Service Based Delivery Model : Managed Services Approach

Theme
Strategic & Innovative Practices Portfolio, Programs & Project (PPP) Management for redefining
India: Management of large and unique projects and programs
Keywords
Managed services framework, Continual Service Improvement (CSI), Risk Priority Number (RPN)

Abstract
The success of large scale infrastructure and application management program mainly revolves around
understanding business impact due to disruption of services and ensuring seamless execution to meet
the business objectives first time and every time.
The most common challenges faced by any new large support engagement are:
1. Ambiguity on demand and expected service levels
2. Knowledge of application stability and availability
3. Estimated resource pooling
4. Maturity of the service management framework and tools
5. Commitment for YoY service improvement
6. Providing value to business from IT
In Cognizant, a rigorous project management framework is followed to handle large managed service
programs. This is essentially an ITIL oriented, service based delivery model and an aggregation of ITIL
best practices. The framework revolves around facets such as Continual Service Improvement (CSI),
matured metrics framework to focus on service outcomes, service based audits, SLA/OLA management,
maturity assessment and intervention tracking, effective Service Management Reviews, service based
risk management framework, service based SOP (Standard Operating Procedures) development etc.
The objective of this paper is to highlight the empirical experience in one large infrastructure and
application management program where the essential crux of managed services framework have been
implemented successfully.
Critical business benefits from adopting the framework are:

100% adherence and continual improvement on critical service levels

Effective governance mechanism and timely risk mitigation

Proactive problem management with 0 customer escalation

Marked improvement (~20%) on service maturity index

Annual benefit of $40K realized through CSI implementation

Business acknowledging true value from IT

Contents
Introduction.................................................................................................................................................... 3
Case Background .......................................................................................................................................... 4
Key Challenges ............................................................................................................................................. 4
Proposed Solution ......................................................................................................................................... 5
Enablement ............................................................................................................................................... 7
Contractual Commitment Review and Tracking........................................................................................ 8
Maturity Assessment ................................................................................................................................. 8
Service based delivery .............................................................................................................................. 8
Managed Services tools and Enablers landscape .................................................................................... 9
Engineering Excellence ............................................................................................................................. 9
Continual Service Improvement (CSI) .................................................................................................... 10
Service Management Integration ............................................................................................................ 11
Service based audits/reviews framework ................................................................................................ 11
Repeat issues dashboard ....................................................................................................................... 12
Risk Management ................................................................................................................................... 13
Service Delivery Excellence Score ......................................................................................................... 13
Critical Success factor................................................................................................................................. 14
What Worked / What didnt ......................................................................................................................... 14
Achievements .......................................................................................................................................... 14
Improvement Opportunities ..................................................................................................................... 15
Benefit to business ...................................................................................................................................... 15
Quantitative Benefits ............................................................................................................................... 15
Lessons Learnt: ........................................................................................................................................... 17
Conclusion................................................................................................................................................... 18
Reference .................................................................................................................................................... 18

Introduction
The Information Technology (IT) industry today in India is growing at a tremendous pace. It has spread in
each and every sphere of business domain, be it retail and consumer goods industry, hospitality, travel,
banking and finance, insurance, healthcare, life sciences, communication, entertainment, environment
protection, defense etc. Improving service delivery for citizens is one of the main thrusts in India in its
attempt to reform the service sector. Thereby use of IT is more integrated with life than ever before. The
use of mobile apps and e-tail industry too is growing at fast rate. Social networking sites are allowing
interactions across the globe. Todays life without IT is almost like living in the Ice Age.
With this rapid growth, the need for timely maintenance and round the clock availability of IT enabled
services too are growing at lightning speed. Can we imagine ATM out of order all through the day? Or etail sites like flipkart down for maintenance during gifting seasons like Valentines Day or Diwali? Or even
our most used sites like IRCTC throwing up errors during transactions and booking of tickets while we are
planning for the most coveted vacation destinations during the summer breaks?
Therefore the current industry expects IT to enable their Business as Usual (BAU) not only during
business hours but throughout 24 hours, 7 days a week, thereby increasing their business margins,
market share across the globe.
Given the dimensions and complexities in the current business scenario, the IT enabled services too are
more complicated to get itself aligned with changing business needs. With business growing and going
global, the need for multi-location, multi-tower integrated service delivery model is in demand. The
customers for the IT enabled service providers are looking for further cost optimization on IT services
along with business risk ownership by the IT vendor.

