Beltug

Contracts and service models: how service management is being influenced by the undeniable migration to Cloud


Date:25/06/2016


How are ‘Cloud-savvy’ IT strategies changing the practice of IT service management? BELTUG organised a discussion featuring presentations by service managers of several companies and Prof Stijn Viaene from the Vlerick Business School to look into this issue. A number of aspects of moving to the Cloud were covered: 

Contract Management: Cloud providers often modify the initial package, adding extra features (automatically) that make it difficult to evaluate a potential price increase when a new contract needs to be negotiated. 

Ideally, the relationship with providers is moving from a vendor model towards a partnership based on mutual trust: a long-term relationship.  While theoretically everything should be able to run on Cloud, vendors are not ready to offer a mature Cloud package- especially for service offerings).

Release Management: In the earlier days of Cloud, new software versions were released very frequently. Even now that Cloud services have matured and Cloud providers have grown into their service model, new releases are often too soon and the IT department has no say in the release date. 

Communication towards the end-users is another a big challenge here: how to clearly explain that updates will be performed every x months and what that means to the users.

Service and business models: Many Cloud providers are still on a learning curve on how to be a service provider.  For the customer, working your way through all the different support levels to solve an issue can be a challenge.  The general quality of service is often related to the skills of the individual technical account managers:  how well do they know your customer environment and how well do they know their own internal team. 

The group noted that while SLAs for basic services were mostly on track, SLAs for subservices are often very unclear, while for SLA monitoring, customers depend on the Cloud provider. 

In general, the concept of Cloud is harder to follow up financially.  Tools and servers are easy to order, but how do you track termination of usage?  Provisioning and asset management are increasingly important, and the need for models for cross-charging between departments or subsidiaries is growing.  This is also a challenge in the budgeting phase of a project. Finally, with ITIL and DevOps next to each other, the tension area between the two will sharpen. 

 The workgroup concluded overall that IT organisations definitely need to reorganise themselves: 

  • The skills, competences and roles needed to manage Cloud and its services, are shifting.  In the new business models, system engineers will make room for functional analysts who can assess the added value of a service or new feature. 
  • To unleash the full productivity gains from Cloud, an organisation should invest in change management. 
  • Integration is key in the evolution towards a Cloud environment. 

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