Strategic

IT Planning
WS 2013/14

Final Report

Project 2: IT Outsourcing Company

Team Members:
Ravi Kiran Khareedi, Rakesh Murthy,
Santosh Kumar Rajaguru, Daniel Senf,
Akash Suman

Table of Contents
1. INTRODUCTION ................................................................................................................................ 3
2. PROJECT DESCRIPTION ..................................................................................................................... 3
2A. PROBLEM DEFINITION ............................................................................................................................. 3
2B. TASK DESCRIPTION .................................................................................................................................. 3
2C. COBIT .................................................................................................................................................. 4
2D. INFORMATION TECHNOLOGY INFRASTRUCTURE LIBRARY (ITIL) ....................................................................... 4
3. GOALS AND OBJECTIVES: .................................................................................................................. 5
3A. BUSINESS GOALS .................................................................................................................................... 5
3B. IT GOALS AND PROCESSES ........................................................................................................................ 5
3C. CRITICAL SUCCESS FACTORS ...................................................................................................................... 7
4. BUSINESS ARCHITECTURE ................................................................................................................. 8
4A. PROJECT PLAN ....................................................................................................................................... 8
4B. ORGANIZATION CHART ............................................................................................................................ 8
4C. VALUE CHAIN DIAGRAM ........................................................................................................................... 9
4D. PROCESS CHAIN DIAGRAMS (SERVICE SUPPORT AND SERVICE DELIVERY) ........................................................ 10
4E. SWOT ............................................................................................................................................... 16
4F. RISK MANAGEMENT MATRIX FRAMEWORK ............................................................................................... 17
5. IT ARCHITECTURE ........................................................................................................................... 19
5A. IT MASTER PLAN .................................................................................................................................. 19
5B. APPLICATION ARCHITECTURE .................................................................................................................. 19
5C. BALANCE SCORE CARD ........................................................................................................................... 21
5D. IT ROAD MAP ...................................................................................................................................... 21
5E. MILESTONES ........................................................................................................................................ 23
6. CONCLUSION .................................................................................................................................. 24

1. Introduction
In order to achieve Business goals of a company, Strategy plays as one of the most important key
role. Building proper strategy is key to success in reaching business goals. As IT Consultant
Company, our job is to build and deliver strategy to our clients based on their business goals they
want to achieve.
2. Project Description
2a. Problem Definition

The company offers IT outsourcing services. The company has different industrial customers in
European countries especially in the logistics business. The business strategy of the next five
years is focused on the development of a software and IT-service production unit (software
development and offshore services) in Asia (India, Malaysia).
As a general ambition the company wants to cut IT production costs by at least 25% within the
next 3 years. The company owns a subsidiary in India, where 60 people are working. According
to the future business plan the company wants to employ about 800 new staff members and tries
also to expand activities to other Asian countries. Within the next 5 years high investments will
be done in this area.
The overall integration of the development and service processes in regarded as a key success
factor to reach the objectives. The task of your team is to plan the IT strategy to match the
business development plans.

2b. Task Description

The task of the project team is to develop a strategic IT plan for the client company. This plan
includes an IT target structure, and IT strategy, a strategy implementation in form of roadmap
and the plan of tactical steps.

2c. COBIT

Control Objectives for Information and related Technology (COBIT) provides good practices
across a domain and process framework and presents activities in a manageable and logical
structure. They are strongly focused more on control, less on execution. These practices will help
optimize IT-enabled investments, ensure service delivery and provide a measure against which to
judge when things do go wrong.
In this project we use COBIT to align business goals to IT goals. Business Goals are mapped to
business processes and these business processes are mapped to IT processes using COBIT. This
is a very necessary and important task to meet the clients objectives.
2d. Information Technology Infrastructure Library (ITIL)
ITIL is a set of practices for IT service management (ITSM) that focuses on aligning IT services
with the needs of business. ITIL describes processes, procedures, tasks and checklists that are not
organization-specific, used by an organization for establishing integration with the organization's strategy,
delivering value and maintaining a minimum level of competency. It allows the organization to establish a
baseline from which it can plan, implement and measure. It is used to demonstrate compliance and to
measure improvement.
The tasks of ITIL:

ITIL describes a systematic, professional procedure for the management of IT services. The
library emphatically puts the emphasis on the importance of meeting the corporate requirements
from the commercial aspect.
The necessary prerequisite for this is the unconditional willingness to accept change in respect of
a customer and a service-orientated approach. In many companies this requires a change in the
existing behavioral culture.
The aim, with the help of ITIL, is to also create a clear world of definitions in the service
management area and to consequently simplify the communication.

