How Cisco IT Transformed Into A Services Organization
How Cisco IT Transformed Into A Services Organization
How Cisco IT Transformed Into A Services Organization
Challenge
Adopting an ITaaSO model is less about technology and more
about progressive cultural and process changes. The transition
requires pervasive shifts in the way IT is organized; how
services are defined, delivered, consumed, and financed; and
LESSONS LEARNED
Dont underestimate the length of the journey
NEXT STEPS
Assess service roles and their functions
Develop service dependency mapping
Re-evaluate service metrics
enterprise-class services for users to consume. Instead of only the availability of systems, IT is measured on the
performance, quality, and user experience of the services delivered, and the direct contribution they have on
business value and enablement.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public. December 2014
Page 1 of 16
The transformation to ITaaSO involves a significant amount of change in how work gets done. IT employees have
to organize and discuss the work of IT differently, and many will need to evolve their roles and skills to succeed in a
services-centric model. Solid organizational change management is critical for success.
Figure 1.
Strong advocacy by the chief information officer (CIO) is crucial to ITaaSO success, as is buy-in and endorsement
from executives across IT and the business. Getting all stakeholders on the same page and keeping momentum
going throughout the transformation requires considerable effort and synchronization from all of IT and the
business.
Solution
Before bringing others on board, Cisco IT had to clearly define what ITaaSO is and why it is important to the
business. We define ITaaSO as a business model for running IT that delivers value as defined by ITs
clients/customers in a cost-effective manner. This definition embodies three tenets that have guided us
throughout the transformation:
Be customer/client-focused:
Represent IT in terms of services delivered versus applications, hosts, networks, storage, etc.
Inform the business in business terms; engage in conversations focused on business outcomes.
Maximize business value of IT investments (focus on identifying, quantifying, and billing for the value
Cisco gets from every internal IT investment).
Connect business and technology architectures, enabling new business models faster.
Cultivate close partnership with the business, providing transparency for better-informed investment
decisions, improved business capabilities, etc.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 2 of 16
Be cost effective:
The move to ITaaSO substantively changes the dialogue between IT and the business. Formerly, discussions
between Cisco IT and business stakeholders mainly focused on specific technology deployments and resources,
not value. The link between IT investments and company performance was obscured or non-existent. ITaaSO
success is demonstrated in our ability to talk about the cost and value of the services we provide, and discuss
needs, tradeoffs, and funding decisions in ways that resonate with internal clients and customers.
Most of our clients arent interested in technical details, says Shawn Shafai, member of technical staff, IT,
Connected IT Services. They want to know how Cisco IT is going to help them solve a problem, overcome a
challenge, or move their business forward. Theyre interested in business outcomes.
Figure 2.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 3 of 16
Regular architecture and investment accountability sessions direct and reinforce continuous business-IT alignment.
We map IT services to the business capabilities and business processes they enable, and investments to the value
delivered by services and the underlying systems, infrastructure, and technology that enable the capabilities. This
process feeds IT investments (projects and programs required to support business requirements) and guides
portfolio management (prioritizing and funding projects and programs).
optimization consultation.
Taxonomy
Roles
Service costing
Governance
Change management.
Taxonomy
At the basic level, service taxonomy provides
a common language about what IT provides.
Consistent taxonomy applied throughout the
IT service portfolio, service catalog, and
service management framework is essential
to a successful ITaaSO transition.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 4 of 16
In ITaaSO mode, we deliver and articulate our value in the form of services. As a service provider to our internal
business users and clients, we have to put quality and the user (customer) experience top of mind. Services must
be defined from the users perspective.
Defining and organizing hundreds of services and service components in an organization the size of Cisco IT is a
monumental undertaking. We spent nearly two years developing the service taxonomy.
People in IT tend to view each of their individual functions as a service. In reality, what they do might actually be a
critical component of a service or a function required to support a service (see Figure 3).
Figure 3.
Just as services should not be defined by activities within IT, they should not be defined by how IT is organized,
where budget is distributed, or what architecture is used (the connection of processes, systems, and technologies).
We connect the architecture view to the services view through the BOST framework, but we dont let one define
the other, says Paul Dench, IT architect, Connected IT Services.
IT activities, organizational models, architecture . . . None of these views resonate with users. Its not what they
see, adds Dench. Its important to define services from the customers perspective, not ITs perspective. A service
should be something your users will actually consume.
For example, Cisco IT previously had a service we called mobility, which included smartphones and similar
offerings. Although well understood by IT and the people who manage the Mobility group, this service did not
resonate with users. In fact, when surveyed, users told us they were not looking for something called mobility.
They simply wanted smartphones, tablets, etc. Over time, we learned that users want services that plainly identify
what IT is offering to them or enabling for them.
