Develop an IT Infrastructure Services Playbook

Automation, SDI, and DevOps – build a cheat sheet to manage a changing Infrastructure & Operations environment.

Table of contents

Analyst Perspective

Executive Summary

Project Overview

• Phase 1: Define and Prioritize Infrastructure Services
  • 1.1: Define the services you own
  • 1.2: Prioritize infrastructure services
• Phase 2: Build Workflows and an Infrastructure Services Playbook
  • 2.1: Design workflow for service delivery
  • 2.2: Build a services playbook
• Phase 3: Identify Costs and Mature Service Delivery Capabilities
  • 3.1: Eliminate infrastructure service costs
  • 3.2: Mature your I&O organization into a service broker

Summary and Conclusion

ANALYST PERSPECTIVE

Technology is changing how infrastructure services are delivered.

"Managing a hybrid infrastructure environment is challenge enough. Add to this the pressure on IT Operations to deliver services faster and more continuously – it’s a recipe for boondoggle deployments, overcommitted staff, end-user frustration, and operational gridlock.

It’s not every service you provide that causes problems, so prioritize a few in-demand, painful services. Build and maintain durable, flexible processes that enable your team to provide consistent, repeatable services at a standard cost. Identify opportunities to improve service delivery.

You’ll save the business time and money and your own team significant grief." (Andrew Sharp, Research Manager, Infrastructure & Operations, Info-Tech Research Group)

Your infrastructure and operations team is a service provider; standardize, document, and communicate service capabilities

This Research is Designed For:

• CTOs and Infrastructure Managers
• Service Level Managers
• ITSM Managers and Process Owners

This Research Will Help You:

• Inventory services that IT Infrastructure & Operations (I&O) provides to the business (servers, storage, and network).
• Standardize services and track costs.
• Articulate the value of these services to business owners.
• Develop a catalog of infrastructure services.

This Research Will Also Assist:

• CIOs
• Application Development Managers
• Security Managers
• Auditors

This Research Will Help Them:

• Understand the complexities of technical service delivery.
• Make better strategic IT infrastructure decisions.

Executive summary

Situation

• Infrastructure and operations teams are managing deployments on- and off-premises and across multiple infrastructure service providers.
• Though automation tools speed up the delivery process, documentation is always pushed off so the team can meet urgent deadlines.

Complication

• Cloud providers have set the bar high for ease of access to stable infrastructure services.
• Without documented delivery processes, wait times are longer, controls are adequate but ad hoc, builds are non-standard, and errors are more likely to be introduced in production.

Resolution

• Prioritize in-demand services for documentation and standardization.
• Build service workflows and document service requirements in the services playbook.
• Create a costing model and track costs to deliver defined services.
• Leverage data on costs and service requirements to improve service delivery.

Info-Tech Insight

1. Keep it simple. Work through a few in-demand services to get early value from the project.
2. Don’t get lost in automation or tooling. You don’t need a complex tool or back-end automation to get value from standardized services.
3. Do then iterate. With a few completed service processes, it’s much easier to identify opportunities for service automation.

Create an infrastructure services playbook to improve efficiency, support DevOps, and streamline service delivery

Begin building an infrastructure services playbook by defining the services you provide. This will also help your team support changes to service delivery (e.g. more use of cloud services and the shift to DevOps).

In this blueprint, the first step will be to document infrastructure services to:

1. Clarify infrastructure capabilities and achievable service levels.

   Document infrastructure services to clarify achievable service levels with given resources and what you will need to meet service-level requirement gaps. Establishing your ability to meet customer demands is the first step toward becoming a broker of internal or external services.

2. Standardize infrastructure service delivery.

   Sometimes, it’s extremely important to do the exact same thing every time (e.g. server hardening). Sometimes, your team needs room to deviate from the script. Create a playbook that allows you to standardize service delivery as needed.

3. Make good strategic infrastructure decisions.

   Knowledge is power. Defined services and capabilities will help you make important strategic infrastructure decisions around capacity planning and when outsourcing is appropriate.

Review and optimize infrastructure service delivery as you shift to more cloud-based services

If you can’t standardize and streamline how you support cloud services, you risk AppDev and business leaders circumventing the I&O team.

	Example: Create a new server resource in a virtual environment vs. public cloud In a virtualized environment, provisioning processes can still be relatively siloed. In a software-defined environment, many steps require knowledge across the infrastructure stack. Better documentation will help your team deliver services outside their area of specialty.
Identify CPU requirements for a virtual machine (VM) Calculate VM memory requirements Configure the floppy drive for a VM Configure IDE devices for a VM Configure SCSI adapters for a VM Configure network adapters for a VM Configure VM priority for host CPU resources Server is live		Complete SDI code development & review, version control, build status, etc. Identify software and specifications for the instance you want to use Review configuration, storage, and security settings Secure the instance with an existing key pair or create a new key pair Update documentation – public IP address, physical & logical connections, data flows, etc. Launch and connect to instance Server is live

Strengthen DevOps with an infrastructure playbook

The purpose behind DevOps is to reduce friction and deliver faster, more continuous, more automated services through the use of cross-functional teams.

