Gaj Flavio - Gestire l'IT con gli occhi del Business

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not the wheel. Industrial model to face the challenge of Digitalization. A fresh approach to the ICT Service Management in the era of Cloud Computing, Big Data ...
Flavio Gaj / Silvio Antonio Varagnolo

Re-inventing ICT but not the wheel Industrial model to face the challenge of Digitalization. A fresh approach to the ICT Service Management in the era of Cloud Computing, Big Data and Multisourcing.

IT Service Management

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Table of Contents 1 IT Service Management......................................................................................... 13 2 Implications of Business Service Management on the IT structure ...................... 17 2.1 Why have a model? ...................................................................................... 17 2.2 How can the IT organization structure be developed? ................................. 20 2.3 The “IT information System” as an instrument to govern costs and quality 28 3 Systemic management of complexity .................................................................... 31 3.1 Interrelation of Services, applications and technological devices ............... 31 3.2 The Service Catalogue: meaning, importance and structure ........................ 34 3.3 Managing the Configuration Management Data Base ................................. 38 3.4 Dedicated and shared components and criteria for cost allocation .............. 40 4 The normalized measure of quality ....................................................................... 43 4.1 Quality: measurement and thresholds .......................................................... 43 4.2 Normalization and the global quality index ................................................. 43 5 Availability ............................................................................................................ 46 5.1 Definitions .................................................................................................... 46 5.2 Availability in IT .......................................................................................... 48 5.2.1 5.2.2 5.2.3 5.2.4 5.2.5 5.2.6

The service works but is slow ................................................................................ 49 The service works but is degraded ......................................................................... 50 Some fundamental functions of the service are degraded ...................................... 51 Some users cannot access the Service .................................................................... 51 The Service is working in the absence of some redundancies................................ 52 The Service is stopped for scheduled maintenance ................................................ 52

5.3 Recording incidents ...................................................................................... 52 5.4 Availability estimate .................................................................................... 53 5.5 Benchmarking .............................................................................................. 54 6 The classification of Services and Balanced Availability ..................................... 57 6.1 Classification of Services based on parameters defined by the Business .... 57 6.2 Assigning quality control parameters .......................................................... 58 6.3 Structure and calculation of Balance Availability ....................................... 59 6.4 Suggestions to valorize the Scores ............................................................... 60 7 Monitoring ............................................................................................................. 63 8 Additional indices of Quality ................................................................................ 65 8.1 Critical Incident index .................................................................................. 65 8.2 Classification of incidents ............................................................................ 65 8.3 Quality indices for Minor Incidents ............................................................. 67 8.4 Compliance with delivery times for Services with recurring deadlines ...... 67 9 Quality control dashboards .................................................................................... 70 9.1 Synoptic representations of the indices ........................................................ 70 10 Fault and incident control dashboards ................................................................... 73 10.1 Classification of failures and incidents ........................................................ 73 10.2 Retrospective analysis of events and the removal of the causes .................. 76 10.3 Problem Management support data and dashboards .................................... 79 10.3.1 Risks and priorities of 3the problem ........................................................................ 79

10.3.2

Problem closure code ............................................................................................. 82

11 Measuring the Change Risk................................................................................... 85 11.1 Definition of Change .................................................................................... 85 11.2 Definition of the types of risk ...................................................................... 85 11.2.1 11.2.2 11.2.3 11.2.4 11.2.5

Intervention Risk .................................................................................................... 86 Component Risk ..................................................................................................... 88 Technical Risk........................................................................................................ 88 Business Risk ......................................................................................................... 89 Change Risk (or Integrated Change Risk) .............................................................. 90

