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For contemporary computer usage, the SaaS model has many attractive advantages that account for its growing popularity. For instance SaaS avoids the initial up front cost of purchasing software and the associated hardware; the ongoing maintenance, and salary costs for employees to maintain a new systems are all avoided.

At the expense of IT as competitive differentiation, these cost advantages are coupled with the fact that many types of software applications have been commoditized: networking speed and availability are trusted, centralised resources are shared across many users and afford higher levels of security, fault tolerance, disaster recovery and access greater expertise. Plus, SaaS examples like Salesforce.com demonstrate the credibility of the concept. So potentially you end up with less cost, less worries and higher quality of service – sounds good eh?

As the business model has matured the SaaS vendors are using increasingly sophisticated techniques to optimise their business, optimise client usage of resources, and deploy up selling techniques. All of this demonstrates the early maturity of a successful business concept.

Users have the right to expect SaaS providers will deploy best practices and the best technology in order to ensure security, high availability, good performance and continual improvement to ensure the quality of service (QoS) they require. Business Service Management (BSM) has an important role to play because of its unprecedented ability to provide service management the proven best practice way of managing IT systems.

SaaS systems, like all IT systems, will be subject to change, for example, upgrades, system expansion and maintenance – and incidents will also occur causing user-impacting problems. To ensure the viability of SaaS is maintained as these systems grow in size and complexity with their increasing popularity then SaaS providers need automated management solutions that can scale to cope with demand, size and complexity.

BSM components like Service Level Management (SLM) and Service Contract Management provide automated and proactive ability to ensure the QoS consumers expect. Since they provide automated root cause analysis of QoS threatening issues. Whereas, BSM’s Configuration Management System (CMS) ensures the risk of change is minimised by making change management aware of the potential impact of a proposed change.

We anticipate as SaaS becomes more popular, more complex and more competitive between SaaS providers. As such we predict that we will see the same rapid adoption of BSM as we have seen by service provision vendors.

I see the title grabbed your attention in these days where there is a lot of talk about managing services, writing service catalogs, defining the managing service level agreement (SLA), SLA reporting and the list goes on. Why is there so much ado about SLAs? Let me explain.

When we engage in a service offering with someone on the outside, we expect a certain level of availability, performance and responsiveness when something does go wrong. This is the basis of the SLA and the agreement we must enter when contracting outside services and these do matter.

Internal SLA’s have long since been hard to calculate, report and are just that...after the fact reporting, much like financial reporting after the quarter. Depending upon faith of accuracy, the reports tend not to be very meaningful in light of the cost of developing and generating them in a timely manner.

In addition, as an internal service provider, the penalty for missing the objective tends to go two ways: it’s either nothing or very high with the threat of an outsourcer knocking on the CEO’s door.

What would make all this effort more relevant? The ability to understand what drives the organization, business KPI’s, managing impact based upon business relevance, historical trend analysis for purposes of positive changes and proactive management before the end of the reporting period. Internal SLAs can be invaluable as a tool to understand the business and manage the supporting technology in alignment to the business of the organization, however, most look at them as after the fact reporting.

SLAs don’t matter when used just to report, SLAs can be invaluable when used to manage and drive the business!

Long time CMP writer and veteran technology watcher Penny Crosman recently blogged about a flood of new start-ups developing solutions aimed at reducing data latency for financial institutions. For example, one provider offers “software that sits on network switch mirror ports and monitors the traffic going by, combined with correlation algorithms that, the company says, can pinpoint latency to the box level.”

While such a tool may pinpoint latency to box level, component-based management only takes you so far. The next step absolutely must be to put this information in a business context - to understand the effect of any single box’s latency on IT’s ability to deliver business services. This is important because financial institutions often have tens of thousands of servers (among other components) in their enterprise, which means potentially tens of thousands of latency alerts. Without business context, the question becomes, ‘which latent box do you fix first?’

One way would be to incorporate Business Service Management (BSM) solutions to allow IT operations to make this determination quickly and easily. BSM manages IT from a holistic, service perspective, and dynamically links the underlying IT components according to the business service they provide – so, for example, IT operations can place the latency at a box level in the context of business impact. Since BSM platforms can integrate to a range of heterogeneous IT management tools from performance monitoring to service desks, it may prove more useful than trade data latency monitoring tools.

In many ways because of their reliance on technology, financial services institutions were among the early adopters of BSM technology in the late 1990s. Today, BSM has evolved to include a range of modular components to include discovery, service level management (SLM) and the configuration management database (CMDB) or as ITIL perhaps more aptly calls it a configuration management system.

-- Jim

Oh, what doom and gloom. The forecasts for IT spending seems destine for more cuts. The Incredible Shrinking Tech-Spending Forecasts laments the headline from The Wall Street Journal. While the Journal is technically correct, several IT research firms have indeed lowered their IT budget forecasts, it overshadows some important details.

As our CTO pointed out in a recent article, AMR Research reported that IT departments plan to spend 9.3% more on performance improvement than in the previous year, which contrasts with plans for an overall IT spending increase of 5%. One pundit’s well-reasoned analysis is that IT thinks it “can deliver almost twice as much bang this year for each new IT buck compared with their colleagues in the wider business.”

