10-steps-whitepaper-13796538102703

10 Steps to Modifying
User Behavior to
Reduce IT Costs
1-800-COURSES
www.globalknowledge.com
Expert Reference Series of White Papers
Written and provided by

White Paper
Stevie Sacks, Enterprise Architect
CA Executive Technology Advisors
February 2006
10 Steps to Modifying
User Behavior to
Reduce IT Costs
Table of Contents
Introduction ..........................................................................................................................................................................................................3
How to Use This Paper ......................................................................................................................................................................................3
Step 1: Document Services ................................................................................................................................................................................3
Step 2: Document Service Levels ....................................................................................................................................................................4
Traditional IT Application Service Agreements ........................................................................................................................................5
Nontraditional Consumer-Usage Agreements ..........................................................................................................................................5
Step 3: Align Services with Business Goals....................................................................................................................................................5
Aligning Services With Financial Management ........................................................................................................................................5
Aligning Services to Corporate Goals..........................................................................................................................................................6
Aligning Services for Increased Efficiencies ..............................................................................................................................................6
Things to Keep in Mind ..................................................................................................................................................................................6
Step 4: Price Services..........................................................................................................................................................................................6
Price = Cost........................................................................................................................................................................................................6
Price = Cost + Profit ........................................................................................................................................................................................7
Cost Allocation = % of Usage x Total Budget ..........................................................................................................................................7

Step 5: Measure Resource Usage or Consumption......................................................................................................................................8
Usage Basis........................................................................................................................................................................................................8
Inventory Basis..................................................................................................................................................................................................8
Mixed Basis........................................................................................................................................................................................................8
Step 6: Define a Service Catalog......................................................................................................................................................................9
Step 7: Provision Services by Automating Workflow ................................................................................................................................10
Step 8: Provide Business with Visibility Into Service Costs ......................................................................................................................11
Step 9: Provide Self-Help and Self-Service Alternatives ..........................................................................................................................12
Step 10: Provide Tools to Support Services and Measure Customer Satisfaction ..............................................................................13
Additional Guidance ..........................................................................................................................................................................................13
Conclusion ..........................................................................................................................................................................................................14
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Introduction
In an economic climate of slow and cautious growth, IT is
under intense pressure to manage costs and ensure that
spending is well aligned with business drivers. Essentially,
IT is being asked to run itself as a business — allocating
resources where they will generate the most value while
minimizing resources from nonproductive areas.
One way to achieve this resource conservation and
alignment is to increase efficiency. But that's only part of
the battle. To truly optimize the business value returned
by its investment dollars, IT must manage, measure and
control the utilization of its services. After all, when users
burn up IT service capacity in ways that don't return value,
the result is waste, regardless of how efficiently IT may be
operating.
IT Service Management (ITSM) as defined in this white-
paper enables IT to define, deliver, measure, support and
cost mission critical services in the most cost-effective

and efficient way possible to support business goals.
IT can modify user behavior by making business units
financially accountable for their consumption of services
(or resources comprising of labor, asset and support).
Steps can be taken to keep users from consuming IT
capacity in ways that don't make good business sense.
And by incorporating these strategies into ITSM
mechanisms, IT can run itself more like a profit-making
business and less like a subsidized utility.
Usually, IT isn't in a position to say no or to curb demand
for the resources it stewards. IT must change the
environment so that it isn't driven by needless requests.
Human dynamics will play a large role in this change.
People modify their behavior only when they feel some
sort of negative or positive impact. It will be necessary to
change not only the number of requests but also the
nature of the requests made to IT. This can best be done
by giving users on the business side the information they
need to make informed decisions.
The 10 steps to IT Service Management are:
1. Document the services you provide.
2. Document the service levels that are expected.
3. Align services with business goals.
4. Price these services.
5. Measure resource usage.
6. Design a service catalog.
7. Provision services by automating workflow.
8. Provide business units with visibility into service
costs.
9. Provide self-service and self-help alternatives.

