Itil V3

ITIL Practitioner Agree and Define (IPAD) All-in-One SLA
Exam Guide and Certification Work Book:

Define, Implement, Manage and Review Service Level
Agreements with Service Level Management and Financial
Management
Notice of Rights: Copyright The Art of Service. All rights reserved. No part of
this book may be reproduced or transmitted in any form by any means,
electronic, mechanical, photocopying, recording, or otherwise, without the prior
written permission of the publisher.
Notice of Liability: The information in this book is distributed on an As Is basis
without warranty. While every precaution has been taken in the preparation of the
book, neither the author nor the publisher shall have any liability to any person or
entity with respect to any loss or damage caused or alleged to be caused directly
or indirectly by the instructions contained in this book or by the products
described in it.
Trademarks: Many of the designations used by manufacturers and sellers to
distinguish their products are claimed as trademarks. Where those designations
appear in this book, and the publisher was aware of a trademark claim, the
designations appear as requested by the owner of the trademark. All other
product names and services identified throughout this book are used in editorial
fashion only and for the benefit of such companies with no intention of
infringement of the trademark. No such use, or the use of any trade name, is
intended to convey endorsement or other affiliation with this book.
Write a Review and Receive a Bonus Emereo

eBook of Your Choice
Up to $99 RRP Absolutely Free

If you recently bought this book we would love to hear from you submit
a review of this title and youll receive an additional free ebook of your
choice from our catalog at http://www.emereo.org.
How Does it Work?

Submit your review of this title via the online store where you purchased
it. For example, to post a review on Amazon, just log in to your account
and click on the Create Your Own Review button (under Customer
Reviews) on the relevant product page (youll find plenty of example
product reviews on Amazon). If you purchased from a different online
store, simply follow their procedures.
What Happens When I Submit my Review?

Once you have submitted your review, send us an email via
review@emereo.org, and include a link to your review and a link to the
free eBook youd like as our thank-you (from http://www.emereo.org
choose any book you like from the catalog, up to $99 RRP). You will then
receive a reply email back from us, complete with your bonus ebook
download link. It's that simple!
ITIL Practitioner: Agree and Define
Table of Contents
1
INTRODUCTION ......................................................................................................................... 5
GENERAL TERMS AND CONCEPTS .................................................................................. 15
INTRODUCTION TO SERVICE LEVEL MANAGEMENT.................................................. 37
INTRODUCTION TO FINANCIAL MANAGEMENT............................................................ 45
AGREE AND DEFINE .............................................................................................................. 53
5.1 MANAGING PLAN AND INITIATE THE KEY ACTIVITIES FOR THE SLM AND FMIT
PRACTICES ........................................................................................................................................... 55
5.2 MANAGING PLAN THE EXCHANGE OF APPROPRIATE INFORMATION RELEVANT TO
MANAGING THE SLM AND FMIT PROCESSES .................................................................................... 61
5.3 MANAGING REPORT ON THE EFFECTIVENESS AND EFFICIENCY OF THE ACTIVITIES SLM
AND FMIT PROCESSES ........................................................................................................................ 65
5.4 ORGANIZING ORGANIZE THE EXCHANGE OF APPROPRIATE INFORMATION WITH
CUSTOMERS, END-USERS AND SUPPLIERS ......................................................................................... 71
5.5 ORGANIZING DEVELOP AND MAINTAIN THE PROCEDURES OF THE SLM AND FMIT....... 75
5.6 ORGANIZING DEFINE SERVICES AND MAINTAIN SERVICE CATALOGUE ............................ 77
5.7 ORGANIZING PREPARE THE NEGOTIATION, AGREEMENT AND MAINTENANCE OF VARIOUS
AGREEMENTS (SLA, OLA, UC).......................................................................................................... 83
5.8 ORGANIZING PARTICIPATE IN THE BUDGETING ACTIVITY ............................................... 105
5.9 ORGANIZING PARTICIPATE IN THE DEVELOPMENT OF THE IT ACCOUNTING SYSTEM .. 109
5.10 ORGANIZING PARTICIPATE IN THE DEVELOPMENT OF THE CHARGING SYSTEM ......... 117
5.11 ORGANIZING PARTICIPATE IN THE CREATION OF THE FINANCIAL REPORTS ............... 127
5.12 OPTIMIZING MONITOR AND OPTIMIZE THE SLM & FMIT PROCESSES ......................... 131
5.13 OPTIMIZING PROPOSE SERVICE AND PROCESS IMPROVEMENTS, BASED ON RESULTS
OF MONITORING AND REVIEWS .......................................................................................................... 135
5.14 OPTIMIZING CONDUCT AUDITS OF THE SLM AND FMIT PROCESSES .......................... 145
5.15 OPTIMIZING MANAGE THE ONGOING FINANCIAL OPERATIONS AND PERFORMANCE ... 151
5.16 OPTIMIZING PARTICIPATE IN ONGOING SERVICE MANAGEMENT THROUGH THE SERVICE
REVIEW MEETINGS.............................................................................................................................. 157
6
ASSIGNMENTS ...................................................................................................................... 177
6.1 ASSIGNMENT 1 SERVICE LEVEL MANAGEMENT ................................................................. 179

6.2 ASSIGNMENT 2 FINANCIAL MANAGEMENT FOR IT SERVICES ............................................ 181
6.3 ASSIGNMENT 3 SERVICE LEVEL MANAGEMENT AND FINANCIAL MANAGEMENT FOR IT
SERVICES ........................................................................................................................................... 183
7
ASSIGNMENT RESOURCES............................................................................................... 185
7.1 COMPLAINT LETTER ................................................................................................................. 187

7.2 CASE STUDY RECE SHOE COMPANY ................................................................................. 189
EXAM PREPARATION .......................................................................................................... 199
FURTHER READING ............................................................................................................. 213
INTRODUCTION
Welcome to this Clustered Practitioner Program from The Art of Service.
This program is fully accredited by the globally recognized accreditation agency for
IT Service Management programs EXIN.
The program has been developed and accredited in accordance with guidelines
provided by EXIN.
The ITIL Practitioner Agree and Define is intended for professionals who will
participate in managing, organizing, and optimizing, the operations of the Agree and
Define processes in an IT Service organization.
Typically such organizations will have implemented, or started to implement,

elements of the ITIL Framework or may be looking to make improvements in these
process areas.
The requirement to look at the provision of IT Services in a professional way is

driven by a variety of factors.
Organizations understand the benefits of having Information Technology (IT)

throughout their structure. However, few realize the potential of truly aligning the IT
departments objectives with the business objectives. More and more organizations
are beginning to recognize IT as being a crucial delivery mechanism of services to
their customers.
The starting point for IT Service Management (ITSM) and the ITIL Framework is not
the technology, not the processes; it is the organizational objectives.
The IT Infrastructure Library is a set of books/CDs with best (good) practice

processes on how to manage the provision of IT services. It is the process part of
the Service Management challenge (people, process and technology).
The core set of material is the following set of tightly coupled areas:
Service Delivery
Service Support
Security Management
Business Perspective: The IS View on Delivering Services to the Business

(Vol I)
Applications Management
ICT Infrastructure Management
Planning to implement Service Management
Software Asset Management
OGC: Office of Government Commerce (the trademark owners of ITIL)
APMG: In 2006 APMG won the tender to own the rights for accreditation and
certification of the ITIL courses. EXIN and ISEB used to be independent bodies, but
now sublicense through APMG.
EXIN: Stichting EXameninstutuut voor INformatica

(Translation: Foundation for EXamination INformation Systems)
ISEB: Information Systems Examination Board

This certification is recognized world wide!
TSO: The Stationary Office
Tool Vendors: (HP, Infra, Remedy, HEAT, etc) provide technical solutions for
customers trying to implement ITIL/IT service management.
There is no such thing as ITIL certified tools. Only people can be ITIL certified.
continued
ITSMF: (IT Service Management Forum) is the only internationally recognized and
independent organization dedicated to ITSM.
Accredited Vendors: (E.g. The Art of Service) Only accredited vendors can provide
ITIL training.
10
Foundation = understanding
Practitioner = doing
Manager = implementing
11
This slide demonstrates the learning pathways that can be taken in developing your
knowledge and skills for ITSM. The Art of Service provides world-class accredited
programs for all ITIL certification levels as described above.
12
What do you think caused the jump in 2000?
Y2K and the after effects of the dot com crash of the late 90s.
Microsoft also introduced MOF which is based on and adapted from ITIL but with a
prescriptive Microsoft flavour. . As Microsoft is a giant player in the IT industry, their
acknowledgement of the strengths of ITIL was a major influence in ITILs promotion.
13
Notes:
14
GENERAL TERMS AND CONCEPTS
Notes:
15
Balanced score cards (BSC) - one of the most common methods of measurement.
This method uses the objectives of the organization or process to define Critical
Success Factors (CSFs).
Critical Success Factors (CSFs) - are defined for a number of areas of interest or
perspectives: customer/market, business processes, personnel/innovation and
finance.
Key Performance Indicators (KPIs) the parameters for measuring progress

relative to key objectives or CSFs in the organization.
Process - a process is a logically related series of activities conducted towards a

defined objective. Processes may define roles, responsibilities, tools, management
controls, policies, standards, guidelines, activities and work instructions if they are
needed.
Process Owner - a process owner is responsible for the process results.