Also is the growing demand for end-to-end

seamless service delivery model catering to services starting from customer infrastructure maintenance,
application support and even new changes implemented which are evolved through ever-changing
business needs and released without disruption of business as usual.
Todays customers expect:
IT services adapt to increased volatility in business environment

Increased variability / ups & downs in business

Scalability to demand

Predictable expenditure

Integrated Service delivery across towers

Accountability

Supplier consolidation and reduced management overhead

Synergy across levels (across L0/L1/L2/L3 support)

Transformational focus

Roadmap for continuous improvements

Leverage best practices across industries

The most common challenges faced by any new large support engagement are:
1. Ambiguity on demand and expected service levels
2. Knowledge of application stability and availability
3. Estimated resource pool
4. Maturity of the service management framework and tools
5. Commitment for YoY service improvement
6. Providing value to business from IT
The objective of this paper is to highlight the empirical experience from one large infrastructure and
application management program where the essential crux of managed services framework have been
implemented successfully.
Case Background
Let us illustrate the successful use of the managed services framework through one case study. This is a
case from the travel and hospitality business domain where Cognizant is entrusted with maintenance and
end-to-end ownership of IT infrastructure of the customer.
The customer in this case is one of the largest players in the aviation industry. Thereby many of the
transactions are business critical. Customer business spans from airline booking, aircraft maintenance,
travel itinerary planning, passenger onboarding and even retail sales during flight.
This is a large engagement and a new logo for Cognizant. This is also a strategic account for the
organization whose success may lead to further expansion of business in the aviation domain.
The engagement is executed out of 4 offshore locations having total resource strength of more than 100.
There are more than 350 applications in scope with 35% categorized as business critical with a multitechnology landscape.
Key Challenges
Some of the key challenges in the engagement are as follows:
a. End-to-end ownership of the customer infrastructure and application portfolio
b. Round the clock service window, seven days a week i.e. 24X7 support.
c.

Partial availability of application knowledgebase during transition

d. Bitter experience of the customer with the incumbent vendor thereby low satisfaction amongst
business users initially
e. Serious liability clauses contracted on IT output based service levels (SLAs)
f.

Highly cost optimized fixed-bid contract, thereby under pressure to execute on low operational
margins

g. Coordination of various towers and levels to ensure seamless service delivery with minimal
impact to business
h. Multi-offshore location based service delivery with minimal onsite present
Proposed Solution
Considering the risks and complexities involved in the engagement, the AVM Managed Services
framework was found to be the most apt framework to adapt during the steady state.
The framework revolves around facets such as Continual Service Improvement (CSI), matured metrics
framework to focus on service outcomes, service based audits, SLA management, service maturity
assessment, risk management framework, and service based SOP (Standard Operating Procedures)
development and few more.
Key Tenets of our Managed Services framework are:
a. SLA Management and optimization
b. Continual Service Improvement
c.

End to-End Service Ownership

d. Service Centric Model

e. Resource Optimization
f.

Service based SOPs (Standard Operating Procedures)

g. Service Management Integration and governance

The basic crux of the framework has been summarized in Fig 1:

Fig 1: Major pillars of Managed Services framework

The Managed Services framework workflow is acombination of both initial onboarding phase and a
gradual steady state phase. The basic workflow of the framework implementation is illustrated through the
workflow diagram given in Fig 2.

Fig 2: Managed Services framework workflow

Let us now briefly discuss the different facets of the framework and how it impacted the success of
service delivery.
Enablement
The teams are new to the managed services framework during the onboarding stage. Resource
enablement was conducted through series of regular training sessions by Academy function. Few
of the examples of such trainings are as below:

Managed services Bootcamp

Managed services tool enablement

CSI and other role based training

Contractual Commitment Review and Tracking

The engagement contract was very vast and segregated into different exhibits. The contract
contained detail definition of SLAs which had liability clauses associated. Not only that the team
was supposed to track and report few more KPIs as well.
In order to address this, the organizational framework for contract obligation management was
adopted. The framework is based on a single integrated system to record contractual
commitments and thereafter measure and report compliance throughout the life of the contract. It
also helped to identify and report performance volatility that is potential opportunities for violation
of contracted liability clauses. It also served to act as an early warning system to the
management on potential contractual risks and key feeder for risk management and timely
mitigation planning.

