
41%
32%
7%
N=129
0% 10% 20% 30% 40% 50% 60%

Don’t know where we stand on this topic

Third-party management service providers/outsourcers
Day-to-day resource sharing, capacity planning, configuration, provisioning/workload balancing
managed on automated/policy-driven basis
Configuration dependency mapping to understand structure of applications, dependency/configuration
details/changes and aid planning and troubleshooting
Automated correlation, predictive analysis/monitoring of events support problem resolution in real time
Operators analyze/synchronize information from multiple domains
Each element of IT infrastructure managed independently

Source: Summit Strategies, Inc., www.summitstrat.com

Page 2 | Six Steps to Service Level Management Success

©2004 Summit Strategies, Inc. Unauthorized use or sharing of this document is strictly forbidden.
 and business leaders with common service definitions, SLA targets and sup-
porting budget calculations. If the business desires a higher service level than
the current budget can support, SLM provides the CIO and the business lead-
ership with a model for understanding both the cost and business impact of
additional spending.

Over time, these business choices can be defined in terms of IT automation

policies and used to drive many real time resource allocation and dynamic
provisioning choices. However, most organizations choose to walk before
they run. The following section describes the six key steps to successful SLM
implementation.

Six Steps to Successful SLM Implementation

Because SLM generally includes as much cultural transformation as it does

deployment of new service level monitoring and reporting tools, several of
the most important steps for SLM success involve planning and process
changes, rather than simply purchasing new software tools. Early SLM
adopters consistently report that spending time at the beginning of a proj-
ect to complete a comprehensive readiness assessment, craft service level
objective definitions, and define joint business/IT planning processes make
the total project flow much more smoothly over time. The following six steps
are the keys to successfully deploying SLM (see Figure 2).

Step 1
Assess organizational willingness and readiness to fund and deliver IT
as business services. This assessment should include an analysis of
existing monitoring tools, the ability to associate costs with services,
and an identification of business partners willing to pilot a business ser-
vice management (BSM) SLM initiative. Depending on the current state
of affairs and the current level of IT and business trust, some general
education may be required to get the key business and IT staff members
on board. During the readiness assessment phase, many organizations
find they have gaps in their ability to track and report on the health of
their IT components.

Step 2
Implement comprehensive network and systems monitoring and report-
ing tools. Since accurate and timely data about the availability and
performance of individual IT components is required to support higher
level BSM SLM reporting, it is important to have a comprehensive base
of monitoring capabilities in place and to have developed a comfort
level with the use of these tools. Filling in the gaps early assures that
the required data will be available when requested by higher level sys-
tems and will have the immediate benefit of providing operational IT
staff with better status and health information about their individual
technical environments.

Six Steps to Service Level Management Success | Page 3

©2004 Summit Strategies, Inc. Unauthorized use or sharing of this document is strictly forbidden.
 Step 3
Build IT interest in service level management. Introduce concepts such as
BSM and ITIL (IT Infrastructure Library) or Six Sigma quality improvement
practices to both IT staff and business peers. SLM requires IT staff to view
themselves as business service providers, as much as it requires the busi-
ness to view IT as a strategic business resource. Models such as ITIL help
both groups to quickly grasp what it means to deliver IT as a service and
how to improve the definition of services and SLAs over time.

Step 4
Run joint business/IT pilot projects that demonstrate the value of SLM.
Work with business partners who grasp the value of BSM and SLM to
design a few pilot programs that demonstrate how shifting to end-user
focused SLAs can improve business and IT performance. Measure and
document improvements to business service level objectives, cost savings,
and improved IT productivity.

Step 5
Expand SLA visibility and reporting to include service/support metrics and
cost data. The long term goal for SLM will be to build a complete business
services model where SLAs incorporate component metrics, end-to-end
user experience information, and IT service and support metrics such as
mean time to repair and trouble ticket response time. Adding in informa-
tion from service desk and related systems will provide a more accurate
and comprehensive view of IT’s impact on the business. Use of executive
dashboards should be widely encouraged at this stage.

Step 6
Extend the use of SLM metrics to drive predictive planning and day-to-day
IT workflow automation. Once SLM processes and the enabling business
policies are well understood, IT can begin to use SLM data to support for-
ward-looking planning activities as well automation to improve responses
to SLA violations. By modeling the potential impact of changes on SLAs, IT
can make better resource allocation tradeoff decisions and keep costs in
line with expected business results. Operationally, operators can be imme-
diately notified when a service-affecting event takes place. At this stage,
SLM goals and policies are very well defined and accepted by both IT
and the business and can begin to be used to drive selected automated
resource allocation, provisioning and problem response activities.

Clearly, different organizations will begin their journey to SLM at different

points. Some organizations will already feel they have a good set of busi-
ness service definitions and service level targets and will focus on deploying
the right set of monitoring and reporting tools. Others will find that their IT
staffs actively resist taking a business service management approach to the
way they set their daily priorities. Some may even resist the idea of nego-
tiating SLAs with the business, believing that business customers cannot
fully appreciate the negative impacts that might result from reducing service
levels in order to hold down costs.

