Operational IT Implementation Management. Transition from IT Projects to IT Operations

Table of contents

List of abbreviations

List of figures

List of tables

1 Introduction

2 IT operations
2.1 Definition of IT Operations
2.2 Core processes for IT operations
2.2.1 Event management
2.2.2 Incident and problem management
2.2.3 Change management
2.2.4 Request fulfilment
2.3 Challenges in IT operation

3 IT projects
3.1 Project characteristics
3.2 Project management and project life cycle
3.2.1 Initiating
3.2.2 Planning
3.2.3 Executing
3.2.4 Monitoring and Controlling
3.2.5 Closing
3.3 Portfolio and program management
3.4 Characteristic of IT projects
3.4.1 Special characteristics of IT projects
3.4.2 Special characteristics within the project phases

4 Interfaces between IT operations and IT projects
4.1 Organisational aspects
4.2 Transition processes
4.2.1 Transition planning and support
4.2.2 Release and deployment management
4.2.3 Validation and testing
4.3 IT operations activities during the project life cycle
4.3.1 Initiating
4.3.2 Planning
4.3.3 Executing
4.3.4 Monitoring and Controlling
4.3.5 Closing

5 Conclusion and further considerations

List of Literature

List of Internet Sources

List of abbreviations

illustration not visible in this excerpt

List of figures

Figure 1: Example organization structure IT operations, based on Bock, 2010, p8

Figure 2: ITIL life cycle, based on Ebel, 2008, p. 36

Figure 3: Simple ITIL process chain, based on Ebel, 2008, p. 468

Figure 4: Project triangle, own illustration

Figure 5: Project Lifecycle (PLC), based on Phillips, 2010, p. 3

Figure 6: Special characteristics in IT projects, own illustration

Figure 7: Example of transition process interaction, based on Kresse & Bause, 2008, p. 119

Figure 8: Project life cycle and transition processes, own illustration

Figure 9: Connection between IT project, IT operations and transition processes, own illustration

List of tables

Table 1: Characteristics of IT projects, own illustration

Table 2: Organizational structures influences on projects, based on Project Management Institute, 2004, p 28.

Table 3: Categories of non-functional Requirements, based on http://dis.unal.edu.co/~icasta/ and http://www.iai.uni-bonn.de/III/

1 Introduction

IT operation in large companies is mostly faced with two major challenges. On the one hand IT should provide reliable, secure and user friendly services like email, desktop-services and accounting or CRM systems. On the other hand IT operation should be very adaptable and able to follow business development without any delay. Due to globalisation and increasing competition, business and consequently IT operations are forced to adapt to current market conditions. For example, the VW Golf III had been produced for ten years before it was replaced by the Golf IV. In 2012, the VW Golf VI was replaced by the successor model after only five years.

An increasing number of changes have to be made in a shorter time. Nearly every major change is implemented within a project organisation. As per data from Gartner and other research agencies, in 2008 more than $2.7 trillion were spent on IT and software projects worldwide. This massive amount demonstrates the importance of IT projects for the company’s business. Endeavours in the form of a project are considered to be faster and more flexible than normal company organization structure. In particular, large changes in big companies are difficult to implement without formal project organisation.

The IT project organizes and executes large changes with a certain aim, within a fixed period of time and with an allocated budget. After the project is finished, the IT project organisation is dissolved and responsibility for the project’s results is handed over to the operational and organisational structure of the company, if necessary. The transition from IT project to operations during the entire project lifetime, needs special attention and management, especially when facing resource problems or other major delays. Once the IT project is finished, IT operation assumes responsibility for running costs, maintenance and trouble-free operation within the IT system landscape. The connection between IT projects and IT operations, from outset to conclusion of a project, are the subject of this thesis.

In particular, answers will be sought for the following questions:

What is IT operation and what are the biggest challenges in IT operations?

What are the special characteristics of IT and IT projects?

What kind of relations between IT projects and IT operations exist?

What kind of services are provided by IT operations during an IT project?