Adopting ITIL can offer users a huge range of benefits that include:

Improved IT services

Reduced costs

Improved customer satisfaction through a more professional approach to service delivery

Improved productivity

Improved use of skills and experience

Improved delivery of third party service.

3. Goals and Objectives:

3a. Business Goals

According to the in 2 b. Task Description mentioned business development plans; the supporting
Business Goals have to be found. The following list shows the supporting Business Goals for the
project.

4. Improve customer orientation and service,

6. Establish service continuity and availability,
8. Achieve cost optimization of service delivery,
10. Improve and maintain business process functionality,
11. Lower process costs,
14. Manage business change,
15. Improve and maintain operational and staff productivity,
17. Acquire and maintain skilled and motivated people.

3b. IT Goals and Processes

Using COBIT the before presented Business Goals can be mapped to IT Goals and afterwards also to IT
Processes. The IT Goals and IT Processes will help to find every needed project for the strategy
implementation and the list of needed projects. The following lists show all identified IT Goals and IT
Processes.
IT Goals:

1. Respond to business requirements in alignment with the business strategy.

3. Ensure satisfaction of end users with service offerings and service levels.
5. Create IT agility.
6. Define how business functional and control requirements are translated in effective and
efficient automated solutions.
7. Acquire and maintain integrated and standardized application systems.
8. Acquire and maintain an integrated and standardized IT infrastructure.
9. Acquire and maintain IT skills that respond to the IT strategy.
10. Ensure mutual satisfaction of third-party relationships.
11. Ensure seamless integration of applications into business processes.
13. Ensure proper use and performance of the applications and technology solutions.
15. Optimize the IT infrastructure, resources and capabilities.
16. Reduce solution and service delivery defects and rework.
22. Ensure minimum business impact in the event of an IT service disruption or change.
23. Make sure that IT services are available as required.
24. Improve ITs cost-efficiency and its contribution to business profitability.
28. Ensure that IT demonstrates cost-efficient service quality, continuous improvement and
readiness for future change.

IT Processes:

PO1 Define a strategic IT plan.

PO2 Define the information architecture.
PO3 Determine Technological Direction
PO4 Define the IT processes, organization and relationships.
PO5 Manage the IT investment.
PO6 Communicate Management Aims and Direction
PO7 Manage IT human resources.
PO8 Manage quality.
PO10 Manage projects.
AI1 Identify automated solutions.
AI2 Acquire and Maintain Application Software
AI3 Acquire and Maintain Technology Infrastructure
AI4 Enable operation and use.
AI5 Procure IT Resources
AI6 Manage changes.
AI7 Install and accredit solutions and changes.
DS1 Define and manage service levels.
DS2 Manage third-party services.
DS3 Manage performance and capacity.
DS4 Ensure continuous service.
DS6 Identify and allocate costs.
DS7 Educate and train users.
DS8 Manage service desk and incidents.
DS9 Manage the Configuration
DS10 Manage problems.
DS12 Manage the physical environment.
DS13 Manage operations.
ME1 Monitor and evaluate IT performance.
ME4 Provide IT governance.

3c. Critical Success Factors

The Critical Success Factors are factors, which have to be taken into account while developing the IT
strategy. They support the business plan objectives dramatically. The impact of every single Critical
Success Factor on a business plan objective is different. So it is required, that the importance and also the
priority of a Critical Success Factor for a business plan objective is calculated. The overall importance
measures the importance of the Critical Success Factor for the IT Strategy. The following table shows this
calculation for this particular project.

Objective
Cost
Reduction
by 25%

Importance

Factor

Weight

Hire 800
Employees

Importance

Factor

Weight

Sum

Integration

Effect
medium

15

Effect
medium

15

30

Standardized
Model

Effect
medium

12

Effect
medium

12

24

Skilled
Persons

Effect
medium

15

Effect
medium

15

30

Structured on
Business
Process for
entire
Organization

Effect
medium

Effect
medium

18

CSF

Figure 3c: Critical Success Factor

4. Business Architecture
4a. Project Plan
The project plan provides an overview over the project, done by the project team. It contains the done
activities and the time schedule. For the project plan see the additional material.
4b. Organization Chart
An organization chart shows the structure of the organization and the relationship between the various
departments. At first, let us focus on the organization of the company. Figure shows the organization
chart.

Figure 4b: Organization Chart

The company is controlled and managed by CEO, CFO, and Board of directors who is in the top of the
structure. The organization is mainly divided five departments namely, Service Unit, Delivery Unit, Sales
Department, Human Resource Department and Finance Department.