12 The Quality/Risk Balance ...................................................................................... 93 12.1 The relationship between Quality and Risk ................................................. 93 12.2 Evolution of Component Risk as a basis for improvement.......................... 95 13 Final thoughts and conclusions ............................................................................. 99 13.1 Resistance to change .................................................................................... 99 13.2 Common ground and beliefs ...................................................................... 102 Appendix 1 Example of Component attributes ........................................................ 106 Appendix 2 Examples of Normalized indices .......................................................... 107 Appendix 3 Analysis of availability ......................................................................... 110 A3.1 Downtime in relation to availability ........................................................... 110 A3.2 Service chain components (in series/parallel) ............................................ 110 A3.3 Calculation methods and parameters .......................................................... 114 A3.4 Estimated availability of application software ........................................... 117 Appendix 4 Normalized Index applied to measuring response times ...................... 118 Appendix 5 Availability in cases of partial outage .................................................. 120 Appendix 6 Measuring Critical Incidents ................................................................ 121 Appendix 7 Measuring minor Incidents ................................................................... 123 Appendix 8 Measuring compliance with critical deadlines ..................................... 125 The authors ............................................................................................................... 127 Bibliography ............................................................................................................. 129

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Index of Figures Figure 1 – Simplified diagram of an email service............................................................................ 22 Figure 2 – Complex diagram of an Information System.................................................................... 24 Figure 3 – Service government .......................................................................................................... 25 Figure 4 – Functional illustration of an IT Services structure .......................................................... 26 Figure 5 – General Architecture of an IT delivery information system ............................................ 29 Figure 6 – Services and components ................................................................................................. 32 Figure 7 – Relationship between Services and the various types of Components ............................. 33 Figure 8 – Example of a Service Catalogue ...................................................................................... 37 Figure 9 – Cost Allocation per Service.............................................................................................. 41 Figure 10 – Examples of Quality Indicators...................................................................................... 43 Figure 11 – Values of a normalized index ......................................................................................... 44 Figura 12 – Example of a Global Quality Index ............................................................................... 44 Figure 13 – Weights in calculating Availability ................................................................................ 51 Figure 14 – Example of Incident attributes ....................................................................................... 53 Figure 15 - Gartner Ranking ............................................................................................................. 55 Figure 16 – Classification of Services from a Business viewpoint .................................................... 58 Figure 17 – Example of measuring the IC of an Incident.................................................................. 60 Figure 18 – Example of classification of Minor Incidents ................................................................ 66 Figure 19 – Example of a Radar chart of global Quality .................................................................. 70 Figure 20 – Summary of Incident Lifecycle Management ................................................................. 75 Figure 21 – Classification of cause and compatability per type of component................................. 76 Figure 22 – Portfolio of active Problems and their characteristics .................................................. 81 Figure 23 – Problem closure code..................................................................................................... 82 Figure 24 – Problem management escalation levels ......................................................................... 82 Figure 25 - Report on Problem management trends ......................................................................... 83 Figure 26 – Combination of risk types .............................................................................................. 86 Figure 27 – Assessment of Intervention Risk for Application components ....................................... 87 Figure 28 – Assessment of Intervention Risk for Infrastructural components .................................. 87 Figure 29 – Simplified calculation of Business Risk ......................................................................... 89 Figure 30 – Change Risk and approval methods............................................................................... 90 Figure 31 – Example of Change Management Flows ....................................................................... 91 Figure 32 – Evolution of Component Risk ......................................................................................... 96 Figure 33 – Service management system (Richard Normann) ........................................................ 101 Figure 34 – Example of Component attributes ................................................................................ 106 Figure 35 – Positive Indices ............................................................................................................ 108 Figure 36 – Negative Indices ........................................................................................................... 108 Figure 37 – Examples of Normalized Indexes ................................................................................. 109 Figure 38 – Downtime in relation to Availability............................................................................ 110 Figure 39 – Components in series and in parallel .......................................................................... 111 Figure 40 – Availability with series links ........................................................................................ 112 Figure 41 – Availability with parallel links ..................................................................................... 113 Figure 42 – Example of a real Service chain in series/parallel ...................................................... 114 Figure 43 – Diagram showing time-related Availability ................................................................. 115 Figure 44 – Estimated availability in relation to Incidents ............................................................. 117 Figure 45 – Normalized index for response times ........................................................................... 118 Figure 46 – Examples of assessment of response time degradation ............................................... 118 Figure 47 – Critical Incident Indicators .......................................................................................... 122 Figure 48 - Example of a Report on Minor Incidents ...................................................................... 123 Figure 49 – Number of accesses per User per Day ......................................................................... 123 Figure 50 – Example of Schedule Performance Index 5 Score .......................................................... 125

Introduction PwC is a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, advisory and tax services. PwC Italy currently employs more than 4,400 professionals, 1,100 of which are active in the Consulting Industry serving prominent clients. PwC has always adopted a proactive and multidisciplinary approach focusing on industries of primary importance in Europe and Italy. This approach aims to create a Business Community and offer a platform of integrated professional services for businesses.