The first part of this thesis describes the general characteristics of IT operations. After an overview of the key processes the chapter takes a detailed look at the current challenges IT operations is facing. The next part describes the theory of project management by considering the different lifecycle phases. Additionally, focus is placed on special characteristics of IT projects in general and in particular within the project phases. In this context, development, testing and deployment of the project`s outcome must be given special consideration.

Chapter 4 deals with the interfaces between IT operations and IT project based on preceding chapters. In addition to organisational aspects, common transition processes were introduced. A further focal point is the interface between IT operations and IT projects. Possible IT operations activities during the project phase and within the transition processes are described and listed. The thesis ends with a conclusion and provides alternative notions that may improve the cooperation between IT operations, projects and transition processes.

2 IT operations

This chapter describes responsibilities and significance of IT operations. It starts with a deeper look into some chosen operational processes, emphasizing current challenges in this area. After a detailed look at some chosen operational processes, the current challenges in this area will be emphasized. In this context, the term Information Technology (IT) refers to everything related to technology that is used to store, process and distribute information and other contents.¹ One subarea is analysis and evaluation of information, another subarea is control and automation of business processes. An additional focus of IT is the entire area of communication, with wireless service products, internet and machine to machine communication.

2.1 Definition of IT Operations

The definition of IT operations differs throughout the industry, where vendors and individual organizations often create their own custom definitions. IT operations coordinate and carry out the activities and processes required to deliver and manage IT services on agreed levels for business user and customer. This is normally defined within a service level agreement (SLA). A service level agreement describes the characteristics of IT services, documents service level targets, and specifies the responsibility of the IT operations and the customer responsibility.² IT operations is therefore responsible for the ongoing management of the technology that is used to deliver and support IT services. Well designed and implemented processes will be of little value if the day to day operation of those services is not properly conducted, controlled and managed. The improvement of IT operations requires a monitored day to day activity. Furthermore, data has to be collected and systematically analysed.³ Besides monitoring and controlling, the range of activities usually includes management, deployment, distribution, implementation, installation, verification, execution and maintenance.

IT Operation performs these daily activities and takes care of the availability of the IT infrastructure, such as email or CRM systems. This includes all of the facilities, software, networks and hardware. The operation staff keeps the implemented IT systems running in the defined quality. Logistics activities like installing desktop systems, networks or populating server racks are also part of IT operations, as are installing software and monitoring, controlling and maintaining the existing IT systems. The required skill set varies widely for each of these different tasks. The various activities have to be organized in order to keep the IT complexity under control and to ensure that staff shortage or unexpected events can be handled professionally, without major impact. In every organisation the right structure is extremely important for efficient operation. Figure 1 shows an example of department organization structure, based on technologies and tasks.

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Figure 1: Example organization structure IT operations, based on Bock, 2010, p8

On the one hand the organisational structure based on different technology layers, provides an optimal support of individual IT components, but - on the other hand it offers only limited customer-focused support. Because of its key role for the business, IT departments transform themselves from a technology-driven to a customer-oriented IT service provider.⁴ Against this background, common processes and procedures, policies, roles, responsibilities, terminology, best practices and standards have to be defined for reliable IT operations. For this purpose, IT management approaches like the Information Services Procurement Library (ISPL), the Application Services Library (ASL) or the IT Infrastructure Library (ITIL) have been developed. ITIL provides a framework of best practice guidance for IT management, which has become the most widely used and accepted approach to IT Management in the world. It provides a universally accepted framework for establishing a set of integrated processes for delivering high quality IT services.⁵ The ITIL Framework in version 3 is based on the idea that delivering IT services is of vital value to the business and a strategic goal of the IT organisation. An IT service in ITIL is defined as every service that uses a combination of information technology, people and processes to support the customer’s business processes, directly or indirectly. Hereby, a customer can be within the same organisation or within an external organisation.⁶ In addition to the concept for IT operations, ITIL also provides concepts for strategy, design, transition and continual improvement of IT services. These five core publications build a lifecycle that a uses hub-and-spoke design as shown in Figure 2: service strategy at the hub, and service design, transition and operation as the revolving lifecycle stages or ‘spokes’. Continual service improvement surrounds and supports all stages of the service lifecycle. The life cycle phases are cross connected to each other so that every phase impacts another. Therefore the IT Operation is greatly influenced by upstream processes and decisions.