10. Provide the tools to support the services and measure
customer satisfaction.
These steps give the user community and business
managers the tools they need to modify their own
behavior or "buying" patterns. They can see what services
are being used by their employees, how well service levels
are being met and how this affects their budgets. They
have alternatives to calling the help desk. And they are
presented with easy-to-use systems that remove the
temptation to do an end run around support procedures.
How to Use This Paper
This whitepaper will help you understand the practices
and procedures needed to implement the foundation for
changing behavior in both the business and IT communities
within your corporation. We will take you step by step
through the various processes you need to consider when
implementing your strategy.
Each section of this document will take you further along
the road toward measuring, controlling and managing IT
resources and investments. The first step is the most
difficult, but it makes each subsequent step that much easier.
Do not think that you have to adopt all the steps, or in
order — common sense should prevail depending on the
maturity of your organization and other initiatives taking
place. You can choose to adopt only certain concepts from
various steps; however we propose that you follow these
general precepts:
• Communicate your plans early and often to the greater
organization.
• Build a usability lab for feedback when implementing

new or changed user interfaces.
• Modularize your approach when considering the larger
projects and principles contained in this whitepaper.
The two guiding principles behind the steps are simple:
Empower users to make the right decisions by giving them
information and choices, and provide financial incentives
and penalties that motivate them to change usage
patterns and behavior.
Step 1: Document Services
When you envision yourself as the CEO of a service
provider company it becomes clear you must define the
services that you provide, how you provide them, who is
involved in their delivery and how much it all costs. Ask
yourself what you need to do to make a profit. Part of the
answer will be incentives and penalties that can change
user behavior. These should be accompanied by
empowerment, which allows users to make choices based
on clear information, such as support levels and prices.
By allocating costs back to users and giving them the
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information they need to make informed decisions, they
will be less likely to demand the fastest, biggest server
when a smaller machine might do.
Your users are your customers, and you should sell your
services to them through a service catalog in which your
tiered service levels are explained. Users can use this
catalog to find out what you charge for services at various
service levels, the charge method (as a monthly retainer,
per subscription or by usage, for example) and whether
you offer price points for size, usage or service levels.

Dialog and negotiation should take place with your
customers when defining services.
If your customers are going to choose services and service
levels that are appropriate to their requirements, the catalog
should define your services in a business context, and the
service definitions must be flexible and comprehensive
enough for users to find what they need. Services must be
measurable in relationship to service levels. Costing
should follow standard financial guidelines, however this is
not always the case. A discussion with your financial and
legal departments should be on your task list.
Where do you begin? Bring together people who
understand what services the IT department provides,
how they are provided and who provides them. At first,
this will include only members of IT; later, members of the
greater business community will become involved.
Break down IT services into three main categories:
1. Services performed directly for individuals in the
company. These are usually user support tasks such
as provisioning. For each of these, include options,
prices and service levels.
2. Services done to support line-of-profit application
systems. These are the application systems hardware,
software and related support. Include these in the
catalog if the business unit has the freedom to choose
components, options or service windows.
3. Services that are common to the support of the
corporation. These are infrastructure devices, security
and business continuity services, and other things
deemed to be "overhead" functions.

Some items may fall into multiple categories. For example,
the business as a whole relies on email to carry out day-
to-day functions, so the infrastructure and support of the
email system might fall under overhead or shared services.
Your catalog may have multiple items to accommodate
different mailbox file sizes with associated pricing. Service
level agreements may be placed on the size or number of
emails received or sent, with a penalty adjustment for
overuse during billing.
Another example would be provisioning. You may already
have standard hardware configurations based on the
capabilities of each machine. For the service catalog, you
may want to categorize the offerings by role, such as
sales, executive or administrator. This will allow the
customer to choose the correct equipment for the purpose
based on a meaningful description. You don't want to
include specifics such as models, however, since these can
change frequently.
One of the most common mistakes made is to define
service offerings that have mandated or predefined
service levels. Let us assume that you have a critical
application, which by its inherent nature must be available
24/7; hence there would be no need to define a “Silver”
service level objective calling for 8/5 availability.
A few tips:
• Don't confuse service level categories such as Gold,
Silver or Bronze with defining a service.
• Do group services under a relevant umbrella.
• Don't define service offerings when the key performance
indicator is pre-defined by the nature of the application

system. For example: Your on-line retail site would by its
nature require 24/7 availability with reasonable response
time to support revenue generation. Therefore you
would have an SLA but not a Service Catalog Entry.
• Do choose names for your service offerings that users
will understand. Use business-centric names such as
"New Hire Provisioning," "Application System Hosting"
or "Department Transfer."
Step 2: Document Service Levels
You should fully define all of your services, such as hosting
critical business systems, provisioning new employees and
responding to help desk calls. Then apply a litmus test to
the services you've defined that will help you create a
service level agreement for these services. SLAs are basic
control mechanisms for IT, ensuring that business
requirements are demonstrably met. The litmus test
consists of a series of questions:
1. Can the service be measured in a way that aligns with
the business requirements?
a. Do you know all the components that make up the
service?
b. Do you have the tools to measure the service?
2. Whose perspective is to be measured?
a. Will there be a service level definition from the
consumer's as well as the provider's perspective?
b. Are there any other groups that will be required to
commit to an SLA?
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3. Will the consumer or interested parties agree to
reasonable terms and definitions?