Example: The owner for the Service Level Management Process
16
continued
Process Manager is responsible for the realization and structure of the process,
and the reports to the process owner.
Function - a team or group of people and the tools they use to carry out one or more
Processes or Activities. Functions provide units of organization responsible for
specific outcomes. E.g. The Service Desk function is responsible for performing
activities from the other ITIL processes including Incident Management, Event
Management, Request Fulfilment etc.
Vital Business Function (VBF) a function of a business process that is critical to

the success of the business. Vital Business Functions are an important
consideration of all ITIL processes.
17
More and more people see the importance of Processes (the primary purpose of
this program is studying some of these in detail).
The Organizational Perspective issue ensures that we align the vision, strategy
and goals of the business with the delivery of IT services.
The People issue is without doubt where we as IT Service Management

professionals face our greatest challenges.
Historically, the Technology considerations got most attention. Now we understand

that without well defined processes we can often make inappropriate selections in
this area.
18
To impress stakeholders (e.g. customers, investors, personnel) your organization will

have to communicate the vision and why they should do business with you, e.g.
because you are the cheapest, the most reliable etc.
The vision can be communicated in the form of a mission statement (see slide). The
mission statement should be a short, concise description of the objectives of the
organization and the values it believes in.
The policy of the organization is the combination of all decisions and measures taken
to define and realize the objectives. Implementing policies in the form of specific
activities requires planning.
Realization of the planned activities requires action. Actions are allocated to

personnel tasks, or outsource to external organizations.
There is a danger, that after time, the mission, objectives and policies will be
forgotten by the organization. This why it is so important to measure at every stage
of the organizations maturity, to ensure remedial action is taken when necessary.
19
So if we accept that the objectives are the starting point for the provision of IT
Services, how can we position the delivery of services and the utilization of the ITIL
Framework?
The objective tree is a very powerful tool not only in showing the benefit and
alignment of IT and Service Management principals to the business, but also in
being able to effectively sell the concepts as well.
See if you can follow along in the following paragraphs and match the sentences to
the above objective tree.
To meet organizational objectives, the organization has business processes in place.
Examples of business processes are sales, admin and financial departments

working together in a sales process or logistics, customer service and freight who
have a customer returns process.
Each of the units involved in these business processes needs one or more services
(e.g. CRM application, e-mail, word processing, financial tools).
20
continued
Each of these services runs on IT infrastructure. IT Infrastructure includes hardware,

software, procedures, policies, documentation, etc. This IT Infrastructure has to be
managed. ITIL provides a framework for the management of IT Infrastructure.
Proper management of IT Infrastructure will ensure that the services required by the
business processes are available, so that the organizational objectives can be met.
21
The questions raised on the left hand side of this diagram arise constantly in the
process-based approach typical of modern IT Service Management. The tools to
answer these questions are shown on the right hand side of the diagram.
The standards for the output of each process have to be defined in such a way that
the complete chain of processes that meets the corporate objective, if each process
complies with its process standard. If the result of a process meets the defined
standard, then the process is effective. If the activities in the process are also
carried out with the minimum required effort and cost, then the process is efficient.
Processes are often described using procedures and work instructions.
22
Elements derived from the OGC Planning to Implement Service Management.
GQM = Goals/Questions/Metrics
The first and most important question that needs to be answered is whether the
initiative or adoption of a CSIP (Continuous Service Improvement Program) will
deliver sufficient revenue/savings to justify the expense. The principle challenge is
that much of the benefit cannot be quantified (eg. quality, flexibility, service
satisfaction).
With regards to Risk Management we must remember that this initiative is not the
only one competing for organizational budget. What is the effect on other initiatives if
this IT initiative is successful at attracting funds? Also what risks will be faced after
the program has begun? The salient point is that risks will always be present, so
dont attempt to eliminate them simply get to understand them.
The Gap analysis is generally an opportunity to use scores to measure current and
future expected levels of maturity. For example a 5 level model of maturity is defined
in the OGC Planning to Implement Service Management text (Initial, Repeatable,
Defined, Managed, and Optimized).
23
Elements derived from the OGC Planning to Implement Service Management
IT organizational maturity progresses through a variety of stages

(Technology focus, Product/Service focus, Customer focus, Business focus, Value
Chain).
To move from one stage to the next requires management and control over people,
processes, technology, steering, attitude and changing relationships between the
business and the IT organization.
IT process maturity is best measured by using an assessment tool for a more

detailed analysis. A variety of such assessments can be carried out as selfassessments as well as commercially available solutions.
24

(Notice some of the concepts raised by Kotter creeping through the fundamentals
are all the same).
The starting point should not be determined on the emotions or feelings of an

individual. The starting point will be a combination of current maturity levels of the IT
organization, the IT processes AS WELL AS overall organization priorities, IT pain
points and process interdependencies (e.g. You cannot have Problem, without
Incident Management) and other factors (including budget, available resources and
current workloads).
The most important aspect of the communication plan is that it needs to be ongoing
and not just given enthusiastic support at the outset of the CSIP initiative. Under the
banner of managing organizational change; it simply isnt enough to get a group of
people together that have project management and ITIL skills and experience. There
is a multitude of issues that have to be considered and addressed (including
resistance, gaining and keeping commitment, involvement and communication).
25
continued
Cultural change is largely reflected in the leadership/management style that is

prevalent/dominant in the organization. Remember that some organizations suit
dominant leadership styles (e.g. Regimented organizations, such as military units).
Careful role definition is required (see later section on using the ARCI model),
especially when considering the allocation of new activities to existing staff
(overload) or the conflict that could arise when processes are implemented across
traditional hierarchical models.
As people are an integral part of the CSIP there is a need to provide appropriate
levels of education, the critical element being timing of delivery. All too often we see
education programs delivered only to witness a lack of follow up activity that gives
the participant an opportunity to put the theory into practice.
Finally, tools. The raging debate is which comes first. Tools or process? In reality,
most organizations have a variety of IT Service Management tools already. It is not
the place of this program to suggest that existing tools are a wasted investment;
however, the commonly accepted principle is that the processes should be
supported by the tools and not the other way around.
(Service Management tools are covered later in the workbook)
26
We need to use measures and metrics to help us determine a point of acceptance

with regard to process improvements and progress of the CSIP.
CSFs are quite simply the things that we have to be able to do. They tell us in
qualitative terms the basic objective for a process (eg. the CSFs for Change
Management can be (a) a repeatable change process, (b) ability to deliver change
quickly, (c) deliver organizational benefits via change management).
KPIs can be considered the quantitative elements of a process that give us a guide
to the process efficiency (eg. the KPIs for Change Management can be (a) the
number of rejected RFCs, (b) the size of the change backlog, (c) quantity of changes
delivered according to RFC schedule). Note that there are generally a lot more KPIs
than CSFs for a given process.
27
continued
Organizational drivers are the points that are raised by business people as their
wish list for the IT department. There have been many surveys conducted over
many years, but the essence of what business people want from their IT
departments can be condensed down into several points. These include support
business operation, facilitate delivery of electronic services, and help to deliver
business strategies, enable change to match pace with required business change.
28
Quick wins should be used to help drive more change that is medium to long term.
Also consider what your legacy of change will be. Consider in 10 years time when all
current staff have moved on or been replaced. When asked why certain activities are
done the way they are what will be the response? That is the way its done
around here. Perhaps that could be considered a good legacy, provided that part of
the way its done around here involves continual monitoring and reviews.
The real essence of a CSIP is the first word of the acronym. Continuous! The way to
create continuity is to go back to the start and begin again. Remember it begins with
the VISION. The vision must essentially promote business and IT alignment.
29
continued
Knowledge management is another way to ensure the legacy of the work you do is
not lost. The rate of change, staff turnover, expectations of performance and market
place competition are all heading in an upwards direction. With these trends the
organization cannot afford not to retain knowledge and not learn from previous
mistakes and lessons. The CSIP must include in its overall design elements
consideration for the gathering, organizing and accessibility of
data/information/knowledge.
30
Most businesses are hierarchically arranged. They have departments, which are
responsible for a group of employees. There are various ways of structuring
departments, for example by customer, product, region or discipline.
In this type of arrangement we often see that communication is ineffective.
31
A process is a logically related series of activities for the benefit of a defined

objective. This slide illustrates cross functional process flows.
32
EXAMPLE PROCESS
What is the Goal? To bake a cake!
What are the inputs? The ingredients (eggs, milk, flour, sugar, butter, chocolate) plus
equipment such as pans, mixers etc.
What are the activities? Mix, pre-heat oven, bake, cool, decorate etc.
What are the measures? How much ingredients, how long to bake, at what
temperature etc.
What are the norms? The recipe
What are the outputs? CAKE!!!!!!
As we can see the basis of ITILs approach to Service Management is on the

interrelated activities.
33
continued
Unlike a project a process is never ending
In this example, baking a specific cake (eg. a birthday cake for Jane) is a project.
The goals, activities, inputs, outputs, goals, measures and norms defined makes up
the process for baking cakes.
Question: What is the process owner (eg. head chef in a kitchen) responsible for?
The output of the process, e.g. the cake itself
34
The ARCI model helps show how a process actually does work end to end
across several functional groups.
A Accountability (is made accountable for ensuring that the action takes place,
even if they might not do it themselves).
R Responsibility (actually does the work for that activity but is responsible to the
function or position that has an A against it.
C Consult (advice / guidance / information can be gained from this function or

position prior to the action taking place).
I Inform (the function or position that is told about the event after it has
happened).
General Rules:
Only 1 A per Row (ensures accountability, more than one A would confuse this)
At least 1 R per Row (shows that actions are taking place)
35
36
INTRODUCTION TO SERVICE LEVEL MANAGEMENT
Notes:
37
The success of SLM is very dependent on the quality of the Service Catalogue and
its contents, because it provides the necessary information on the services to be
managed within the SLM process.
38
Service Level Management enables:
IT effort to be focused on those areas that the business think are key
IT and Customers to have a clear and consistent expectation of the level of

service required and to be delivered
The establishment and improvement of lines of communication between IT and its

customers.
39
Notes:
40
Notes:
41
SLA: Written agreement between a service provider and Customers), that

documents agreed Service Levels for a Service.
Service Level Achievements: The actual service levels delivered to a customer

within a defined life-span.
SIP: Identifies and introduces measurable improvements within a specified work

area or work process.
Service Catalogue: Written statement of IT services, default levels and options.
Underpinning Contracts: Contract with an external supplier that supports the IT

organization in their delivery of services.
Operational Level Agreements: Internal agreement which supports the IT

organization in their delivery of services.
Service Level Requirements: Detailed recording of the Customers needs
42
It is important SLM ensures that all internal and external parties (including end users)
are made aware of the details within the SLA. This communication enables a
thorough understanding of the overall aims and objectives as well as the benefits
and service targets of the SLA.
All relevant services are described within the Service Level Agreement. The
descriptions of each of these services should include:
Key Business Functions
Deliverables
All other relevant information to describe the service and its scale, impact and priority
for the business.
43
According to the ITIL framework which of these documents should be

developed first? Why?
Service Catalogue. You need to know what you can do first, and then we can map
the customer requirements to the Service Catalogue.
44
INTRODUCTION TO FINANCIAL MANAGEMENT
Notes:
45
Notes:
46
Using FMIT to provide services with cost transparency (e.g. via service catalogue)
clearly understood by the business and then rolled into the planning process for
demand modeling and funding is a powerful benefit.
47
3 Fundamental Activities
Budgeting: Predicting the expected future requirements for funds to deliver the
agreed upon services.
IT Accounting: Enables the IT organization to account fully for the way its money is
spent. Identify costs by Customer, by service, by activity.
Charging (optional activity): Required to bill the Customers for the services
supplied to them.
48
Service Recording the assignment of a cost of entry to the appropriate service.
Cost Types these are higher level expenses such as hardware, software, labor,
administration etc
Cost Classifications there are also classifications within services that designate
the end purpose of the cost. This includes classifications such as:
1) Capital/Operational this classification addresses different accounting

methodologies that are required by the business and regulatory agencies.
2) Direct/Indirect this designation determines whether the cost will be assigned