The ITIL processes for Service Delivery and Support are implemented by the Service and Delivery Unit.
The software development is in Asia which provides offshore services to its clients.
The main branch of the Human Resource department is in Europe which monitors and guides the
activities of its subsidiaries in Asia.

4c. Value Chain Diagram

Value chain diagrams describe the processes, which add value to the company. The diagram below
depicts the value chain of our organization.

Service
Management

Delivery
Management

Sales
Management

Incident
Management

Problem
Management

Sales Planning

Service Desk

Change
Management

Demand
Management

Availability
Management

Release
Management

Results &
Reporting

Figure 4b: Value Chain Diagram.

These are primary and secondary processes defined. The Service Management and Delivery management
processes are responsible for the ITIL process implementation in the company.

4d. Process Chain Diagrams (Service support and Service Delivery)

For an IT outsourcing company, providing proper services to their customers plays an important
role to achieve success. Since, our client is an IT Outsourcing Company providing services to their
customers, defining a proper service support process is very much necessary. To ensure our clients
customers have an access to appropriate services to support their business goals, we suggest following the
following service support management structure:
Service
Management

Service Desk

Problem
Management

Incident
Management

Change and Release

Management

Figure 4d: Service Support Management Processes.

However, with respect to our clients business objective, its neccesary to define Service desk process,
Incident Management Process and Problem Management process.

Service Desk Process

Service desk is a first point of contact between our client (i.e.IT Out-Sourcing Company) and
their clients. Service desk extends a wide range of services to the application users. Along with handling
Incidents and problems, it also provides interface to other process like change requests, Service level
Management and configuration management. Figure 4d (a) shows proposed service desk process.
Service process goes like this:
1. Customer calls with a problem
2. Service desk employee reviews the problem and if possible guides user in resolving the problem
and close the issue.
3. However, if he cannot resolve the problem, he raises it as an incident and identifies and assigns
the issue to L2/L3 teams, who can solve the problem.
4. Once, the problem is solved service desk will confirm with the user and closes the issue.
Since, most of our clients customers are located in Europe; we would recommend this process to
be set up in our clients European offices.

Customer or
User calls with
Problem

Service Desk
Employee Access
and review issue
SD Employee
raise new
Incident Record

Link the issue to

existing issue

Guides the User with

resolving steps

Identifies and assign

the issue to Resolver
L2/L3 group

Closes the issue

Confirm with user

Service desk to
Incident Management
teams

Figure 4d (a): Service Desk Process.

Incident Management Process
This process should have an interface with the service desk. The main goal of this process is to
restore the normal service operation as soon as possible and minimize the adverse impact on business
operations of our clients customers. This result of this process should not breach Service Level
Agreement. An incident is customers problem delegated to Level 2 / Level 3 teams by service desk. To
handle the delegated Incident following Incident management process is proposed and shown in figure 4d
(b).
Incident process goes like this:
1. Incident is received by respective team from service desk via interface.
2. Incident is then assigned to a problem resolving specialist.
3. Specialists resolve the incident and request service desk employee to confirm with customer,
whether problem is solved and requests for closing the issue.
4. However, if specialists identify any change is required in the applications which a customer is
using. Then, specialist defines a project to implement change and delegate it to a problem
management teams.

5. Implementing such changes could reduce the number of incidents occurring in the applications
which a customer is using.
Since, this process has to maintain SLA and result in solving customers problem as soon as
possible. This process also needs to be setup in our clients (i.e. Outsourcing company) European
office unit.

Service Desk to
Incident Management
Teams

Incident closure
request to service
desk

Service Desk Identify

and transfer issue to
respective resolving
L2/L3 team

Identify any changes

required

Define a project to
implement the
required Changes

Incident is assigned
to Specialist

Specialist checks and

fix the issue

Project Delegated to
Problem management
team( Development
Team)

Figure 4d (b): Incident Management process.

Problem Management Process

The main goal of this process is to minimize the impacts of Incidents and problems on the
customers business and prevent the recurrence of Incidents. To achieve this goal, this process will try to
identify the root cause of incidents and initiate proper actions to improve or correct the situations.
Problem Management process solves problem in response to one or more incidents or it involves in
identifying and solving the known errors before incidents occur again. Hence, for our client to provide
their customer a better service, we are proposing the Problem management process as shown in figure 4d
(c).

Problem Management Process goes like this:

1. Recurring problems are defined assigned to problem management team by the Incident
Management teams.
2. Problem is then assigned to a specialist and is reviewed. Once reviewed, the problem is
prioritized and investigated for root cause.
3. If root cause is identified, then, Implementation of code is done to fix the problem.
4. New code is tested and new version of application is created.
5. New version of software is now delegated to change and release management team.
This is a long process and hence time consuming. This process need produce its result on priority. Hence,
this process can be setup in any location by our client. However, with respect to our clients business
objectives, we as a consultant will suggest our client to setup this process in Asian countries.

