What is a Service Management Office?

Differences between an SMO and PMO

PMO vs. SMO Charter

A service management office (SMO) is a center of excellence within your organization chartered to improve the quality, effectiveness, and efficiency of delivering services to your users and business functions. The SMO accomplishes this charter by leveraging industry standards and best practices – applying them to your organization’s unique environment.Service management has been a familiar concept for many years and has become a common framework for IT organizations to contemplate, plan and manage the activities they perform in support of the broader business organization. The challenge many IT organizations face when implementing service management is balancing the desire for centralized control and process consistency with the efficiency and scale that is the result of distributing (federating) service management activities to different parts of the organization. The service management office provides a solution to that challenge by creating a function with the explicit purpose of coordinating service-management activities throughout the IT organization.When many different people are involved in delivering services, it is important to have clear accountability for all of the services your organization provides (both business and IT services). This includes owning the vision for and the execution of the design, delivery, orchestration, and support of the services. This “all-up” accountability ensures users receive consistent service experiences, regardless of which IT teams are involved in service delivery.The service-management-office concept is an adaptation of the Project/Program-management-office (PMO) concept used in the project management discipline for decades. Just like a PMO, the SMO provides a central point of focus within the organization to drive efficiency and effectiveness: efficiency through the sharing of common resources and effectiveness through centralized programs that provide education, techniques, processes, tools, etc.

The difference between a PMO and SMO is the context they are chartered to coordinate. PMOs coordinate projects – temporary endeavors to achieve a specific outcome. SMOs coordinate continuous activities of managing the end-to-end lifecycle of services. Because of the difference in scope, each of these concepts is likely to have a structure based on their own set of discipline-specific industry standards and best practices. PMOs often align with best practices from the Project Management Institute (PMI) while most SMOs leverage standards, such as ITIL and Lean IT.

Having both a PMO and SMO

Many organizations have recognized significant benefits with both a PMO and SMO that work closely together. PMOs are better equipped to manage coordinated delivery projects of new capabilities while SMOs are better equipped to coordinate the activities that help an organization use those capabilities to generate business value. Connecting these two functions enables an organization to execute more effectively continuous service-improvement initiatives that result in better quality services for end-users.

What does a Service Management Office do?

Centralized SMO function

The scope and activities of a service management office vary significantly from organization to organization, based on the SMO’s vision and charter, the size of the IT organization and the cultural preferences of centralized vs. distributed control. In some companies, the SMO will directly manage and oversee all employees working on service-management activities while, in others, the function of the SMO is to provide advice and guidance.

A typical SMO model oversees the service desk, incident management, problem management, and change management, as these are typically centralized functions for multiple groups. The SMO also may own the service catalog, SLAs, service-level monitoring and reporting as well as service desk tools, asset management, the CMDB or other systems. In this model, the service-owner role (determining what services to offer and making operational decisions) resides within individual business or IT groups, which are closer to the end-users of services.

Coordinating across autonomous teams

In other organizations where culture promotes a high degree of autonomy amongst teams, the SMO may have a much smaller charter and do little more than set policy and standards, define processes and provide training to service-management practitioners distributed throughout the organization. While this model may be less successful in achieving the SMO vision, it may be the most effective and practical method of working within the cultural constraints of a fragmented organization.

Process Documentation and Monitoring

An SMO is almost always responsible for managing the service-management-process documentation for the organization, monitoring process conformance and providing operational insights to management about service-management costs and performance. The SMO is often considered an objective advisor on cost-containment initiatives, scalability issues, and service management-related regulatory-compliance concerns.

Value of a Service Management Office

Centralized Shared Capabilities

The value your organization realizes from your service-management-office function will depend greatly on the strength of the charter and the authority granted to the function. A strong SMO charter will enable the function to achieve greater levels of standardization and efficiency while a weaker SMO charter will result in less organizational resistance . In general, the value of the service management office can be categorized according to 3 key areas: shared capabilities, shared expertise and service assurance.

