28.01.2007 15:04Tim Cole

Which path to IT Shared Services?
Financial transparency adds value to corporate infrastructures
As vendors and users begin to think about identity as a service, questions about what IT Shared Services (ITSS) really are and how best to implement them are being asked more and more frequently. KCP senior partner Tim Cole sought answers from HP’s Uwe Aichler. And as it turns out, transparency may be the central issue.

In a Shared Services environment, IT essentially becomes an internal service provider, offering its “customers” within the company at least the same quality of service, cost and value that an external service provider might give them. Services are defined by the needs of the business, not by the capabilities of the IT department, they are delivered based on market standards of excellence, and they are usually billed by service level and consumption like any other utility.

This approach seems straightforward as a way of delivering more value from IT to the business. But consolidating common IT functions that are otherwise spread across an enterprise and delivering over a shared infrastructure usually calls for a complete rethinking of a company’s IT value delivery chain and IT’s role within the business.

Experience shows that while all roads lead to Rome, there can be more than one path to IT to share services. “Basically, there are two ways to go if you intend to move to ITSS,” says HP Program Manager Uwe Aicheler, “either top-down or bottom-up.”

Of the two, “top-down” is probably the most traumatic for IT traditionalists. It essentially calls for rethinking IT fundamentals – such as the services portfolio strategy, services billing, financial planning, governance and organisational change – according to guidelines set down in the beginning at the highest corporate levels. Commonly referred to as the “transformation” approach, this method promises a fast shift from the old world of clunky, dedicated IT systems to a sleek new world of service-driven centralised IT.

In the process, the IT department may be required to radically transform itself. Most projects call for the creation of an “IT / LOB Account Management Structure,” a distinct organisation aimed at creating service level agreements to select business groups via the customer/supplier model. Many CIOs will find their jobs being transformed as well, namely from that of budget manager to service broker.

In contrast, the bottom-up strategy may appeal to some because it offers a softer, more tactical approach to the future of IT. Typically, the “utility” strategy calls for the use of pre-packaged shared service modules, allowing selective implementation of ITSS without demanding fast and full organisational transformation. These utilities feature a common architecture that includes a shared infrastructure, automation, service level management and a portal interface.

“I would embark on both approaches at the same time,” Aicheler says. His argument: Trying to implement an IT shared service business model based on inflexible infrastructure can take quite long and result in expensive over-provisioning. “On the other hand, if I only invest in server consolidation and infrastructure virtualization without addressing the core business issues like processes, governance, account management and value based charging then I risk alignment with business priorities. ” he maintains. The solution – as so often in life – is a good balanced approach driven by one or two business initiatives.

“HP is well-positioned to help businesses implement ITSS either way,” Aicheler says. In fact, HP recently announced two new offerings within its IT Shared Services portfolio which give customers a free choice of which roadmap they wish to follow.

The HP IT Shared Service Transformation portfolio includes consulting services aimed at helping customers define their desired IT shared services objectives and assist them in implementing the detailed projects identified in the transformation plan. This includes helping them to avoid the “culture shock” entailed in transforming their IT from a siloed, budget-driven department to an open, customer-focused, revenue-driven service provider.

The HP IT Shared Service Utility portfolio provides an expanding range of pre-integrated shared service utilities allowing customers to begin their transition towards ITSS at the point where the fastest benefits are to be expected. For starters, HP has rolled out shared service modules for test and development environments designed to efficiently allocate, provision and manage heterogeneous IT infrastructure services through a portal interface. Also included is a Shared Messaging utility for Microsoft Exchange, which allows companies to design and craft advanced provisioning and subscriber self-service facilities. Other modules are in the pipeline and will be announced as they are finished. These offerings tie in very neatly into Adaptive Infrastructure, HP’s guiding vision of a 24×7 lights out computing environment.

“For me, the biggest benefit of an IT Shared Services model is financial transparency.” Aicheler says. “Once a certain level of insight is achieved it is much easier to negotiate SLAs, improve the shared service value chain, identify areas for growth or sourcing and react to change.”

And while there may be a choice of routes, the ultimate destination of IT Shared Services is clear: Helping the business achieve better operational efficiency, world-class cost structures and improved quality and responsiveness.

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