4. What is the financial impact of a failure to deliver the
agreed-upon service level?
a. Based on that financial impact, is there an
appropriate corresponding monetary penalty?
In an ITSM environment, SLAs should include incentives
for reducing resource usage and deterrents against
overuse. After all, IT can't agree to provide a specified
level of service for a transaction-processing system with
an expected transaction volume
of x if that volume suddenly spikes to 10x. That's why the
process of negotiating an SLA is meaningful only if it is
used to clarify mutual obligations and resource limitations,
as well as work-unit benchmarks. (I am using the term work
unit to refer to any unit of performance measurement.
A work unit can be any quantifiable measure, including
availability, response time or number of emails.)
Let's look at three sample scenarios, two of which are
traditional, and one that is not.
Traditional IT Application Service Agreements
A traditional IT service agreement usually focuses on
the applications that generate revenue or are critical to
corporate operations, such as accounting or payroll.
The SLAs attached to these applications are usually based
on availability. Keep in mind, a transaction-processing
system may require round-the-clock availability, but others,
like a payroll application, do not. When negotiating an
SLA, make sure the customers understand that supporting
greater availability increases costs. Allow them to
determine whether the occasional need for a manager to
have remote weekend access is worth the additional cost.

You may also negotiate a guaranteed application response
time from the user's perspective. The one caveat with this
type of service agreement is that you must be able to
measure response time from that perspective. You
may want to set up a workstation to be used only for
establishing a performance baseline and performing
ongoing measurements. This ensures that response times
aren't being viewed subjectively or by performance on a
desktop that is seriously underpowered or misused.
Traditional IT Support Service Agreements
Another traditional type of service agreement is based on
the time is takes to respond to a service desk call. The one
caveat you should keep in mind when negotiating this type
of service agreement is not to contract for a work unit
based on mean time to repair. Mean time to repair can be
based on so many factors that you may end up missing
many of your service levels.
Nontraditional Consumer-Usage Agreements
Consumer-usage agreements are nontraditional methods
of curbing IT resource demand. Printer and email usage
are two areas where benefits can be reaped by cutting
demand and costs. You may negotiate various levels based
on the number of units, such as 500 pages printed per
month on any given printer, or the volume of email sent
or received by a user, specified in bytes. Such agreements
may prompt business-unit managers to ask their
employees to take steps like zipping or compressing large
attachments or printing only what's necessary and not
using hard-copy printouts just to view files.
Financial and other such incentives are essential to change

user behavior. The disconnect between SLAs and user
behavior can be remedied when your service catalog, cost
allocation/billing and service level management systems
are coordinated and integrated. By integrating the SLA
into a cost allocation/billing system, credit adjustments
can be made should an SLA be missed or breached.
Here are some pitfalls to look out for:
• Make sure that all negotiations use the same
terminology, business goals and executive sponsorship.
• Ensure that there is some meaningful incentive to
change behavior.
• Ensure that you can provide baseline and ongoing,
meaningful metering of the defined work units.
Step 3: Align Services with
Business Goals
Aligning IT services with the implementation of service
level agreements (SLAs) designed to formalize the contract
between the business community and IT means ensuring
that the performance of the service can be measured and
is in line with the stated service level objectives (SLOs).
Aligning Services With Financial Management
When aligning service with financial management through
cost allocation or a formal chargeback, the associated
hard (asset) costs and the soft (support, maintenance,
labor and usage) costs will need to be determined in order
to effectively price the service. Varying prices can be
established based on SLAs. This can help influence
customer behavior toward the goal of reducing costs,
since customers might decide that their needs can be
supported through less-expensive alternatives than they

otherwise might have chosen.
Financial management encompasses a range of processes.
Asset management and inventory provide data relating to
what is owned and what is installed. Incident and problem
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