Cisco IT defines an IT service as an identifiable technology-related solution with well-defined functional
and operational characteristics. An IT service either directly enables business capabilities or indirectly
enables them by providing necessary foundational functionality. Key service characteristics include:
Is organization-agnostic.
Architected from the enterprise reference model and contains business, system, and technology
capabilities.
Composed of requestable offerings that are consumed by a user, business function, partner, or another IT
group.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 5 of 16
Defined in terms that resonate with the user, not the provider.
We use these characteristics as a guide to vet requests for new services as well as define and classify service
offerings.
IT services are one tier in a service taxonomy hierarchy that describes how services are packaged into discrete
offerings and how those offerings roll up within the service portfolio. The service taxonomy provides us with an
understanding of the relationships and dependencies of IT services to business services, says Dench.
At the highest tier in the Cisco IT service taxonomy are nine organizing principles, or service domains (see
Figure 4). Cisco IT senior leadership chose these principles as the starting point to begin working down the
service taxonomy hierarchy, defining and parsing thousands of potential services and service offerings. The
organizing principles are the highest level classifications within the IT service portfolio.
You dont have to build out the entire pyramid of services at once, says Dench. For example, if youre going to
focus on infrastructure for a few quarters, then spend your effort on defining services and offerings within the
infrastructure area alone.
Figure 4.
In the service hierarchy, the nine operating principles are followed by service categories, services, service
offerings, and service assets (see Figure 5):
Services are groupings of multiple service offerings. Services align to the Operations, Systems, and
Technology views in BOST (see Figure 2).
Service offerings are variations, or flavors, of an IT service. Offerings are what end users request or
subscribe to in the service catalog.
Service assets are the infrastructure components that enable the service offerings. Assets can also be
people, processes, documentation, etc.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 6 of 16
Everything in the service hierarchy is managed in the IT service portfolio except service assets. Assets are
mapped to the offerings they enable and managed in a separate applications portfolio. While important from ITs
perspective, end users do not usually care about what these infrastructure components are called or how they
connect to the services. Introducing the concept of service assets helped us reduce the volume of service
offerings in the service portfolio.
Figure 5.
The IT service portfolio has contracted over time as service categories, services, offerings, and assets are
reassessed, redefined, and validated through data quality checks. When the service taxonomy was introduced,
the portfolio contained 50 service categories, 259 services, and more than 2800 service offerings. Today there are
52 service categories, 174 services, and 720 service offerings. The number of offerings will continue to
consolidate as we fine tune our definitions across the service portfolio.
There isnt a magic number or right amount of services and offerings. Just dont back into a number. Dont say
youre going to have ten services and then try to create ten services, says Dench. Most importantly, IT orgs
should exercise due diligence and apply the service definitions appropriately and consistently throughout their
portfolio, catalog, and systems management framework.
Roles
Transforming to ITaaSO involves significant change in how work gets done. IT employees must align their work to
a services portfolio and undertake various refinements to their processes, roles, and skill levels. Talent is needed
to ensure that services are delivered and managed effectively, and to forge strong relationships with business
clients. We introduced the following new service roles and responsibilities:
Service executive accountable for overall client experience and operational excellence of the service at
the executive level. A member of IT senior staff.
Service owner responsible for end-to-end service delivery including all service offerings.
Business relationship management responsibility for the client relationship with respect to the IT
services consumed by the client.
Service lifecycle management responsibility for optimizing service across all offerings and all service
lifecycle phases.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 7 of 16
Service roadmap management responsibility for overall success of delivering the service category
roadmap.
The service roles did not eliminate or introduce new job titles within IT. All roles and responsibilities were
absorbed by existing employees. For example, there are IT managers who perform the role of a service owner,
and project managers who take on service lifecycle management responsibilities.
All IT services have a service executive and a service owner, along with employees responsible for
system/technology architecture management. The service owner is accountable for many aspects of the service,
including identifying roles needed for the service and establishing a service team of people from functional areas
across IT. As with the service taxonomy, the service owner role is not based on functional or vertical
organizational lines. This person owns a service end to end regardless of whether the content of the service falls
within his or her organization. Likewise, if a service and its corresponding service category are run by three vice
presidents in different functional areas, for example, there is still only one service and one service owner that
represents all three areas.
Business relationship managers from IT are embedded within business units where they can influence business
strategy, promote IT capabilities, identify opportunities, and evaluate service alternatives with their clients.
Service Roles Handbook and Training
To facilitate adoption of the new service roles throughout the IT organization, one of our first major deliverables
was an IT Service Roles Handbook. This 26-page handbook not only defines each role and details the associated
responsibilities, but also provides principles and guidelines for successful adoption. Using the RACI assignment
matrix, service roles are linked to activities in the service lifecycle along with the associated responsibilities,
accountability, decision making, and level of participation by supporting team members.