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Figure 2: ITIL life cycle, based on Ebel, 2008, p. 36

2.2 Core processes for IT operations

In general, a process is a structured set of activities designed to accomplish a specific objective. A process takes one or more defined inputs and transforms them into defined outputs. Within IT, operations processes are used to organise the technology driven approaches to an activity based method. Processes can improve the productivity within an organisation and make activities repeatable, comparable and measurable. Measurable process characteristics are performance, cost, quality and quantities, the specific process results, and if a customer that uses the process directly or indirectly.⁷ Once defined, the process should be documented and controlled. Every process is initiated by a trigger which might be an event or a specific request. The output of one process can be the input for one or more additional processes. For this reason, process often generates process chains within process landscapes, as shown in Figure 3.

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Figure 3: Simple ITIL process chain, based on Ebel, 2008, p. 468

Special significance for the work of IT operations are the interference suppression processes, like incident and problem management, as well as processes that change the existing IT environment, such as change, release and deployment management.

2.2.1 Event management

Event management deals with any detectable or discernible occurrence that has significance for the IT environment. Events are typically recognized through notifications from the IT infrastructure, by a user or a monitoring tool. Nearly every IT item or IT process that can be automated needs to be controlled. Virtually all those kinds of IT items and IT processes fall within the scope of event management. Some IT components are included because they have to be available 24x7 like a network router, whilst other components change their status frequently and hence specific actions are required. For example, memory usage of a server needs to be monitored.⁸ Furthermore, environmental conditions, software licence monitoring and IT security are in the scope of event management, as well as normal activities like monitoring the processor load of an application server. Monitoring and event management are closely related but have a slightly different nature. Monitoring covers every occurrence, while event management includes only occurrences that are specifically generated to be monitored. In other words, monitoring is about handling a stream of events, while event management deals only with specified events.

Effective IT Operation depends on knowing the initial state, combined with a good understanding of the target status of the IT environment. Every event and related impact has to be evaluated in order to notice deviations, incidents and possible risks for IT services or IT environments. After evaluation, the event records will either be closed or trigger new processes. ⁹

2.2.2 Incident and problem management

Each incident is triggered by an event like a system error log entry, a message from a user or by the technical staff itself. An example of incidents might be lost network connectivity of a client or reported software failures due to source code issues. Both incidents have different root causes and require different actions in order to restore the IT service. The purpose of the incident management process is to restore normal service operation as soon as possible, after any kind of IT service interruption or other deviations from the SLA. The goal is to reduce the impact on the delivered IT service and therefore to minimize the impact on business operations. This approach ensures the best possible levels of service quality and availability. An incident is defined as an unplanned interruption of an IT service or a reduction in the quality of an IT service. Besides that, a failure of components that have not directly impacted the business service, like backup systems or failure of one disk from a mirror set, is also considered an incident.¹⁰ IT operations have to take all appropriate means to restore normal operations as quickly as possible, with the least possible impact on the business and the user, at a cost-effective price. The incident management process is responsible for managing the lifecycle of all incidents until the failure has been remedied. It ensures the use of standardized methods and procedures for efficient and prompt response, documentation, ongoing management and reporting of incidents.¹¹ The root cause analysis may be a part of the process, however only when it is definitely necessary to restore the IT service and no workaround is available.

Unlike the incident management process, which is focused on restoring the IT service as soon as possible, the problem management process handles the unknown root cause of one or more incidents.¹² The problem management process seeks to minimize the adverse impact of incidents and problems on the business that are caused by unknown errors within the IT Infrastructure. In order to achieve this, the problem management uses two basic approaches. The reactive problem management identifies the root cause of incidents, documents and communicates known errors and initiates changes to improve or correct the situation. The proactive problem management identifies and solves problems and known errors before further incidents related to them can occur again. As an ongoing process, the proactive problem management tries to find patterns and trends within the incident, event and change records that may indicate the presence of underlying errors in the infrastructure.