This jives with other analyst forecasts including Enterprise Management Associates. EMA has a soon-to-be released report indicating that spending on Business Service Management (BSM) is “poised to surpass” is more mature precursor of Service Level Management (SLM).

All this goes to show that IT simply spending its pennies more wisely in an effort to meet its two lasting, if not dichotomous, priorities to improve service quality and maintain or lower costs.

- Randy Jones

In a recent article in CIO Magazine, “IT departments do not deliver ‘great’ IT, say CIOs”, a survey of CIOs and IT Directors revealed that almost half do not deliver “great” IT. “Great” IT is defined by 3/4ths as being able to to add real value to the organizations strategy and bottom line.

I am always amazed when I speak to leaders of IT organizations for enterprise organizations that may know what sector of the market their organization falls into, but cannot describe to me what the business units do day-to-day and how they determine success for the business unit. I find often times I may know more by reading annual reports and surfing the company websites prior to a meeting than the IT leaders I meet within the organization. So I ask how would an IT organization believe it should have a say in strategic decision making within the organization without basic knowledge of what drives and grows the business?

Alignment to the business has almost become a passé phrase due to the lack of meat behind the initiative and the continued siloed, technology focus of many IT organizations. True alignment will only be achieved when IT organizations immerse themselves into the business and become fully integrated. A recent Information Age article quotes: “There is no such thing as an IT project: all IT’s activity should be about business projects.” The only way an IT organization can better manage change and impact is for it to be immersed and integrated in the business. This is not to suggest that IT organizations become distributed by business units, rather there are emerging roles of service managers that work side by side with the business teams on projects leveraging technology to the success of the business.

I often work with organizations on “IT projects” and the business case for an “IT project”. These are always problematic because most are “soft” in their cases of cost management. Cost saving projects that reduce hardware and software licenses are easy cases with hard savings. It’s the CMDB, SLA, ITIL process improvement, etc. projects that are difficult and I would point the finger at the root of the problem, these are typically internally, IT focused projects without links back to the business they support. I’m often looked at like I turned green and grew horns if I ask questions like, “How does this improve performance of the business? What impact on the business will this project have?”

I find ITSM (IT Service Management) projects that have a focus on managing business impacting events and can be quantified as such for business driving applications are easy cases. BSM (Business Service Management) projects that also bring in business data providing analytics regarding the effectiveness of the business providing information during the quarter versus a financial report after the fact after the quarter also have greater success. My humble advice is to always error on the side of the business and find the high impact services and understand how the technology can be better applied or improved.

IT has a difficult job in managing two sides of a coin: efficiency internally managing costs and effectiveness externally improving the business. Often times IT organizations error on what we know best, IT, but by better understanding the impact to the business and integration to the business provides the greatest benefits all the way around the business speeding up projects and decision making of projects.

– Michele

Anyone who has ever had to hike a long mile to the nearest gas station to call AAA will attest to the fact that the world can sometimes seem very large. These days it is almost unheard of for someone to have to walk anywhere to make a call. Last month I arrived at the scene of a car accident and my first action, after ensuring the occupants of the car were safe, was to dial 911 from my blackberry.  The mobile device also provided me with the altitude, latitude and longitude of the accident to better inform first responders.

The world has gone mobile. Nobody can dispute this fact.

The ramifications of a mobile world are broad. Motorola’s fad has turned into a cultural phenomenon with rural villages in developing countries now having mobile phone service, but no sewage. The steady buzz of the blackberry can be heard everywhere from ski lifts in Colorado to weddings in India. In major economies, the workforce is now steadily becoming more mobile, where just a few years ago – it was unheard of to work from home. These days I work out of my home full time, for a company based on another coast, and hook into client systems half a world away on a daily basis.

The advent of the mobile workforce has created a huge infrastructure that requires a somewhat high level of maintenance. If I work remotely in Denver our IT staff in Virginia need to be able to push patches to my laptop, maintain my blackberry and keep my VPN secure, all without affecting my ability to produce the work for which I was hired to do in the first place. Stuck on a client site with no access to the internet, but need to urgently send an email? No problem. Pull out the blackberry and the email has been securely forwarded in a matter of seconds.  Need to quickly get online and log into a clients system to fix an urgent production issue? No problem, the mobile broadband card that came with your laptop will get you on there in seconds.

But what happens when things break? What if security has been compromised or if the new patch that Microsoft just put out renders other work critical software inoperable? What then? I can no longer log into my network let alone my clients’ networks.

This drives the need for a high level of automation, exception based monitoring and what the medical field might call Preventative Care. IT is now a business service and must be treated as such.

Working for a company that pioneered BSM puts me in a unique situation, as I watch this transformation firsthand. In some cases the transformation has been dramatic, with entire workforces becoming mobile. The fact that this has made these workforces more productive is no surprise and to maintain this trend, it is essential that corporations move towards practices like exception based monitoring, Service Level Agreements and proactive interdiction. The future of the mobile workforce lies in managing the business of IT as a service to its customers.