Cisco IT uses a variety of ways to educate and train employees on the service roles and the services
transformation, including:
A series of live training classes for people assigned service roles. Recorded modules are available for
employees who cannot attend the live sessions.
Webinars about the importance of ITs move toward a services organization, and what management and
individual contributors can do to support the transformation.
Mandatory web-based training (for example, everyone in the IT organization must complete a BOST
framework introductory course).
Communities of practice to build and support talent among employees that share a common purpose (for
example, a community was established for employees assigned one or more service roles, regardless of
job title); community discussion forums encourage knowledge sharing and best practices.
Brief (less than 10 minutes) video-on-demand modules that educate users about the service portfolio.
Training is tailored for anyone assigned an IT service role and for service portfolio administrators; these
videos are in the Cisco formal learning and development system, so participants register and receive credit
for completing the training.
Mentoring programs.
Training targeted for service owners is under way, which will focus on customer-centric skills owners need to run
their service effectively.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 8 of 16
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 9 of 16
Cisco eStore is built on top of Cisco Prime Service Catalog and Cisco Process Orchestrator (see Figure 7). Cisco
Prime Service Catalog enables enterprise service management for reporting, chargeback, entitlement, and
consistent taxonomy control. Cisco Process Orchestrator handles automated provisioning of all service requests
through integration with other systems. With this IT process automation system, requests for IT services,
applications, and infrastructure can be processed in minutes instead of hours or days with greater transparency
and control for end users as well as for IT.
The eStore low-touch, automated service delivery model has garnered additional benefits for Cisco, including:
Productivity saving of approximately 15 minutes per user per visit (seamless user experience)
Figure 7.
Service Costing
Running IT like a business involves setting a value and a cost for every IT service. Transparent service costing is
critical not only because IT service users want to know what they are paying for, but also because costing
provides an opportunity for IT to quantify its value to the business.
Running an IT services shop is one thing. Knowing how to cost services and being able to show that data to
groups outside of IT, thats transparency, says Gustav Toppenberg, Cisco IT manager, Architecture, Connected
IT Services.
Service costing enables us to:
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 10 of 16
Most importantly, service costing fuels value-based discussions between IT and the business and leads to more
informed decision making.
Architecture-Led Investment Planning
Cisco IT works closely with business stakeholders throughout the investment planning process to align delivered
capabilities with clients business requirements. Architecture-led planning maps business requirements to the IT
capabilities needed to support them, and investments to the value delivered by IT services and the underlying
systems, infrastructure, and technology that enable the capabilities. This process feeds IT investments (projects
and programs required to support business requirements) and guides portfolio management (prioritizing and
funding projects and programs).
Architecture-led planning helps ensure that IT investments can be tracked back to one or more business
objectives and corresponding business capabilities.
Governance
A consistent accountability cycle underpins our ITaaSO model (see Figure 8). Regular architecture and services
reviews reinforce continuous business-IT alignment and service goals.
Quarterly architecture reviews, held by the chief information officer and senior staff, validate IT and business
alignment. These reviews are forums for vetting dependencies, risks, opportunities, and projected costs, savings,
and benefits. This knowledge fuels informed decision-making and agile course-correcting when business needs
change. If service-level agreements (SLAs) established on the roadmaps are not being met, IT and business
stakeholders bring issues back into the architectural review to make the necessary course corrections or
investment adjustments.
IT service goals and metrics are reaffirmed and reported in quarterly service reviews. Success is measured by the
effectiveness of the services and the impact that investments have on the services. In service reviews, the CIO
selects services from the portfolio and service managers present their metrics.
Figure 8.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 11 of 16
Change Management
Navigating the abundant cultural and process shifts along the ITaaSO journey requires rigorous organizational
change management. Every organization, inside and outside of IT, has to adopt a services-oriented mindset.
While the path will be somewhat different for each organization, all organizations have to align with the
overarching services management framework.
Change management initially focuses on getting organizations to align their senior leadership teams and mobilize,
and then on developing continuous learning to drive improvements and putting in place governance and
incentives to sustain the culture transformation. Change management involves five major stages:
Accelerate adoption
Efforts are tracked through positive indicators showing signs of progress in each stage.
Stage One: Align Senior Leadership
This stage entails preparing senior leadership in each organization to guide the ITaaSO effort, establishing
internal change teams, and communicating senior leadership commitment. Senior leaders must galvanize around
the importance of becoming a services organization, manage as a cohesive alliance with other organizations, and
ensure that their employees have sufficient resources and clarity to move forward effectively (e.g., learn and use
the correct service taxonomy). Internal change teams must have sufficient time, focus, and skills to be credible
and keep the change momentum going. Depending on the size of the organization, this team requires one to three
full-time people.
