SaaS service desk application turns IT into BPM guru with strong ROI

By Christina Torode, Senior News Writer 24 Feb 2009 | SearchCIO-Midmarket.com

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Midmarket at a glance Company: Unitus Community Credit Union Headquarters: Portland, Ore. Locations: Eight Employees: 190 IT staff: 18 More on IT Service Management How an ITSM implementation can help in a recession ITIL strategy guide for the midmarket CIO

The heart of Irvine's strategy was to turn the service desk and IT into a business unit akin to sales or human resources (HR), where technology services could be delivered as easily as payroll direct-depositing a check in an employee's bank account.

But to get there, Irvine had to replace an outdated service desk ticketing system and make organizational changes in the IT department, shifting people around and changing the mentality of the staff to a service-oriented one. At the same time, IT started to revamp its change management and business improvement request process for its core Jack Henry Episys banking transactional system.

Now in year three, the initiative has replaced the old Numara Software Inc. Track-It help desk ticketing system with Service-now.com, a SaaS vendor of IT Service Management software. Simultaneously, IT has been able to get the company's employee lifecycle access management processes, or hire to retire policies, under control using the new SaaS service desk. Not an easy task considering the core Episys platform alone has 1,100 permission groups.

With the big pieces falling into place, Irvine's vision is taking shape. A 32-step process to onboard a new employee has been reduced from 30-plus days to a two- to three-day process because IT created a workflow in Service-now that lets HR type in basic information such as name and title and with one click launch the workflow approval process.

"The service desk should be about cross-functional service," Irvine said. "We want the rest of the business to look at IT and say, 'Wouldn't it be great if we could handle our service requests the same way?'"

When the SaaS service desk application officially launches next month, employees will be able to make service requests based on their job role and permissions through a self-service portal.

"A good IT service desk can and should be used throughout an organization because a call to unlock a password is no different than someone calling HR to change the deductions on their W-2," Irvine said.

Making the SaaS product choice

Speed to market was behind Service-now's win. Implementing the system took just three days of working with Service-now's professional services arm to configure the documented processes, although Irvine acknowledged that all the change management and business process prep work the IT team had done in the past year had a lot to do with how quickly this went.

Unitus had been using the help desk component of an enterprise management tool from AtTask Inc., but the company found that this component required too much customization. Unitus continues to use AtTask's management tool for project, portfolio and resource allocation and is looking to integrate Service-now with AtTask's tool to share information for resource allocation.

"We had to change horses midstream, so there was a certain level of urgency to not delay this another six months because we were making progress, we had the momentum and we needed to move before we lost momentum and credibility," Irvine said.

"The Service-now service desk is also highly configurable, vs. customizable, speeding up the delivery of new services and integration with other systems through standard configurations, vs. custom code," he said. It takes only about 15 minutes for a new user to get up to speed and start using the system.

Another benefit of Service-now was Unitus was able to get a single, integrated service for five areas: incident management, service catalogue, business improvement requests, credit union member file management and facilities management. Competing vendors wanted Unitus to mix and match 15 or more modules, Irvine said. Other pitches also involved lengthier implementation times.

Calculating the ROI of a SaaS service desk application

Solana Beach, Calif.-based Service-now requires a minimum purchase of 40 annual licenses at $1,100 per license. Though that was larger than Unitus' IT department of 18, Irvine said he believed it was worth the gamble and that the company would grow into it over time, as more IT staff members and employees were introduced to the system. Unitus also paid $20,000 in the first year for Service-now's professional services.

To justify the $64,000 initial investment, IT team members pulled help desk ticket information, such as the number of tickets and the time it took to resolve a ticket, out of the old Track-It system. Then they took a blended salary rate for tier 1 and tier 2 IT employees and the time the team would save when resolving tickets using the new service desk application (five hours a week per IT employee), to come up with a projected ROI.

That analysis showed they would break even within six months and realize an ROI of 110% for the first year. In years two through five, they expect to average an ROI of about 170%.

Comparing the same level of functionality between Service-now and Numara's SaaS service desk solution FootPrints, Irvine estimated that FootPrints would cost $97,000 in the first year. Another request for proposal respondent, EMC Infra, would have cost around $169,000 in year one and LANDesk, which Irvine thought would be a shoo-in because it was already partially installed for IT process management, would have cost $80,000 in the first year.

We want the rest of the business to look at IT and say 'Wouldn't it be great if we could handle our service requests the same way?' Brian Irvine CIO, Unitus Community Credit Union

"If we did apples-to-apples comparison to LANDesk, even though we already had it partially installed, it would have actually cost us $150,000 to get the same functionality," he said. Unitus was able to integrate the LANDesk installation with Service-now for free.

Irvine considered only Web-based applications. Looking at total cost of ownership, Irvine did not compare SaaS vs. on-premise models for service software. Though there is an ongoing cost for SaaS, as opposed to a one-time license and installation cost for on-premise software, there are ongoing costs for on-premise installations, too: Hardware needs to be replaced every three to five years, and there are ongoing maintenance and licensing costs such as server OS licenses and database licenses.

With Service-Now, transactions are handled in the provider's data center, where Unitus' instance and data resides, and software updates are free. And since Service-now's software is built on an open architecture and is essentially a set of database tables, integration with third-party software is a no-brainer, Irvine said.

As for customization costs, Irvine said it depends on the SaaS application. If the architecture is open, such as with Service-now, it is fairly easy and cost effective to develop custom interfaces and integrations through standard configurations that cost less to maintain and can be used for other purposes, he said.

"If the [SaaS] application is not wide open, you had better be committed for a good long time to that application before spending a lot of time and money on integrations," Irvine said.

Tags: Business process management,  IT Service Management for the midmarket,  SaaS for the midmarket,  ROI for the midmarket,  Vendor selection and management for the midmarket,  VIEW ALL TAGS

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