HP Discover case study: Vodafone Ireland IT group sees huge ROI by emphasizing business service delivery

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: HP.

Welcome to a special BriefingsDirect podcast series coming to you from the HP Discover 2011 Conference in Vienna. We’re exploring some major case studies from some of Europe’s leading enterprises.

Out next customer case study interview highlights how a shift from a technology emphasis to a business services delivery emphasis has created significant improvements for a large telecommunications provider, Vodafone. We’ll see how a series of innovative solutions and an IT transformation approach to better support business benefits Vodafone, their internal users, and their global customers.

To learn more, we’re here with Shane Gaffney, Head of IT operations for Vodafone Ireland, based in Dublin. The interview is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Here are some excerpts:

Gaffney: Back in summer of 2010, when we looked at the business perception of the quality of service received from IT, the confidence was lower than we’d like in terms of predictable and optimal service quality being provided.

There was a lack of transparency. Business owners didn’t fully understand what quality was being received and they didn’t have simple meaningful language that they were receiving from IT operations in terms of understanding service quality: good, bad, or indifferent.

Within IT operations, as a function, we also had our own challenges. We were struggling to control our services. We were under the usual pressure that many of our counterparts face in terms of having to do more with less, and downward pressure on cost and headcount. We were growing a dynamic complex IT estate, plus customers are naturally becoming ever more discerning in terms of their expectations of IT.

So with that backdrop, we knew we needed to take some radical steps to really drive our business forward.

Vodafone is Ireland’s leading telecommunications operator. We have in excess of 2.4 million subscribers, about 1,300 employees in a mixture of on-premise and cloud operations. I mentioned the complex and dynamic IT estate that we manage. To put a bit of color around that, we’ve got 230 applications, about 2,500 infrastructure nodes that we manage either directly or indirectly — with substantial growth in traffic, particularly the exponential growth in the telecom data market.

Gardner: What does this get for you — if you do it right? What is it that you’ve been able to attain by shifting your emphasis to the business services level? What’s the payoff?

Reduction in lost hours

Gaffney: We’ve seen a 66 percent reduction in customer lost hours year on year from last summer to this. We’ve also seen a 75 percent reaction in mean time to repair or average service restoration time.

Another statistic I’d call out briefly is that at the start of this process, we were identifying root cause for incidents that were occurring in about 40-50 percent of cases on average. We’re now tracking consistently between 90-100 percent in those cases and have thereby been able to better understand, through our capabilities and tools, what’s going on in the department and what’s causing issues. We consequently have a much better chance of avoiding repetition in those issues impacting customers.

At a customer satisfaction level, we’ve seen similar improvements that correlate with the improved operational key performance indicators (KPIs). From all angles, we’ve thankfully enjoyed very substantial improvements. If we look at this from a financial point of view, we’ve realized a return on investment (ROI) of 300 percent in year one and, looking solely at the cost to fix and the cost of failure in terms of not offering optimal service quality, we’ve been able to realize cost savings in the region of €1.2 million OPEX through this journey.

Gardner: Let me just dig into that ROI. That’s pretty amazing, 300 percent ROI in one year. And what was that investment in? Was that in products, services, consulting, how did you measure it?

Gaffney: Yes, the ROI is in terms of the expenditure that would have related primarily to our investment in the HP product portfolio over the last year as well as a smaller number of ancillary solutions.

The payback in terms of the benefits realized from financial perspective that relate to the cost savings associated with having fewer issues and in the event where we have issues, the ability to detect those faster and spend less labor investigating and resorting issues, because the tools, in effect, are doing a lot of that legwork and much of the intelligence is built in to that product portfolio.

[Another way] we measure success, is we try to take a 360 view of our service quality. So we have a comprehensive suite of KPIs at the technology layer. We also do likewise in terms of our service management and establishing KPIs and service level agreements (SLAs) at the service layer. We’ve then taken a look at what quality looks like in terms of customer experience and perception, seeking to correlate metrics between these perspectives.