directly or indirectly to a consumer or service.
Direct Costs are charged directly to a service since it is the only consumer of the
expense.
Indirect or shared costs are allocated across multiple services since each service
may consume a portion of the expense.
Cost Units a cost unit is the identified unit of consumption that is accounted for a
particular service or service asset.
49
continued
Fixed/Variable The strategic issue around this classification is that the business
should seek to optimize fixed service costs and minimize the variable in order to
maximize predictability and stability.
50
Notes:
51
52
AGREE AND DEFINE
53
54
5.1
MANAGING Plan and initiate the key activities for the SLM and FMIT
practices
Notes:
55
It is essential that all IT departments internal to the organization understand the

importance and the benefits of the SLM role and how this process in particular is
integral to the success of delivering quality services to customers.
An awareness campaign is a great way to win support and advise all parties how
and when they might be affected.
It is also critical that current monitoring tools and techniques are reviewed and
improved as necessary to ensure there are adequate capabilities for monitoring
SLAs.
SLM will plan to review and implement Operational Agreements with internal
suppliers and Underpinning Contracts with external suppliers the support SLA
targets.
56
In addition, at this stage, setting and agreeing Incident priority levels and escalation
paths, with Customers, and internal and external providers (in conjunction with
Service Desk and Problem Management) would be appropriate.
These activities may be incorporated with a formal project and managed via a
recognized project management method e.g. PRINCE2.
57
If monitoring is not yet in place, finding metrics may be difficult. However, a

customer satisfaction survey or evaluation form would be a helpful tool in gathering
customer feedback. A similar procedure can be used for internal departments, end
users etc. So the SLM gets an end to end perception from all parties as to how the
current services are viewed.
58
As with SLM, it is essential that the organization recognizes the benefits of

introducing FMIT as well as the costs. Evaluation of these benefits and costs prior to
implementing the systems of Budgeting, IT Accounting or Charging, will pave the
way for quick implementation as customers and IT staff will be more accepting.
59
60
5.2
MANAGING Plan the exchange of appropriate information relevant to

managing the SLM and FMIT processes
Notes:
61
The SLM process involves assessing impact of Changes upon the service quality
and SLAs, both when Changes are proposed and after they have implemented.
Some of the most important targets set in the SLAs will relate to service availability
and thus require Incident resolution within agreed time periods.
Therefore it is essential that SLM holds good communication links with the other
processes, and plans the exchange of appropriate information to ensure their
success.
An SLA without the underpinning support processes is useless, as there is no basis

for agreeing its content.
62
Service Level Management The SLA specifies customer expectations and IT

service obligations. The cost of meeting the customers requirements may have a
major impact on the shape and scope of the services that are eventually agreed.
FMIT liaises with Service Level Management about the costs of meeting current and
new business demands, the Charging policies for the organization, their effects on
customers and how the policies are likely to influence customer and user behavior.
The more that the SLA allows the individual customers to request variations to
service levels, the greater is the scope for (and potential benefits of) Charging for IT
services but also the greater the overloads of Budgeting, IT Accounting and
Charging.
Capacity Management Cost information can be used to estimate the costs of the
desired Capacity and Availability of the system. In planning the Capacity it may be
necessary to discuss the costs with individual customers or the organization as a
whole. Data that is collected so that costs can be determined may also be relevant
to Capacity assessments, e.g. staff effort, machine usage.
63
continued
Configuration Management FMIT requires asset and cost information that may
be managed by large organization-wide systems. Configuration Management is
responsible for managing the data relating to assets (C.Is) and their attributes e.g.
costs.
64
5.3
MANAGING Report on the effectiveness and efficiency of the activities

SLM and FMIT processes
Notes:
65
Periodic reviews must be held on a regular basis with customers, to review the
service achievement in the last period and to preview any issues from the coming
period.
Particular attention should be focused on each breach of service levels to determine

exactly what caused the loss of service and what can be done to prevent any
recurrence. It may be necessary to review and re-agree service targets, e.g. if the
service level was or has become unachievable. If the loss of service was caused by
a failure of a supplier or internal support group, it may be necessary to review the
Underpinning contracts and/or the Operational Level Agreements.
We will look at Service Review Meetings in more details later (Optimizing section).
66
Notes:
67
Notes:
68
Senior IT executive committee reports should contain similar information.

There may also be valuable information found in any external efficiency and
effectiveness reviews or from auditors, as they may contain details of progress
followed up from previous reports.
69
70
5.4
ORGANIZING Organize the exchange of appropriate information with

customers, end-users and suppliers
Notes:
71
Service Level Management is not about providing a cushion for customer complaints
or a process for passing blame around and avoiding responsibility.
Successful Service Level Management depends on the nature of the relationship

between the customer and the service provider. When mutual benefits exist within
the relationship, agreements and motivation are easier to manage and maintain.
This provides the cornerstone for a successful partnership based on a managed
services environment.
Service Level Managers should aim to build partnerships with customers built on a
shared vision or strategy that unites them in their goal for attainable and successful
managed services.
72
They key indicators of successful Service Level Management are the continuous
successful mapping of services to the ever changing customer requirements, the
sustained provision of services, and a mutually beneficial customer/provider
relationship under the umbrella of a shared strategy.
73
74
5.5
ORGANIZING Develop and maintain the procedures of the SLM and

FMIT
Notes:
75
The Service Operating Procedures (SOPs) are recorded in a document that details
every business activity and process.
It is essential to document company procedures. Especially for organizations who

are working towards, or working to maintain, compliance with governance standards
such as ISO 9000 or more recently ISO /IEC 20000. These standards require
organizations to document all operating procedures.
As there is a great deal of planning that is required before SOPs can be organized,
SLM will play a leading role in this process.
Unlike the Service Catalogue, which is written using business language as it is a

customer facing tool. The SOPs are written from a technical and managerial
perspective.
SOPs can be used as benchmarks for performance reviews, training aids, or in the
case of quality standards, a starting point for improvement.
76
5.6
ORGANIZING Define services and maintain service catalogue
Notes:
77
The Service Catalogue contains all information on services currently available to

customers. The SLM uses this customer facing tool to document, coordinate,
maintenance and refer services.
78
In defining the services the organization actually provides, a hierarchy of services will
generally emerge as the basis for the Service Catalogue.
Service Catalogues can be integrated and maintained as part of the organizations

Configuration Management Database (CMDB). This approach enables each service
to be identified as a Configuration Item (CI) and linked to those Incidents and/or
Requests for Change (RFCs) which are associated with the CI or service.
79
Notes:
80
Notes:
81
As organizations grow and develop their IT infrastructures, so do the complexities of

what services are provided and which customers utilize each service. To gain clarity
of the services being provided and the customers of each, it is recommended that a
Service Catalogue be produced. Often produced as part of the ITIL Service Level
Management deployment, the Service Catalogue drives organizations to ask the
basic questions What is a service? and What services do we actually provide?.
This is not an easy question as most organizations focus on the technical

infrastructure often confusing a service as perceived by the customer - with an IT
System. In most cases, one IT service can comprise of several services which in
turn are made up of one or more IT systems.
The key to defining IT services is to relate the customers business processes to

supporting services. At the customers business unit or departmental level, you will
find business processes and procedures that when mapped reflect the most
important day-to-day activities of the business unit or department. It is these
established and defined business processes which are supported by IT services.
82
5.7
ORGANIZING Prepare the negotiation, agreement and maintenance of

various agreements (SLA, OLA, UC)
Notes:
83
Determining and documenting a true set of service level requirements which can
then be made into a SLA is far from simple.
84
Notes:
85
Service Level Agreements allow customers to be flexible and ask for changes or
additions to the services currently on offer. These changes and additions are
complex and need to be managed by the SLM, to ensure their workload is
coordinated effectively and efficiently.
86
Evaluating the customers perceived value of services is a worthwhile, yet often

overlooked activity in Service Level Management. Ascertaining the customers
current perception of services provides a baseline to:
measure the effectiveness of Service Level Agreements yet to be negotiated

and agreed as part of the SLM process; and
assist in determining which services to address first.
To gain the full three-sixty degree view, perceptions should be gathered and
evaluated at both the User and Management levels within the Customer community
and the Service Provider.
Marlene Blaszczyk is the co-founder of the internet site "Motivating Moments".
87
It is important SLM ensures that all internal and external parties (including end users)
are made aware of the details within the SLA. This communication enables a
thorough understanding of the overall aims and objectives as well as the benefits
and service targets of the SLA.
All relevant services are described within the Service Level Agreement. The
descriptions of each of these services should include:
Key Business Functions
Deliverables
88
Notes:
89
Add your comments below for each SLA type:
1. Service Based:
Benefits:
Challenges:
2. Customer Based:
Benefits:
Challenges:
90
continued
3. Multi-Level Based:
Benefits:
Challenges:
91
Notes:
92
Notes:
93
Notes:
94
Notes:
95
A good example of a service provided by external providers is desktop break-fix

support.
96
Notes:
97
Notes:
98
Customer expectations are based on perceived values of services. Deciding what

are reasonable expectations and targets for services at the same time as
establishing customers current perception of service levels can reap many benefits.
Most times, Customers do not have a clear understanding of their needs so assisting
in determining their needs is a valuable service. In the process, expectations may be
set or adjusted to correspond to known service capabilities.
Both customer perceptions and expectations may be determined through interviews,

surveys, conversations or other collection methods.
The fact is customers can be unrealistic about their expectations. More often than
not, IT service providers are saying yes to delivering services based on unrealistic
or excessive demands by customers. Although the service provider may be well
intentioned in agreeing to these demands, inevitably the outcome is not poor
customer service.
Gaining a common understanding between the customer and service provider(s) of

the customers service expectations and the providers capability is fundamental to
the expectation management process.
99
These are the SLM activities broken into 2 cycles:
What are the outputs for each activity ?
Define:
Specify:
Negotiate:
Monitor:
Report:
Review:
Evaluate:
100
E.g. Customer calls and explains that they have requirements for certain types of
services. We refer to our Service Catalogue to see if we provide these or not. If we
do, we can IDENTIFY the service name and then move into the CONTRACT stage
with the customer. If the service doesnt exist then we need to more clearly DEFINE
the customer requirements.
Note: in the DEFINE stage we may uncover new services that are not part of the
current Service Catalogue or require modifications to existing entries in the
catalogue/spec sheets.
We do not re-create the Service Catalogue and Spec Sheets each time we go
through the activities of SLM. The Service Catalogue and Spec Sheets are created
once and then modified (this relates to the Mods to in the slide above).
In the CONTRACT stage we create our OLA, UCs and SLAs as required.
Reviewing the Service Level Achievements is part of the MONITOR stage.
101
continued
In the REPORT stage Service Level Reports are about specific SLAs. Remember
that a report does not need to be a written document it can be a series of numbers,
a health meter or other form of representation.
Finally in the REVIEW stage the Service Quality Plan helps us to define the SLM
activity. How the process works and how it should interact with other process areas.
The SQP is like a central point for the Service Manager to define their view of the
entire ITSM approach.
102
Notes:
103
104
5.8
ORGANIZING Participate in the budgeting activity
Notes:
105
It is also the means of delegating control and monitoring performance against

predefined targets. It is paramount that budgets are effectively integrated within the
organization and the managerial responsibility and accountability is matched and
communicated in an efficient way.
As all spends affect profitability, it must be recognized that decisions about

investment in IT Services and the integrated management IT Accounting discipline
can help provide the competitive edge necessary for survival of an organization.
106
Types of budgeting:
Zero-based budgeting (Start from scratch)
Incremental budgeting (Takes last years expenditure into account)
When could you use each type?
107
The final budget agreed for an IT organization may include financial disciplines
imposed by the organization, including:
Limits on capital expenditure
Limits on operational expenditure
Limits on variance at any point in time, between actual and predicted spend
Guidelines on how the budget must be used
An agreed workload and set services to be delivered
Limits on expenditure outside the organization or group of organizations
Agreements on how to cope with expectations.
108
5.9
ORGANIZING Participate in the development of the IT Accounting