Fig 3: High level Contractual Commitment Review and Tracking Workflow

Maturity Assessment
This was a new logo for the organization and it was imperative to ascertain the as-is service
quality and work towards better and more matured service delivery.
The maturity assessment framework is designed to determine the maturity of the engagement
and design a transformation journey to take the engagement from the current level to next higher
levels of maturity e.g. from staff augmentation to more business critical maturity levels.
The output from assessment (interventions) was baselined according to the different
transformation leavers and presented to the customer for agreement. Finally these were tracked
for planning and implementation through an organizational web-based portal.
Service based delivery
The customer had bitter experience with the incumbent vendor in terms of service quality. Also
very little knowledge base was available for the team during the knowledge transition phase.
In order to ensure ready availability of adequate knowledge base, service based SOPs were
developed and base lined.
To ensure seamless service delivery, the organizational Managed Services framework was
adopted. This is essentially an ITIL oriented, service based delivery model and an aggregation of
ITIL and organizational best practices.

The framework segregates the engagement activities and responsibilities into services to be
delivered. Once service definition is complete (service discovery), the major KPIs i.e. the Key
Performance Indicators were derived as a measure for successful delivery. These services and
KPIs were then base lined along with agreement of customer.
The entire tracking and reporting of base lined KPIs and corresponding effort were made in an
organizational proprietary tool for project/service management tracking and reporting.

Fig 4: ITIL Framework

Fig 5: Tool set-up high level workflow

Managed Services tools and Enablers landscape

The managed services engagement adopted from a suite of AVM tools and enablers prescribed
based on the applicable scope. Some of the tools were third party tools (such as Service Now,
CAST, Minitab etc.) while others are organizational proprietary tools.
The adoption and usage of such tools improved the service delivery quality and provided more
value to the customer and thereby helped in promoting engagement maturity to the next level.
Engineering Excellence
The engagement had more than 350 applications in scope, out of which around 35% were
categorized as business critical. It was absolutely necessary to determine the as-is application
code quality. In order to ascertain the code quality, engineering excellence, which is a collection
of design and coding best practices called CEPs (Core Engineering Practices) were adopted.
These CEPs consists of both coding practices as well as adoption of prescribed technology
specific tool sets.

Once adopted, the teams underwent regular code quality compliance audits. The output from
audits was tracked as engineering excellence score, based on the extent of framework adoption
against the organizational set benchmark.
Continual Service Improvement (CSI)
This engagement, being a strategic one, retention of services and customer as a whole was a
very critical factor. In todays scenario, most of the revenue comes from repeat business. To
retain these customers as well as to get into new customer contracts we need to deliver more
value and that too in a systematic and strategic manner. Organizational framework of CSI, which
would help in continually improving service capability by using structured process, had been
adopted.
The inputs to CSI was from VoC, CSS, SLA variability study, maturity assessment interventions,
existing themes adoption from organizational CSI catalogues etc. The team was facing issues in
meeting the resolution time SLA, high ticket backlog volume etc. CSI themes were identified to
resolve these issues.
The entire onboarding, tracking and closure of CSI initiatives or themes were handled through a
single organizational portal (CSI portal).

Fig 6: CSI Implementation workflow

Theme execution basically follows the lean six-sigma principle of DMAIC/PDCA.