DevOps: bridging Applications Development and Infrastructure & Operations by embracing a culture, practices, and tools born out of Lean and Agile methodologies.

• Create a common language across functions.
• Ensure that all service steps are documented.
• Move towards more standard deployments.
• Increase transparency within the IT department.
• Cultivate trust across teams.
• Build the foundation for automated services.

"The bar has been raised for delivering technology products and services – what was good enough in previous decades is not good enough now." (Kim, Humble, Debois, Willis (2016))

Leverage an infrastructure services playbook to improve service delivery, one step at a time

Crawl Prioritize infrastructure services that are good candidates for standardization. Document the steps and requirements to deliver the service. Use the playbook and workflows internally as you gather requirements and deliver on requests. Track costs internally.	Walk Provide infrastructure clients with the playbook and allow them to make requests against it. Update and maintain existing documentation. Automate, where possible. Showback costs to the business.	Run Provide infrastructure customers with scripts to provision infrastructure resources. Audit requests before fulfilling them. Chargeback costs, as needed.

Focus on in-demand infrastructure services — PHASE 1

Standardize in-demand, repeatable services first.

Demand for infrastructure services is usually driven by external requests or operational requirements. Prioritize services based on criticality, durability, frequency, availability, and urgency requirements.

Scheduling Delays

• Dealing with a slew of capital projects driven by a major funding initiative, the IT team of a major US transit system is struggling to execute on basic operational tasks.

Action:
• A brainstorming and prioritization exercise identifies web server deployment as their most in-demand service.
• Identifying breakdowns in web server deployment helps free up resources for other tasks and addresses a serious pain point.

Think outside the box

• On a new project for a sporting goods client, the IT department for a marketing firm deploys and supports a “locker” kiosk that users engage with for a chance to win a gift.

Action:
• As the campaign proves successful, the I&O Manager creates a playbook to guide kiosk support and deployment in the future, including required skills, timelines, success metrics, and costs.

Keep it standard, keep it safe

• An IT audit at a higher education institution finds that no standard process for server hardening has been defined or documented by the infrastructure team.

Action:
• Improving IT security is a strategic priority for the department.
• The infrastructure team decides to standardize and document processes, guidelines, and configurations for hardening OS, SCCM, SaltStack, scripting, and patching.

Leverage service workflows to populate the playbook — PHASE 2

Infrastructure as Code is breaking down traditional infrastructure silos and support models.

1. Document the workflow to deliver the service. Identify pain points and target broken processes first.
   Provision –› Configure –› Run –› Quiesce –› Destroy
2. Define logical expected results and metrics for problematic steps in the process. Identify challenges and possible improvements to each problematic step.
   

   Building and deploying toolsets is taking a long time
   Start Create a baseline offering for common requests. Make clear that non-standard requests will take time to fulfil.	Stop Move to just one web server.	Continue Use weekly drop-ins to communicate the change.

3. Document skills and roles, approvers, and pre-requirements to fill out the documentation, as needed. Use the documented process to guide internal process and align with external expectations.

Cross-silo knowledge is needed: In a software-defined environment, building and launching a new server requires knowledge across the stack.

• Complete SDI code development & review, version control, build status, etc.
• Identify software and specifications for the instance you want to use
• Review configuration, storage, and security settings
• Secure the instance with an existing key pair, or create a new key pair
• Update documentation – public IP address, physical & logical connections, data flows, etc.
• Launch and connect to the instance

Server is live

Take a progressive approach to cost tracking — PHASE 3

Infrastructure & Operations are bound by two metrics:

1. Are systems up?
2. Is technology delivered as efficiently as possible?

Because tracking cost is integral to efficiency, cost and budget management, by proxy, is one of the most important Infrastructure & Operations metrics.

Cost management is not a numbers game. It is an indicator of how well infrastructure is managed.

Track costs in a practical way that delivers value to your organization:

1. Build and leverage an internal rate sheet to help estimate cost to serve.
2. Showback rate sheet to help managers and architects make better infrastructure decisions.
3. Chargeback costs to defined cost centers.

Project overview

Use Info-Tech’s methodology to get value faster from your infrastructure services playbook.

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Info-Tech offers various levels of support to best suit your needs

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation Overview

Your Trusted Advisor is just a call away.

Your Guided Implementation will pair you with an advisor from our analyst team for the duration of your infrastructure services project.