System
Notes:
109
The basic IT Accounting principles and implementation (why do it, what to do and
who it affects) are common to all business processes.
But the details of what to cost and how to cost it depend upon the type of service
being provided.
IT Accounting can be very complex and if implemented at too high a level of detail,
may cost more than the benefits realized. The IT Accounting system described
below should enable an organization to:
Track actual costs against budget
Support the development of a sound investment strategy which recognizes

and evaluates the options and flexibility available from modern technology.
Provide cost targets for performance and Service Delivery.
Facilitate prioritization of resource usage.
Make day-to-day decisions with full understanding of the cost implications

and, therefore, the minimum risk.
Support the introduction (if necessary) of Charging for IT Services.
110
Costing models are used to analyze the incurred costs for IT service provision.
Costs can be identified as:
Capital: Applying to the business assets of the IT organization
Operational: Resulting from the day to day running of the IT organization
Fixed: Do not vary with resource changes
Variable: Vary based on a factors such as time or usage
111
Notes:
112
Notes:
113
Based on previous Cost Model (by customer), you can calculate the costs for a
specific service. The basic approach is similar:
Identify all Direct costs

Attributable directly to the service being analysed,
(e.g. Any dedicated hardware, software, staff or contracts)
Apportion the Indirect Costs

Such as IT Infrastructure shared used by multiple services
Adjust the total to allow for Unabsorbed Costs

Such as IT management, buildings or administration
This must be the same uplift figure calculated for the whole model, or used from the
Costs-by-Customer Cost Model.
114
FYI
http://ids.csom.umn.edu/faculty/kauffman/courses/8420s98/Project/TCO/tco.gif
Gartner, Inc. (NYSE: IT) is the worlds leading information technology research and
advisory company. They deliver the technology-related insight necessary for clients
to make the right decisions, every day, from CIOs and senior IT leaders in
corporations and government agencies, to business leaders in high-tech and
telecom enterprises and professional services firms, to technology investors.
Through the resources of Gartner Research, Gartner Consulting and Gartner Events,
work with every client to research, analyze and interpret the business of IT within the
context of their individual role. Founded in 1979, Gartner is headquartered in
Stamford, Connecticut, U.S.A., and has 3,800 associates, including 1,200 research
analysts and consultants in 75 countries.
115
116
5.10 ORGANIZING Participate in the development of the Charging system
Notes:
117
Such a system controls IT Service costs and influences the proper use of IT
resources, so that these scarce resources are used in the manner that best reflects
business need.
To calculate the charge for providing IT Services internally, or between (or to)
subsidiaries, an organization must decide, prior to implementation, what it is hoping
to achieve. One key factor is to analyze the motivational aspects of Charging,
considering both the effects upon the provider and the customer of the service. The
objective is to optimize the behavior of both parties in achieving the organizations
aims.
118
Charging Policy (ie decision to charge) set by the business, not IT.
Examples of charging policies based on:
Cost Price = calculated cost
Cost-plus Price = calculated cost + % to cover for aspects like R&D and training
Going rate Price is comparable with other similar internal departments costs (e.g.
price per seat)
Market rate Price matches that what is charged by external suppliers
Fixed price A set price is agreed (for a set period of time) with the customer (e.g.
customer does not pay for the full development costs of software, but an agreed part
ie negotiated contract price)
119
continued
Charging policies should be:

Simple Customers should be able to understand the policy and Influence their
spending
Fair Charges should recover the costs without biasing any ONE customer
Realistic: The cost of implementing charging should not exceed the benefits
120
Simple: The overheads of Cost Management must deliver the benefits of an

improved overall cost-effectiveness without the bureaucracy commonly associated
with IT Accounting for costs.
Fair: The system must be fair and realistic, services which are not cost-effective
need to be reviewed and hard decisions taken. Each business should pay the same
money for the same service.
Realistic: Anomalies in the charging system will be exploited by businesses. The

charging mechanisms must be designed to achieve optimal behavior.
The image of the IT Service organization is likely to change; they may be seen
initially as demanding money without providing the required service, as having
become bureaucratic and focused on trivial accounting. To limit this risk, IT
organization considering the implementation of charging should:
Publicize the program and work with the businesses to define charging policy
Ensure that Service Level Agreements are in place and representative of actual
service.
Ensure that the benefits are quantifiable and demonstrable.
121
Notes:
122
No Charging: Calculating and circulating to managers full details of costs for

providing each businesss IT Services.
2. Notional Charging: As above, but including details about how much the IT
organization would charge, should a charge back system be operated without
applying transactions to the financial ledgers.
3. Full Charging: As above, but applying transactions to the financial ledgers.
Often the first two options above lead to the introduction of Full Charging. Whatever
approach is followed, the presentation of the information to the customer must be
simple, understandable and honest.
Notional Charging is useful when a Charging system is being introduced for the first
time. Notional Charging allows the IT Services organization to gain experience and
time to correct errors in the Charging formulae or cost recovery plans and
familiarizes customers with the concept of being charged for using IT resources.
Notional Charging is not recommended for long-term use unless the organization
does not intend to move to a real Charging system, because the incentive to become
cost conscious is lessened when money does not change hands.
123
continued
If Full Charging is introduced, the organization must ensure they are able to manage
cash flow. If a bill is only paid annually, the organization may have to account for the
gap between revenues and expenditure in the same way that a separate company
would have to manage its cash flow.
124
Charging for IT Services is seen as a method of:
Forcing the business divisions to control their own Users demands.
Reducing overall costs and highlighting areas of service provision which are
not cost effective.
Allowing the organization to match service to justifiable business need,

through direct funding.
125
Benefits of each model:
Accounting Cost Centre: Focuses AWARENESS on costs
Recovery Centre: Recognition of TRUE costs by customers
Profit Centre: Commercially OPERATED alternative to external
126
5.11 ORGANIZING Participate in the creation of the financial reports
Notes:
127
In addition to the documents covering IT operational procedures, User manuals

should be developed covering learning, references and User guide for IT Finance
Management and staff.
There are benefits to implementing a system without proper and complete

documentation to help customers and support personnel. E.g. to complement their
training, particularly when the system involves accounts procedures that may be
unfamiliar to staff outside the Finance department. The complexity of the support
documentation varies depending on whether the Customers is the IT Accounting
team, the Service Desk or a business Customer.
It would be vital to cover:
How and when IT management and customers management will be informed

of costs
How IT Accounting data is to be collected
How the Charging system works and what pricing structures are to be used
How budgets are monitored between bills
How accounts are to be settled
Who is responsible for policing the IT Accounting system and producing

reports, bills etc
How and when auditing takes place
128
continued
What contingency options are in place
How errors in billing will be handled
What Change control is applied to the IT Accounting system.
This analysis and design deliverables should be retained as detailed support

documents.
129
Customers usually expect IT Services to manage this without additional cost, but
there may be no IT budget available. The likely effect is a stretching of resources,
which impacts all service levels; hence SLM must be involved in any decisions to
provide chargeable service in excess of agreed budgets.
As no IT organization can actually afford to just stop, it is critical that the FMIT tracks
customer budgets to be able to identify over-runs before they occur.
130
5.12 OPTIMIZING Monitor and optimize the SLM & FMIT processes
Notes:
131
Periodic reports should be issued to customers a few days in advance of the SLA
reviews, so any queries or disagreements can be resolved ahead of the review
meeting. This stops the meeting from being diverted by such issues.
132
The resources required to produce and verify reports should not be underestimated.
It can be extremely time consuming and if reports do not reflect the customers own
perception of service quality accurately, they can add insult to injury.
SLM will take into account the specific reporting needs and automate production of
these reports, so far as possible. The extent, accuracy and ease with which
automate reports can be produced should form part of the selection criteria for
integrated support tools.
133
134
5.13 OPTIMIZING Propose service and process improvements, based on

results of monitoring and reviews
Notes:
135
Notes:
136
Notes:
137
Notes:
138
An example of mismatching is where the a number of reported service failure and

the customers still feel positive about things because they may feel satisfied that
appropriate actions are being taken to improve things.
139
Notes:
140
Yes/Why Questions:
Implementing effective and efficient Service Level Management should produce

Yes answer to each of these questions.
If the answer is no:

If the answer is No to any of these questions, the very next question that should be
asked is Why?
From this we can investigate where the process is deficient and begin a plan for
improvement. Communicating this to the business also gives them a better
understanding of the complexity of providing the services and more importantly
allows the business to be actively involved with assessing the costs, risks and
plausibility of will be needed in order to bridge the gap.
141
continued
If the answer is yes:

If the answer is Yes to any of these questions we should sill ask ourselves Why?
From this we can communicate to the business the reasons we were successful and
thereby market the value of IT to the business.
Remember: Communication, communication, communication.
142
Notes:
143
144
5.14 OPTIMIZING Conduct audits of the SLM and FMIT processes
Notes:
145
Rules for measurements and metrics

If you dont measure it, you cant manage it.
If you dont measure it, you cant improve it.
If you dont measure it, you probably dont care.
If you cant influence it, then dont measure it.
Attempts should be made to monitor Customer perception on the important

softer issues through:
Telephone perception surveys
Periodic questionnaires
Satisfaction survey handouts
User group meetings
146
Notes:
147
Periodic reviews of the IT Accounting and Charging systems should check they are
working effectively. They also ensure that FMIT is continually reviewing the system
and that all identified deficiencies are corrected at source to prevent recurrence.
Audits may be performed by internal staff or by external auditors. In both instances

audits are intended to confirm that FMIT and the supporting personnel are adhering
to defined procedures.
FMIT should perform their own audits and checks to reassure management that the
systems runs properly and is policed effectively. Independent audit should confirm
this and also provide comparison with other organizations.
148
Notes:
149
There can often be a trade off between capital investment and running cost
expenditure. Capital investment decisions are essentially longer-term decisions,
therefore it is more difficult to hold management responsible for such decisions.
However, because the performance of a manager is often measured on the effective

and efficient use of resources within a budget period (perhaps once annually), there
are only a limited number of ways of holding them accountable for investment
decisions. This is where sound Investment Appraisal procedures can be an
essential factor for a successful organization.
From the viewpoint of the Business Manager:

IT investment and the supply of IT Services is the same as any other planned
expenditure or allocation of resource in that it is measured in terms of its contribution
to the effective, efficient and economic achievement of business goals. It must
enable the business to determine whether the returns would be better from a new IT
system or from increased advertising.
150
5.15 OPTIMIZING Manage the ongoing financial operations and performance
Notes:
151
The day-to-day operation of the IT Accounting system includes both the production
of cost and Charging data and the checking of its accuracy.
152
Notes:
153
Changes at agreed SLA reviews must also be reported. SLA changes are normally
aligned to annual budget negotiations but IT Services Management may delegate to
SLM the powers to vary SLAs within agreed bounds during the year.
154
Workload Variances: Detailed in the organizations SLAs should be statements

about what happens if a customers workload exceeds (or falls below) agreed levels.
The statements should include situations where a) Spare Capacity is available b)
Spare Capacity is not available.
IT organizations usually have a margin of Capacity in addition to forecast. It is likely
that increased Capacity will be provided, if available, and the IT services
organization will negotiate uplift in charges for the next IT Accounting period if the
usage continues. The organization as a whole may need to consider whether a
customer is allowed to continue to use excess resources to the detriment of other
customers. Every case is likely to require a management decision and mechanisms
must be in place to cater for such problems.
Cost Variances: Costs for Cost Units are the basis of the budgeted costs of IT
Services. If they have been miscalculated, they affect the overall recovery of costs
(i.e. Charges) and this has to be addressed by recalculation ASAP. If there has
been some change in the expenditure required to purchase or maintain the IT
Services, it may be possible to pass this on to the customer, with their agreement.
Particularly if the costs are clearly attributable to a single customer; an example of
this might be increases in software or hardware maintenance.
155
continued
Revenue Variances: Although the organization may decide to run the IT Services
at a profit, it is possible that monitoring reveals either too great a profit or a shortfall.
Where too much revenue is generated the cause must be identified and justified or
corrected; unless absolutely necessary the charges must not be altered. Some of
the reasons for generating excessive revenue include: a) workload has grown faster
than forecast and flexible Charging has resulted in increased charges, although
sufficient Capacity was available without the IT organization incurring additional
costs b) customers are being forced to buy more IT resource than they anticipated
possibly because there is insufficient Capacity or inefficient service c) charges really
excessive.
Where the problem is identified as a poor service, the underlying cause must be
identified. When workload growth is the problem, forecasts must be revised and it
may become necessary to make a case to procure additional capacity.
156
5.16 OPTIMIZING Participate in ongoing service management through the

service review meetings
Notes:
157
Notes:
158
Notes:
159
Notes:
160
Notes:
161
Notes:
162
Notes:
163
Notes:
164
Notes:
165
The SLM process must be owned in order to be effective and achieve successfully
the benefits of implementation. This does not mean it should be undertaken by a
single person, unless that is appropriate within the organization.
However, if the role is split, it is important to avoid giving tasks to people in fire
fighting type roles, as they will not be able to mange the majority of the required
tasks pro-actively.
166
Notes:
167
Notes:
168
Notes:
169
Fundamentals for effective Service Level Management
SLAs should be compact documents; a description of the agreements between the

customer and the service provider should not take more than 20 pages.
SLAs should give the IT service provider the freedom to alter the content of their
services; only the scope and boundaries should be pinned down in an SLA. (The
customer and IT service provider agree upon the outcome of the services, not the
content)
170
Notes:
171
Notes:
172
This includes staff directly working in these areas and Operations or other staff
involved in the data collection.
Some of these tools are also required for other Service Management processes.
Once costs are visible, the demand for some services may fall. This results in
reduced revenue but is not really a cost of implementation, as it is in the
organizations interest to identify and reduce use if IT resource.
173
Notes:
174
Notes:
175
176
ASSIGNMENTS
177
178
6.1
Assignment 1 Service Level Management
You will complete the following tasks relating to Service Level Management over the
course of the day, culminating in a presentation that will summarize your knowledge
learnt and throughout the day. You will need to use the associated case study in
responding during these tasks and for the final presentation. You will act in the role
of an external consultant who is assisting the organization described in the case
study in implementing the Service Level Management process.
Task a) Develop Proposal
Create a definition for Service Level Management that would easily be
understood by management staff who have little or no IT experience.
List 5 benefits that introducing Service Level Management would bring to the
organization. Be sure to make clear reference to elements of the case study.
Task b) Design Process Workflow Diagram
Design the Service Level Management process using a workflow diagram. You can
use any convention you wish in creating this diagram to show the flow of activities
that need to occur.
A low level example of a process workflow diagram is shown below:
Task c) Create Service Catalogue

Using the case study, define the IT services discussed as they should be described
in a Business Service Catalogue.
Task d) Develop SLA template
Create an SLA template, listing all the headings used and topics covered within an
SLA suitable for the organization. Also decide which SLA structure would be most
appropriate for the organization described in the case study.
Task e) Define SLM Roles & Responsibilities
Fill out the RACI model diagram below that defines the roles and responsibilities of
different groups in the described case study for the Service Level Management
Process. Assume that Service Level Management and Financial Management has
been implemented at this time. To focus your efforts, chooses one particular IT
service that is being delivered and supported by the IT organization.
179
List relevant IT functions or customer departments across the top
Define
(Service
Catal.)
Refine
(SLRs)
Agree &
Negotiate
Monitor
Report &
review
Evaluate
(SIP)
Task f) Develop Service Improvement Programme for customer: Rece

Using the information found within the case study, develop some ideas that could be
utilized as part of a Service Improvement Programme for the Point of Sale IT
Service.
Task g) Final Presentation
Acting as an external consultant, you are required to deliver a presentation to the
CIO and managing directors who are considering implementing Service Level
Management. Your presentation will need to include:
A brief description of Service Level Management
What are the goals of SLM?
What are the activities that are performed?
Who will be involved?
What are the benefits that would be delivered to the organization?
What challenges may be faced and how would these be overcome?
Conclusion
180
6.2
Assignment 2 Financial Management for IT Services
You will complete the following tasks relating to FMIT over the course of the day,
culminating in a presentation that will summarize your knowledge learnt and
throughout the day. You will need to use the associated case study in responding
during these tasks and for the final presentation. You will act in the role of an
external consultant who is assisting the organization described in the case study in
implementing the FMIT process.
Task a) Develop Proposal
Create a definition for FMIT that would easily be understood by management
staff who have little or no IT experience.
List 5 benefits that introducing FMIT would bring to the organization. Be sure
to make clear reference to elements of the case study.
Task b) Create a Charging model that is fair and realistic to be implemented with
Rece shoes. In addition consider the potential challenges and risks that will need to
be considered. Your findings will need to be included in Task D Final Presentation.
Task c) Final Presentation
Acting as an external consultant, you are required to deliver a presentation to the
CIO and managing directors who are considering implementing FMIT. Your
presentation will need to include:
A brief description of FMIT
What are the goals of FMIT?
What are the activities that are performed?
Who will be involved?
What are the benefits that would be delivered to the organization?
What challenges may be faced and how would these be overcome?
Conclusion
181
182
6.3
Assignment 3 Service Level Management and Financial Management for

IT Services
You will complete the following tasks relating to Service Level Management and
Financial Management for IT Services. You will need to use the associated case
study and accompanying complaint letter to organize your final presentation
materials. You will act in the role of the newly appointed Service Level Manager.
Task a) Read and discuss the issues raised within the case study and especially
within the complaint letter.
Task b) Organize a letter responding to the customer complaint letter, addressing all
the issues and explaining how you intend to improve the current service, with
specific and realistic targets.
Task c) Prepare a memo for the IT Organization as a whole detailing the
improvements you want to see implemented on a day to day basis, with regard to
communication and responsibilities etc. In addition, this will need to include any
relevant information for specific process managers, with regards to their
responsibilities in meeting the improvement targets.
183
184
ASSIGNMENT RESOURCES
185
186
7.1
Complaint Letter
June 25, 2008
Dear Sir or Madam:

I am writing to complain about the lack of communication and general support from
your organization.
I recently received a report, sent from your office, that I assume was intended to
update me on the current status of our Service Level Agreement. I have been
unable to ascertain any helpful information from this report as it written with a
technical IT focus and not a customer focus I had expected. My current view is that
I am spending a lot of money, but have little idea what I am paying for.
In a recent meeting, I was informed that the previous issues that have affected the
targets agreed within the SLA had been identified and improvements would be
implemented ASAP to avoid further dissatisfaction. However, since this meeting I
have had no further communication with regard to any improved services or, more
importantly, what they have cost.
I have attempted to call on several occasions, but have been unable to make any
progress as every member of staff I have spoken to seems to repel accountability
and responsibility.
As I am sure you are aware, the retail operations of this company are essential to
our continued success and growth. Without the support of the IT division we are left
floundering and unable to satisfy our customer needs.
I am sure that you will agree that this is not the service we signed up for, and would
like to hear your thoughts on this current performance. I expect a response in writing
ASAP.
Sincerely,
Mrs G. Rumpipants
Retail Operations Manager
187
188
7.2
Case Study RECE Shoe Company
Business Case Study

RECE Shoe Company
Global Conglomerate
ITIL Practitioners Case Study
V1.0
Rece
Couture Shoe Design
For the love of
craftsmanship
189
Introduction
Rece Couture Shoe Company of London, England, is a privately owned shoe
company, founded in 1994.
Rece has grown rapidly to become one of the leading shoe retailers of the world.
During recent years Rece has expanded substantially to reach in 2004 the third most
favoured designer shoe label. The company has also expanded the product line with
the introduction of an accessory line. Such spectacular growth has been achieved
internally and not through acquisition or merger.
Rece is a company that has major operations centres in New York, Paris, Milan,
Hong Kong and Melbourne, as well as 150 retail outlets worldwide (Rece stores and
concessions in major department store locations).
In addition, Rece operates an online store with the capacity to accept in excess of
5000 online orders per day.
Rece provides an unparalleled service network via dedicated own offices throughout
the world and remains a truly independent and private Company able to respond
quickly to market changes and implement long term plans, without unnecessary
interference or delay.
With a streamlined management structure in London, England, Rece has become a
leading customer focused and cost effective global retailer, their first class
craftsmanship is favoured by international stars and elegant women worldwide.
Officers & Employees
CEO: Claire Enever (co-founder and president)
Creative Director: Angela Miller
Group Managing Director, Finance and Administration: Paul J. Rizzo,
Group Managing Director, Commercial and Consumer: Bernard Scholl
Group Managing Director, Retailing Business Solutions: Cecile Yelland
Group Managing Director, International Shipping: Anton Chirac
Group Managing Director, Employee Relations: Rebecca Cartwright
Group Managing Director, Network and Technology: Anwar Sadat
Group Managing Director, Sales and Marketing: Steve Birch
Group Managing Director, Press and Public relations: Carla Scott
Group Managing Director, Convergent Business: Rachael Alfonsin
Group Managing Director, Legal and Regulatory: Pien Ch'iao
2007 Employees: 13,840
1-Year Employee Growth: (7.7%)
Headquarters: Level 42, 76 Oxford Street, London, England
190
Vision
Rece vision is to enhance its position as the leading designer shoe design and
retailer in the world.
To realise this vision and prepare for competition, Rece has adopted a four-part
growth strategy, entailing:
Optimising returns from the classic products and services throughout
the world
Developing and delivering value-added services via an online interface
and extended accessories line.
Transforming our corporate culture and improving productivity
Extending our global scope
The Rece Organization
The organization is virtually identical at each of the head offices. For example, each
head office will have the following departments:
Marketing and Sales