Employees need to see unified leadership commitment to the direction. This can be done through regular
communications about the transformation, such as ITaaSO value presentations shared with management and
cascaded down to their staff, and discussing the progress toward becoming a services organization and
answering employees questions in staff meetings.
Examples of progress indicators for this stage:
The opportunity for all employees to see and respond to an ITaaSO value presentation.
A defined future state that is well understood by senior leaders and key players
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 12 of 16
Governance in place
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 13 of 16
Results
Our transition to ITaaSO has yielded several benefits for Cisco. Chief among them:
Increased business agility and speed (time to capability) - Reusing and leveraging existing services and
components allows Cisco IT to deliver scalable capabilities faster. Connecting business and IT architectures
enables faster delivery of new business models.
Progressed new services delivery without growing the total IT budget - On a flat-to-down overall IT
budget for the past five years, we:
Rolled out new, global telepresence and video architecture with more than 1600 endpoints
Doubled the number of supported end-user devices
Integrated more than 50 acquisitions into defined services
Cut server provisioning time from 8 to 12 weeks to less than 15 minutes
Migrated all applications to x86 with more than 85 percent virtualized
Built out a pair of active-active data centers.
Improved operational excellence - Cisco IT has made huge strides in improving operational excellence
and reinvesting in growth and innovation by focusing on simplification and moving resources away from
operational tasks that do not differentiate or move the business forward.
Lower total cost of technology ownership - Achieved through TCO-enabled cost reduction, reuse, and
centrally managed IT budget. Processes are more efficient and less resource-intensive.
More informed decision-making - Transparent service costing provides more direct association of costs
to consumption. New reporting and metrics-based approach allows for greater visibility into service
performance and business impact.
Greater IT relevancy - Finer IT alignment with the needs of the business, closer partnership with the
business to make better investment decisions. IT is viewed as a trusted partner, helping to grow Ciscos
business and competitive rank.
Lessons Learned
Following are some recommendations for other enterprise IT organizations embarking on the ITaaSO journey.
Dont underestimate the time it will take to adopt an ITaaSO model. This is a transformational journey that
spans years, not months.
Ensure strong advocacy and commitment from the CIO level down. Buy-in and endorsement from senior
leadership across IT and the business is crucial.
Abandon the traditional siloed, vertical, functional-based IT organization mindset. Services cut horizontally
across vertical functions. Dont let the IT organizational structure, activities, budgets, or architecture drive or define
your services.
Dont expect to get service taxonomy right the first time. There is no perfect list or magic number when it
comes to the types and quantity of services and service offerings.
Define services from the end users perspective, not ITs perspective. A service is something that users
consume. Developing a catalog of services from this perspective might require rethinking or unraveling terms that
are entrenched within your IT organization.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 14 of 16
Dont confuse services with critical components of a service or IT functions that support a service. Not
everything IT does is a service. What people do and what they offer are two different things. This mixup will dilute
the value of the services IT provides.
A service catalog isnt about a particular tool, but the information that gets put into the tool. The shiniest,
latest tool wont do the job if the information inside it doesnt resonate with users. Technology wont solve this
problem.
Fill the service catalog with what your users need and want: Think through their most-used items. Not
everything can or should be put in the catalog at once.
Promote employee acceptance of change. A transition on the scale of ITaaSO will create concerns and
questions among employees. Allay their concerns through ongoing awareness and education efforts. And back
the transformation with a solid organizational change management plan.
Next Steps
Although Cisco IT is well into the transformation to a services-oriented organization with several successes to
showcase, there wont be a time when we can rest on our laurels. As a services organization, we will continually
seek ways to improve the users experience, refine our services and delivery, gain operational efficiencies,
exploit reuse opportunities, and strengthen our partnership with the business.
In the near term, we are:
Assessing the effectiveness of the service roles and their functions. There might be room for
consolidation.
Developing the process of service dependency mapping and configuration management. You
have to understand all the technical infrastructure connections behind each service, says Dench. How
does an application connect to the host, to the database, to the network, and ultimately to the service? If
a change occurs, whats the impact on the business? Who should be notified?
Re-evaluating our service metrics and how we use them. The same metrics cant be applied across
all services. Are we gathering extraneous metrics? Collecting data simply because we can? How much
information do we need to determine if were going in the right direction?
Lastly, says Dench, Well continue to improve the quality of the data and service definitions in our IT portfolio.
Its never a done deal.
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
Page 15 of 16
Note
This publication describes how Cisco has benefited from the deployment of its own products. Many factors may
have contributed to the results and benefits described. Cisco does not guarantee comparable results elsewhere.
CISCO PROVIDES THIS PUBLICATION AS IS WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
Some jurisdictions do not allow disclaimer of express or implied warranties; therefore, this disclaimer may not
apply to you.
Printed in USA
2015 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public.
02/15
Page 16 of 16