SMOs are an ideal place to manage capabilities and operational activities that can be shared throughout the organization. Centralizing these activities provides economies-of-scale, the ability to manage resources more efficiently and reducing performance variability in the service experiences provided to end users. Some of the most common shared capabilities an SMO manages include:

Service Desk

Incident Management

Request Management

Problem Management

Change and Release Management

Configuration Management

Asset Management

These capabilities are ideal for centralization under a service management office because either they require a “big-picture,” company-wide perspective or they contribute to a consistent experience for end-users to request and seek support for the services they consume.

Shared Expertise

Service-management-office functions can be a highly effective tool for organizing and sharing expertise throughout a large organization. This builds upon the “center-of-excellence” concept that, even in distributed organizational structures, provide an opportunity to share ideas and experiences and propagate best-practices. Some of the key activities a SMO can oversee to help orchestrate the sharing of expertise include:

Knowledge Management

Training, Coaching, and Mentoring

Defining Processes and Best Practices

Managing IT Systems

Curating and distributing shared data

Providing a Pool of Shared Resources (staff)

The shared expertise and supporting capabilities SMOs provide to the organization are intended to provide resources and supporting functions to service-management activities occurring in distributed teams. Shared expertise can also be leveraged for centralized capabilities.

Service Assurance

There are many service-management activities that require centralized coordination, even in highly distributed IT organizations. These are often thought of as management support and/or governance activities required to provide all-up service assurance for the organization. Examples of service assurance activities the SMO manages include:

Business Continuity and Disaster Recovery Planning

SLA Definition, Monitoring, and Reporting

Service Quality

Organizational Risk Management

Regulatory Compliance

While it is possible to perform these activities in a distributed manner, the SMO can provide both an enterprise-wide perspective to drive management decision-making as well as cross-team coordination to ensure complete and consistent execution on service-assurance initiatives.

Learn how the SMO can help drive Digital Transformation

Implementing a Service Management Office

Leveraging StandardsThere is no definitive standard for implementing and operating an SMO. As a result, you will likely need to leverage portions of multiple standards to cover the entirety of service-management-office activities. Some standards to consider are ITIL, for general ITSM reference; the Project Management Body of Knowledge from PMI, for best practices related to PMOs; and Lean IT, for guidance on establishing efficient operational processes. Once you’ve assembled input from various standards, you must customize them to your organizational culture and the charter of your SMO.

Defining ProcessesProcesses are the core tool the SMO uses to drive consistent execution of service-management activities and to collect the data needed for effective decision-making. Defining service-management processes will require modeling process workflows, establishing decision-making criteria, assigning roles and responsibilities and defining data and automation needs. Managing your ITSM processes also requires determining how they will be monitored and controlled to ensure conformance and achieve performance objectives. Industry standards are a helpful source of reference, as are existing processes your organization is already using.

Training and SkillsThe most important factor in determining the success of your service management office is individuals’ adoption of the SMO processes that are involved in the various aspects of service delivery. This requires both a solid change-management plan as well as a strategy for continuous training and skills development. Well-documented processes, easy-to-use tools, access to data and a clear understanding of how decisions are made are the essential components to foster organization-wide alignment to your SMO’s guidance.

ITSM ToolingService-management-office functions (like all other parts of a modern company) rely heavily on technology to support their operations. Most companies already have some sort of ITSM platform that serves as a good starting point. As you define and implement SMO processes, it is imperative you plan and coordinate changes with your ITSM tools – ensuring the people who need to execute the processes have the technological support and data they need to be successful.

Process-Management ToolingIn addition to your ITSM tooling, your SMO will need an effective means of managing the various processes it employs throughout the organization. This includes process models, decision matrices, roles and responsibilities, control mechanisms and other process documentation. A robust set of process-management tools can help save implementation time and costs, enable you to capture ITSM tool requirements as you’re defining processes and plan your compliance activities from the start.

Who should own the SMO?

