Selecting the Correct SaaS-based IT Service Management Solution

Customers Share Experiences and Insights

2www.DimensionalResearch.com Selecting the Correct SaaS-based IT Service Management Solution

Introduction For many IT organizations, the concept and use of software as a service (SaaS) solutions are no longer new or novel. The companies that choose to deploy SaaS-based IT Service Management (ITSM) solutions expect real business benefits of a well-implemented SaaS solution build on proven technologies. These including:

• Significantly lower capital costs • Reduced total cost of ownership (TCO)• Reallocation of resources• Simpler upgrades• Ease of use• Quicker deployments• Dynamic scalability• Universal accessibility• Simple licensing models

Nevertheless, determining which benefits are fully realizable is entirely dependent on each company’s business model, personnel objectives, and long-term IT strategy. The focus of this report is to highlight the key factors for determining whether or not a SaaS-based ITSM solution can deliver the desired benefits and to what extent.

The participants who were interviewed stressed five key factors that must be examined carefully when considering a SaaS-based ITSM solution:

• Your company’s ITSM strategy and overall cloud objectives

• Integration with other systems• Security • Implementation and deployment • Global operations

The following paper, sponsored by HP, will examine the factors mentioned above. In addition it will share lessons learned from those companies who have already implemented SaaS-based ITSM offerings.

Project Methodology For this project, HP commissioned Dimensional Research to interview customers who have already purchased and implemented SaaS-based IT Service

Management solutions in an enterprise environment. Dimensional Research obtained in-depth feedback on actual experiences from customers using these solutions.

The content in this paper is based directly on telephone interviews with IT managers and executives from 24 companies in North America and Europe. The participants were identified using independent sources. All quotes were taken from interview transcripts, although some quotes have been edited slightly for grammar and improved readability. Participants were assured that their feedback would only be presented as part of a summarized report with no specific attribution made to them or their companies.

It’s important to note that HP did not introduce Dimensional Research to any participant, take part in the interviews, or influence the report content.

Participant ProfileParticipants included IT managers and executives from companies with revenues ranging from $10M to $120B and service desks supporting from 100 to 30,000 employees. The participants represented 24 companies from a wide range of industries:

• Energy (1) • Financial Services and Insurance (3) • Food (1) • Healthcare (4)• Manufacturing (1) • Public Sector (1)• Real Estate (1) • Retail (2) • Services (3) • Technology (4) • Telecommunications (1)• Travel and Entertainment (2)

All participants were experienced with both on-premise and SaaS-based ITSM solutions. And they currently use one of the following SaaS-based ITSM solutions: ServiceNow, Remedy OnDemand, or HP Service Manager.

3 www.DimensionalResearch.comCustomers Validate Value of HP Business Service Management Solutions

SaaS Isn’t New Anymore The participants explained that ITSM and SaaS solutions are now rigorously evaluated and weaknesses are no longer ignored just because SaaS is a new concept. However, the strategic value of a well-functioning ITSM tool has grown substantially during the last few years. Due to the increasing diversity of IT technologies and distributed employees, most companies are facing geographical footprint. That footprint must meet continued demands of higher security, increased uptime, and support for distributed employees on diverse mobile devices. A tool that manages and supports an evolving IT environment and alignment with ITIL practices has never been more valued.

“We knew we were going to install a new service desk solution, and we are going to use that opportunity to become much more aligned with ITIL.”

The research participants emphasized that the adventure days of just trying a new technology and figuring out later how it fit into an overall strategy and operations are over. They revealed that in order for a SaaS-based ITSM solution to be the right choice it must be defined as part of the larger cloud strategy and fit with the company’s overall IT vision. And as the ITSM solution grows in importance to the business, it must also communicate and integrate well with an increasing number of other systems and services.

“We were mature enough in our service desk and CMDB system that we wanted to integrate monitoring and discovery tools. It was just impossible with ServiceNow.”

Everyone expected SaaS-based solutions to be easy to use, deploy, and scale. But they also shared that the technical implications, processes, and license models directly impact the expected benefits.

“Our SaaS ITSM solution is really easy to use. There was no reason to go through the web-based training materials.”

Ensuring a SaaS-based ITSM fits the IT visionMany participants shared how SaaS solutions are commonly viewed as the latest way for IT to save money. These solutions typically provide some cost savings, but the real question is — does the SaaS solution fit with your company’s IT vision?