Workshop Overview

Develop an IT Infrastructure Services Playbook

PHASE 1

Define and Prioritize Infrastructure Services

Step 1.1: Define the services you own

This step will walk you through the following activities:

• Define “infrastructure service”
• Brainstorm service offerings
• Consolidate services with affinity map

This step involves the following participants:

• Infrastructure Manager
• I&O SMEs

Results & Insights

• Results: Consolidated list of end-to-end services
• Insights: Avoid analysis paralysis by brainstorming without restrictions. It is more effective to cut down in Step 1.2 rather than risk neglecting important services for the playbook.

Consider a range of infrastructure services

Your infrastructure team is a service provider to the applications team – and sometimes other users as well.

Service Requests

• A developer requests a new web server.
• The marketing department asks for a database to support a six-month digital marketing campaign.

Projects

• A new service is promoted to production.

Operations

• Firewall rules are updated to support server, network, or security posture changes.
• Standard practices are followed and maintained to harden a range of different operating systems.
• Engineers follow a standard process to integrate new tools and entitlements into Active Directory.
• Patches and firmware updates are applied to core infrastructure components as needed.

Problems

• A database batch job often breaks on overnight batch jobs and requires manual intervention to check and restart.

IT infrastructure & operations teams deliver services that fulfil requests, support projects, resolve problems, and operate systems.

Brainstorm infrastructure services you deliver

INPUT: Knowledge of IT infrastructure

OUTPUT: List of service offerings

Materials: Flip charts, Sticky notes, Markers

Participants: Infrastructure Manager, I&O SMEs

1. Divide your group into small teams (2-3 people per team).
2. Ask each team to brainstorm any core infrastructure services (servers, network, and storage). Try to come up with 5-10 services per team.
   • If participants have trouble getting started, begin with recent or common requests from the applications team and common operational tasks.
   • Name specific systems where possible.
3. Every team should capture services on sticky notes. Write down one service per sticky note.
4. Invite the teams to add their sticky notes to a whiteboard or flip chart paper.
5. Allow each team to present their list and briefly define each service.

Info-Tech Best Practice

Get to know your service offerings. If you don’t understand how services are connected, or what the steps are to deliver it, you can’t identify opportunities to improve or automate.

Remove redundancies and consolidate services with an affinity map

1(b) 10 minutes

INPUT: Brainstorming exercise

OUTPUT: Consolidated inventory of infrastructure services

Materials: Whiteboard, Sticky notes, Markers

Participants: Infrastructure Manager, I&O SMEs

1. Consolidate services. As a team, organize sticky notes into end-to-end services. Find logical groups for similar services. For example:
   • Different groups may list different parts of the same service.
   • The same service may have different names or be listed multiple times by different groups.
   • For sticky notes that do not seem to have a natural map, create a “parking lot.”
2. Identify sub-steps. Label each of the groups.
3. Arrange steps chronologically. Within each group, roughly organize sticky notes into stages in the lifecycle (provision, configure, run, quiesce, destroy). If a single sticky note overlaps across multiple stages, break it into different stages.
4. Add consolidated services to the infrastructure services playbook.

Download the Infrastructure Services Playbook.

Step 1.2: Prioritize infrastructure services

This step will walk you through the following activities:

• Complete a pain-points exercise
• Perform a root-cause analysis for pain points
• Analyze demand
• Prioritize services based on standard criteria and voting

This step involves the following participants:

• Infrastructure Manager
• I&O SMEs

Results & Insights

• Results: Ranked list of services
• Insights: Not all services are suited for standardization and automation. By narrowing in on high-demand services you ensure that you get the most value for effort required.

Define service pain points

1(c) 5 minutes – brainstorm, 5 minutes – ranking

INPUT: Services affinity map

OUTPUT: Process pain points

Materials: Sticky notes, Markers

Participants: Infrastructure Manager, I&O SMEs

Point to where it hurts.

1. Distribute red sticky notes to the group.
2. Individually brainstorm pain points for the services on the board.
3. Add the sticky note pain points beneath each service on the board or flip chart.
4. Ask each contributor present the sticky notes to the group.
5. Use the pain point sticky notes to rank services from most to least painful.

Define service pain points

1(d) 20 minutes as a group

1. As a group, review the list of infrastructure services.
2. Create a problem statement and populate a box on the right-hand side of a whiteboard or a piece of chart paper.
3. Draw a horizontal line left from the box and draw several ribs on either side to represent categories of the cause that you will explore. Label each rib with relevant categories for IT: people, process, technology, and environment.
4. Facilitate discussion to identify significant drivers to the pain point.
5. Repeat this process as needed.
6. After identifying the root cause for each pain point, remedy each pain point with an action item.