As an example, we routinely and rigorously measure our customer net promoter score, which essentially assesses whether the customers, based on their experience, would recommend our products and services to others.

[Lastly, we also] build confidence within the team in terms of having a better handle on the quality of service that we’re offering. Having that commercial awareness really does drive the team forward. It means that we’re able to engage with our customers in a much more meaningful way to create genuine value-add, and move away from routine transactional activity, to helping our customers to innovate and drive business forward.

We’ve certainly enjoyed those type of benefits through our transformation journey by automating a lot of the more core routine and repeatable activity, facilitating focus on our relationship with our customers in terms of understanding their needs and helping them to evolve the business.

Gardner: How do you, at a philosophical level, bridge the continuum among and between technology and the other softer issues like culture to obtain these benefits?

Gaffney: The first thing we did was engage quite heavily with all of our business colleagues to define a service model. In essence what we were looking at there was having our business unit owners define what services were important to them at multiple levels down to the service transactions, and defining the attributes of each of those services that make them successful or not.

Once we had a very clear picture of what that looked like across all business functions, we used that as our starting point to be able to measure success through the customer eyes.

That’s the focus and continues to be the core driver behind everything else we do in IT operations. We essentially looked to align our people, revamp our processes, and look at our end-to-end tool strategy, all based around that service model.

The service model has enforced a genuine service orientation and customer centricity that’s driven through all activities and behaviors, including the culture within the IT ops group in how we service customers. It’s really incorporating those commercial and business drivers at the heart of how we work.

Without having a consolidated or rationalized suite of tools, we found previously that it’s very difficult to get control of our services through the various tiers. By introducing the HP Application Performance Management tools portfolio, there are a number of modules therein that have allowed us to achieve the various goals that we’ve set to achieve the desired control.

Helicopter view

Essentially, the service model is defined at a helicopter view, which is really what’s important to our respective customers. And we’ve drilled down into a number of customer or service-oriented views of their services, as well as mapping in, distilling, and simplifying the underlying complexities and event volumes within our IT estate.

Gardner: I suppose this would be a good time to step back and take a look at what you actually do have in place. What specifically does that portfolio consist of for you there at Vodafone Ireland?

Gaffney: We have a number of modules in HP’s APM portfolio that I’ll talk about briefly. In terms of looking to get a much broader and richer understanding of our end-user experience which we lacked previously, we’ve deployed HP’s Business Process Monitors (BPMs) to effectively emulate the end-user experience from various locations nationwide. That provides us with a consistent measure and baseline of how users experience our services.

We’ve deployed HP Real User Monitoring (RUM), which gives us a comprehensive micro and macro view of the actual customer experience to complement those synthetic transactions that mimic user behavior. Those two views combined provide a rich cocktail for understanding at a service level what our customers are experiencing.

Events correlation

We then looked at events correlation. We were one of the first commercial customers to adopt HP’s BSM version 9.1 deployment, which gives us a single pane of glass into our full service portfolio and the related IT infrastructure.

Looking a little bit more closely at BSM, we’ve used HP’s Discovery and Dependency Mapping Advanced (DDMa) to build out our service model, i.e. effectively mapping our configuration items throughout the estate, back up to that top-down service view. DDMa effectively acts as an inventory tool that granularly links the estate to service. We’ve aligned the DDMa deployment with our service model which, as I mentioned earlier, is integral to our transformation journey.

Beyond that, we’ve looked at HP’s Operations Manager i (OMI) capability, which we use to correlate our application performance and our system events with our business services. This allows our operators to reduce a lot of the noisy events by distilling those high-volume events into unique actionable events. This allows operators to focus instead on services that may be impacted or need attention and, of course, our customers and our business.

We’ve gone farther and looked at ArcSight Logger, software which we’ve deployed to a single location that collects logged files throughout our estate. This allows us to quickly and easily search across all logged files for abnormalities that might be related to a particular issue.