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Fig 7: DMAIC cycle

Fig 8: PDCA cycle

Service Management Integration

Effective, transparent and timely stakeholder communication is a key success-factor. Teams set
up periodic (daily/weekly/monthly/quarterly etc.) governance with all vendors and other
stakeholders to ensure end-to-end ownership of IT related business disruption and their faster
resolution.
Service based audits/reviews framework
In order to ensure service delivery quality compliance and timely notification of impediments /
risks / issues, organizational review and audits framework was adopted for this engagement.
Based on the applicable services in scope, appropriate service based audit framework was
adopted in the engagement. The audit was conducted based on standardized service audit
checklist.
The output from service audits was reflected using service excellence score which is an
aggregation of engagement service delivery scenario against the expected compliance and its
excellence.
The measures, metrics and their corresponding data quality (DQ) compliance were monitored
through regular DQ reviews.
Service Management Reviews (SMRs) were conducted using a specified and agreed upon format
on a month on month basis. These reviews were attended by all relevant stakeholders including
members from service delivery leadership.
Based on the output from service excellence scores, it shows a marked improvement of around
20% within a span of 1 year, signifying service delivery excellence and alignment to customer
expectation.

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Table 1

Chart 1: Improvement Trend

Repeat issues dashboard

During initial days of steady state, there were repetitive issues identified during periodic audits
and reviews. Especially issues pertaining to SLA compliance, Knowledge Management,
Operations etc. were on high focus, which could have led to customer escalation.
In order to highlight, reduce and prevent such repetitive issues, special focus was given to service
delivery areas such as to Service Delivery Management, SLA compliance, Service Quality, Lights
on support issues, Operations, Knowledge Management, Knowledge Transition, Business
continuity, Transformation and Continuous service improvements.
Repetitive issues coming out of the above areas from audits/SMRs were reported to practice
management for identifying preventive measures to reduce these issues.
A sample repeat issue dashboard is given in Fig 9.

Fig 9: Sample repeat issue dashboard

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Risk Management
As a part of service audits and SMRs, few high priority operational risks were identified in the
engagement. Risks related to resource availability, service management tool maturity, lack of
knowledge base etc. were potential source of service disruption unless tracked and mitigated
adequately.
In order to manage risks and its impact, organizational risk management methodology was
implemented with appropriate customization. Risk analysis was conducted at the very beginning
of the program, Risk identification is carried out through different assessments and reviews All
identified risks were then logged into the organizational risk repository (Risk Portal) with
appropriate severity, priority and adequacy of control scores, known as Risk Priority
Number(RPN). The entire risk tracking, mitigation planning and reporting mechanism was based
on the identified RPN.
The engagement was categorized as critical based on its appearance in the risk heat map.

Fig 10: Risk Management Workflow

Fig 11: Risk portal workflow & sample Risk Heat map
Service Delivery Excellence Score
Organizational Service Delivery Excellence score mechanism was used as a measure for
tracking and assessing the overall engagement health.

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The project health is based on the compliance against both Maturity and Service Delivery
Performance parameters, some of those have been discussed in the earlier section.
A sample Service Delivery Excellence report is shown in Fig 12:

Fig 12: Service Delivery Excellence report sample

Critical Success factor
Critical success factors for achieving the expected goals for managed service implementation are as
below:

Establish customer buy-in and recognize customer VoC on this transformational journey

To break internal silos and integrate the internal organisation

To buy defined outcomes and not just the service

To cut BAU costs and establish future service quality

To establish organizational leadership focus

Metrics benchmarking for all services in scope and improvement thereafter

What Worked / What didnt

Achievements
The project is in steady state for the last 1.5 years. The achievements till date are many folds. Few of
them are highlighted below:

Before Managed Service implementation, transactional SLAs were only defined for few of the
services like IM and CM. However based on the success of service based metrics tracking, the
team has currently baselined many of the output based metrics (e.g. application availability, FLR,
MTTR, Incident to Problem ratio etc.) as internal KPIs for consistent tracking and reporting to
customer.

Based on interventions from maturity assessment, the engagement has taken up the shortcomings in the existing service management tool (Assyst). Based on the organizational

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recommendations, the customer had agreed replace Assyst with an enterprise level
implementation of Service Now, being much more matured service management tool.

Implementation and extensive usage of tool based KEDB, have resulted in faster resolution of
incidents, thereby improving on the MTTR.

Regular and transparent communications and feedback from all relevant stakeholders at different
stages of engagement support life-cycle helped immensely in removing most of the impediments.