Design and Manufacturing
Retailing and Logistics
Shipping and distribution
Customer Services
Maintenance
Legal
Accounts Department
Human Resources
ICT Department
Each manager for the listed departments will report directly to the director of that that
local office.
The CEO of the company and her managing directors are located in Head Office in
London, England.
Logistics
The logistics departments main responsibility is to ensure that all goods being
shipped by sea or land are loaded to the appropriate carrier. This is to ensure that
Rece can fulfil their obligations regarding paid orders from their customers.
The logistics department works very closely with both the Sales and the
Manufacturing departments. The logistics departments will organise the loading and
consignment of the goods, but it needs to also ensure that appropriate crews have
already been notified and that there is an availability of transport.
The Sales, Manufacturing and Logistics departments work closely together. As a
result of the complexity of the relationship a number of business process issues can
191
arise. In the event that it becomes difficult to ascertain the nature or the solution for
the issues, the Logistics department will be given priority to manage the issue to
resolution. The Logistics department will therefore have the final authority in these
decisions.
Maintenance
The Maintenance department is responsible for maintaining and stocking the
necessary parts for both road and air transport. The primary objective is being
responsible for the state of repair of the delivery road vehicles.
Rece operates a number of large container workshops around the world, so that
maintenance can be carried out more efficiently.
Sales
The sales department is responsible for obtaining orders for international company
chains and stores requiring Rece concession stock. They are also responsible for
the online orders made via the Rece website.
Rece operates a total of 350 dedicated sales offices across the entire globe, and
employs approximately 8,000 sales staff.
Because of such a large volume of people each regional head office will have a
Sales Director which will look after the sales offices within that region.
Accounts Department
The Accounts Department takes care of the head office's financial accounts,
including the management of the accounts payable and accounts receivable ledgers.
The Accounts Department also takes care of the payment of salary to staff members
and any contractors.
There will also be small Accounts Departments at each key location across the
globe. The managers of these departments will report directory to the manager at the
head office for that region. As a general rule, there is not more than four Accounts
Departments per region.
The Accounts Departments work very closely with the Sales Departments. The Sales
departments will interface into the computer systems controlled by the Accounts
Department.
Human Resources
The Human Resources department is the department, involved in the recruitment,
selection and discharge of personnel and in human resource management. For
example, each head office employs a company doctor and a psychologist, who
provide medical and mental assistance to employees.
192
Rece sees this function as being critical to their organization. Sales, Design and
some Manufacturing staff are required to travel on a regular basis, sometimes at
short notice for extended periods of time. This can place a serious strain on staff and
their families, and as a result Rece wishes to ensure the well being of its staff
members as it is recognises that they are integral to the organization. Rece does this
through medical and mental assistance programs, and by offering generous product
discount and annual leave packages.
ICT Department
Each head office around the world employees a small team of IT personnel to help
deliver and support IT Services for their specific regions. For all intents, these groups
run fairly autonomously, having their own support teams, including their own Service
Desks.
However, in London, there is a central ICT Department that provides IT Support for
all the store and online requirements.
The Rece information systems
General
The computerisation of Reces information systems has not been fully completed at
this stage. However, there are certain aspects that can be considered fairly mature.
A large part of the financial accounts of the entire Rece organization have been
computerised. Due to the geography that exists between the various head offices,
there had been identified a need for a virtually identical computerisation standard at
these offices.
However, unfortunately a large part of the handling of orders and planning processes
has not been as well computerised as possible. This is generally due to local
constraints being enforced by the relevant government organizations within the
various regions that Rece operates.
Resolution of this is being seen as a key aspect of the success of the Rece
organization.
Systems
FINANCE is the information system used by the Accounts Department to prepare
financial reports.
FINANCE contains modules for accounts receivable, accounts payable, salary
records and book keeping. After an order is completed, the relevant invoices are
created automatically. The payments to suppliers of shipping and payments to
providers of specialist maintenance are also made by means of this system.
193
Due to the need for various head offices to comply with the local laws regarding
finances, the FINANCE system has evolved to be the most diverse system in the
organization, being virtually different at each head office.
PAYPOINT is the companies point of sale system. This is ready for an up date.
The technology being used is out of date and not to the standard represented by the
company, who want to be state of the art but at the right cost!
STOCK is the Rece Inventory Management system. It holds list of goods and
materials themselves, held available in stock by a business. The inventory is held in
order to manage and hide from the customer the fact that manufacture/supply delay
is longer than delivery delay, and also to ease the effect of imperfections in the
manufacturing process that lower production efficiencies if production capacity
stands idle for lack of materials.
FOCUS is the companies CRM system that manages their relationships with
customers, including the capture, storage and analysis of customer, vendor, partner,
and internal process information.
There are three aspects to the FOCUS system:
Operational - automation or support of customer processes that includes the

company sales or service reps
Collaborative - direct communication with customers that does not include the
company sales or service reps
Analytical - analysis of customer data for a broad range of purposes
Currently the third aspect of Analysis is not used effectively.

General Systems
There is also a general suite of applications, mainly Microsoft, with some Lotus
Notes, which includes an e-mail, word processor, spreadsheet application,
appointment calendars & scheduling software and the Human Resources
applications...
These suites of applications are offered via local networks. The links between local
networks and the links between desktop computers are completely transparent to the
users.
This software is stored centrally on the main servers within the ICT Department in
London, which allows remote users to download them as needed. However, each
head office around the world, local versions are kept as this allows for easier
management of the local standard operating environments.
Hardware
Each of the head offices uses a series of UNIX based servers for capturing and
recording their information. These servers have direct data links back to the head
194
office in London, where the information is then stored on a central mainframe. The
mainframe is equipped with disk and tape storage facilities.
However, across the organization the network structure is fairly similar at each of the
head offices. This allows for easier deployment of applications across the entire
organization.
Additional Infrastructure Information
The wide area network has been outsourced. The outsourcer in this situation is
managing and coordinating the leasing of the necessary network infrastructure. The
outsourcer is responsible for providing monitoring information regarding the
availability of the wide area network.
The cost of the organization maintaining the WAN infrastructure was considered too
great. However, recently it is being seen by the organization that the infrastructure
may not be as stable as proposed and are looking at the IT Departments to manage
this in a more structure manner. This has resulted in incomplete transactions being
fed back into the central mainframe, potentially costing the organization millions of
dollars.
IT Organization
Due to the diverse nature of Rece, there are a number of IT Departments.
However, policy and objectives for IT are created and managed from the London
office. London is seen as the central IT Department. However, autonomy is provided
to the other head offices to manage, deliver and support IT Services as they need.
As such, each head office has a Chief Information Officer (CIO), who reports into the
Group Managing Director, Network and Technology.
All CIOs have a monthly video conference call, with a bi-annual face to face
meeting. At the bi-annual meeting, strategy and policies for Information Services and
Information Technology are discussed and agreed upon. This meeting is chaired by
the Group Managing Director, Network and Technology.
In addition to this, there are regular consultations between the head offices regarding
technical matters. Telephone and e-mail are the means most commonly used for this
with the occasional video conference.
There is however a general consensus amongst the senior IT Managers that the IT
functions within Rece could probably contribute more to the business objectives of
the company. However, they still all agree that in general terms the deployment and
organization of its IT resources is reasonably good:
Communication internationally is regular with good information and

results
195
Head Offices are communicating well

The technical infrastructure has been extensively documented by each
head office
London
London uses a Fujitsu 8500 series mainframe as its central computer. The
mainframe serves as a way of centralizing all the data from the other various head
offices. The mainframe has approximately 3000 GB of disk storage.
Due to the large nature of the organization, it was determined that there also needed
to be a development mainframe, although scaled down in size. At this stage the
organization does not have a testing mainframe and as such, most of the testing is
carried in the development environment.
The remote head offices can access the mainframe via deployed client applications
and for some specific uses, via the World Wide Web.
Sales Offices
The following IT components have been installed at each local sales office:
Personal Computers
Operating System: Windows 2000
No CD ROMs
No Floppy Disk Drives
Pentium III 500Mhz
At least 1 Server
Operating System: Windows 2000 Server
This allows individual sales offices to enter shipping orders into the system, as well
as create and distribute information via email for their local regions. This is seen as a
key aspect, as each sales office is responsible for generating their revenue.
General Other Head Offices
At certain times and for certain parts of the infrastructure, development and
maintenance of this is contracted out to various suppliers with whom a maintenance
agreement has been signed.
At this stage Rece does not have any reciprocal arrangements with any other
company in the event of a disaster.
The IT Organizational structure of each of the head offices is as follows:
Regional IT Manager Overall Manager for the specific region
Network Manager - Local Area Network infrastructure
196
Project Manager - who is responsible for testing and coordinating any modifications to the systems and solving small
problems
Service Desk - manager specialising in the management of the
service desk representatives and dealing with IT Incidents
Desktop Manager responsible for managing co-ordinating the
roving engineers.
Change Control Co-ordinator
In addition to this, there is a group of roving engineers who travel their local region
and are trained to solve the most commonly occurring problems independently. If
he/she is unable to do this, the head office is contacted. The call will then be routed
through to the local head office, if resolution is not possible then the assistance of
suppliers who are able to solve the problems are called in.
Policy
The current services delivered by Rece are under pressure. With the opening up of
global trade agreements, customers are placing greater and more stringent demands
on Reces services.
The biggest requirement coming from the customers is an assurance of accurate
delivery. In a lot of instances, goods have taken longer to deliver due to incorrect
distribution because of badly written consignment sheets. Consequently, some
goods have travelled further than needed or been lost in transit.
Unfortunately the manner in which data regarding orders is currently being
processed makes it virtually impossible to adequately respond to the needs of the
customers demanding accurate delivery.
The Group Managing Directors are seeing certain opportunities arise within the
global community which they wish to capitalize on. As a result of this they have
formulated the following objectives:
They have formulated the following objectives:
Information regarding an order or freight must be supplied to all the

offices, for which such information may be important within one
hour, 24 hours a day.
A better system must be developed to ensure logical distribution,

i.e. last on, first off scenario
Allow customers to connect to the network in a secure manner so

that they can submit orders electronically and request information
regarding freight that is under way
197
The maturity of the organization has been increasing and as such

the Managing Directors believe it is time to allow the various offices
to operate more independently, implying a direct responsibility for
the financial results of each head office.
Provide and develop a better interface for Land Freight to

communicate better. This will help ensure better transfer of goods
for Reces customers, providing more accurate delivery.
Given the above objectives and Reces existing Information Technology, the
Managing Directors believe that with its present level of technology within the IT
Infrastructure they will be able to meet its objectives. However, the management,
delivery and support of the IT Services may require some restructuring. There is a
belief that third parties will be increasingly called upon to help manage and
implement planned projects.
This option raises a number of alarms with regards to cost and security issues. The
Managing Directors believe the talent exists within the organization and will be
looking for them for recommendations. The IT Departments across the various head
offices see the reliance on external suppliers as a direct threat to their job security.
198
EXAM PREPARATION
QUESTION 1
As the financial controller for the IT Department of a large organization with who
would you normally negotiate with regarding the amount of funds required for the IT
Service Delivery budget?
a)
b)
c)
d)
Service Level Manager