More specifically, companies must ask how various cloud solutions fit in their long-term IT strategies. Is it purely for cost savings, or a reallocation of internal resources? Is there a desired shift from capital expenditure (CapEx) accounting to operating expense (OpEx)? Or, do you need a support platform that can be globally accessible by all employees and customers?

“The SaaS financial model does provide some key short-term advantages as it frees up CapEx to pursue more visible projects.”

“From a pure license point of view, it will save money. But the real savings are all of the operational benefits.”

Those interviewed quickly pointed that even a SaaS-based solution requires dedicated internal resources to support it. They advised to plan for two key roles — one to manage the vendor contract and SLAs and another to manage any technical issues and needs.

“We did the ROI analysis and it wasn’t quite what we hoped, especially with ongoing personnel commitments. But the strategic decision to move applications to the cloud has paid many other dividends.”

Further, each company should contemplate the long-range view of ITSM and its evolving role in the company. Will it just be a help desk, or will it be a fully integrated solution with CMDB, security, asset management, operations, monitoring, HR and more? For some companies, an ITSM solution is a strategic platform with operations monitoring feeding into it to predict issues and inform help desk, security, operations, and maintenance personnel of current or impending issues. That vision directly impacts how well ITSM must work with other applications and services.

4www.DimensionalResearch.com Selecting the Correct SaaS-based IT Service Management Solution

Most of the participants acknowledged that ITSM is an increasingly strategic solution, which adds another set of requirements to the SaaS vendor selection process. What other products does that vendor offer? Are they best in class? Are they enterprise class? Does the vendor offer integrated solutions to help provide easier deployments?

“ITSM will be like CRM and a strategic fabric for our IT and business. We need to consider what else will integrate with it now and in future and how many vendors we have to use to get to that solution.”

“I would like to see more orchestration and automation features integrated with the help desk. Think of advanced notification of scheduled maintenance and upgrades to both service desk administrators and affected end users.”

“Discovery by ServiceNow is weak and troubled. You can only have a good discovery and dependency tool if you are using on-premise solutions.”

One participant indicated the nature of the move to a SaaS-based solution forced a comprehensive plan for backup and recovery of data. And for many industries there will be regulatory, compliance, and security impacts. These key factors must be considered carefully when choosing a vendor in order to ensure

its operations will comply with your business requirements.

“We wanted to run trends on tickets and fixes by geographies and groups. We use this to measure support team performance. ServiceNow didn’t do that type of trending out of the box.”

“We wanted an on-site backup option with a warm rollover. However the question became where is the primary CMDB? Is it in-house or in the cloud?”

Lastly, it’s fundamental to know all of the possible customizations that can be made to extend the potential of your cloud-based ITSM solution. But you need to understand the total effort that is involved to code and maintain these customizations. Participants advised to be mindful of the desired customizations and their impact on upgrades and integrations. Specific investigation needs to be pursued in advance to determine if a customization will result in a proprietary deployment that may sacrifice the expected benefits from your SaaS solution. A thorough set of evaluation questions and exercises should reveal the range and resiliency of customization without impact to the core SaaS operation.

“ServiceNow encouraged us to try anything. But two years later we can’t do an upgrade without breaking what we did.”

SAAS BASED ITSM CHECKLIST

* Easy to evaluate - Administration and configuration by current employee

skill set - Simple licensing models

* SaaS offering is strategically aligned with IT vision - Reduced capital and personnel expenses - Quick to deploy - Quantified personnel commitment - Simple and straight forward maintenance - Required ITIL policies supported - Vendor can prove uptime and SLAs claims - ROI in one to three years

* ITSM integrates easily with other systems - Upgrades won’t break desired customizations - Multiple integration options and APIs - Existing integrations with IT operations solutions - Existing integration with application lifecycle solutions - Vendor offers complementary on premise solutions

* Implementation Resources - 24x7 support - Available and experienced resources - Best practices for process refinement and deployment - Reference installations and timeframes

* Secure - Prepare a rigorous validation process - Vendor offers continuous security reporting - Data backup and disaster recovery options

* Global Operations - Scalable - Multi-language support - Key features to easily move and route tickets

5 www.DimensionalResearch.comSelecting the Correct SaaS-based IT Service Management Solution

Integrating ITSM with other systemsOnce the strategic fit and vision of the ITSM solution are established, you should document a list of applications and services for integrating it within your existing infrastructure. This critical step helps to ensure a smooth and timely deployment. In addition, you’ll need to create a timeline for those integrations.

