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At a recent itSMF Conference, more than 30 percent of survey respondents currently use v3 within their organization, yet 16 percent of respondents admitted to being confused about the differences between v2 and v3. Whether you are confused or are currently using v3 in your organization, Capacity Management is playing a more important role in this version of ITIL.

As a result, IT service optimization is more relevant today. Let’s take a look at v3, Capacity Management and IT service optimization.

ITIL and the Avocado
The previous version of IT Infrastructure Library (ITIL) was criticized as it failed to engender sufficient interaction between IT and the business. As a result, one of the primary shifts in ITIL v3 is a reorganization to address this deficiency.

The core practices of v3 are now:

• Service Strategy
• Service Design
• Service Transition
• Service Operation
• Continuous Service Improvement

The best way to understand the new structure is by using an avocado analogy. Service Strategy is the core, the seed that sustains the organization. Service Design, Service Transition and Service Operations represent the meat wrapped around the core/strategy. They help foster growth. The avocado skin is made up of Continuous Service Improvement - it holds the entire structure together, keeping what’s inside fresh.

Service Strategy
Good capacity planning plays a vital role in Service Strategy by establishing baselines, inventorying IT so you know what you are capable of delivering, and modeling to see if strategic shifts are workable.

Service Strategy is crucial to the success of all succeeding steps in ITIL. This step sets both the strategy and policy as well as enforcing the policy to implement the strategy. At this point, you must consider the constraints and barriers, and determine documentation requirements.

According to the Service Strategy concept, IT services are viewed as business assets. IT is run as a business supplier using a formal service lifecycle process. This includes how you take IT elements out of use when they have aged. It also determines the markets to be serviced by IT as well as the best way to leverage strategic assets. And it all begins with the establishment of goals aimed at business value creation.

The processes defined within ITIL address finance for IT and adopting the appropriate business perspective. Service Catalog is replaced by Service Portfolio which now includes knowledge management elements previously omitted from ITIL v2. The Service Portfolio contains everything there is to know about services and the code used to create them.

Service Design
Service Design is all about balancing costs and business needs. It encompasses IT solutions, architecture, standards and design plans. An IT Steering Group is set up in every department to review proposed new services and comment upon them.

This aspect of ITIL also addresses enterprise architecture, Business Service Management (BSM) to deal with business processes, IT Service Management (ITSM) to execute the IT aspects of those strategies; and below that, the management of the underlying technology elements such as servers, memory, operating systems and other low-level details.

Since you can’t drive the business without monitoring multiple indicators, Service Design also includes metrics mandatory in ITIL v3 such as Balanced Scorecard. Besides examining dollars, you have to look at indicators that span financials, customer needs, employee capabilities and overall business direction. The metrics used in ITIL v3 must be defined upfront. Service components are also defined. How these services will be delivered is covered within service level agreements (SLAs).

The processes that comprise Service Design are much the same as before:

• Service Level Management (SLM)
• Capacity
• Availability
• Continuity
• IT Security
• Supplier Management
• Portfolio Management

The capacity database has been expanded to include analysis and reporting tools and is now called the Capacity Management Information System (CMIS). This must be established to ensure consistency in data gathering and reporting. If all aspects of ITIL draw their data from the CMIS, then everyone is seeing the same answers, which wasn’t always the case in ITIL v2. Thus common reporting can now occur across the enterprise.

Service Transition
Service Transition is where Program/Project Management, Quality Testing, Knowledge Management and Application Development are defined and performed. The Service Transition phase monitors the application from the moment the design is finalized until it is into production.

This core practice builds for tomorrow, instituting an orderly process to move things from Design to Operations.

In addition, ITIL v3 incorporates a warranty period to address any bugs that come up after the software is launched. This lets you take a cold hard look as to whether you delivered as per the plan and the timetable.

The processes of Service Transition include several old faithful such as Change/Release Management, Service Asset and Configuration Management, and Application management (development). The new processes introduced are Transition and Deployment Management, Service Testing and Validation and Knowledge Management.

Consequently, the role of capacity management has changed. More work has to be conducted upfront during pre-production. Far more measurement and reporting have to be completed during deployment throughout the warranty period. Design predictions have to be reviewed against the real world (i.e. did we do what we set out to do).

Service Operations
The day-to-day running of IT is the concern of Service Operations, dealing with the planning and delivery of IT services in all aspects. Capacity plans are developed and monitored in this core practice.

From the TeamQuest perspective, ITIL v3 is borrowing an old mainframe concept of Plan-Build-Run, with Service Design being the Plan step, Service Transition equating to Build and Service Operations being like the Run step.

Service Operation performs actions such as monitoring, reporting, data collections/storage, backup/recovery and access control.

The processes involved are Service Desk, Incident Management, Problem Management, Operations, Application Management (maintenance) and Technical Management (formerly Technical Support) which includes items such as desktops, networks, print, storage, servers, middleware, Internet, databases and directory services.

Event Management (monitoring), a new Service Operations process, demands that thresholds be set and monitored regularly for all services. Other new processes include Request Fulfillment, Facilities Management and Access Management. In addition, there is one significant administrative change. Under ITIL v3, the application manager now reports to the data center manager.

Continuous Service Improvement
Continuous Service Improvement uncovers gaps and inefficiencies. Six Sigma, Scorecards, Gap Analysis, Benchmarking, Service Measurement, Reporting, ROI, KPIs and CSFs (Critical Success Factors) are all part of this step.

The key supporting processes include SLM, Capacity Management, Problem Management, Availability and Incident/Service Desk. To support this, Capacity Management has to use CMIS for Scorecards and Reports, Historical Trend Analysis, Performance Analysis and KPI/Metrics Assessment.

Relating ITIL v3 and ITSO
While ITIL is now strategic and tactical, IT Service Optimization (ITSO) is for the most part tactical. Both use the old mainframe favorite of Plan-Build-Run, and both have Continuous Service Improvement components.

ITSO arrived two years before ITIL v3 and has had time to mature since inception. That doesn’t mean ITSO needs an extensive revision to better comply with ITIL v3. ITIL’s latest version and ITSO are more closely aligned due to the current changes in v3.

Let’s take a moment to relate the two.

Service Strategy is not part of ITSO (as it addresses strategy for IT as a business). ITSO focuses on a particular area of IT with very specific goals in mind so although ITSO supports Service Strategy, it has no direct role.

Service Design correlates to several elements of ITSO:

• Understanding Business Objectives
• Capacity
• Determining Priority, Risk and Demand
• Service Catalog
• Plan

Service Transition is covered by the plan and provision process of ITSO.

Service Operation equates to Managing Service Performance as does ITL v3’s Continuous Service Improvement.

ITIL v3 demands a much closer alignment among IT and business units. As a result, the role of Capacity Management changes significantly. It now impacts pre-deployment testing, measuring and reporting during deployment, warranty period reporting, and the comparison of design predictions to discover if the organization achieved what it set out to do.

Capacity Management plays a direct role in improving service to the customer. By doing so, it demonstrates the value of ITIL by aligning business and IT.