In the last few years the growth strategy pursued globally in the field of Technology has increased the number of professionals to approximately 15,000 worldwide. The PwC belief that technologies will be a distinctive driving factor in the coming years for its clients has prompted it to develop several competence and key product Centres of Excellence at international level. PwC collaborates and has established partnerships with major technological players including Google, Microsoft, SAP, Oracle and HP.

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PwC is globally recognized as a leader in IT Consulting because of its highly qualified technical and professional people, full integration between teams, and its methodologies and project accelerators which make PwC a landmark company within the Technology Consulting Industry. PwC Italy has more than 400 technology professionals in its offices in Milan, Rome and Padua working in the following areas:

The IT Governance and ITSM Team is going from strength to strength to satisfy the extensive Service demand that is also driven by the issuing of new national and international regulations. Many big players increasingly demand support to develop and implement advanced IT Governance Models that give them a consistent overview of their IT System and Technology and, at the same time, facilitate their Business Strategies. In pursuing these goals it is paramount to think in the medium term and abandon misleading illusions that adopting Service Management Tools alone will automatically lead to quick business results. The transformation process must be well thought out and supported at all corporate levels. It is crucial to lead the change, constantly foster a change culture and adopt a clear and effective communication strategy throughout the whole process. PwC has extensive and proven hands-on experience in this type of Business Transformation project and has decided to spread this expertise within the network so that operational and governance needs can be combined. The goal of this book, beginning with the evolution of Transformation and Governance Services observed in recent years, is to recommend possible approaches to manage day-by-day complexity and business processes in the current and future competitive landscape. This book was written by Flavio Gaj, the main designer, and Silvio Varagnolo, with the collaboration of Francesco Ferrari, Giampiero Rado, Andrea Mazza and the PwC Technology Competence Center.

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Acknowledgments “The urns of the great spur the spirit of the strong to accomplish illustrious things, oh Pindemonte, making noble and sacred to the stranger the ground that entombs them.” Ugo Foscolo, Dei Sepolcri

