September 25, 2009 DRAFT – FOR DISCUSSION PURPOSES ONLY

1. Commonwealth of Massachusetts Statewide Strategic IT Consolidation (ITC) InitiativeChargeback Long-term Vision and Maturity Reference Model September 25, 2009 DRAFT – FOR DISCUSSION PURPOSES ONLY

2. Table of Contents

3. Components of ITIL: Service Desk 1.0 Executive Summary

4. Chargeback Vision • Services that are standard, formally defined in a Service Catalog that customers can use for planning and ordering, segmented to accommodate different cost and service level expectations • Usage measurements and reporting that are fair, accurate and readily available; usage units that are effective in managing demand and encouraging cost-conscious consumption • Chargeback Administration that is streamlined, automated, and documented; customers can easily access their usage data and receive error-free invoices • Product Managers that take responsibility for the management of costs and the quality and evolution of their Services, able to adjust to changing demand while maintaining or reducing rates • Costs that provide the customer the best value for the services provided, comparable to other states • Customers feel valued, and understand their services and costs, with the assistance of Service Account Managers

5. Summary of Key Findings

6. Components of ITIL: Service Desk 2.0 Five Dimension Assessments

7. Dimension 1: Service Maturity

8. Dimension 2: Service Usage Management

9. Dimension 3: Service Cost Management

10. Dimension 4: Chargeback Administration 1 2 3 4 5 1 2 3 4 5

11. Dimension 5: Service/Cost Management

12. Components of ITIL: Service Desk 3.0 Roadmap for Improvement

13. Short Term Roadmap for Chargeback Improvement Legend: Oct 2009 Apr 2010 Dec 2010 Dimension 4 2 3 5 3.5 4.0 2.7 Service Maturity Service Usage Management Service Cost Management Chargeback Administration Service/Cost Management • Develop standard products for different cost & service expectations • Customer-friendly catalogue pages 2.0 2.5 3.7 • Automate/streamline usage collection • Product Managers are responsible for reported usage • Usage history online for easy customer access 2.3 3.0 3.7 • Align costs to standard cost framework • Remove single-customer costs are from pools • Document all cost allocation assumptions 2.0 2.5 3.0 • Identify information needs of customers • Automate/streamline manual activity • Provide for information needs of customers 2.0 2.7 4.0 • Train Product Managers for Role • Monthly cost pool reviews • Models created for all service rates • Product Managers have plans for the evolution of their services

14. Long Term Roadmap for Chargeback Improvement - Directional Dimension 2010 2011 2012 • Standardize and segment services • Customer-specific view of Catalog • Continuous Improvement of Services and Catalog • Continue to Standardize and segment services Service Maturity Service Usage Management Service Cost Management Chargeback Administration Service/Cost Management • SAMs meet with Clients on Services • Direct link from Service Catalog to Service Request System • Improve Catalog with customer feedback • Improve usage measurement for allocated/derived usage • Continue to automate/standardize usage reporting, tie into modeling tool and invoices • Usage information is available in real-time • Customers access their real-time usage via the web • Usage units are business-based • Automate/standardize usage reporting • Product Managers review and are responsible for reported usage • Provide usage history online for easy customer access • SAMs review usage with customers at least quarterly • Review allocated, non general overhead costs, to determine how to link to specific services • Ensure procurement procedures and coding of supply requisitions identify the specific service or services • Align costs to standard cost framework • Remove customer-specific costs from pools • Document rules and assumptions governing allocations • Monthly reports of pool cost budget/actual provided to Product Managers • Product Managers can see real-time summaries of costs-to-date, as they are incurred • Specific purposes or subsets of services can be identified separately in cost data • Continue to automate and streamline • Ad hoc modeling of new services and rates • Customers can track usage more frequently than monthly • Automate or streamline manual activity • Identify and provide for information needs of customers • Eliminate errors on invoices • Real-time cost and usage data is available to Product Managers and customers • Product managers flexibly manage the capacity of their services • Continuous improvement analysis is performed to enhance service quality • Train Product Managers to take responsibility for managing costs • Monthly cost pool reviews and variance analyses • SAMs proactively discuss services and costs with customers • Modeling of Services and rates in tool • Product Managers research customer needs with SAMs • Product Managers have documented plans for the evolution of their services, • Product Managers take proactive action to manage costs to protect rates

15. Personnel Tools and Systems Assumptions For Short Term Roadmap • Tivioli UAM (Usage and Accounting Manager) • Implementation is completed, loaded with current cost, usage data, and business rules for services invoiced and reported • Tivoli has the capability to be used for modeling rates (if not, some other tool must be acquired or created). • Tivoli UAM, or software native to Service toolsets • Support the automated collection of usage for more services • Asset Management System • There is a repository of the asset data required for Chargeback accounting, maintained effectively to ensure accuracy. • MMARS • Queries can be saved for reuse • Full-time Lead • Work with Finance on specifications for cost and usage collection automation, standardizing and documenting the manual processes and allocation rules, error-proofing processes and updating Chargeback documentation. • 0.5 FTE TFG staff • Time to support analyst’s research on usage and cost collection, make adjustments and corrections to cost accounting, produce reports • Half-time trainer • 3 months to prepare curriculum for Product Managers, then deliver training • Product Managers • 20% of their time devoted to learning to be cost and business managers • 0.25 FTE from IPG • Work with Product Managers and SAMs to develop service segmentation for selected services • SAMs • Time to research customer information needs, one SAM acts as the lead to collect and refine the requirements, over see implementation of requirements into the Service Catalog, or provided to TFG or another responsible party. • Developers • Spend portion of time making revisions to Service Catalog

16. Components of ITIL: Service Desk 4.0 Maturity Model Overview

17. Capability Maturity Scoring • The general guidelines for scoring the maturity of Chargeback follow the standard CMMI structure, aligned with the nature of the Chargeback activities Increasing Level of Maturity

18. Chargeback Capability/Maturity Model

19. Components of ITIL: Service Desk 5.0 Appendix

20. Dimension 1: Service Maturity / Service Definition Example

21. Dimension 1: Service Maturity / Service Catalog Tiering

22. Dimension 2: Usage Measurement / Allocation Example

23. Dimension 3: Service Cost Management / Cost Granularity

24. Dimension 5: Service/Cost Management / Service Management

25. Revised Chargeback Cost Framework

26. Dimension 1: Service Maturity

27. Dimension 2: Service Usage Management

28. Dimension 3: Service Usage Management

29. Dimension 4: Chargeback Administration

30. Dimension 5: Service/Cost Management

31. Challenges for Chargeback from ISB Chargeback Subcommittee