Recession shifts IT service management into fast lane

IT efficiency has become paramount to companies during recent lean times

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.

MasterCard's IT operation, 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 its philosophy and approach to service management a couple of years ago.

First, MasterCard hired Burlington, Ontario-based IT consultancy Pink Elephant to evaluate its IT services. Pink Elephant designed companywide standard IT incident, problem and change management processes based on the Information Technology Infrastructure Library (ITIL) framework.

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 Inc. is similarly developing IT service management processes for use across its global organization. IT officials say the processes are uniform 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 last week during a presentation at an IBM conference that focused on IBM's integrated service management tools. And while these users had adopted IBM tools, they are part of a larger trend throughout enterprise IT that involves the use of products from multiple vendors.

What may be most striking about the IT service management business is just how resilient it has been during the current recession, according to data provided by Mary Johnston Turner, an enterprise system management software analyst at research firm 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 category will grow by 5.6% in 2010. Revenue generated by problem management software, which includes service desk systems, rose 4.2% in 2009 to $4.2 billion, IDC added. Problem management software revenue is projected to increase by 5.9% in 2010.

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

Evelyn Hubbert, an analyst at Forrester Research Inc., said adoption of IT service management tools has accelerated as IT operations move to meet or exceed the requirements of 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 business units considering the use of third-party software-as-a-service and cloud computing platforms. Competition with cloud and SaaS technologies means that IT departments have to show, precisely, how the cost of their services compares with those of external providers, said Hubbert.

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

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

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

Improving uptime and reliability was the overarching goal driving the adoption of IT service management tools at Sisters of Mercy Health System 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 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 or subscribe to Patrick's RSS feed .

Copyright © 2010 IDG Communications, Inc.

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