Flavio Gaj This text contains a large part of the experience I have gained in over forty years of professional life. The memories of the many people with whom I have had the good fortune to work and share parts of this journey are always with me and to them I express my gratitude. I will mention only some and my apologies to those whose names are not included. Firstly, I thank my professor and thesis advisor, Valentino Castellani. I am very grateful to those I consider to be my mentors. Special thanks to Alessandro Scandella who introduced me to Database Design, Guido Motta who passed on to me the basics of project management, Paolo Borghese and Franco Brai who opened my mind to using mathematical models in computer science, Giangiacomo Casonato who taught me to look at things in their context and to aim high, Alfonso Lavanna who taught me that numbers are concrete, Angelo Forloni that made me realize how important it is to listen, Umberto Quilici who knew how to channel my experiences and interests towards the emerging matters of IT governance. I thank all the people I have met as superiors, co-workers, colleagues, suppliers or clients with whom I have shared ideas, adventures, initiatives and projects. I would like to especially mention those who helped me to grow with their continuous stimuli and professional exchange of views. My thanks to Stefano Achermann, Stefano Accordi, Gianfranco Albergamo, David Alfieri, Fabiola Alparone, Saverio Andaloro, Andrea Angrisani, Isidoro Atzori, Danilo Augugliaro, Claudio Baffigi, Simone Barezzani, Roberto Barison, Mark Barlow, Marco Bassi, Giampaolo Battistella, Angelo Belbusti, Vania Benetti, Fabrizio Bernardi, Paolo Bettini, Giuseppe Biancofiore, Francesco Biancucci, Fausto Bolognini, Paolo Bonamini, Roberto Bossi, Paolo Bovone, Fabrizio Campi, Carlo Bugliarello, Pompeo Busnello, Rino Cannizzaro, Fabio Caramella, Nicola Cattane, Elia Cerio, Achille Cerqui, Livio Cettolin, Lorenzo Chiaradia, Silvia Ciardi, Sergio Cipri, Sonja Codnich, Mark Cohen, Enzo Contento, Renato Comes, Andrea Corbella, Massimiliano D’Abramo, Domenico D’Avanzo, Giulia Dalla Piazza, Simone Del Prete, Marco Deidda, Brunella Di Silvestro, Emanuele Esposito, Franco Evangelisti, Annalisa Erba, Paolo Fenini, Umberto Fossati, Gregor Gedlicka, Massimo Giambelli, Barbara Giani, Danilo Gipponi, Andrea Giudici, Siegfried Graf, Nazareno Gregori, Horst Griebaum, Andrea Guazzotti, Wolfgang Hofer, Walter Holderrid, Patrizia Iacovone, Gabriele Infunti, Saverio Iormetti, Tomasz Gola, Fausto Jori, Alfredo Labate, Marsha Lansman, Giancarlo Lanzillotta, Hishem Laroussi, Nicola Lassandro, Nadia Lavalle, Renato Leali, Federico Longo, Roberto Lorini, Davide Lotti, Volker Mac Meier, Romano Manetti, Riccardo Mantero, Gaetano Maretto, Mario Maretti, Giorgio Marras, Marco Martini, Roberto Masiero, Victor Massiah, Oronzo Mauro, Klaus Melcher, Roberto Miccoli, Marco Micchia, Claudio Molinaroli, Alberto Montardi, Michele Morelli, Fausto Moreni, Alessandro Moretti, Pierangelo Mortara, Ferdinando Musto, Enrico Muston, Fabio Massimo Ottaviani, Vincenzo Pagliaro, Filippo Panelli, Marco Paolillo, Guido Paparella, Marco Pappo, Alessandro Parma, Nadia Pedretti, Alessandro Pelella, Mario Pennacchioni, Maurizio Perego, Gianfranco Perrucchione, Domenico Pignata, Alessio Pomasan, Nicoletta Pomello, Giovanni Ponteggia, Emilio C. Porcelli, Denise Radici, Giampiero Rado, Daniele Rancati, Kai Reichardt, Andrea Restelli, Marco Righetti, Alberto Rigotti, Massimo Riserbato, Gianluigi Romano, Gianluca Ronchi, Marcello Ronco, Carmela Rosà, Maura Rossetti, Luigi Aquileio Rossi, Gabriele Ruf, Roberto Rufolo, Paola Salomone, Sheina Sampson, Andrea Scotti, Klaus Schreieck, Andrea Spangaro, Stefano Signani, Angelo Sironi, Margherita Sorato, Giuseppe Stacchiotti, Klaus Steinheimer, Achille Steffano, Andrea Stocchero, Andrea Tognetti, 8

Graziano Tosi, Barbara Uttini, Marco Venturini, Fabio Violante, Sebastiano Vita, Giovanni Vitiello, Christoph Wallner, Fabio Zafferri, Mauro Zandonà, Franco Zibordi, Rolf Zimmermann, Tarcisio Zucca Alessandrelli. More recently I owe my thanks to the UniCredit information technology management where I spent the last years of my professional life. Thank you to Paolo Cederle, Massimo Messina, Massimo Milanta, and Massimo Schiattarella. Special thanks to Giuseppe Mannucci for his continuous stimulus to thought and to systematization, and the significant and innovative projects carried out together in the last few years. I thank my son Nicolò (psychologist) for the time he dedicated to me in discussing Service Management, an area he deals with in the world of health. We found there were many similarities in our approach. I thank my daughter Desirè (psychologist) for having explained to me the basic concepts of how human beings acquire and accumulate knowledge. Heartfelt thanks to my wife Maria Chiara Bertorello for her patience and her support, given generously in all my professional adventures. I thank my grandfather, Mario, who patiently answered my first ‘why’ and instilled in me confidence in my abilities. Thanks also to my grandmother Maria who was affectionately there for me as I dismantled my toys to see how they worked. I thank my father, Quirico and my mother, Magda for listening to me with affection and with love and confidence helping me realize my childhood dreams. And thanks to the countless people who I have met in passing and who have given me – often unknowingly – ideas, encouragement and support.