2.2.3 Change management

The Change management process takes care of all changes that could have an effect on IT services, enabling beneficial changes to be made with minimal disruption. A change is the addition, modification or removal of any item that has a direct relationship to the IT environment.¹³ There are plenty of reasons for changes, for example the implementation of an IT service, like a new CRM system or new desktop clients, the installation of a software patch on a server- or the assignment of new permissions for a user. The change management process has to evaluate every change for risk, impact to the IT and business, resource requirements and especially authorization. Changes generally differ in their size, in relation to the needed budget, time and other resources, as they differ a lot in their impact on IT and business. The exchange of a network router is a relatively small change concerning budget and time, but it can affect every IT service that depends on this component and therefore every business process that uses these IT services. It is essential to maintain the required balance between the need for change, and the impact of that change. The great majority of all incidents that occur are based on unauthorized changes.¹⁴ The correct authorisations, completed in time and at the right time, from the competent organizational units are one of the biggest challenges of change management. Even if a change request was processed correctly, the risk for the IT environment is still high. In particular, changes which are requested for the first time, are a major challenge for IT operation.

2.2.4 Request fulfilment

To handle the large number of changes and to maintain user and customer satisfaction the request fulfilment process has been introduced. Password changes by users, movement of a desktop PC from one room to another or the executions of a defined report are typical demands in the daily work within an organisation. Request fulfilment handles a defined set of service requests, changes and other actives that frequently repeat, typically with low risk, low cost and small scale. These characteristics prefer those requests to be handled separately. Otherwise, processes like change management get congested and obstructed by business as usual tasks. ¹⁵

2.3 Challenges in IT operation

In addition to day to day operation and the observance of service level agreements, IT operations have to meet several challenges. Those challenges are usually associated with the company organization structure and complexity of vertical range of manufacture.

Flexibility

In light of enhanced global competition, the non IT departments face a growing demand on short-term provisioning of IT services. Regarding delivery time, product development, decision-making and other customer requests the departments have to be more flexible and react faster than in the past. IT operations have to keep pace with the rapid changes that occur in most IT environments today. The pace of change has been accelerated by the increasing range of possible IT services, like virtualization, IP-based storage, etc. But this increased range is opposite to the quest of operational stability.¹⁶ In IT, it is very difficult to predict the effects of making small changes in software and other components and therefore to anticipate possible failures.¹⁷

Customer orientation

IT organisation teams are often based on the technological structure, like database or network operations. This kind of separation by technology provides a higher degree of technical expertise. The focus on one technology or one product guarantees the formation and development of expert knowhow. However for those kinds of organizational units, it is often difficult to understand the business as a whole and therefore the business requirements in detail. Technical subunits often lack the information to understand which system supports which business process. From the team’s viewpoint, every system or service with the same SLA has an identical criticality.¹⁸ For example, a management reporting system has the same SLA as the company’s online shop. In the worst case, both services fail at the same time and IT operations focusses on the reporting system, resulting in major sales losses due to the online shop outage. On the other hand, non-IT units aren't able to understand the vertical range of manufacture of IT, which makes it too complex to change anything within the IT environment.

Costs

The budget spent on IT worldwide is estimated at US $3.5 trillion and it is currently growing at 5% per year. Approximately 75% of this expenditure are recurring costs, used to “keep the lights on” in the IT-operations.¹⁹ Hence, IT budget is always under pressure of cost savings. Once an IT service is implemented it is expected to run with the assumed budget. Very few organisations plan effectively for the cost of ongoing management of IT services. It is not easy to quantify the cost of a project, but it is just as difficult to quantify what the service will cost after years of operation.²⁰ In particular, design flaws or unforeseen requirements make it difficult to obtain funding during the operations stage. These kinds of problems often occur months after start-up.