Financial Capacity Process owner
Chief Business Accountant
Customer or customers
QUESTION 2
How can Service Level Management use data from the incident register at the
service desk? Service Level Management uses this data:
a) To draw up reports about the number and nature of incidents in a certain
period
b) To determine the availability of an IT service, on the basis of the number of
incidents resolved
c) To draw up the Service Level Agreement (SLA)
d) Together with other data to work out whether the service level agreed upon
has been achieved
QUESTION 3
Consider the following statements:
1. A service level agreement (SLA) is an agreement in which the measurable levels
of service delivery are documented.
2. A service level agreement (SLA) guarantees the users the most important
applications will always be available.
Are these two statements correct?
a)
b)
c)
d)
Only the first

Both
Only the second
Neither
QUESTION 4
Which two processes along with Service Level Management are used to instigate a
Service Improvement Program (SIP)?
199
a)
b)
c)
d)
Availability and Problem

Problem and Capacity
Continuity and Availability
Incident and Financial
QUESTION 5
With regard to ITIL Financial Management, we are interested in a variety of costs.
All but one of the following are costs we are interested in tracking.
Which one is not a cost of interest?
a)
b)
c)
d)
e)
f)
g)
Meeting costs
External service costs
Hardware costs
Accommodating costs
Transfer costs
Software costs
People costs
QUESTION 6
Which of the following best describes the service catalogue?
a) Service user guide
b) Sales catalogue
c) A document, internal to the IT department, containing all key information of all
services offered
d) A document containing key information of all services offered by the IT
department
QUESTION 7
As the Financial Manager for your IT organization, you want to demonstrate the
effectiveness of the IT accounting systems established.
Which of these elements would demonstrate the effectiveness of the IT accounting
systems?
a) The actual costs for every budget item can be accurately tracked
b) A reduction in the number of budget variances and adjustments
c) The IT financial objective of either break-even or profit is being met
200
QUESTION 8
An important consideration in Change approval is the financial impact assessment of
the Request for Change (RFC). As the Financial Manager, you have been asked to
participate in approving RFCs.
The financial approval of an RFC indicates that the cost of a Change has been
assessed and that it meets one of two criteria. The first is that it meets the costbenefit criteria.
What is the second criterion?
a) The estimated costs are within approved budgetary limits
b) The return on Investment (ROI) has been demonstrated and approved
c) All cost types have been identified and their cost estimates have been
approved
QUESTION 9
One day, one of your colleagues in the Technical Management department hears
about your activities as the Service Level Manager in relation to SLAs. He says he
can record the SLAs in the chosen Service Management tool. He shows you an
entry screen for SLAs.
Which of the following fields does not belong here?
a) All components (CIs) on which the service depends
b) Response and repair time of incidents
c) Start and end date of the agreement
QUESTION 10
According to ITIL best practice, which of the following information should NOT be
included in an SLA?
a) A description of the services covered
b) Performance incentives/penalties
c) Contact details for underpinning contract providers
QUESTION 11
You are an external consultant asked to make a recommendation on the Service
Level Management Process. Your client currently has no formal SLM process in
place and you are asked to perform the first steps to make it a little bit easier for the
new Service Level Manager. (Interviews for this role are scheduled to commence in
2 weeks time).
What is the first thing you need to do?
201
a) Evaluate the customers current perception of the service levels

b) Gather documented evidence of Service Contracts, agreements and MOUs
c) If you cant measure service delivery metrics, it is really difficult to convince
the customers of the value of the services. So first step is to implement
monitoring tools.
QUESTION 12
In recent discussion it has been decided that Desktop Publishing be a part of the
Service Catalogue. No agreements have been reached at all yet for this service. In
fact, for the sake of convenience you have simply omitted this service from the
Service Catalogue.
When you discuss this with the branch directors, you hear all kinds of different
opinions on the direction things should go with DTP. Good agreements on
development and operations are not yet possible.
Which other service activity can Service Level Management offer?
a) advice on policy and planning
b) delivery of hardware and software
c) calculation and charging of costs
QUESTION 13
The goal of Financial Management for IT Services for an in-house organization is:
"To provide cost effective Stewardship of the IT assets and resources used in
providing IT services."
Which of the following statements is also an aim of Financial Management?
a) To assist management decisions on IT investment by providing details
business cases for changes to IT services
b) To help deliver a cost effective and sustained level of availability that enables
the business to satisfy its objectives
c) To help eradicate poor service in line with business or cost justification
QUESTION 14
According to ITIL Best practice, which of the following would NOT be considered a
proper Cost Type?
a) External service costs
b) Payroll costs
c) People costs
202
QUESTION 15
As the Service Level Manager, you want all parties to make clear agreements on
periodic batch processing, for reports that the IT department is to produce
concerning the XYZ service.
You examine the following service parameters: frequency, simultaneous users, time
completed, method of distributing reports.
Do you use all the above service parameters in the SLA?
a) No, not frequency
b) No, not simultaneous users
c) Yes
QUESTION 16
For the Personnel department, there is a functional relationship between the
department at head office and the departments in the individual branches. The
Personnel Department System (PDS) service is to be used by all branches too. You
want the agreements that you make and record to be supported by all the interested
parties.
With whom do you agree the contents of the SLA?
a) Both head office and the branches. They are the users of the service. It is not
only about hierarchical authority.
b) With the board of management. It wants to be strategically involved. If it
agrees, the rest will have to conform to it too.
c) Only with the head office. It is the owner and determines how the system is to
be. In view of the functional relationship, the working method is imposed on
the branches.
QUESTION 17
The senior management of your organization is concerned about the time, effort and
costs that are required for setting up a Service Catalogue (SC).
In order easily justify the cost and effort of an SC you make the suggestion that the
Service Catalogue be created in conjunction with a Business Impact Analysis (BIA)
due to be performed in a few weeks by Availability Management.
Which of the following statements best justifies the cost and effort of creating a
Service Catalogue in conjunction with a Business Impact Analysis?
203
a) It will allow better understanding of the 3rd parties required to keep services
running and therefore ensure a better level of service.
b) Creating the Service Catalogue in conjunction with a BIA ensures that the
most important services to the organization are covered first and therefore the
first SLAs created will be on business critical services.
c) It will foster a better relationship between the ITIL process managers and lead
to better overall service delivery through a better understanding of outside
factors and internal issues of delivering services.
QUESTION 18
The Service Catalogue is finished and has been accepted, and there is a structure
and set-up for SLAs. You have a fair idea of what IT now delivers. Now it is
necessary to conclude SLAs for each service and with each department.
You want to prepare your meetings properly with the departments, in order to
achieve clarity in the Service Level Requirements.
What form does such a meeting take?
a) You formulate a number of open questions in order to steer the meeting. You
want to leave the customers to talk as much as possible and say what they
think is important.
b) You want concrete agreements, so you prepare a comprehensive list of
detailed questions
c) Everyone has a PC at home and knows quite a bit already about IT. The more
the customer specifies
QUESTION 19
As the Service Level Manager in your organization, it is your responsibility to
measure the effectiveness and efficiency of the process. Following is a list of KPIs
that you've come up with so far:
1. Number SLAs signed
2. Number of SLA breaches
3. Number of OLAs
4. Number of UCs
5. Number of incidents for each service
6. Percentage availability of the services
Which of these are correct KPIs for the SLM process?
a) None of them are correct they are not defined in a smart way. You cant
measure them per time unit
b) 1, 3, 4 are process KPIs; the others are delivery KPIs
c) All of the KPIs are correct
204
QUESTION 20
Service Level Agreements (SLAs) allows each individual Customer flexibility in
requesting variations to Service Levels.
Which one of the following is a negative effect if too many variations to the Service
Levels of a Service resulted from this flexibility?
a) An increase in the number of Change Requests to be assessed
b) An increase in the number of SLAs to be managed
c) An increase in the overall Service Level Management workload
QUESTION 21
Mr. Savage wants you to put together a Service Catalogue for the services that the
IT department currently provides.
You start by identifying the services provided by the IT department. For this purpose
you have meetings with the heads of the IT Management departments.
Each of them has his own views on how the services should be described in a
Service Catalogue.
What is the correct concise description for the service to Personnel?
a) Making available and maintaining the PZS application, version 2.1.5, running
on server XYZ under MVS
b) Undertaking service support and delivery processes for the PZS application
and all components on which this application depends
c) Supporting the provision of information for personnel management with the
aid of the automated information system PZS
QUESTION 22
As part of the implementation of Service Level Management, you are asked to create
a clear role definition of the process manager role, as opposed to that of the process
owner.
You have identified the following responsibilities:
1. Create Service Catalogue
2. Develop, negotiate and agree SLA's, OLA's and UC's
3. Produce regular reports on service performance
4. Organizes Service Level Review process
Which of the following are additional responsibilities?
205
a) Creates utilization and performance reports

