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Transitioning From Cost Center to Service Center

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Overview• History as a cost center• “Keeping the lights on”• Why we must transition• Benefits of a Service Centric Model• How to transition• How to know when you’re there• How we can help

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History as a Cost Center

• IT has a reputation for being a cost center– Expensive skill sets to maintain– Expense capital investments– High dollar recurring expenses for renewals– Frequent system upgrades which can be

expensive• Lack of clear correlation to business goal

achievement/business performance– Costs are shared but benefits are unequal

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Keeping the Lights On

• Frequently understaffed/under budget• Focus is keeping systems running (“Keeping the

Lights On”)• Frequently behind the technology treadmill of

emerging demands• Solving last year’s problems with last year’s budget• Unfunded mandates• Aging infrastructure/high turnover• Little time for preventive maintenance

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Why We Must Transition• Skilled resources are harder to find and

harder to keep• Budgets aren’t getting larger (as a

percentage of revenue)• IT solutions are getting more complicated• We must be able to correlate IT costs to

business performance• We must be more responsive to business

needs and spend less time on maintenance

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The Benefits of a Service Centric Model

• Agility – Making IT more flexible so that it can reduce time-to-market for business initiatives and facilitate change

• Financial transparency – Improving the cost structure of IT to better extract business value from each project and/or service consumed

• Control – Managing IT more effectively to reduce risks associated with each new project or service

• Alignment – Linking the structure and operating model of IT with those of the business as a whole to improve operational efficiency and relationships between IT and lines of business

Source: http://h71028.www7.hp.com/enterprise/cache/603762-0-0-225-121.html

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How to Know When You’re There• IT responds quickly to business needs with a

service solution versus a server solution• Cost is directly associated and funded by the

business request versus the IT budget• IT manages the architecture standards and

service contracts versus upgrade projects• More time ensuring service quality than

server up time

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How We Can Help?

• Identify systems which are candidates for converting to service management

• Establish an internal transition plan for moving towards service management

• Sell the idea to internal management• Build a service management framework• Understand service cost versus server cost• Engage our team as a service broker

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Next Steps?

• Contact me to discuss more

Michael ChapmanCertified Solutions Architectmchapman@yorel.com

Twitter: @ShareSuccessLinkedIn: Http://www.linkedin.com/in/mschapman919-875-8819 ext. 106