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Acknowledgments Silvio Varagnolo I’ve spent a great part of my professional life advicing commercial and industrial companies and in many occasions I was puzzled by the contrast of the level of innovation and quick evolution of industrial products in comparison with the slow progress in the evolution of IT production and service management processes. It is self evident that mass production of any complex industrial product, like for instance cars, would not have been feasible without the bill of materials, still IT production and service management processes are very often managed as an artisanal work. For this reason I increasingly drove PwC Technology practice to advice clients on the need to innovate IT management and to support them in the journey towards the adoption of a real industrial model for the management of IT processes. I wish to thank all the collegues that helped me in this effort: Giampiero Rado, Francesco Ferrari, Andrea Mazza, Federico Albani, Edoardo Bacchini, Francesco Bandolin, Andrea Bedoni, Michele Bergamaschi, Matteo Bonente, Lorenzo Paolo Brunello, Carmine Michele Bruni (Nino), Ahmet Burdu, Biagio Cocciola, Marco Costantino, Claudio De Riso, Giovanna De Toni, Ruggiero Davide Donatello, Gianluca Ferrari, Leo Rocco Fina, Giorgio Galbusera, Alessandra Giannunzio, Roberto Guglielmi, Massimo Iengo, Fabio Insaccanebbia, Michela Mazo, Andrea Meneghello, Marco Felice Mengozzi, Fabio Merello, Giulia Messina, Daniele Migliavacca, Giuseppe Mognetti, Gabriele Montani, Nicola Morlin, Mauro Napoli, Fabrizio Enrico Palazzoli, Veronica Pozzi, Lucio Pozzi, Riccardo Radice, Marco Rosini, Anna Ruzzene, Jader Sabbi, Marco Sartor, Sayed Seliman, Stefano Spiniello, Matteo Tencani, Alessio Testa, Marcello Viganò.

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Background and guide for readers “Master the subject, the words will come” Cato the Censor

“IT Service Management” is not a new term. It has been increasingly talked and written about for several years now. Reference models, guidelines and certification systems abound. Of these, the Information Technology Infrastructure Library (ITIL) is the most consolidated, exhaustive and closest to the problems of IT Service Management. ITIL was developed by the UK Government’s Central Computer and Telecommunications Agency (CCTA) in the 1980s in response to the growing dependence on IT. This framework remained largely ignored and little used until the mid-1990s when the Internet era began and the consequent opening outwards of corporate information systems made the management methods used until then both obsolete and outdated. ITIL exploded and it quickly spread throughout the world, USA included. Subsequently it gave rise to the issuing of support standards including ISO/IEC 20000 (previously BS 15000) which is inspired by many elements of ITIL for IT service management. The explosion of ITIL has also been the driving force for renewed interest of a multitude of methods and models designed to improve processes (TQM, Six Sigma, CMMI to name just a few), each one aims to provide advance tools for governing IT Services. In this methodological upheaval, adopting ITIL (or the above models), in the majority of cases, meant more attention was placed on operational aspects rather than overall governance. Many organizations implemented and reengineered Operation processes (for ordinary management of incidents and requests) and Transition processes (for change management, tests and production releases) completely ignoring service Strategy and Design aspects. This was because often the focus was on solving day-to-day problems and trying to achieve tangible and immediate results. A simple comparison with the automobile industry shows what was happening – the main aim was to make the engine work well to allow the IT machine to go forward; the steering, gearbox, clutch and dashboard would have been dealt with later. The most noticeable value of this first “implementation wave” was the widespread distribution of a common taxonomy whose benefits are still visible today: IT people are still inclined to use terms such as Knowledge Base, SLA/OLA, CAB, CMDB, and Known Error. Just as no IT Operations technician would stare if expressions such as “Incident”, “Change”, “Release” or other typical ITIL framework terms were used. The downside was that this approach proved effective only in the short term, revealing a structural deficiency in managing Services in the medium-long term. Without a strategic plan and an overview of their portfolio of services many companies lost their bearings and were overwhelmed by the wave of technological innovation from 2005 onwards; having control of the Systems and their functioning was not sufficient to allow them to rapidly transform and follow new business opportunities. On the basis of this scenario, in 2005 the then UK Treasury Office of Government Commerce (OGC), (the CCTA had merged into it in 2001) started an improvement project on the ITIL library. Thus a significant revision of the framework began that led to the development of ITIL V3 (2007) and to the subsequent and latest update in the 2011 edition (July 2011). In this new role the ITIL strengthened the definition phase of strategy, making the interconnections between Business Strategy and IT Strategy explicit, and placed the emphasis on Business relationship management (BRM) to assess requirements in new services and agree on guaranteed levels. The definition of the Catalogue of Services was also optimised, finally clarifying the difference from the Service or applications Request Catalogue and really shifting the focus to the customer’s viewpoint instead of the technical or IT perspective. The methodological effort of approaching the Business reflects the needs that emerged after the first “implementation wave”, so much so that there is an increasing tendency to refer to the “second life” of ITSM. Service Management today faces a double challenge from this point of view: on the one 11