Info-Tech Best Practice

Avoid naming individuals in the diagram or during any of the other root-cause analysis exercises you might undertake. Where possible, use titles. The goal of the root-cause analysis is not to lay blame for disciplinary reasons or focus on a guilty party.

Prioritize services based on criticality, durability, frequency, availability, urgency, and grief

1(e) 5 minutes individual work; 10 minute debrief

INPUT: List of services provided by infrastructure

OUTPUT: Offerings for the pilot service catalog project

Materials: Markers, Whiteboard

Participants: Infrastructure Manager, I&O SMEs

Identify good candidates for inclusion in the playbook.

1. Create a table on the whiteboard/flip chart. Add a service at the start of each row. Add the following six criteria to the row headers:
   • Criticality: How critical is the service to the larger organization?
   • Durability: How long do you expect to offer this service?
   • Frequency: How often is this service used?
   • Availability: What is your tolerance for downtime?
   • Urgency: How quickly do you need to perform this service?
   • Pain point: How much grief does this particular service cause your team?
2. As a group, assign a score between 1 and 3 for each criteria and each service. High scores are more in-demand or painful.
   • If the group is less than ten people, a voting exercise (with cards or dots) can encourage participation and discussion.
3. Add the scores across each service. Circle the highest scores.
4. Discuss the results with the entire group and choose 1-2 services for a pilot.

Phase 1: Insights and outcomes — PHASE 1

In this phase, you have identified high-demand infrastructure services.

In the next phase, you will design workflows and create the services playbook.

1. Brainstorm Services
2. Consolidate & Break Out Services
3. Define Pain Points
4. Perform Root-Cause Analysis
5. Prioritize Services
6. Select High-Demand Services

"First, you have to understand your catalog of common processes and evaluate whether you can even define them. Many processes are very specific to the application. These may not be suitable as a common service catalog item." (IT Director)

PHASE 1 Recap

• Brainstorm infrastructure services delivered to other departments in the organization.
• Consolidate like services with an affinity map and begin to break out the service process.
• Define any pain points and conduct a root-cause analysis.
• Prioritize services based on criticality, durability, frequency, availability, urgency, and grief.

Develop an IT Infrastructure Services Playbook

PHASE 2

Build Workflows and an Infrastructure Services Playbook

Step 2.1: Design workflow for service delivery

This step will walk you through the following activities:

• Why workflows?
• Design workflow for infrastructure service
• Analyze and amend

This step involves the following participants:

• Infrastructure Manager
• I&O SMEs

Results & Insights

• Results: Charted workflows
• Insights: Seize the opportunity to have SMEs collaborate, and aim to find the most effective and efficient way to deliver standard infrastructure services.

Manage the tension between fit-for-need and standardization

Standardization provides a lot of benefits – be clear about what you’re signing up for.

• Where most steps are definable and predictable, you can document the process at a more granular level.
  • For example, certain server builds may be well understood and definable. Inputs are well known and the process is executed regularly.
• Where the service is less definable or predictable, create higher-level documentation.
  • Think along the lines of a sports team’s playbook. Rather than outlining every step in detail, provide guidelines for what actions should be taken when and by whom.
  • Where the service steps can be defined, define the steps.
  • Where the process is not predictable or easily defined, provide structure and guidance, but leave room for individual thinking and judgement.

Deliver tailored services

• More efficient use of hardware
• Deliver to application specs
• “Give the client what they want”

Deliver standard services

• Higher throughput
• Simpler management & cost control
• More efficient use of human resources
• Easier to cross-train
• Automation possibilities
• Greater transparency

Create services workflows to identify steps and requirements for the infrastructure services playbook

Document key workflows for better alignment and consistent delivery.

• Prioritize documentation creation for infrastructure services based on demands for the service.
• Identifying all steps in the service opens the door to automating discrete, repetitive processes or procedures.
• Documented processes are repeatable and more predictable, allowing you to define SLAs or SLOs and other internal metrics. Define service levels to Improve IT-Business Alignment.
• Eventually, documented services can support a self-serve portal or service catalog, where appropriate.

First,

• Document workflows to identify processes to deliver each service, from provision to destroy, as well as approvals or sub-processes that require involvement from multiple parties.

And then,

• Analyze workflows to identify gaps and opportunities to improve service levels.
• Document skills, roles, approvals, cost to serve, metrics, and expectations for individual steps in the Playbook, as appropriate.
• Identify where auto-approval or automation is appropriate.

Info-Tech Insight

Service standardization and better documentation improves transparency for all stakeholders, ultimately leading to better alignment as well as increased satisfaction and business value. Leverage Info-Tech’s research to Create Visual SOPs to Drive Process Improvement.

