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This report has been licensed for exclusive use and distribution by Tata Consultancy Services.
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Executive Summary
As technology disruption continues at an unprecedented pace, IT service delivery
organizations are under significant pressure to respond to the rapidly changing
environment and establish themselves as a strategic business enabler. IT
organizations are expected to drive the adoption of next-generation IT, yet
manage traditional systems with the utmost cost efficiency and agility. Therefore,
they need to balance innovation with rigorous discipline. However, most IT
organizations struggle to effectively meet these conflicting expectations, given the
inherent inefficiencies in the traditional models of IT service delivery.
Most enterprises erroneously equate IT service delivery with IT support and,
therefore, are unable to achieve optimization across the entire value chain. This
suboptimal IT services approach impacts the ability of the enterprises to respond
to the market demands in a timely manner, and raises questions on their ability to
remain nimble, competitive, and relevant.
Everest Group research suggests that a large number of enterprises recognize this
source of value erosion and are adopting remedial steps to optimize IT services.
However, most efforts are piecemeal and, typically, focus on production support
versus the entire Software Development Life Cycle (SDLC). These organizations
continue to exhibit over reliance on human skills and run by memory in IT
service delivery, which increases risks and compromises the user experience.
To achieve an optimized IT service delivery, enterprises must focus their efforts
across the entire SDLC. The complexity across SDLC processes requires
enterprises to leverage technology-driven initiatives that are not disjointed point
solutions but deliver end-to-end services for the application lifecycle.
Enterprises need to automate, industrialize, and digitize their processes to make
them measurable and aligned to industry best practices.
Most discussions around IT service delivery optimization emphasize cultural
change and process overhaul rather than pure technology. Our research
suggests that though these are indeed important, they are difficult to implement
and measure. Technology-driven IT service delivery optimization initiatives, on the
other hand, are measurable and generate tangible results. However, these
initiatives should not fundamentally disrupt ongoing IT service delivery. A strong
focus on cross-team collaboration and reliance on technology versus scattered,
fragmented, and inefficient processes residing in team islands will result in an
optimized IT service delivery.
This report analyzes existing challenges in IT service delivery and suggest
mitigation strategies to enable its optimization. The key areas of focus are:
Sustainability
Business
requirements
Innovation
Efficiency
Still most enterprises are under an erroneous assumption that IT service implies
IT support. Therefore, they are disproportionately focused on infrastructure
operations. These organizations obsess over IT Service Management (ITSM) and
ITIL (IT Infrastructure Library) frameworks. These principles though important,
focus more on supporting existing systems than transforming, modernizing, and
preparing systems for the future.
Shrinking product life cycles, increasing adoption of agile methodologies, and
DevOps strategies are pushing IT service delivery organizations to further
optimize operations. Many optimization initiatives that were implemented earlier
could not deliver meaningful value as these were largely focused on IT support.
Enterprises now require integrated technology solutions spanning the entire
application lifecycle that can truly optimize IT service delivery compared to the
earlier piecemeal approach.
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Pr
IT service delivery
challenges
lated
d
te
s re
Overdependence
on manual effort
es
oc
Peopl
e
delivery
re
la
Limited end-to-end
application lifecycle
management
Poor adherence to
process standards
and benchmarks
Inf
te d
orm
ation rela
People-related challenges
IT service delivery is almost entirely effort driven. The cost, quality, and enduser experience vary significantly based on the skills of the people involved. This
is in contrast to leveraging repeatable and automated processes that can
consistently deliver business-aligned IT services.
Further, sporadic industrialization and automation is unable to provide the
needed IT service delivery optimization. IT resources spend significant amount
of time on tasks such as test data generation, data masking, gathering
information about applications, manually analyzing legacy applications, and
fragmented project management, rather than focusing on creating consistently
excellent IT service.
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Process-related challenges
Most organizations, fully or partially, follow ITSM processes to align IT service
delivery with business objectives. However, little focus is given to data-driven
analysis for adherence across the SDLC. For example, very few organizations
deploy automated mechanisms to analyze adherence to best practices for code
development (e.g., code reuse, prototyping) to minimize technical debt.
Further, enterprises have fragmented governance processes to manage their IT
service landscape from development to production support. They do not have
access to one view of performance across internal and external service
providers. Various IT projects create their own version of best practices without
organization-wide validation. These create significant cost overheads and
islands of scattered best practices with limited value.
Information-related challenges
Enterprise IT teams have vast pools of internal or tribal knowledge. However,
most of it is hardwired rather than documented. The knowledge within teams is
rarely disseminated, creating significant challenges in transformational
initiatives. The meta-data related to IT inventory (e.g., legacy systems) is either
unavailable or fragmented, and rarely stored in a central platform.
Moreover, there is little cross-team collaboration and information exchange due
to lack of an engaging platform. Information sources are scattered across
multiple teams with little consolidation or centralized access. This creates
significant duplicity of effort and poses challenges to develop a best in class IT
service delivery experience.
