The ROI of Problem Management

The ROI of Problem Management
“Achieving tangible benefits through better process and analysis”
Jim Blayney
Director Product Marketing
Diego Jimenez
Senior Solutions Consultant

©2012 FrontRange. All rights reserved. Proprietary & Confidential. 2
ROI of Problem Management
Agenda
What is the “Problem?”
Key Problem Concepts & Functions
Overcoming Common Pitfalls
Key Benefits
Realising Tangible Benefits

The Problem Management Process
(according to ITIL® v3)
A `Problem' is an unknown underlying cause of one or more incidents
The goal of Problem Management is to reduce the number and severity of
incidents and problems on the business
The proactive process identifies and resolves problems before
incidents occur

The Problem Management Process
(according to HDI 2012 Survey)
In 2012, 43.5% of HDI
respondents follow ITIL
for Problem
Management
Percent who followed ITIL® process in 2011 and 2012:
2011 2012
Availability Mgmt. 9.9 10.2
Capacity Mgmt 11.2 9.6
Change Mgmt 56.4 53.1
Configuration Mgmt 28.6 24.2
Financial Mgmt. 6.4 4.3
Incident Mgmt 68.7 63.5
Problem Mgmt 46.2 43.5
Release Mgmt 20.6 20.3

Problem Management is one of the least understood of the processes in
the ITIL framework
Problem Management is (arguably) the most valuable process in the ITIL
framework
Process typically not defined in detail
Never enough resources allocated to make the process fully effective
Requires effective communications between related “silo” groups and
departments
Normally confused with Incident Management

Problem Management
Understanding Key Concepts

Formalize Problem Management processes and measurements
to ensure consistency and rigor for root cause analysis and issue prevention.
Understand the process of how issues discovered by event management tools
get filtered into the IT service desk tool, and look to automate the process.
Employ end-user satisfaction surveys in conjunction with cost analysis and
Operational metrics to obtain a comprehensive understanding of IT service
desk performance.
Problem Management Recommendations
(according to Gartner*)
* Gartner 2008 Data Center Conference Polling Gives Insights Into IT Service Desk Maturity
Problem Management: Key Concepts

Goal:
• Efficiently and rapidly
resolve minor and
major service
disruptions
Business Benefits:
• MTTR can be reduced
• FCR rates can be
improved
• Service and response can
be optimized with
prioritization based on
impact to the business
User
Rapid
Resolution
Service Desk
A Knowledge Base
exists for resolutions
and efficient incident
handling
New Incidents
matched with
related Incidents
Policies, Procedures &
rules for registering
Incidents
Formal
Incident
Capture
Escalation
procedures
facilitate
efficient &
timely
resolution
Incidents are assigned a
category, priority, impact &
urgency
Incident Management: Key Concepts

Goal:
• Eliminate the cause
of recurring and
related service
disruptions
Business Benefits:
• Incident volume is
reduced
• Faster resolution of
Incidents
• Service availability
increases
• Shift from reactive to
proactive delivers
higher value service
Service Desk
Resources with
required resolution
skills are assigned to
determine root
cause
Policies, Procedures &
rules for relating
Incidents to Problems
A Problem is
defined to be the
underlying cause
of 1+ Incidents
Incident data is
routinely analyzed to
identify patterns of
recurring incidents
Problems are
eliminated through
resolution of Root
Cause
IT & Business
Customer
Known Errors are identified
and documented
Problem Management: Key Concepts
Problem Analysis:
• Kepner Tregoe
• LEAN 5 D’s
• 5 why’s (simple, low
level problem solving)
• Why – Why and six
serving men
Root Cause Analysis:
• What is the RCA
Root Cause
Resolution

Activities of Problem Management
The Reactive & Proactive prevention of Problems
•“Problem”
•A condition identified from multiple incidents exhibiting common symptoms, or from a single
significant Incident, indicative of a single error, for which the cause is unknown
Problem Control
•“Problem Control “
•is the activity performed to identify the root cause, which CIs are at fault and to provide
information and advice on Workarounds to the Service Desk
Error Control
•“Known Error”
•A condition identified by successful diagnosis of the root cause of a problem, when it is
confirmed which CI is at fault and a workaround has been identified
•Managing Known Errors through the process of resolution
Problem Reviews
Management Information for Decision Support

How do I know if I have a Problem?
You know you’ve got a Problem when......
Can’t match the Incident to an existing Problem and/or Known Error
Analysis of Incident data indicates you have “recurring” Incidents
Incident Analysis shows Incidents not been matched effectively to the correct
Problems or Known Errors
Analysis of events or symptoms from the IT Infrastructure indicates an
underlying Problem that could potentially lead to Incidents

Problem Control - Activities
Problem Identification and
Recording
RFC and Problem
Resolution and Closure
Problem Investigation and
Diagnosis
Problem Classification
Problem
Tracking &
Monitoring
Problem Control
Problem
Management