Build a workflow for infrastructure services

2(a) Define service requests with SLAs

Participants: Infrastructure Manager, Infrastructure SMEs

What You'll Need: Whiteboard or cue cards

1. Build a workflow for the services, one at a time.
   • Break the workflow exercise down into the stages defined in the service matrix, and consider each stage one at a time: provision, configure, run, quiesce, and destroy.
   • If needed, break these stages down even further (e.g. define plan & design stages within provision).
   • When documenting the configure, run, and quiesce phases, you’ll often need to list “buckets” of tasks and procedures (patch, upgrade, monitor, etc.). Identify these buckets with a different symbol in the flowchart. Differentiate between tasks that can be scheduled and those that can’t.
2. Identify any approval gates, handoffs, or required documentation. Identify where parties are required for input or approval outside of Infrastructure & Operations and IT.
3. Capture the work done in a (legible) picture so you can refer to it and document it later.

Info-Tech Best Practice

Use Info-Tech’s guidance to Create Visual SOPs that are usable, maintainable, and drive process improvements.

Analyze service workflows to improve service delivery

2(b) Build and critique workflows

Participants: Infrastructure & Operations Manager, Infrastructure SMEs

What You'll Need: Flipchart or whiteboard, Draft SOP

1. Document the workflows, either separately or in a group. Once they’re complete, reconvene and present workflows to the group.
2. Critique workflows for efficiency and effectiveness:
   • Did you capture all planning and design, provisioning, configuration, backup and archive, and disposition processes? Are approvals, handoffs, and required documentation recorded?
   • Where are the gaps and obstacles in the current process? Indicate gaps with yellow cards and obstacles with red cards.
   • Are approvals appropriate? Can some approvals be removed? Can they be pre-approved or moved ahead if they interrupt technical processes?
   • Is the IT staff consistently following the same workflow?
   • Do the workflows support defined SLOs/SLAs?
3. Where appropriate, you can add workflows to a knowledgebase or service management tool.

Info-Tech Best Practice

A Start, Stop, Continue exercise is a good way to get the team past gripes and towards constructive criticism. What should we start doing to deliver the process? What should stop? What must we continue to do?

Use the sample infrastructure service workflows to build your own documentation

Example: Web Server

• Drawing out the workflow on the board is usually messy. Try not to worry about how it looks – just get the information written down.
• You may find that it makes sense to change the scope of the service as you work on the whiteboard. Make careful adjustments to scope where needed.

Service Workflow

Download an example Service Workflow

Step 2.2: Build a services playbook

This step will walk you through the following activities:

• Understand the changing landscape for infrastructure
• Strike a balance between custom services and standardization
• Create a bill of materials for infrastructure services
• Build out an infrastructure services playbook

This step involves the following participants:

• Infrastructure Manager
• Applications Development Manager
• I&O SMEs

Results & Insights

• Results: Infrastructure Services Playbook
• Insights: Use the service matrix as a cross-functional learning initiative between internal IT staff. This is the first step in adopting the DevOps culture.

Leverage the workflows to populate the Playbook

Take a practical approach to establishing requirements.

Service Phase: The five high-level phases in service delivery – Provision, Configure, Run, Quiesce, and Destroy.

Process: Use this column to identify specific processes within each phase. Update the “processes” to reflect what you’re doing in your environment. These processes may be similar from service to service or they might change.

Action: Identify specific actions or steps within each process. Use the workflow to identify actions.

Pre-requisites: List any pre-requisites to the action, including approval forms, documentation, or prior actions.

Download the Infrastructure Services Playbook.

Q: Do I need to complete every cell in the Playbook?

A: No. For example, you might not need to define skills, KPIs, or costs for all actions. The goal is a first draft you can iterate on. Don’t get bogged down in the details. There are diminishing returns to completeness, especially at this stage.

Leverage the workflows to populate the Playbook (continued)

Approver: The role required to approve the results of an action (if applicable).

Skills/Roles: Identify any roles required to complete the action and any specific skills that may be needed.

Expected Results: Summarize expected outputs and outcomes for this step (if needed).

Metrics/KPIs: List any metrics used to assess whether actual outputs align to expected outputs.

Service Pricing: Identify pricing for the action, as needed.

Developing Metrics and KPIs

Successful infrastructure managers apply metrics to everything from capacity planning to customer satisfaction and problem management.

Before you use metrics, you need to know what you’re measuring and why you’re measuring it. Identify the metrics that serve a purpose, and eliminate the rest.

Establish a formal review process to verify that the metrics are valid, provide needed answers, and are manageable and useable.

Leverage Info-Tech’s research to Take Control of Infrastructure Metrics.

Master the manual process to create a solid foundation for automation

Layer automation on simple, well-defined steps.