The latest customer satisfaction survey report shows an overall improvement of 30% in the last one year
timeframe. There are various proposals in work in progress status with scope for expand and extend the
current service scope.
Improvement Opportunities

Organizational effort tracking tool could not be implemented because of customer software
restrictions. This has resulted in limitations on effective tool based effort tracking.

Benefit to business

100% adherence and continual improvement on critical service levels through effective demand
management. Output based metrics definition and tracking brings in alignment to business
expectation

Effective governance mechanism and timely risk mitigation through end-to-end focus, risk
management & effective governance

Proactive problem management with 0 customer escalation by aligning services to business

expectation and consistent improvement of quality of services

Marked improvement (~20%) on service excellence maturity through usage of better service
management tools and KEDB

Process Improvement Initiatives through effective usage of CSI framework led to an annual
benefit of $40K realized through CSI implementation

Business acknowledging true value from IT

Quantitative Benefits
Few of the areas where the team is likely to achieve quantitative benefits are through revenue generation
by implementation of CSI, averting financial penalty due to SLA breach, through left shift of L1 activities
etc.

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Below are 2 sample case-studies on benefit realization for reference:

Example 1:
In an attempt to improve the average resolution time for P2 tickets (MTTR i.e. Mean Time to Resolve), the
CSI initiative on KEDB implementation and its effective usage was taken up.
Before improvement, the MTTR value was 3.88 hrs. and was very near to the resolution SLA contracted
for P2 tickets i.e. 4hrs.
P2 SLA breach was a potential cause of financial penalty.
However, after KEDB implementation and through its effective usage, the MTTR figure was improved to
2.5 hrs, much below the set SLA.
This improvement was achieved within 6 months time of managed services onboarding.

Table 2
Chart 2: MTTR improvement
The overall monthly effort saved through MTTR improvement initiative, led to ~$30K annual savings,
resulting in increased engagement profitability.
Example 2:
In the 2nd example, the team had taken up a CSI initiative to improve upon their monthly P3 ticket
backlog.
The measurement metrics was reduction of Backlog Index.
Backlog Index for a month = (Total (Open + Carry Forward - Closed) tickets)/ (Total (Open + Carry
Forward) tickets)
Before Improvement the average Backlog Index was around 0.88.
After solution identification, implementation and control which are basically a process change, the backlog
index was improved to 0.5 i.e. around 56% improvement in 9 months time.

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Table 3

Chart 3

Table 4

Chart 4

The improvement of backlog index improved upon the monthly ticket closure rate to around 56%, leading
to faster turn around and thereby customer satisfaction.
Lessons Learnt
The lesson learnt from this implementation are many fold:
I.

Stakeholder communication is very important in all phases of onboarding, stabilization and steady
state phase of Managed services framework implementation.
Identification of the concerned stakeholders and then designing the right approach for timely
communication can go a long way in identifying the impediments and finally coming up with the
right approach for resolution.

II.

The Managed Services framework should be customized to fit into the needs of the engagement.
The team was exempted from mandatory usage of organizational effort tracking tool. As a work
around the team designed and implemented an internal web based tool for effort tracking. This
tool was ultimately adopted at customer end, as well as identified as one of the best practices.

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Conclusion
The managed services implementation is a never ending process in quest for better service maturity and
providing value to the customer.
This is one of the many success stories of Managed Services framework implementation. It helped
transform the engagement from a service management way to the matured way of Managed Service
mode of execution. It has resulted in business acknowledging and realizing the true value from IT.
The managed services framework can be effectively customized and implemented in similar IT service
delivery engagements. Through effective stakeholder management, early risk mitigation and planning and
tracking of results we can redefine the IT service delivery landscape in India and its typical impediments
for end-to-end support, maturity and customer satisfaction.
Managing expectations, dispelling perceptions and enforcing reality help create a successful partnership
between client and supplier, one of aligned vision and mutual respect.
The success of this framework is not only on process change, but on overall behavioral transformation
amongst engagement leadership as well as each and every stakeholder involved and committed towards
excellence in service delivery.
Reference
I.
AVM Engagement Models
II.

AVM Managed Services Framework Guideline

III.

Cognizants Risk Management guideline

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