Problem defined by
Incident Management
teams

New project to fix

defined Problem is
initiated

Review the project if there is

already project going on for
newly arrived problem

Problem assigned to
specialist and
reviewed

Investigate and
Diagnose Problem

Problem is
prioritised

Root cause
identified

Implement Code to
Fix the problem

Test the code

Delegate the Change

to Change and
Release...

Create a new version

software

Problem Management
to Change and
Release Management

Figure 4d (c): Problem Management process.

Service delivery Process

This depicts the detailed process flow of Delivery unit. This is described by an Event Driven Process
Chain, where state is responsible for allowing the activity to move further. This modeling is achieved by
Aris framework.
Our client is an IT-Outsourcing company. Hence, the service delivery unit should adhere to the IT
Infrastructure library standards (ITIL). This unit supports the business functions such as problem
Management, Release Management.
When recurring occurrences of the identical errors should be categorized and rectified by this business
function. As this delivery process will consume the inputs from the incident management function and
will provide the bug free product, it contains the processes as follows.
The figure below describes the design phase. This gathers the information and defines the scope of the
requirement.

Business Analyst

Information
collection

requirement
collected.

Project Manager and

Technical Leads

System Requirement
Check

Scope Defining

Not Feasible
Scope defined

Priortize
Requirements

Figure 4d(d): Delivery Process figure 1

The below figure consists of the designing of business requirements and functional requirements. On
completion of the design of the requirements it moves to implementation phase.
High Level designing

Business
requirements not
covered

High level
designing
completed
Implementation

Low level designing

Functional
requirements not
covered

Low level Design

Completed

Figure 4d(e): Delivery Process figure 2

After implementing the requirements, it should be checked. According to, Release management business
function the release of the current version should be working fine according to other functionalities.
Unit Testing

Implementation

Bug detected

Bug Free

Integration Testing

Met
Requirements
satisifaction

Not meeting
requirements

System and
Acceptance Testing

Not Passed

Passed

Deployment

Figure 4d(f): Delivery Process figure 3

These above activities will help to achieve the business functionality, by which our client can achieve the
business goals.

4e. SWOT
Definition: - SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to
evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in
a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It
involves specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective.
Strength:

One of the top companies of Service provider in Europe

Focused management towards increase of market share
Quick response team in Incident management for both Asian/European customers
More focus on Process Delivery Functionality
Strong reputation in international market
Strong and detailed organization structure

Weakness:

Training New staff according to Asia/European Norms

Time Taking in Adapting European customers needs and requirements
Lack of efficient communication among various departments
Huge workload in Response management team on Asia/European team

Opportunities:

Expanding Business in Asian Countries

Providing solutions to wider group of customers around the globe
Acquiring new Investors
Providing Services as per market demands
Improvement in process by adoption of new frameworks
Integration of various process flows
Adoption of new technologies

Threats:

Competing in Asian Market with similar service providers

Changing Trends and Customer Service Demands
Confliction of Laws Changing Government regulatory policies
One of the most competitive sectors
Fluctuations in international stocks

Figure 4e: SWOT Analysis.

4f. Risk Management Matrix Framework

Definition: - It is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the
effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical
application of resources to minimize, monitor, and control the probability and/or impact of unfortunate
events or to maximize the realization of opportunities.
Framework is just a standard model stating our approach to Risk Management. Whereas the Matrix
shows identified risk along with their Impact level.

Explanation for Matrix

Factors
1.
2.
3.
4.
5.
6.

Establishing New Development Unit

Closing of German Development unit
Recruiting New Employees
Service level Agreement
Foreign Policies
Investor/Stakeholders Involvement

Risk
1. While Establishing New development unit the risk is of Infrastructure
i) How well the office environment is going to be.
ii) Finding suitable location
iii) power supply
iv) electronic equipments (Computers, Internet, Communication Links)
2. Closing of German development unit would result in Workload Dissipation
i) Huge amount of workload would be on European client side which cannot be transferred to
Asian client side for quick processing & response. Hence it has to be there.
3. Recruiting is not a big issue as for an outsourcing company as because a lot of manpower are
available not much qualification is needed.
4. In Some cases candidates want to be permanent some want to leave after a while so company
approach would be hiring on contract basis.
5. Very few policies contradict within a business of overseas. If it occurs alternative design are
available to overcome it.
6. Investors sometimes dont appreciate the idea or the strategy & want to alter it. In such case take
them into confidence by showing better previous result
Verdict:In Totality 1st, 3rd, 4th points are at low risk 2nd point is at high risk and rest is at medium risk.
Hence a minimum risk approach is established.