Page 4 | Six Steps to Service Level Management Success

©2004 Summit Strategies, Inc. Unauthorized use or sharing of this document is strictly forbidden.
Figure 2 Six Steps to Successful SLM Implementation

Successful SLM implementation requires a modular plan to introduce

business and IT decision makers to the concept of business service
management while gradually increasing the sophistication of the service
level agreements. Over time, SLM can become the CIO’s primary strategy
for keeping IT spending and operational performance in line with expected
business results.

Step 1: Step 2: Step 3:

Readiness Comprehensive SLM
Assessment Component Monitoring Education

 Tools  IT metrics  ITIL Training

 Business support  Operational health  Business champions
and stability
 IT staff perspectives  Service identification

Step 4: Step 5: Step 6:

SLM Pilots/ Integrated Predictive
Validation SLM SLM

 End-to-end user  Cross-business analysis  SLM impact analysis

experience
 Service desk and  Policy-based
 Application specific support metrics added automation
 Executive dashboards

Source: Summit Strategies, Inc.

www.summitstrat.com

Still other organizations will find they have solid service models and a moti-
vated staff, but lack the tools required to get the job done. For those who are
ready to deploy SLM tools, three major types of tools are needed:

IT component health monitors. These tools are designed to measure the
basic health (e.g., uptime, availability, utilization) of individual network and
system elements. They help IT staff detect problems at the component
level but the data collected by these monitors needs to be available to a
higher level tool to support business service-oriented SLM. They are not
able to associate system level performance with the end-to-end business
service impact or end user experience.

End-to-end user experience monitors for specific applications. These mon-
itors include synthetic transaction monitors and agents capable of tracking
actual desktop performance. They typically report SLAs for specific applica-
tions but provide little or no insight into which underlying network or system
element may be the source of problems.

Six Steps to Service Level Management Success | Page 5

©2004 Summit Strategies, Inc. Unauthorized use or sharing of this document is strictly forbidden.

Executive SLM reporting and dashboard tools. These tools take data
from multiple sources (element monitors, synthetic transactions, actual
user response time monitors, etc.) and integrate it with performance
data from service desks systems and asset management tools. The
resulting analysis positions IT costs and performance in an executive
framework that both business and IT decision makers can use to drive
ongoing business service delivery performance and return on invest-
ment. Most often this information is provided to the business in the form
of an executive dashboard.

BMC’s SLM Portfolio Supports All Levels of SLM Monitoring

With the acquisition of Remedy, BMC’s SLM portfolio provides customers with
a comprehensive set of capabilities to support a modular SLM implementation.
Specifically:

SLM Express with PATROL classic or PATROL Express collects and

reports on IT component availability and system performance across the
enterprise using industry standard protocols to collect data from heteroge-
neous computing environments. The resulting SLM reports are suitable for
use by IT staff and provide a solid baseline of information to support future
discussions with the business.

SLM Express with PATROL End to End Response Timer enables the use
of synthetic transactions to monitor end-to-end user service levels on an
application specific basis. Tools from BMC partners, such as FineGround
Networks’ AppScope product, provide additional end-user focused SLA
reporting tools using desktop agents for measuring actual transaction per-
formance. These reports begin to provide the business and IT leadership
with a common set of service definitions and business relevant metrics and
provide a solid starting point for introducing SLM concepts on an applica-
tion-by-application basis. Web-based dashboards allow IT management to
easily share information with business sponsors.

SLM Express with BMC Service Impact Manager and Remedy SLA report-
ing tools allow CIOs to integrate data from multiple end-user focused tools
with service desk performance data to build a more comprehensive view
of the over-all business experience. These tools enable more proactive,
predictive analysis that can assess the impact of changes on SLAs and
incorporate Quality of Service (QoS) information from IT component mon-
itoring tools and the Remedy Service Desk Quality of Response (QoR)
reports to develop a complete picture of service performance and impact
before problems occur.

SLM is one of eight Routes to Value that BMC is developing to help its custom-
ers get started implementing a business service management strategy. Each
Route to Value addresses a specific operational pain point and provides a

Page 6 | Six Steps to Service Level Management Success

©2004 Summit Strategies, Inc. Unauthorized use or sharing of this document is strictly forbidden.
 rapid return on investment by enabling more proactive IT management and
stronger business/IT alignment. Other BMC Routes to Value include Incident
and Problem Management, Identity Management, Capacity Management and
Provisioning, as well as several others.

Routes to Value are built on a common development interface, rely on common

user interfaces and share data via a common configuration management data-
base. While each Route to Value can deliver value on a standalone basis, the
SLM Route to Value is particularly important for BMC customers who aim to
deliver IT as a business service and/or who want to make more aggressive
use of automated provisioning and management technologies over time. The
SLM implementation process builds stronger business/IT relationships as they
collaboratively develop a common view of IT priorities, SLAs and budgets.

Beyond the near term, benefits resulting from improved business credibility,
better aligned costs and higher end-to-end service levels, SLM lays the cor-
nerstone of well-defined policies, priorities and business/IT decision making
processes that are needed to fully exploit the power of BMC’s BSM vision and
the full menu of its Route to Value solutions.

Mary Johnston Turner

mturner@summitstrat.com

Six Steps to Service Level Management Success | Page 7

©2004 Summit Strategies, Inc. Unauthorized use or sharing of this document is strictly forbidden.