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Cost overruns
Poor quality
Delayed
timelines
Result of
suboptimal IT
service delivery
Business-IT
disconnect
Business impact
Diminished
profitability
Reputation risk
Sustainability
challenges
Cost overrun
Most IT service delivery resources are engaged in tasks that consume significant
time, however, create limited business value. This increases the cost of IT service
delivery as more resources are deployed than necessary. Senior leadership
bandwidth is consumed in operational tasks for managing manual processes
and their outcomes. Cost of communication and collaboration increases in the
absence of a centralized platform. Everest Group research indicates that
enterprises with suboptimal IT service delivery teams overspend by 25-35% in
delivering the needed services.
Organizations typically lack an end-to-end view of their IT service landscape
that result in islands of costs. Most business critical projects (e.g., legacy
application transformation) underestimate the cost drivers as they leverage
inadequate tools that can comprehensively assist in this process.
Delayed timelines
A suboptimal IT service delivery impacts the agility of a business to respond to
market demands. Timelines of projects are repeatedly missed due to erroneous
effort estimation, incorrect requirements gathering, poor development activities,
and multiple ad-hoc manual interventions. For example, in legacy application
transformation this is visible in the limited understanding of old technologies,
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Approaches to optimize IT
Focus
Process
reengineering
IT skill
development
IT incentive
alignment
Technologydriven initiatives
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across SDLC
Implement and
maintain
Adopting technology-led IT
agile delivery
Build and design
management
Continuous integration and
testing
Requirements
and design
Application lifecycle
For example, code reuse can save 25-35% of effort of developers. Further, a
strong focus on code quality during build and design leveraging code
diagnostic tools, can reduce approximately 30% of application tickets during
production1. Collectively, these initiatives result in over 20% productivity
improvements in activities such as application maintenance whenever tools are
holistically leveraged across the SDLC.
For enterprises to realize the full value of IT service delivery optimization
initiatives, these technology solutions need to enable the following changes that
are meaningful yet manageable:
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EXHIBIT
Impact of technology
Design and
development
Management and
support
Implementation
Transformation
Reusable
Knowledge
Integrated
Data-driven
components
Enable low skill
development
Optimized testing
management and
transition
Automated
deployments
System data stores
and mappings
governance and
collaboration
Data management
Factual application
Program
management
transformation
and systems
analysis
Quick turnaround
and transition
Business value
Responsiveness to
market demand
Improved operational
efficiency
Enhanced customer
experience
However, for this to succeed, organizations need a plan of action that does not
introduce overwhelming changes to the overall environment. These initiatives
should not be perceived as unmanageable by the stakeholders. Enterprises
deploying technology solutions to optimize IT service delivery need to
incorporate the vision of simplification at the core of their strategy.
Though the idea of process reengineering is attractive, it is not always the best
suited mechanism to optimize IT service delivery. Optimization initiatives should
ideally be run in the background without requiring significant change
management. In our experience, most well intentioned big bang optimization
initiatives introduce unmanageable and unwarranted changes that result in
failure. We believe that most business value resides in automating and digitizing
manual processes, rather than in defaulting on process reengineering.
The success of technology-led IT service delivery optimization initiatives rests on
five major pillars as summarized in Exhibit 6.
6
IT service delivery
Ensure coverage across SDLC processes
Source: Everest Group
EXHIBIT
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Given that the QA management platform is the nerve center for the entire
QA organization, the deployment was performed in phases where dedicated
TCS engineers provided live demo, deployment, customization, and support to
Woolworths.
Woolworths unlocked value in its QA process by deploying the TCS MasterCraft
Application Lifecycle Manager. Apart from the fact that it is SaaS delivered,
resulting in cost savings on infrastructure and support, the solution offered
useful feature sets and workflows. Some of the key benefits derived till date
include:
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Conclusion
The rapid disruption in technology, importance of maintaining & transforming
existing systems, and aligning IT to business objectives requires enterprises to
reinvent their IT service delivery.
We believe right technology solutions deployed and integrated across different
sub-processes across the SDLC can deliver significant value. However, these
technology solutions need to be augmented with long term changes across
different dimensions as shown in the Exhibit 7 below.
EXHIBIT
Level 1: Ad-hoc
Delivery model
continuum
Level 2: Reactive
Level 3: Optimized
Sporadic industrialization
and automation
Little cross-team
collaboration and
knowledge dissemination
Reactive and over
focused on IT support
with misaligned practices
Limited understanding
and adoption of tools
No clear tool strategy or
vision
Little tangible business
impact
Fragmented and
expensive tool ecosystem
Tools leveraged in team
island
Limited focus on
estimating business ROI
Metrics and
SLAs
Organization
design
Project-based metrics
Tower-focused SLAs with Application-centric
with limited portfolio
limited business
delivery
perspective
alignment
Business-aligned SLAs
Incomplete and
Unstructured IT-aligned
Metrics focused on Total
inconsistent definition and
metrics and measurement
Cost of Ownership (TCO)
assessment
Limited overarching
design
Poor accountability
across technology and
processes
Segmented by complexity
and business process
Decentralized with
multiple vendors and
shared services
End-to-end ownership of
technology and business
process
Seamless internal and
third-party vendor
management
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rather than in the silos. The focus needs to shift away from IT-aligned KPIs to
business outcomes. This will be possible when these tools can assist in an
application-centric IT service delivery that can support business objectives.
Leveraged correctly, technology can make IT service delivery optimization a
reality. The upside is too big to ignore, and the downside, well, it is outright
scary!
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