The Value of a Service Catalog

IT departments spend a significant amount of wasted time processing requests – e.g. for logins and PCS. Many large organizations will give a lead time of up to 6 weeks to provide a new PC – this is mainly due to:

• Inefficient and manual processes
• Sometimes no agreed processes at all
• The need to get and chase authorization from a number of sources

IT people therefore spend a lot of time manually raising and chasing orders when they could be doing productive IT tasks. This can result in more people being hired simply to carry out these tasks – often they are relatively junior and don’t have the authority to press for action and response outside their areas. In addition, if there is no agreed process or tool in place, it can take weeks for the ‘paper-chase’ to be resolved – hence the long lead times. So developing and automating processes for fulfillment can cut out a lot of wasted time and effort – and radically improve delivery times. It can also help to reduce staffing levels by removing the need for manual intervention and chasing activities.

The service catalog provides the link between IT infrastructure and business performance, by defining business and process-based bundles of IT components as 'services'.

Through the process of designing and managing bundled services, IT organizations are in a strong position to deliver and demonstrate value and optimum efficiency.

Analysts estimate that implementing effective ITIL® processes integrated around a service catalog will deliver:

• A reduction of 20% on the IT operational budget within 18 months
• Improved efficiency and productivity, through an efficient user request catalog, portal and workflow. It is estimated that this can bring savings up to 39% off operating budgets
• The ability to prioritize and optimize services, through visibility and control of service 'bundles'. The focus of reporting and monitoring shifts from technology areas and 'silos' to service-based reporting
• Ultimately service catalog provides the ability to demonstrate and deliver value from IT. In an Axios survey, 57% of IT Executives believe that their systems do not deliver the value expected by the business. 64% of IT Executives felt that they were 'unable to provide the business with quantifiable metrics demonstrating the value of IT services and assets.'

Service catalog is the key to unlock the value of ITSM processes to IT – and to demonstrate the value of IT to the business it supports.

Next: The Service Catalog Business Case

Why do we need a Service Catalog?

Service catalog provides 3 main areas of benefit:

• Reduction in operating costs – generally 20%+
• Quality and efficiency improvements – better management and control
• Relationship/communications benefits – customer satisfaction and engagement

All of these help the IT service organization to deliver and demonstrate improved value as:

• Service costs become more transparent
• Customers can interact with IT in a more intuitive way
• Demand is managed appropriately and without excess cost

Tangible benefits can be quickly achieved through the automation of approval and request processes – reducing lead times and costs. Industry analysts all identify that service catalog implementation and automation reduces operating costs by around 20%. The cost of service request management and fulfillment can be significantly reduced (around 40%) – in simple terms it requires less interventions, less chasing, less unnecessary administration and less time to deliver.

As an example if you currently manage 1,000 standard requests per month, at an average fulfillment cost of $100 per request - that is a monthly cost of $100K. A fully functional service catalog implementation will reduce that cost by 20% - 40% - conservatively at 20% that will be $20,000 per month - $240K per year. This can be realized through re-allocation of key staff, less interruption and delay to projects, or reduction in headcount through the removal of human administrative intervention.

Basically reducing the ‘paper chase’ cuts costs, saves time and allows IT to get on doing what it does best – deliver technology solutions to the business.

Many organizations also indicate that non-standard requests can cost considerably more that $100 – particularly if these take expensive people off other work and projects. Having an automated process in place can reduce the cost and increase the efficiency of handling all types of request, which will improve communications and drive down the financial overhead.

ROI is achievable quickly and demonstrably – usually within 18 months but often earlier, particularly if there are large volumes of requests to be handled. Business customers immediately see the value of interacting with a familiar ‘Amazon-like’ portal, which also means that the process of ordering and getting services from IT is quicker, easier and more professional. It is also relatively straightforward to construct a business case for investment in tools and services that can deliver service catalog functionality and value.

Next: Cost Reduction

Service Catalog - Cost Reduction

• Reduced cost of standard and non-standard requests by 20%-40% - Removing administrative bottlenecks, unproductive time and administrative headcount.
• Reduced/eliminate cost of manual errors and re-work - Remove the chasing and reworking that characterizes IT operations, caused by inefficient, error-prone manual processes.
• Reduced impact on the service desk calls for requests and chasing - Many service desks now spend a large amount of their telephone time taking requests. Automation frees up their resources for support and reduces the needs for administrative staff to take these calls.
• Optimized procurement costs through demand management and reporting - Managing procurement and demand by service allows the IT organization to monitor demand across their customer base and make appropriate savings.

Next: Quality and Efficiency

Service Catalog - Quality and Efficiency

• Improve delivery time for standard and non-standard requests - Automation and configuration means that the process, approvers and authorization of standard requests are all pre-defined thereby reducing delivery time and removing bottlenecks.
• Reduce administration and intervention for standard requests - As well as cost reduction there is also less interruption to key staff for approvals, chasing and tracking.
• Opportunity to charge and recover service costs - Automation of the ‘service view’ provides the opportunity to charge-back services at service (e.g. Email) or offering (e.g. Create Account) level.
• Improved availability (24x7) for logging and tracking requests - IT can offer its service portal at any time and from potentially any location.
• Capability to increase request workload without impact on resources - The system will be able to absorb a large amount of new standard requests and services, at the same service levels, without the need for more administrative staff.
• Capability to manage non-IT processes - A service request portal can be used for literally any type of service, so the IT organization can offer this capability to other departments.
• Opportunity to recover/share some costs with other non-IT departments for requests - This is an opportunity to reduce and share the operational cost to IT of request management, plus also providing revenue-earning opportunities.
• Opportunity to resolve cross-department issues with supply chain management and reporting - Most IT organizations depend on other departments to deliver part of their service ‘supply chain’, e.g. finance, HR approvals. By managing this as end-to-end services and identifying individual sub-tasks and ownership it is simple and transparent to identify where problems lie.
• Opportunity to manage IT services end-to-end and monitor service availability - Allows IT departments to act more like businesses and deliver and monitor their services as complete packages rather than IT components. Reporting to the customer is more focused on their experience and requirements and is also couched in more user-friendly terms.
• Opportunity to charge IT services end-to-end - From a financial perspective the bundled services can be costed and charged back in full or in part. Demand can also be tracked and controlled.
• Opportunity to manage multi-tenancy services and SLAs - Organizations such as Managed Service Providers, or simply IT organizations with multiple autonomous customer groups, can manage, charge and control their various customer groups and services separately, independently and securely.

Next: Relationship and Communications

Service Catalog - Relationships & Communications

• Improved customer satisfaction ratings - The interfaces and communications between IT and its customers are greatly improved, plus customers are usually delighted to have faster and more predictable turnaround times.
• Improved image and engagement between IT and the business - Reporting and feedback between IT and its customers becomes highly tailored, allowing customers to receive information that is relevant and appropriate to them. This helps to engender improved relationships and understanding between the parties.
• Improved transparency of IT processes - Transparency helps to get issues resolved and also reduces time wasted through misunderstandings. IT can also focus clearly and demonstrably on business priorities.

Contact us to find out more about the benefits of our Service Catalog Software.