Participants advised investigating all of the integration options and APIs that ITSM vendors provide. Some offer web service integrations, which are simple and straightforward. However, XML parsing dramatically impacts performance and speed. Code-level APIs may require more effort to initially build and deploy, but they will offer superior performance in the long run.

“Integrations are with web services which requires XML parsing and that is slow. A direct API call is so much faster. This is why some integrations with ServiceNow are just slow.”

For many companies, the path of integration will cross over into legacy applications. You need to know if the SaaS vendor is experienced with these types of applications. It’s vital to understand what your options are and know how it will be to implement and maintain before deployment. Legacy and other applications can be very “chatty” as they require frequent back and forth communication for proper operation. This legacy integration will have two direct impacts. The first impact is performance, which can create operational delays or end-user experience problems, as applications may be perceived as slow or broken. The second is a bandwidth impact since these types of legacy integrations may affect both WAN and LAN traffic needs.

“If an integration is chatty and needs bidirectional information flow, the latency and performance issues in a SaaS solution are very evident.”

Validating a Secure ITSM SolutionSecurity continues to be the top requirement companies investigate when considering SaaS solutions. Will the SaaS solution be secure? Will it meet our internal standards? Will it meet regulatory and compliance requirements? Participants of this research shared that they had successfully met their internal and external security requirements. Even those participants from industries with the strictest security requirements, such as health care, government, and financial services, were successful in securing their SaaS solutions.

“The SaaS model does not fail because of our security requirements but it is an extra process. We need to validate that the SaaS is operating the way they claim it does.”

6www.DimensionalResearch.com Selecting the Correct SaaS-based IT Service Management Solution

Many companies often discover that cloud solutions are more secure than their own internal applications based on the personnel and diligence applied by the SaaS vendor. Nevertheless, this step requires thorough investigation not just with the physical and logical implementation of security but also with the track record of the application and company. Can the vendor be trusted to continue operating the solution in the manner just verified? In addition to this initial validation, you must also receive ongoing reports that satisfy continuing requirements. This security adherence requires someone within your company to be tasked with this ongoing responsibility.

“We have to validate SaaS solution security. Then we need to develop a process where we get monthly reports to verify its security strategy is constantly in effect. We need that to be compliant with our regulations.”

Participants further indicated that customizations and integrations would directly impact security. Are integrations with on-premise solutions or other SaaS based services secure? Where is the data, and how is it secured at rest and in flight? These questions reinforce the assertion that a cloud-based SaaS and ITSM solution needs to be conceptualized as part of your IT strategy. In addition, a comprehensive user identity strategy outlining security must be implemented as any inconsistencies in an LDAP server may create risk or deny access to applications required by employees to perform their duties.

“You have to have a very good internal process to manage identity internally. If your Active Directory and your SaaS solution implementation are in disagreement, issues will arise.”

Implementation Best Practices and Expert ResourcesThroughout the interviews, participants cited solution implementation and best practices as two key areas they should have addressed more scrupulously. Many participants wished that they had evaluated their vendors and partners more thoroughly. Participants

shared that deploying the first couple of modules in isolation in an “off the shelf” manner achieved initial SaaS expectations. But when they looked at a longer-term implementation involving capabilities beyond incident and problem, these SaaS solutions needed more work.

“The problem isn’t the technology; it is a process to get the business to understand what process they want and need. Moderators or special consultants would be worth their weight in gold.”

Some SaaS vendors don’t offer robust services or provide best practices, which means their customers must figure it out on their own. Many companies want to move to an improved ITSM process and increased adoption of ITIL practices along the way. For these companies, a set of best practices and templates would be helpful in designing the overall process regardless of who implements it. Proven workflows with a knowledge base of information will allow companies to apply exact changes to processes required for specific industries or company requirements.

“ServiceNow just didn’t have a very good program for knowledge transfer, best practices, or example process flows. You are on your own for the most part.”