IT automation requires flow analysis, much like a production line. What work is completed at each step and how does it impact work done down the line?

Start with the basics.

1. Understand the whole service first. The workflows and playbook provide an end-to-end view of each service.
2. Clean up broken processes. Automate in a “clean” environment, tackling process inefficiencies and improving documentation before you automate. Leverage Info-Tech’s guidance on building Visual SOP Documentation.
3. Maintain clear and open communication. Valuable process automation is almost never siloed and dips in and out of different processes and business areas.
4. Find individual steps that can be automated. Get technical SMEs and delivery teams involved.
(Adapted from Oswalt, 2016.)

Info-Tech Best Practice

Good process automation requires a good process. It must come from a solid foundation; a bad process automated is only a bad process faster.

Phase 2: Insights and outcomes — PHASE 2

In this phase, you have created the first iteration of the infrastructure services playbook.

In the next phase you will create cost estimates for infrastructure services.

Workflow

• Document key workflows for better alignment and consistent delivery.
• Better standardization ultimately leads to better business alignment and increased IT satisfaction.

Playbook

• Leverage the workflows to populate the Playbook.
• Be practical and tactical; keep in mind this is an iterative process and remember to update and amend information as necessary.

Practice

• Analyze the workflows and identify opportunities for improvement.
• Layer automation on a well-defined manual process.

PHASE 2 Recap

• Design service workflows with a two-step approach. First design the workflow on a whiteboard, where processes can be easily changed, and then document these processes in soft copy (e.g. Visio).
• Use Info-Tech’s template to create an infrastructure services playbook.

Develop an IT Infrastructure Services Playbook

PHASE 3

Identify Costs and Mature Service Delivery Capabilities

"Now, you can deliver a virtual template in minutes and have a service running in a few hours. This gives the impression that virtual computing is ‘free.’ Not true." (Sowande, 2016)

Step 3.1: Estimate infrastructure service costs

This step will walk you through the following activities:

• Importance of cost tracking
• Rate sheet requirements
• Crawl, walk, run approach
• Overhead allocation methods

This step involves the following participants:

• Infrastructure Manager
• IT CFO or Finance equivalent

Results & Insights

• Results: Infrastructure Services Rate Sheet
• Insights: Strike a balance between accuracy of cost and time efficiency for the rate sheet to be an effective tool.

Adopt a commercial style of delivering services to internal departments by building a rate sheet

Why should you track infrastructure costs?

• Improve transparency around infrastructure costs.
• Effectively communicate costs via showback.
• Facilitates cost analysis and identifying waste and redundancies.
• Leverage the data to support more accurate investment decisions.

What’s included in a rate sheet?

• Service category
  • Identify whether the service is on-premises or off-premises.
  • Split pricing information into categories.
• Service Pricing Policy
  • Identify if the service is usage based or capacity based.
• Unit
  • Identify the unit of measurement (GB, vCPU, etc.)
• Monthly Unit Cost
  • Approximate cost per month per unit.

Infrastructure is like your trusty electrical outlet. Outside of electricians, most of us really only care that it powers our appliances reliably and doesn’t cost us too much. Tracking costs is critical to good infrastructure management.

Populate the Service Rate Sheet

Calculate monthly costs using the appropriate model.

In general:

• Use the capacity-based costing formula for in-house infrastructure the organization has purchased.
• Use the usage-based costing formula where a vendor owns the infrastructure.

Download the Service Rate Sheet.

Choose an allocation method for overhead costs

If there are significant and uneven overhead costs to delivering a service, there may be value to tracking where the overhead is going using one of the allocation methods below.

Even Spread Allocation

• Allocates expenses evenly across all relevant cost pools.
• E.g. $1M of expense is allocated equally across 12 months for a monthly recurring cost.

Cost Rate Allocation

• Allocates expenses proportionately based on the known costs of a service.
• E.g. Service 1 has known direct costs of $1M and service 2 has known direct costs of $2M. The $1M overhead expense is allocated 33% to service 1 and 66% to service 2.

Assigned Percentage Allocation

• Allocates expenses according to a predetermined, predefined, or standardized percentage.
• E.g. $1M in expenses is allocated at 30% to service 1 and 70% to service 2.

Single-Driver Activity-Based Costing (ABC) Allocation

• Allocates expenses based on consumption of a single cost driver.
• E.g. $200K of a $1M expense is allocated to a service that consumed 20% of a standard resource.

Multi-Driver ABC Allocation

• Allocates expenses based on the consumption of multiple cost drivers.
• E.g. Expenses are allocated based on tier of support, urgency, and service location.

Employ the crawl, walk, run method to make use of costing data

Crawl: Internal Use – Infrastructure only

• Estimate the cost to deliver on each service using the rate sheet to calculate unit costs. Add overhead, if needed, using the chosen allocation method.
• Conduct variance analysis to improve rate sheet estimates and build improved estimates back into the rate sheet.