hand it has to close the strategic misalignment gap with the Business, and on the other, to guide and govern a continually changing technological scenario. The great transformation taking place, which not only strictly affects IT components but also their methods of supply and use, is leading to ever more complex configurations; “hybrid” solutions is the term used in such cases. The adjective “hybrid” can be applied both in reference to technological aspects (for example to indicate architectures that contextually contemplate legacy systems and Cloud infrastructures) and in reference to the method of development or service delivery (in-house or outsourcing). The current framework is obviously very complex and varied and many providers within organizations (frequently IT management) see an increasing risk that the Business will seek alternative providers (via widespread outsourcing) or will find innovative technological solutions better suited to their needs. Against this background the Governance of Information Systems (no longer operational or tactical, but strategic) is no longer a “detail” which can be overlooked, but becomes an essential prerequisite for remaining in the market. This book does not intend to replace what already exists but rather to present experience from the world of IT and a real industrial model of how a Service Provider of complex IT services can work. No special preconditions are required for a successful interpretation of its content if not some basic IT concepts within reach of every business manager who only uses IT and any university student studying the subject for the first time. A basic knowledge of ITIL is desirable but not essential. Detailed explanations of ITIL will not be given, but conceptual indications will be explained for planning operational implementation. Where possible, comprehensive definitions adhering to standards will be given to help inexperienced readers, being fully aware, however, that IT terminology is not yet fully established and that different contexts may have developed different semantics and terminology over time. This book is an ideal reference for Chief Information Officers (CIOs) and for Chief Data Officers (CDOs), and for IT Governance system designers that are involved in the control or improvement of the Service Management activities of their organization. And it is also a useful guide for general managers, for heads of company departments or functions interested in understanding better how an IT structure works, inspiring IT workers to improve quality and to interpret their role in a more proactive way that is more geared to the business. Finally, it is a useful reference for all IT professionals who wish to enhance their ability to design, manage and improve complex IT structures. The parts not essential to understanding the general concepts are shown in the Appendices and can be disregarded without losing anything from the general overview. This allows smoother reading for those interested in principles and concepts alone without disappointing readers that are concerned with details. The Appendices are interesting for designers of detail and can be useful inspiration for developing special functions in structures that decided to initiate operational transformation projects.

