Why is Shell using the IT4IT™ Standard for managing the business of IT?

The IT4IT Reference Architecture, an Open Group standard, is designed to help IT managers and CIOs manage the business of IT in a multi-supplier environment. Among the early adopters of the reference architecture is oil industry company Royal Dutch Shell. Shell has worked with The Open Group IT4IT Forum to share expertise and jointly design an integrated model for managing the business of IT.

Challenges for the new IT service broker

IT4IT Standard for managing the business of IT

Perfect Storm – IT4IT

The role of IT in the business is elevated from being a support function to an enabler to drive innovation, enhancing competitive advantage, boost productivity, and reduce cost by applying new innovative technology. Like many larger enterprises, Shell faces challenges around matching their IT capabilities to changing business needs, and reducing IT spend while delivering IT solutions faster.  Trends like cloud, mobile, the Internet of Things (IoT) and big data are changing how businesses connect with consumers and enable new business models. However, these new technology trends, such as big data and cloud, can only provide value to the business if these can be properly implemented and managed.

The challenge is that the organization need to everything at the same time: reduce IT costs significantly, while fulfilling the increasing business demands at a faster speed – also leveraging the capabilities of digital IT to enable new business models. At Shell, similar to other larger enterprise, a number of disruptive IT technologies or ecosystem changes are identified affecting existing IT management capabilities such as:

  • Cloud computing e.g. SAAS, PAAS and IAAS
  • Mobile
  • Big data
  • IT consumerization
  • Internet of Things
  • API economy

At the same time the complexity as well as the volume of IT activities will increase significantly the coming years:

  • Escalating number of devices connected to the network
  • Accelerating number of interfaces between applications and external parties
  • Increasing volume of enhancements, changes and releases (due to continuous delivery)
  • Increasing security risks; and the need to act more quickly
  • Increasing number of external service providers (a more complex IT ecosystem)
  • Growing consumption and usage of IT resources (e.g., more transactions, more storage, etc.)

All these trends and movements combined results in a changing IT ecosystem in which the Shell IT organization must become more responsive, agile, and cost-effective service broker. As highlighted by Mary Jarrett (IT4IT Manager at Shell) in her presentation at The Open Group launch of the IT4IT Reference Architecture in October 2015:

“IT needs to become quicker, easier to use, perform well every day, and do that at lower cost and risk.”

Shell has realized that to manage this more agile and fast changing IT ecosystem a fundamentally different approach is needed to IT management. These trends raise the demand for more consolidated and automated IT management capabilities also referred to as IT for IT (now referred to as IT4IT). A new IT operating model is needed to manage the new IT reality.

From the old to a new integrated approach

Because of the lack of applicable standards in the market, Shell has for the last decade developed its own IT management architecture and blueprint to improve and standardize the IT function (similar as any other larger IT organization). This blueprint consisted of a common process model, IT data model, and IT management tool architecture. Best practices such as ITIL, COBIT, SCRUM, and PMBOK Guide were combined to provide a standard delivery model of how to operate IT. However, the implementation of the tools needed to support this IT operating model required a lot of customization and maintenance effort.

During a large outsourcing initiative in 2008, the majority of the IT infrastructure was outsourced to three global external service providers. Shell had to develop its own interfaces to collaborate and integrate with these providers in order to exchange incidents, changes, consumption, and IT costs data – this all due to the lack of open and standard integrations to collaborate with external service providers.

There is still a lot of effort involved in the design, configuration, integration, and maintenance of IT management tools. Multiple tools from different vendors are needed to manage the IT estate through its end-to-end lifecycle. Often tools from different vendors (or even from the same vendor) do not integrate well and each vendor has its own proprietary data models, which makes it difficult to share information to improve transparency and support decision-making. Although there are many IT standards and frameworks such as ITIL and COBIT, a major gap remains: each vendor has chosen its own way for how these IT processes are actually performed.

As the CIO at Shell global functions, said: “In our industry, control of the end-to-end IT value chain is mandatory. That includes effective and dynamic management of a multi-sourced landscape, which can only become a cost-efficient and high-quality reality with the right level of standardization. Lack of IT integration and workload interoperability is pushing enterprises such as Royal Dutch Shell to collaborate with IT providers to develop standards”

In 2011, Shell decided to change their approach and initiated discussions with different vendors and IT organizations to jointly design a comprehensive and integrated model for managing the business of IT and to deal with the challenges identified.  This arrangement paved the way for Shell and several other companies to share their expertise.  Significant progress has been made since on the IT4IT initiative, and in fact we are on the verge of seeing an open standard for IT management come into place.

Shell benefits from this work in various ways e.g. by enabling crucially needed interoperability in multi–‐vendor ecosystems and gaining a much deeper insight into what is  happening in the IT function that will highlight opportunities for cost improvement, quality enhancement and risk reduction.  The IT4IT standard from The Open Group will drive a change in the market that will enable Shell to consume IT management capabilities as a service and to streamline future sourcing decision.

Now the next sourcing wave is coming in which IT services are moving to the public cloud. As result the number of service providers in the IT ecosystem will significantly increase, requiring a different approach for service brokering, integration, and orchestration. With this cloud enablement, a similar challenge as in 2008 is becoming apparent. In this new IT ecosystem automation and integration is becoming even more important, such as automated testing, automated deployment, and provisioning. That is why The Open Group IT4IT Reference Architecture is becoming essential. Shell realizes that it must adopt the IT4IT open market standards to provide these integrated capabilities to manage the IT function.

The new IT4IT standard provides the necessary guidance of how to implement a new IT operating model to enable the new IT management paradigms such as:

  • DevOps
  • Lean and agile development
  • Continuous integration and continuous delivery
  • Significantly automate IT activities such as automated build, test, deploy, monitor and automated recovery

The value of the IT4IT Reference Architecture

The IT4IT Reference Architecture describes how the new IT function should be managed to optimize the value of IT for the business. The IT4IT Reference Architecture enables a more streamlined, transparent and automated IT function across the entire IT value chain. This standard helps the IT organization to transition to a lead and agile service broker, enabling the following benefits:

  • Increased value of IT investments for the business
  • Ability to respond and deliver faster to business needs
  • Reduce cost of IT by automating IT activities and standardize the IT service portfolio
  • Reduce risks of IT
  • Improve transparency and traceability supporting continuous improvement

Next step

If you want to know more about the IT4IT Reference Architecture please read the IT4IT management guide and other official IT4IT publications of The Open Group.

IT4IT® is a registered trademark of The Open Group

Link to the management guide:

IT4IT StandardTitle: IT4IT™ for Managing the Business of IT – A Management Guide
Author: Rob Akershoek et al.
ISBN: 9789401800310
Price: € 23,50 (VAT tax.)

https://www.vanharen.net/shop/it4it-for-managing-the-business-of-it-a-management-guide/