Walk: Showback

• Use the rate sheet to demonstrate the approximate cost of a service to external stakeholders who request this information.
• Engage the rate sheet as a decision-making tool for managers.

Run: Chargeback

• Optimize a balanced approach between cost precision and time necessary to gather information for the rate sheet.
• Apply IT service costs to the business unit in which they are used.
• Use the rate sheet for cost and budget management in the infrastructure department.

"IT chargeback systems are sometimes called ‘responsibility accounting’ because this sort of accounting demonstrates which departments or individuals are responsible for significant expenses." (Rouse, 2011)

Monitor and track costs for better infrastructure management

Even where it’s not required, you should track variance and bring material differences to the business for several reasons:

1. Variance reporting builds trust and establishes credibility with business partners and improves transparency and oversight in the budgeting process. Trust is paramount to a successful relationship with the rest of the organization and is critical for IT to be seen as a strategic partner.
2. Tracking variance helps infrastructure and operations leaders to keep track of how their actual spend compares to what they had budgeted and understand what is left for the remainder of the year.
3. Reviewing budget variances enables you to develop a better budget next year based on what you’ve learned from deviations this year.

Although it can be tempting to be spend the excess budget leftover due to variances without revealing them, such practices are detrimental in the long run for IT’s relationship with the rest of the business.

Info-Tech Best Practice

The bottom line: A quarterly variance report is a critical infrastructure budget management process and strategic communication tool. Use Info-Tech’s research to Develop and Manage Your Infrastructure & Operations Budget, including effective variance reporting.

Step 3.2: Mature your I&O organization into a service broker

This step will walk you through the following activities:

• Support the service catalog with the playbook
• Develop the service broker role

This step involves the following participants:

• Infrastructure Manager
• Core Project Team

Results & Insights

• Turn the self-service model upside down by prescribing services to users based on their requirements and your expertise to get the best services delivered.

Improve infrastructure delivery with an infrastructure service catalog

A user-facing catalog does not need to be complicated. It’s just Infrastructure. Keep it simple.

Don’t snatch complexity from the jaws of simplicity. There’s only so many services that Infrastructure provides.

"Why would an infrastructure service catalog be any more complicated than this?" (Darin Stahl, Senior Director, Info-Tech Research Group)

Use the playbook and rate sheet to build your infrastructure service catalog

Create a single view of the services delivered by Infrastructure & Operations.

• When you use the playbook and rate sheet to intake new projects and requests, keep a copy of each request and any modifications to the base project requirements.
• As the number of requests you fulfil grows, review the data to identify opportunities for standardization. Can you standardize your server builds? Is there a common process for updating firewall rules?
• Aggregate common requests, organized by service phase, to a single document. A mind map, where each process aligns with a phase, can be an efficient way to structure this information.

A mind map is an effective way to capture the many different services and related processes that Infrastructure & Operations delivers.

Download the Infrastructure Service Catalog Mind Map Example.

Become a service broker for internal and external infrastructure services

Take a tactical, practical approach. Become a service broker one step at a time.

A true service broker can:

• Be a single point of contact for provisioning and operating multiple or aggregated cloud services.
  • Get started: Selecting the right service for new projects should be a repeatable process that enables your Cloud Strategy & Action Plan.
• Monitor and control multiple cloud services.
  • Get started: Be tactical – don’t monitor everything. Effective Performance Monitoring focuses on critical transactions first.
• Develop pre-defined mitigation/reaction strategies to manage detected failures.
  • Get started: Right-Size Your DR Plan. Moving your environment offsite doesn’t mean you don’t need a DRP.
• Optimize and improve performance, costs, features, and functionality.
  • Get started: Where possible, develop a process to Effectively Acquire Infrastructure Services. Do your best to ensure the terms of any agreement permit you to share in the benefits of efficiencies implemented by your vendor.

Add infrastructure services to your ITSM toolset

A service catalog isn’t a webpage, it’s a process.

A tool can help by automating repetitive tasks, such as:

• Node or server discovery.
• Automatic pricing calculation.
• Script monitoring and logging.
• Request intake and ticketing.

A tool can’t:

• Choose a costing model or set prices for you.
• Fix a broken process – automating a bad process will only give you a bad process, faster.
• Improve underlying infrastructure reliability, availability, or serviceability.

Info-Tech Best Practice

Define your requirements through a structured, incremental, and iterative process. The process you follow should define your requirements for tooling. Don’t let a tool tell you how things should be done. Use Info-Tech’s research to Build an ITSM Tool Implementation Plan.