Figure 4f: Risk Analysis

5. IT Architecture
5a. IT Master Plan
IT Master plan is developed as the part of the IT Architecture. IT describes which process is implemented
by which organizational unit and which application. We have to come up with the suitable applications to
implements our processes.

ORGANISATIONAL
UNIT

The chart below shows the IT Master plan of the organization.

Sales
HR
Finance

Sales
Planning
SAP ERP
Operations

PROCESSES
People
Payroll
Management

Service
Management

Delivery
Management

BMC Remedy
ARSXLink

BMC Remedy
ARSXLink

ERP HCM
ERP
Financials

Service &
Delivery

We have mainly used the SAP ERP modules and BMC Remedy Suite.
SAP ERP Operations handles the Sales and Service related processes within the company. SAP Human
Capital Management (SAP HCM) takes care of the Human Resource Activities like Recruiting, Talent
Management and end user maintenance. SAP Finance handles all the accounts, travel management and
cash flow related processes. BMC Remedy is a support and system maintenance suite, which provides
extensive set of features for IT Service Management. The ITIL processes are implemented by BMC
Remedy. The interface between the BMC Solution and SAP ERP modules is provided by ARSXLink.
This is a standardized interface and certified by both SAP and BMC.

5b. Application Architecture

According to the outsourcing point of view, we have used Service oriented architectural design.
This will use the BMC ITIL suite and Enterprise resource planning (ERP), which will support
the business process in IT level. This BMC application will provide a common platform for the
services, which are led by the delivery and support business functions. The Enterprise Service
Bus will be used to connect the applications to the processes. It also validates the flow of data
from the back end to the application layer. We have used the ARSXLink, Action Request
Systems and all XML (SOAP) compatible systems, for exchange data between BMC, ERP and
management systems. This provides quick end to end process through effective integration. This
platform provides exchange of business data between services as well as with in services. It
provides bi-directional and synchronous data exchange with the applications.

The above figure depicts the processes of respective organizational units which are relevant for
the current phase. This can be further extendable for the subsequent phases.

This section describes the architecture which we have used in our architectural design.

Figure: Application Architecture

5c. Balance Score Card

5d. IT Road Map

IT Road Map shows various applications that have to be deployed according to the timeline.
Figure 5d shows our proposed roadmap to our client (i.e. Outsourcing Company). Since our clients
business objective is long term objectives, timeline of the roadmap is from 2014 till 2019. The
applications are deployed with respect to business objectives and priority of deployment of the respective
application.

IT Road Map is explained as below:

1. As one of the major business objectives of our client is to expand the business to Asian countries,
first priority is to setup a Human Resource Unit in the region where they are planning to expand.
And hence, SAP Human Capital Management (SAP HCM) which takes care of the Human
Resource Activities like Recruiting, Talent Management and end user maintenance has to be
deployed at first place.
2. Once the HR unit is established, we have all the necessary resources to carry out our clients
services to their customers and thus need to setup Service and Delivery unit. Hence, SAP
Solution Manager which provides extensive set of features for IT Service Management has to be
deployed.
3. As the normal functioning of Service and delivery unit progress. Sales unit has to be setup to
bring more and more customers towards or clients company. Hence, SAP ERP Operation
application is deployed. This SAP application will helps our client to carry out their sales and
services process.
4. Once all the above units mentioned are deployed, Finance unit has to be setup. SAP ERP Finance
that handles all the accounts, travel management and cash flow related processes of our client is
deployed.

Figure 5d: IT Road Map

5e. Milestones

While working on the project, not every milestone was done in time. To provide a rough overview over
the progress of the project, a milestone analysis is used.

Figure 5e: Milestones

6. Conclusion
Consultant Perspective:
We have successfully developed an IT strategy to achieve the business goals of the organization.
Firstly we have come up with the future landscape of business architecture which includes the
organization chart, value chain and the process chain. The business architecture is developed
using the ITIL framework which defines the processes for Service support and delivery. Then we
have come up with the IT Architecture using SOA approach which includes all the application
modules and the order in which it has to be implemented. We have identified the risks involved
in implementing this strategy and defined the balance score card to which is a performance
measurement tool.
Student Perspective:
We have successfully developed an IT Strategy for a fictive company by understanding the
concepts of Strategic IT planning and experiencing the view of a Strategic IT consultant. Along
with the mentioned benefits, we gained exposure by working in a team of international students.