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1 IT Service Management “Science walks forward on two feet, namely theory and experiment (…). Sometimes it is one foot which is put forward first, sometimes the other, but continuous progress is only made by the use of both.” Robert Millikan, physicist, Nobel Prize winner 1923

Information and Communication Technology (ICT) has been considered a technical, or engineering, discipline for some years now, but it has not always been so. For a long time after its beginnings in the 1960s it was not considered a specific discipline that merited consideration, academic or otherwise, but solely a combination of electromechanical machines designed for a specific purpose (ie managing information). The first computing centres were housed in the historic centres of cities where, traditionally, the banks were located, as they were among the biggest users, just as they are today. Computing centres were also appendages of industrial plants and were simply considered ancillary instruments for the administrative or productive sectors. The IT sector was called Data Processing which depicted exactly what it was expected to do: calculate more quickly and, if possible, with fewer errors what had previously been done manually. The computing centres were also called “electric accounting centres” and although in the mid-70s remote processing (Tele Processing as it was called) began to establish itself, the concept of technology and services based on it were still far off. Internet existed only in the boldest imagination that speculated about how processing power and storage could one day become commodities that, like electricity, would be available through outlets, regardless of the physical location of the technical infrastructures (this was the cloud ahead of its time…). Users were few and only some – and of these, just a small number– relied on ICT to perform their work. Moreover, users worked during the day so the machines and computing centres were available for maintenance, tests, and the installation of new devices etc. only for a few hours during the night when the batch and maintenance procedures had ended. If the available night hours were not enough, weekends were used. The technology was electronic and partly mechanical while the processing of information was simply an unstructured outcome which was not explicitly recognized but, more especially, not studied. Software was an ephemeral concept; no one dreamt of paying for it, it was an appendage of the machine. This evolution was accompanied by a slow and gradual recognition in the 1960s of the need for highlevel professionals who specialized in the processing of information and its implications, from Data Bases to languages, from networks to protocols, et cetera. Computer Science was thus established and still today it produces technological innovation and tools of various kinds. In fact the first faculty of Computer Science in Italy dates back to the late 60s. Similarly, today, the need to have service experts working alongside ICT technical experts is felt more and more - even after the explosion in the number of ICT users and the opening of company information systems to the outside world thanks to the internet; service experts who can design and implement end-to-end delivery systems and make the user experience positive in all its phases from design to testing, operation to support, who facilitate and structure communication with users in a shared, effective and clear way. In recent years particularly we have seen the advent of new technologies that move the focal point of ICT operators’ activities from a highly technical focus to a more service oriented one. A striking 13

example of this is big data: the massive volume of data that today moves over the net and requires specific analytical and instrumental methods to process it. The development of big data processing models and especially the ability to direct analyses to support (an in some cases indicate) business objectives are skills that are highly sought-after today, to the point that there is a great insistence on the key role of the Data Scientist1. A data scientist has a solid foundation in technological skills (know-how to process data), coupled with strong business acumen (know-how to analyse and interpret data) and an outstanding ability to communicate (to explain and present the direction indicated by the data). Knowledge of the services provided and the ability to determine their future evolution are the distinguishing characteristics of this ICT role. Cloud computing is another example of the ICT approach to service. This model involves the use of services hosted in a so-called internet cloud: the product (software, platform, hardware…) is not purchased but can be used remotely without having it physically. In its simplest form, Software as a Service (SaaS), cloud computing, implies a choice of flexible provisioning technology that allows greater proposal and governance agility for IT in dealing with its users (internal business users, customers and consumers, suppliers, partners, etc.). The need to identify and introduce service experts is also strongly felt in other sectors due to the constant growth - at least in the Western world - of the service sector and of the decreasing importance of product in favour of the Service built around the product. The acronym SSME (Service Science, Management and Engineering) proposed by IBM has become popular in the last few years. The SSME approach can be defined as “the application of scientific, management and engineering disciplines to tasks that an organization performs for the benefit or advantage of another (namely, services). SSME aims to make improvements in productivity, quality, performance, compliance, growth and learning more predictable in work-sharing and risk (co-production) relationships. SSME is the study of service systems with the aim of improving them”. SSME as a concept was announced in 2006. Many companies have embraced it and actively support universities around the world in contributing to the development of the so-called T-shaped professional. This is a professional figure that, while having an in-depth knowledge of a single discipline, has sufficient knowledge of others relating to it to give them a systemic vision of the organization of service delivery which takes into account, in a coherent and coordinated way, technical, organizational and financial aspects as well as people management. Corporate sponsors come from various industrial sectors such as consulting, software, computer and the automotive industry. Even some Italian universities offer courses and study programmes in the field of SSME. Detailed information on the subject is not given in this book as it is a very dynamic and continually evolving subject. Readers who are interested can find the latest information by typing in “SSME” in a search engine to find up-to-date documents on current initiatives and recent developments. It is interesting to note that SSME aims to create models and awareness that in manufacturing industries that gave rise – following the efforts of the first half of the 20th century – to definitions, taxonomies and models known as Material Requirement Planning (MRP), MRP II, Enterprise Resource Planning (ERP), et cetera, which resulted in supply chain management methodologies which are now part of the common heritage and taught all over the world. The request for control models has been strongly emphasized in recent years, especially in the Banking industry. Regulatory Authorities at all levels have increasingly recognized the vital importance of managing large-scale systems and the underlying governance processes within organizations. In Italy major innovations in the domestic banking landscape were introduced with the publication by the Bank of Italy of the 15th revision (July 2013) of Circular no. 263 dated 27 December 2006. These innovations mainly concerned the spreading of a risk management culture to 1