Participants often stated that their teams were capable of implementing solutions, but for many that defeated the primary benefit of SaaS. They often preferred to have solutions implemented for them, which meant they needed either vendor professional services teams or partners. Experience and availability are on the top of the vendor checklist as most participants expected SaaS solutions to be implemented in less than six months.

“The deployment only took six months and rolled out without a hitch, but we did a lot of internal planning first.”

“Installation was straight forward and accomplished in just a few weeks with dedicated experts.”

7 www.DimensionalResearch.comSelecting the Correct SaaS-based IT Service Management Solution

Because many participants were perhaps blinded by the fantasy of a worry-free SaaS implementation, they neglected to ask about support and troubleshooting practices and policies. This further adds to the requirements of internal personnel who must be assigned to the SaaS solution, especially if your company has a global deployment that dictates a 24x7 operation and support process.

Preparing for Successful Global OperationsA SaaS-based ITSM provides benefits to companies of all sizes. If your organization is international, you must fully evaluate the capabilities of its global operations. Several participants articulated the importance of their ITSM solutions supporting different languages around the world. What languages will the solution support natively? Can the fields handle non-native languages? Will the solution provide automated translations, or will you constantly force your team to use the Google cut and paste translation method?

“One challenge with ServiceNow in a global deployment is the lack of supported languages. There is no automated translation and that makes assigning or reviewing tickets globally very difficult.”

The requirement for global operations revealed a new set of needs that participants did not contemplate prior to purchase. Specifically, several individuals mentioned the importance of administrative controls for routing and batch assignments. Companies that offer a 24x7, follow the sun strategy want both manual and automated capabilities to route tickets to the next region based on issue type, application, language, and location. This business requirement identified the necessity to perform searches on different fields to ensure nothing falls through the cracks and to discover if there are problem trends in specific regions, applications, or users.

“There is no search function for the assignment of tickets during the escalation process. You have to know the group or the individual.”

“As we roll over from one service center there is no way to assign a bulk or group of tickets. You hope they sign in, and see them, but no one is working them or knows it is their responsibility. Yes, you can do them one by one but at the end of the day you just want a group selection and reassign to the support leader.”

Finally, participants indicated that global use models added extra requirements to the vendor selection process. These requirements verified performance checks in each of the major locations for help desk centers as well as the locations of end users. This addition often created and refined the SLAs from the SaaS provider.

Conclusion It was clear from participants that companies received value from their ITSM SaaS solutions. Yet the value received, relative to expectations, varied considerably.

To reap maximum value from your SaaS solution, you must first define and plan how any cloud or SaaS-based implementation fits with your overall IT strategy and objectives. Then, you’ll need a vision of how ITSM will be implemented and what capabilities are needed. This information must be captured and documented to ensure a strategic fit. You should also outline the key integrations and customization required to meet those objectives. In addition, your requirements will further reveal the security implications and data exposure that has to be managed. While most SaaS solutions have significantly less internal personnel impact, you should anticipate some staffing needs.

© 2012, Dimensional Research. All rights reserved. www.dimensionalresearch.com

ABOUT DIMENSIONAL RESEARCH® Dimensional Research provides practical marketing research to help technology companies make smarter business decisions. Our researchers are experts in the people, processes, and technology of corporate IT and understand how corporate IT organizations operate. We partner with our clients to deliver actionable information that reduces risks, increases customer satisfaction, and grows the business. For more information visit www.dimensionalresearch.com.

ABOUT HP HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services, and IT infrastructure to solve customer problems. More information about HP (NYSE: HPQ) is available at www.hp.com

SaaS providers must offer solutions that are secure today, as well as stand behind their solutions to ensure they remain secure tomorrow. They must also provide service offerings with expertise and best practices so you have every choice available on how to implement and maintain their solutions. Lastly, these SaaS providers must offer the features and company operations to support your global business.

IT does not stand still and it must constantly look to the future. Several of those interviewed indicated how ITSM is becoming a business fabric supporting a new way of operating IT and the business. Several participants who were looking ahead indicated that mobility needs to be factored into the solution capabilities not just for end users but for the support staff and those implementing the fixes that are not always available at their desks. Cloud services and solutions are proven business options today. But you must question if the proposed SaaS solution and company supporting it can be your partner today, as well as provide the long-term commitment to be there tomorrow to support your IT vision.