Enterprise Architecture

If your organization is considering implementing a service management office, then the good news is you don’t have to start from scratch and invent everything yourself. The best practices gleaned from PMO implementation and with the work of ITSM efforts, such as ITIL, provide a wealth of information and insights as a starting point. Tool suppliers are also a great source of information to implement your SMO in a way that is sustainable for long-term operations.There are 5 key areas you must address as a part of your SMO implementation planning:The SMO can significantly influence your IT operations, so the decision where to place it within your organizational structure is not one to be taken lightly. It can be difficult to create a new SMO organization from scratch that is unknown to anyone in the company. It is often much easier (and more effective) to implement your SMO within your current organizational structure by assigning formal accountability for service management to a pre-existing team. There are two places within the typical IT organizations where companies often initiate SMO functions:

The enterprise-architecture (EA) function is typically accountable for the architecture of IT solutions and looking at the all-up impacts on business operations. Aligning your SMO function under EA provides a natural “top-down” perspective, a pre-existing governance relationship with operational teams and generally strong executive support. Many EA functions are already responsible for service-assurance functions, such as business continuity planning, risk management, and compliance. Organizing your SMO under EA also benefits your company by ensuring business services receive a similar level of attention as IT services.

IT Production Support

The drawback of aligning your SMO under enterprise architecture is a potential cultural disconnect between the strategic focus of EA and the operational focus of many of the ITSM functions the SMO must oversee. The SMO must primarily influence the support operations staff, distributed project teams and specialized ITSM roles, such as problem managers and change managers. These employees tend to be very tactically and operationally focused on day-to-day activities that are often independent of EA’s longer-term focus.

The IT production-support function is another common place to organize a service management office. In companies that have adopted standards-based ITSM processes, such as ITIL and many of the capabilities, processes, and systems that an SMO must coordinate, are likely already implemented within various production-support functions. Aligning your SMO under production support provides the opportunity to harvest an increased level of grassroots support that can help to accelerate SMO adoption and results. Support managers are also likely to offer greater support for SMO functions aligned under production support because of greater opportunities for them to influence SMO activities to support their teams’ productivity objectives.

The drawback of putting the ownership of Service Management in the hands of a Production Support group is that it may have limited upstream understanding of what is being developed and the strategic direction of the organization. Support Managers are often fighting very tactical fires that require a narrow focus, which could obscure their perspective of bigger-picture issues that the SMO may need to address. IT production-support teams are also often more concerned with IT services than with business services – leading to potentially less support in these areas.

Executive Sponsorship

There is no clear answer as to the best place to align the SMO within a company’s organizational structure; however, there are some general guidelines all SMOs should follow:

The SMO should have an influential executive sponsor who understands service management and has a genuine interest in ensuring the SMO is successful. The SMO should have the support of leaders with the power and accountability to solve problems early in delivery cycles. Most service-quality and performance issues are introduced during planning and design activities, so it is very important the SMO has a strong influence during this stage of the service lifecycle. Your SMO should have strong ties and coordinate closely with PMO and portfolio management functions. This doesn’t mean they must be in the same organization, it just means their activities must be aligned and the teams collaborate.

Planning for the Future

Another consideration for placement of your SMO within your organization structure is the changing needs of the organization, as the enterprise grows and as service-management processes mature. It may be easier to implement your SMO initially by aligning it with production-support functions; however, as the SMO matures, there may be a need to realign it with a more strategic function, such as enterprise architecture, as a way of supporting long-term goals and transformational business objectives.

Using your SMO to Drive Continuous Service Improvement

The overarching purpose of your service-management activities should be to provide the best quality services possible to your users and business stakeholders. Your SMO is critical in driving continuous service-improvement (CSI) efforts and helps your organization balance service cost, quality and performance considerations when making CSI decisions. It does this with a combination of governance and compliance activities as well as continuous process-maturity efforts.Sentiment is also an important part of driving continuous service improvement within your ITSM operations . There are many facets of service quality and performance as well as perceptions about support activities that aren’t easily captured through traditional process-based metrics. Your service management office must develop capabilities to capture and assess the sentiment of end-users, business functions, and management as a part of their CSI efforts.