A McKinsey survey reveals that by 2018 there will be an unmet need for 140,000 to 190,000 Data Scientists in the USA alone. (Big data: The next frontier for innovation, competition, and productivity)

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corporate life as a whole in terms of identifying risks, setting limits, the role of the control functions, information flows and various other governance topics. These regulatory contents, now incorporated in Bank of Italy Circular no. 285 of December 2013 and in the 14th revision of November 2015, require the preparation and constant updating of the ICT information resources map, a suitable configuration management system, a correct assessment of IT risk (also for “critical operations”), appropriate recovery procedures and the definition and control of processes to ensure proper governance of the systems. This book takes this evolutionary context as a model and addresses some aspects of ICT services management in detail. It will focus especially on delivery and governance - understood as service quality management - and not on design and implementation, which are services. This choice is dictated by the observation that design and implementation (albeit in a rudimentary way) are recognized and managed as a service, while delivery and governance are still, in many cases and for the most part, unrecognized territory, not defined in a structured manner and often still managed unconsciously and implicitly. Often the ICT Service does not have the dignity of autonomous Management in its own right, an equal counterpart of those providing the service components (Application and Infrastructure). It is almost always a low-level organizational unit located in the area of Infrastructure Management with difficult and conflictual relations with those in charge of the design and development units. This book is especially, but not only, written for management professionals in corporate organizational structures that provide IT services to users, both inside and outside the company whether captive or non-captive, or partial or total outsourcer structures. The proposed approach represents a Copernican revolution and, at the same time, a return to basics. A Copernican revolution because it inverts the viewpoints and priorities: IT constraints and rigidities no longer condition the business, but, business priorities direct and guide IT operations in a quantitative and rigorous manner. A return to basics because it retrieves, enhances and adopts some well-established manufacturing management concepts and criteria by adapting them: the bill of materials (the description of the product in terms of tangible and intangible components), the quantitative measure of failures, incidents and service levels as perceived by the end user and not only for the purposes of IT technical management. The concepts and definitions used come mainly from the Information Technology Infrastructure Library (ITIL), the main source of inspiration. The approach is more detailed than ITIL. Operational guidance and mathematical formulas for calculating real indicators are provided as is a description of a quality, in a holistic sense, ICT service. The development and application maintenance sector, while important, will not be dealt with. The approach proposed, although strictly operational, is general, and can be effectively applied in various industrial contexts, both IT Intensive such as Banking, Telecommunications and nonIntensive, for example, Transport.

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Chapter 1 in a nutshell    

IT has a very short history and ICT is a contemporary discipline. Computer Science dates back to the 1950s. Since then the importance of ICT has grown rapidly. From 2000 onwards a clear need for industrial operating models emerged; needs that were already well addressed by the manufacturing world. Information Technology Infrastructure Library (ITIL) established itself worldwide as a reference model although concrete paradigms of operational application are still lacking. As a confirmation of the need for models (and culture) in providing Services, the so-called Service Science, Management and Engineering (SSME) is slowly asserting itself with the aim of promoting the construction of models and the dissemination of culture – beginning with universities - as part of Services which now occupy the majority of the workforce in the Western world.

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