Phase 3: Insights and outcomes — PHASE 3

In this phase, you allocated cost to standard infrastructure services, identified ways to use cost information, and reviewed next steps to get more value from the work you’ve done already.

1. Services Playbook
2. Service Rate Sheet
3. IT Service Broker
   • Define infrastructure capabilities
   • Confidently make strategic decisions
   • Run IT Infrastructure like a business

"We can provide some data back to our executive team that either we are exceeding their expectations or that we’re not. Without data, we rely on intuition and feeling, and that is not a good way to make a decision." (IT Director)

PHASE 3 Recap

• Run your IT shop like a business by tracking the costs of standard services.
• Gather information for the rate sheet and explore overhead allocation methods.
• Select a starting point in the crawl, walk, run approach.
• Support your IT service catalog and become an IT service broker.
• Equipped with your playbook and rate sheet, begin integration into daily operations.

Establish baseline metrics

Baseline metrics will improve through:

1. Increased operational efficiency. Through standard processes and training on these processes. Provide resources that meet all requirements the first time.
2. Clear delineation of tasks. Identifying which resource or department is responsible for what in each process will reduce back and forth.
3. Fast-track standard requests. Low-risk, well-understood requests can be fulfilled with less approval and planning requirements.

Insight Breakdown

Keep it simple

• Focus on in-demand services that present opportunities for improvement.
• Even a handful of documented processes can improve overall service delivery.
• Don’t worry about completeness the first time you document the exercise. Write a first draft, then iterate.

Ensure capabilities meet customer requirements

• Document the process and requirements for service delivery.
• Manage the process and requirements to ensure the service is delivered the same way, every time.
• Compare your ability to deliver the standard service to your customers’ requirements for the service, and identify opportunities to improve service delivery.
• The playbook, as a communication tool, can improve transparency between I&O and parties requesting services.

Use the playbook to make better strategic decisions

• Review the cost to deliver services. Build this data into budget planning processes.
• Identify common requests, and develop build standards that cater to most of them.
• Incorporate the standard process for different services into complex project proposals to improve project time, effort, and cost estimates.
• Use the playbook as a communication tool to get the business input needed to make strategic infrastructure decisions.

Research contributors and experts

Joe Bajek, Director of Technology & Infrastructure Centura Health Joe is currently the Director of Technology & Infrastructure at Centura Health. Prior to Centura, he served in IT management roles in healthcare and higher education at The University of Colorado, the U.S. Surgical Corporation, and GE Capital. Originally from Connecticut, Joe holds a B.S. in Computer Science/ Mathematics from SUNY Maritime College. He is a graduate of the GE Information Systems Management Program, a CPHIMS, and a Fellow with HIMSS.

Charles F. Nicholson, Director & ESO, Technology Services Ultimate Software Group For 15 years Charles has focused on designing and building the technology foundation for a SaaS company. First, transforming bare-metal infrastructure into an flexible IaaS. Then evolving that IaaS into a series of services that operates as a platform for a PaaS. Finally, harnessing both to deliver 20+ B2B award-winning applications as a SaaS serving 30 million users globally. As a business leader, Charles has built and led multiple teams focused on customer service, operations, research & design, collaboration, architecture, and supply chain logistics.

Research contributors and experts

Parshuram Limaye, Sr. Manager, Infrastructure Services Ultimate Software Group Parshuram Limaye is a Senior Manager, Infrastructure Services at Ultimate Software. He’s passionate about working with leaders, helping them deliver business value through infrastructure transformation, and providing increased agility and scalability. For over 16 years he has led the design, development, and implementation of numerous high-performance technology and information security solutions.

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Bibliography

Agarwal, Himanshu, Leandro Santos, and Irina Starikova. “Managing the Demand for IT Infrastructure.” McKinsey & Company, Digital McKinsey, Apr. 2014. Web.

Cooper, Robin, and Robert Kaplan. “Measure Costs Right: Make the Right Decisions.” Harvard Business Review, Sept. 1988. Rpt. in HBR.org, 21 Aug. 2014. Web.

Kim, Gene, Jez Humble, Patrick Debois, and John Willis. The DevOps Handbook: How to Create World-Class Agility, Reliability, and Security in Technology Organizations. IT Revolution Press, 6 Oct. 2016. Print.

Oswalt, Matt. “Principles of Automation.” Keeping It Classless, 18 Oct. 2016. Web.

Rouse, Margaret. “IT Chargeback System.” WhatIs.com, Tech Target, Feb. 2011. Web.

Rae, Barclay. “Why bother with a Service Catalogue?” Barclay Rae, Independent Management Consultant, Jan. 2010. Whitepaper.

Sowande, Bunmi. “Communication Challenges in IT Organizations.” Turbonomic, 15 Aug 2016. Web.