By integrating ArcSight Logger with OMI — and I believe we’re one of the first HP customers to do this — we’ve enriched operator views with security information as well as the hardware, OS, and application layer events. That gives us a composite view of what’s happening with our services through multiple lenses, holistically across our technology landscape and products and services portfolio.

Additionally, we’ve used HP’s Operations Orchestration to automate many of our routine procedures and, picking up on the ROI, this has allowed us to free up operators’ time to focus on value-add and effectively to do more with less. That’s been quite a powerful module for us, and we’ve further work to exploit that capability.

The last point to call out in terms of the HP portfolio is we’re one of the early trialists of HP’s Service Health Analyzer. A year ago, we were to a degree reactive in terms of how we provided service. At this point, we’re proactive in how we manage services.

Service Health Analyzer will allow us to move to the next level of our evolution, moving toward predictive service quality. I prefer to call the Service Health Analyzer our “crystal ball,” because that’s essentially what we’re looking at. It’s taking trends that are occurring with the services of transaction, and predicting what’s likely to happen next and what may be in jeopardy of breaking down the line, so you can take early intervention and remedial action before there’s any material impact on customers.

We’re quite excited about seeing where we can go there. One of the sub-modules of Service Health Analyzer is Service Health Reporter, and that’s a tool that we expect to act as our primary capacity planning capability across a full IT estate going forward.

Throughout our implementation, partnership was a key ingredient to success. Vodafone had the business vision and appetite to evolve. HP provided the thought leadership and guidance. And, Perform IT, HP’s partner, brought hands-on implementation and tuning expertise into the mix.

Full transparency

One of our core principles throughout this journey has been to offer full transparency to our customers in terms of the services they receive and enjoy from us. On one hand, we provide the BSM console to all of our customers to allow them to have a view of exactly what the IT teams see, but with a service orientation.

We’re actually going a step further and we’re building out a cloud-based service portal that takes a rich feed in from the full BSM portfolio, including the modules that I’ve called out earlier. It also takes feeds in from a remedy system, in order to get the view of core processes such as incident management, problem management, change management.

Bringing all of that information together gives customers a comprehensive view of the services they receive from IT operations. That’s our aim — to provide customers with everything they need at their fingertips.

It’s essentially providing simple and meaningful information with customized views and dynamic drill-down capabilities, so customers can look at a very high level of how the services are performing, or really drill into the detail, should they so desire. The portal, we believe, is likely to act as a powerful business enabler. Ultimately, we believe there’s opportunity to commercialize or productize this capability down the line.

Gardner: Any recommendations now that you’ve been through this yourself?

Gaffney: For customers embarking on this type of transformation initiative, first off, I would suggest: engage with your customers. Speak with your customers to deeply understand their services, and let them define what success looks like.

Look to promote quick wins and win-wins. Look at what works for the IT community and what works for the customer. Both are equally important. Buy-in is required, and people across those functions all need to understand what success looks like, and believe in it.

I would recommend taking a holistic approach from a couple of angles. Don’t just look at your people, technology, or processes, but look at those collectively, because they need to work in harmony to hit the service quality sweet spot. Holistically, it’s important to prepare your strategy, but look top down from the customer view down into your IT estate and vice versa, mapping all configuration items back into those top level services.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: HP.

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About Dana Gardner

Dana Gardner is president and principal analyst at Interarbor Solutions, an enterprise IT analysis, market research, and consulting firm. Gardner, a leading identifier of software and cloud productivity trends and new IT business growth opportunities, honed his skills and refined his insights as an industry analyst, pundit, and news editor covering the emerging software development and enterprise infrastructure arenas for the last 18 years. Gardner tracks and analyzes a critical set of enterprise software technologies and business development issues: Cloud computing, SOA, business process management, business intelligence, next-generation data centers, and application lifecycle optimization. His specific interests include Enterprise 2.0 and social media, cloud standards and security, as well as integrated marketing technologies and techniques. Gardner is a former senior analyst at Yankee Group and Aberdeen Group, and a former editor-at-large and founding online news editor at InfoWorld. He is a former news editor at IDG News Service, Digital News & Review, and Design News.
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