Efficiency

IT operations is challenged by the task of structuring the workflows and processes more efficiently and reliably. This includes organisational aspects, technology and personnel, in order to meet the business expectations. Efficiency in this case basically means, “doing more with less”, maintaining or improving the quality of IT services while constantly reducing the cost of these services.²¹ This approach is reinforced and justified by the ability of the IT operations staff. The IT staff is able to automate processes and to take advantage of synergies between IT services.

On the one hand, it is expected that IT operations get more efficient in the day to day business, on the other hand, it is difficult to obtain additional funding for tools or actions aimed at improving the efficiency of operations. The customer expects that these costs would have been built into the cost of the service from the start. Once an IT service has been successfully launched, and been operational for a period of time, the service is taken for granted and any action to optimize it is perceived as fixing a service that is not broken. ²²

Clear distinction of tasks and responsibilities

In projects and as part of business processes, IT operations can be involved in several tasks. Here it may occur, that task characteristics differ widely from the core competency of IT operations. A clear distinction of tasks and responsibilities is necessary to reduce difficulties arising from suboptimal task sharing.

The current separation between operation al staff and the teams involved in IT projects was originally deliberate to prevent collusion and to avoid potential security risks. The different duties of IT operations and IT projects could be a source of rivalry and political manoeuvring within an enterprise.²³ A clear organisational structure considering virtual teams and matrix organisation, is essential to guide staff and management decisions. This separation and distinction has to apply to personnel and for individual tasks as well. The basis for cooperation between IT projects and IT operations is often simple resource planning, based on available headcount. For example: new IT services often consist of standard software with an individual part of source code. User roles, GUI views and reports may be configured by the standard software. Normally, configuration of IT components is part of the responsibility of IT operations. If these tasks are not included in the scope of the project, for example due to the fact that these activities are part of standard performance for the view of the project, it could result in resource-related conflicts or a lack of resources.

If operational staff is involved in business processes, this could rapidly lead to comprehension difficulties and misinterpretations. The distribution of tasks and transition points, between business units as customers, and IT operations as supplier might be complex. Even when IT operations is considered as customer-oriented, it cannot fulfil customer requirements proactively by itself. For example: although a billing run starts every month at the same point in time, IT operations should not start the process proactively in order to support the business in the best way. The business has to give a clear order instead.

3 IT projects

The vast majority of all changes are performed within projects. This section focuses on the theory of projects and project management in general. After an overview of different project phases, special characteristic of IT projects will be discussed.

[...]

¹ Cf. (Royal Academy of Engineering and the British Computer Society, 2004), p. 7

² Cf. (The Stationery Office - A, 2011), p. 106

³ Cf. (The Stationery Office, 2007), p. 13

⁴ Cf. (Bock, 2010), p. 10

⁵ Cf. (itSMF International), p. 103

⁶ Cf. (The Stationery Office - C, 2011), p. 13

⁷ Cf. (The Stationery Office - C, 2011), p. 21

⁸ Cf. (The Stationery Office - C, 2011), p. 58

⁹ Cf. (Ebel, 2008), p. 458

¹⁰ Cf. (The Stationery Office - C, 2011), p. 72

¹¹ Cf. (The Stationery Office - C, 2011), p. 72

¹² Cf. (The Stationery Office - C, 2011), p. 98

¹³ Cf. (The Stationery Office - B, 2011), p. 61

¹⁴ Cf. (Ebel, 2008), p. 376

¹⁵ Cf. (The Stationery Office - C, 2011), p. 86

¹⁶ Cf. (Bock, 2010), p. 8

¹⁷ Cf. (Royal Academy of Engineering and the British Computer Society, 2004), p. 16

¹⁸ Cf. (Bock, 2010), p. 8

¹⁹ Cf. http://omtco.eu/wp-content/, p. 2

²⁰ Cf. (The Stationery Office - C, 2011), p. 35

²¹ Cf. http://www.teamquest.com/pdfs/, p. 5

²² Cf. (The Stationery Office - C, 2011), p. 36

²³ Cf. (The Stationery Office - C, 2011), p. 233