b) Maintain an appropriate SLM structure for the organization
c) Supports the Change Manager for emergency changes to service when they
are needed
QUESTION 23
Which of the following metrics is useful in assisting you to determine the
effectiveness of the Service Level Management process?
a) Percentage of SLAs that require changes
b) Service Level Requirement to Service Level Agreement turnaround [days]
c) Number of SLAs mapped to configuration items
QUESTION 24
Which of the following Key Performance Indicators (KPIs) does not reflect an
improvement in the effectiveness and efficiency of the Agree and Define Processes?
a) Number and percent of SLAs with OLAs and UCs
b) A percentage improvement in the overall duration of Service Level negotiation
Meetings
c) Number and percent of service targets being met
QUESTION 25
In the OLAs with the IT Management departments, you have agreed to the following
escalation procedure when norms are exceeded.
Step 1: Examine the reason why the norm is exceeded.
Step 2: Can the cause be removed promptly?
Step 3a: Yes, remove cause.
Step 3b: No, inform Service Level Manager.
Step 4: Resume repair work.
Is this procedure practical?
a) Yes
b) C. No, examining reason why the norm is exceeded is the task of the Service
Level Manager, not the IT Management department itself
c) B. No, the IT Management department must warn the Service Level Manager
immediately if there is a danger that a norm will be exceeded
206
QUESTION 26
You are an external consultant asked to make a recommendation on the Service
Level Management Process. Your client currently has no formal SLM process in
place and you are asked to perform the first steps to make it a little bit easier for the
new Service Level Manager. (Interviews for this role are scheduled to commence in
2 weeks time).
What is the first thing you need to do?
a) Evaluate the customers current perception of the service levels.
b) If you can't measure service delivery metrics, it is really difficult to convince
the customers of the value of the services. So first step is to implement
monitoring tools.
c) Gather documented evidence of Service Contracts, agreements and MOUs
QUESTION 27
Which of the following Key Performance Indicators (KPIs) does not reflect an
improvement in the effectiveness and efficiency of the Agree and Define Processes?
a) Number and percent of service targets being met
b) A percentage improvement in the overall duration of Service Level negotiation
Meetings
c) Number and perfect of SLAs with OLAs and UCs
QUESTION 28
Which of the following metrics is useful in assisting you to determine the
effectiveness of the Service Level Management process?
a) Percentage of SLAs that require changes
b) Service Level Requirement to Service Level Agreement turnaround [days]
c) Number of SLAs mapped to configuration items
QUESTION 29
When estimating the costs of budget items it is important to consider all costs
associated to the items in question.
In addition to cost types and cost elements, which additional information should be
used to properly estimate the costs of budget items?
a) The cost of downtime associated with the item
b) Depreciation is a key part of calculating the cost of a budget item as the
"value" of an
c) The depreciation amount of the item
207
QUESTION 30
You have recently completed a Service Catalogue for the services that IT can
provide and begin with the next step. For each service in the Service Catalogue, you
want to draw up a SLA with the departments who are to use these services. You
know that first you must concentrate first on a general set-up for the structure of the
SLA.
After meeting with your organization it is decided that for the LAN service, it is best to
have an SLA that allows the least amount of duplication from customer to customer
but still enough flexibility for some silos to have some customizations to critical
services. This will make the consistency in the delivery of that service easier to
deliver and measure.
Based on this criteria, which of the following is the correct structure of SLAs to
chose?
a) Customer Based SLAs

b) Service Based SLAs
c) Multilevel SLAs
QUESTION 31
There are three departments in a company requiring IT Services: Marketing, Sales
and Manufacturing. Each department is asked to contribute to the IT budget, based
upon the services they require.
Rather than trying to determine the actual usage of the IT Infrastructure the three
departments rely upon, it was decided to group all IT Infrastructure costs into one
cost called "IT Infrastructure".
What would be the most feasible approach to recover the IT Infrastructure costs that
is perceived to be fair, equitable and simple?
a) Equally divided among all three departments
b) By the number of transactions processed by each department
c) By number of Users in each department
QUESTION 32
In developing new services (Sales, Internet), it has subsequently become evident
that the agreed service levels were hardly met at all. You put this down to
shortcomings in the SLM process.
Which activity are you going to improve in order to prevent this?
208
a) Test the service better before delivery

b) Document the service better
c) Train the use of the service better
QUESTION 33
You have finished the Service Level Report for the Basic Workplace service (SLA
concluded with the Board of Management) and are about to distribute it. You send
the report to the secretary of Messrs Duur and Reinaard.
Is this sufficient?
a) No, it is better to put the report on the Intranet. Each user has a workplace
and therefore must be able to view the reports
b) Yes, the report will be discussed in the board meeting, which is also attended
by the Finance, Purchasing, Architecture and Personnel Managers.
c) No, you must send the report to the branch directors at the very least.
QUESTION 34
In the SLAs, you have agreed to produce a report each month on the service levels
realized. Each week you receive from the Technical Management department the
following information about IIS on the mainframe:
Weekday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
CPU Sec
293453
459320
650494
304507
905448
123654
DBTx.
23043
54594
45948
49540
49840
12110
Av. Users
32
34
20
29
36
14
Disk I/O
69596459
28382943
12939203
54954833
34393439
12548323
Which column is practicable for reporting on the service supplied to the users
concerning the performance and the use of IIS?
a) CPU Seconds (CPU Sec.)
b) Average Users (Av. Users)
c) Database transactions (DBTx.)
QUESTION 35
When cost elements are identified they should be put into classifications. According
to best practice what are the two minimum classifications that should be created for
cost elements once they have been identified?
209
a) Capital Costs and Operational Costs

b) Direct Costs and Indirect Cost
c) Transfer Costs and External Costs
QUESTION 36
It appears that there is confusion about the level of support by IT for functional
questions on the Basic Workplace (how do I use Word?). Both the users and the
Functional Management staff become irritated about this and the time agreements
are not met. You decided to start up a number of actions for improvement.
Which of the actions below is not correct?
a) Organize some training programs for users
b) Review the agreements in the SLA (give more time)
c) Make a list of frequently asked questions (FAQ)
QUESTION 37
You are the sole Service Level Manager and you realize that you are short of time.
Managing the current process in particular is a heavy burden. You hardly have any
time for improvement actions. This is reflected in the service levels that are not met.
How can you improve the efficiency of the current process?
a) By holding a Service Review discussion only once a quarter
b) By merging a number of services. This will result in fewer SLAs.
c) By introducing improvements at the monitoring and reporting stages
QUESTION 38
The service levels for the services to the branches are met each month, but even so
the IT department is given only just a satisfactory score during the annual user
satisfaction survey. This was not what you had expected. You had made clear
agreements, after all.
Is it clear where the cause lies?
a) Yes, the Service Desk staff and the users do not speak politely to the users.
This means that while the service levels are good, the feeling is not.
b) No
c) Yes, you must visit the branch managers more often to discuss service levels.
Certain expectations are not expressed.
210
QUESTION 39
In the SLA for the email service, the opening times of the service have been set from
Sunday to Friday from 7.00am to 11.00pm. The marketing departments want to
produce a Sunday edition of their magazine in the near future, and therefore ask to
be able to work on Saturdays too. You have to adjust the service and do this by
following these steps:
Step 1: Determine the new or adjusted Service Level Requirements
Step 2: Determine the feasibility of the demands (incl. financial consequences)
Step 3: Modify the service in accordance with the desired service levels
Step 4: Modify the SLA, negotiate and sign
Is this correct?
a) No, as the second step, the Service Catalogue must be amended
b) No, the report on the service must be amended
c) Yes
QUESTION 40
An important consideration in Change approval is the financial impact assessment of
the Request for Change (RFC). As the Financial Manager, you have been asked to
participate in approving RFCs.
The financial approval of an RFC indicates that the cost of a Change has been
assessed and that it meets one of the two criteria. The first is that it meets the costbenefit criteria.
What is the second criterion?
a) The estimated costs are within approved budgetary limits
b) The Return on Investment (ROI) has been demonstrated and approved
c) All cost types have been identified and their cost estimates have been
approved
211
212
FURTHER READING
For more information on other products available from The Art of Service, you can
visit our website: http://www.theartofservice.com
If you found this workbook helpful, you can find more publications from The Art of
Service at: http://www.amazon.com
213

Itil V3

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Itil V3

Uploaded by

Copyright:

Available Formats

ITIL Practitioner Agree and Define (IPAD) All-in-One SLA

Exam Guide and Certification Work Book:

Write a Review and Receive a Bonus Emereo

Up to $99 RRP Absolutely Free

How Does it Work?

What Happens When I Submit my Review?

ITIL Practitioner: Agree and Define

GENERAL TERMS AND CONCEPTS .................................................................................. 15

INTRODUCTION TO SERVICE LEVEL MANAGEMENT.................................................. 37

INTRODUCTION TO FINANCIAL MANAGEMENT............................................................ 45

AGREE AND DEFINE .............................................................................................................. 53

ASSIGNMENTS ...................................................................................................................... 177

6.1 ASSIGNMENT 1 SERVICE LEVEL MANAGEMENT ................................................................. 179

ASSIGNMENT RESOURCES............................................................................................... 185

7.1 COMPLAINT LETTER ................................................................................................................. 187

ITIL Practitioner: Agree and Define

EXAM PREPARATION .......................................................................................................... 199

FURTHER READING ............................................................................................................. 213

ITIL Practitioner: Agree and Define

Welcome to this Clustered Practitioner Program from The Art of Service.

ITIL Practitioner: Agree and Define

Typically such organizations will have implemented, or started to implement,

ITIL Practitioner: Agree and Define

The requirement to look at the provision of IT Services in a professional way is

Organizations understand the benefits of having Information Technology (IT)

ITIL Practitioner: Agree and Define

The IT Infrastructure Library is a set of books/CDs with best (good) practice

Business Perspective: The IS View on Delivering Services to the Business

ICT Infrastructure Management

Planning to implement Service Management

Software Asset Management

ITIL Practitioner: Agree and Define

OGC: Office of Government Commerce (the trademark owners of ITIL)

EXIN: Stichting EXameninstutuut voor INformatica

ISEB: Information Systems Examination Board

TSO: The Stationary Office

ITIL Practitioner: Agree and Define

ITIL Practitioner: Agree and Define

ITIL Practitioner: Agree and Define

ITIL Practitioner: Agree and Define

What do you think caused the jump in 2000?

ITIL Practitioner: Agree and Define

ITIL Practitioner: Agree and Define

GENERAL TERMS AND CONCEPTS

ITIL Practitioner: Agree and Define

Key Performance Indicators (KPIs) the parameters for measuring progress

Process - a process is a logically related series of activities conducted towards a

Process Owner - a process owner is responsible for the process results.

ITIL Practitioner: Agree and Define

Vital Business Function (VBF) a function of a business process that is critical to

ITIL Practitioner: Agree and Define

The People issue is without doubt where we as IT Service Management

Historically, the Technology considerations got most attention. Now we understand

ITIL Practitioner: Agree and Define

To impress stakeholders (e.g. customers, investors, personnel) your organization will

Realization of the planned activities requires action. Actions are allocated to

ITIL Practitioner: Agree and Define

To meet organizational objectives, the organization has business processes in place.

Examples of business processes are sales, admin and financial departments

ITIL Practitioner: Agree and Define

Each of these services runs on IT infrastructure. IT Infrastructure includes hardware,

ITIL Practitioner: Agree and Define

Processes are often described using procedures and work instructions.