Error Control - Activities
Error Identification and
Recording
Error Assessment
Record Error Resolution
Close Error
&
Associated
Problems
Error
Tracking &
Monitoring RFC
Change Implemented
successfully
Error Control
Problem
Management

Outputs from Problem Management
Typical actions and outputs resulting from
Problem Management include:
• Raising an RFC
• Providing feedback regarding testing, procedures,
training and documentation
• Initiating Customer education and training
• Initiating Service Support staff education and
training
• Ensuring adherence to Problem and Incident
Management procedures
• Process or procedural improvement

Can you identify “high impact” recurring Service
events that are costing the organization a
substantial loss in terms of dollars?
Problem
Management
Designated Problem Management Resources: Create a specialty-trained
Problem Management Team
Unique Problem Management Toolset: Separate Incident and Problem
Management Process Tools
Incident Resolution Knowledge Base
CMDB: Build Problem Management around a centralized CMDB so IT can
track known errors against the affected CI and associated Business service
ITIL-based Problem Management

Problem Management
Identifying Common Pitfalls

Lack of proper Skill / Training
No adoption top to bottom
No measurement to show improvement
Incident bouncing
No objectives. Don’t have specific targets
Constraint by framework imposed
Reactive problem not under control – Trying to do proactive mgmt
No problem methodology – not enough why’s
Identifying common pitfalls

Problem Management
Key Benefits

Problem Management - Benefits
Improved Problem Solving Skills / Resolution
• The Problem Management process is based on the concept
of learning from past experience
• The process provides the historical data to identify trends,
and the means of preventing failures and of reducing the
impact of failures, resulting in improved User productivity
Improved First Call Resolution (FCR)
• Problem Management enables improved FCR of Incidents at
the Service Desk
• Improved Knowledge Management database containing
Incident resolution and Workaround data integrated within
the workflow automation of the Support toolset

Problem Management - Benefits
Improved IT service quality
• Problem Management helps generate a cycle of rapidly increasing IT
service quality
• High-quality reliable services are good for the business users of IT
• Improved Service provision and System stability is good for the
productivity and morale of the IT team
Incident volume reduction
• Problem Management is the key to reducing the number of Incidents
that interrupt Services
Permanent Solutions
• There will be a gradual reduction in the number and impact of
Problems and Known Errors as those that are resolved stay resolved

The ROI of Problem Management
Realising Tangible Benefits

Problem Management – Key Metrics
Percentage of Incidents defined as Problems
Number of Incidents related to Problems
Number of Problems and Known Errors created - by status, service, impact, category
Number of Known Errors created
Number of Problems by CI
Number and impact of Incidents occurring before the Problem is resolved and closed
Number of Workarounds or temporary solutions provided
Number of Problems outstanding and expected resolution time
Number of RFC’s issued
Resolution times with respect to Service Level Requirements
Problem Management - Time Investment by Period

Problem Management
Savings Potential How is it Realized?
Team to diagnose
Problems before they impact the business
Integrated Incident, Problem and Knowledge
Toolset that supports ITIL best practice
Increased First Call Resolution
Elimination of underlying problems
reducing Service impacting Incidents
Recurring Incidents Avoided
Incident Handling & Time Reduced
Outbound Calls Avoided
Business Service Interuptions Avoided

ROI Example - Baseline Metric Examples
L1 Staff 14 FTE $50K Salary
L2 Staff 8 FTE $56K Salary
Service Desk Manager 3 FTE $85K Salary
L1 Resolution Rate 63%
L2 Escalation Rate 46%
Annual Incident Volume 10,000
Average Callback length 2 minutes Cost / Call: $0.50
Small Business System Outages 30 per year 30 Minutes
Medium Business System Outages 25 per year 45 Minutes
Large Business System Outages 6 per year 30 Minutes

Problem Management Input

Problem Management ROI Tab
Incident Handling Time Reduced

Problem Management ROI Tab
Out-bound Call Avoided

Calculating ROI
Business Service Interuption Avoided

$2,334 / year or $7K 3 year ROI
Savings Area Potential ROI
Incident Handling Time Reduced
Outbound Call Avoided
Business Service Interuption Avoided
Calculating ROI
Total Savings in first year: $53,969

Intangible Benefits
ROI does not always have to be expressed in financial terms
Survey, survey, survey…
ROI Expressed in intangible benefits such as:
• increased satisfaction of their users
• improved perception of service, etc.
Don’t forget about Customer Satisfaction

Summary
Key Take-aways:
People, Process & Technology
• Measure
• Identify
• Analyze
• Assess “ROI”
• Implement
• Communicate

Thank You!
For more information please find us at
www.frontrange.com

The ROI of Problem Management

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