Service Level Organization: Making Production Support More Efficient
By Natarajan Krishnamoorthy
Where can corporations least afford to cut corners? To many, it’s production. As a result, IT organizations spend much of their budgets keeping production capabilities up and running (In a corporation with a billion-dollar IT budget, 15% is typically spent on production support activities—8% of which goes toward maintaining production capability).
With this level of spend, IT organizations can ill-afford to waste the time and cost of SMEs on non-strategic activities. As a result, they are turning to Service Level Organization (SLO) models, which assign serviceable tasks to non-SME-level personnel. As a result, it enhances efficiencies, saves costs, and spurs business transformation—all the while keeping IT operations effective and efficient.
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In a recent Cognizant study, performing IT infrastructure upgrades was found to be a major distraction for application SMEs. Instead of spending time on strategic projects, SMEs were regularly focused on testing infrastructure upgrades and patches—tantamount to assigning a heart surgeon to apply a band-aid to a cut finger.
SLO addresses this issue with an innovative model that encompasses:
- Understanding the services performed. Analyzing the data available at the organization level helps understand the activities being performed by the team.
- Defining a service catalog, with entry and exit criteria. Identifying areas of work that do not require application knowledge leads to the identification of potential serviceable activities. In other words, the goal is to identify areas of work that do not require the time of an SME.
- Conducting a cost/benefit analysis. A quantitative evaluation helps identify services that provide maximum ROI with minimal risk, as well as the challenges and costs of implementing each AVM activity as a service across lines of business and the projected implementation benefits.
- Identifying scalable services. Once identified as services, these activities will open up avenues for standardization, an accomplishment that otherwise would be tough to achieve.
- Creating cost optimization opportunities. Introducing process improvements, automation and more innovative delivery solutions to that effect.
For practical purposes, the application of an SLO model:
- Identifies repetitive tasks that are easily serviceable, while minimizing risk to business and application stability
- Optimizes the onsite/offshore ratio and delivers continuous improvement over time
- Maintains business satisfaction and realizes Service Level Agreements (SLAs)
- Increases productivity
- Improves understanding of cost per unit of service provided
- Increases ability to implement scientific processes
- Improves coordination among service recipients and providers
- Improves ability to implement strategic initiatives across services delivered
- Enhances control, coordination and streamlining of the process for delivering services
The success of Cognizant’s SLO model may best be illustrated by citing a recent case study…
A leading U.S. insurance company is a pioneer in implementing dedicated production support units. Its IT organization is divided into two groups: application enhancement by an application development team, and production support via a dedicated production support unit that supports more than 400 applications.
Cognizant used the SLO model to deliver "Core Initiatives Certification" services, including all hardware and software upgrades. The Service Organization certifies applications after the upgrades for fitness of "as-is" operations prior to the upgrades. The result: Since implementing Cognizant’s SLO model, the insurance company has realized a cost savings of about $800,000 annually along with other procedural benefits, as depicted below.
Implications for the Future of Work
Cognizant’s SLO model aligns effectively with the Future of Work, which is all about global and virtual workplace flexibility and collaboration. With a framework that can be used to identify and implement SLO services in any customer environment, our SLO model:
- Requires no application subject matter expertise, providing a flexible model that can be deployed on any domain
- Reduces costs in any existing production support environment
Cognizant’s SLO model provides a framework that identifies potentially serviceable tasks, by determining the Serviceability, Portfolio Readiness and Management indices.
- The Serviceability Index is calculated by assessing the risk of transitioning a service to a service model approach. It includes:
- Ability to drive standardization
- Provide centralized support
- Modularity
- Ability to measure the service performance
- Sustainability over time
- The Portfolio Readiness Index is calculated by analyzing the application groups within the portfolio against the service catalog. It includes:
- Criticality of service request
- Stability of implementation
- Dependency on application knowledge
- Availability of documentation
- Technology dependency
- The Management Index is calculated by assessing the effort, resource and dollar savings provided to the customer for a particular portfolio. Refer to the image below for an overview.
About 15% of an organization’s IT budget is spent on production support activities; 8% of that spend is allocated toward serviceable maintenance activities.
IT organizations can ill-afford to waste resources. Yet skilled SMEs are regularly assigned to mundane production support tasks.
Organizations looking to devote specialized resources to equally specialized tasks are increasingly turning to a Service Level Organization (SLO) model, which frees SMEs from performing mundane day-to-day tasks.
For organizations with tight IT budgets and leaner operations—coupled with a maturing onsite/offshore model—an SLO model can help:
- Keep costs in check
- Invest savings in strategic projects
- Spur business transformation, while keeping IT operations effective and efficient