{"id":4453,"date":"2015-01-13T19:12:28","date_gmt":"2015-01-13T19:12:28","guid":{"rendered":"https:\/\/multiacademstg.wpengine.com\/20000academy\/blog\/2015\/01\/13\/itil-service-provisioning-shared-model\/"},"modified":"2025-06-13T14:30:58","modified_gmt":"2025-06-13T14:30:58","slug":"itil-service-provisioning-shared-model","status":"publish","type":"post","link":"https:\/\/staging.advisera.com\/20000academy\/blog\/2015\/01\/13\/itil-service-provisioning-shared-model\/","title":{"rendered":"ITIL – Service Provisioning: Shared model"},"content":{"rendered":"

Every now and then, I get that ultimate ITSM question: \u201cWhy should my organization implement ITIL principles?<\/em>\u201d And while there are many non-financial benefits to implementing ITIL<\/a>\u00a0(such as service quality or transition readiness), for any organization the most compelling are the financial benefits, which we\u2019ll be discussing within this week\u2019s article.<\/p>\n

Before we start, I\u2019d suggest reading our other blog posts, most notably: ITIL & Accounting in IT organizations<\/a>,\u00a0in which you may find out how costs are categorized according to ITIL framework, and ITIL Service Provider types \u2013 Type 2 or Shared Services Unit<\/a>\u00a0\u2013 because they both contain relevant information.<\/p>\n

Cost shared is cost reduced<\/h3>\n

\"Service_provisioning.png\"Figure 1 \u2013 Service provisioning with Type I service providers<\/em><\/span><\/p>\n

Let\u2019s say you have a company or organization with a smaller number of employees, and you need e-mail accounts for them in order to perform your daily business. In order to set up a functioning e-mail system, the organization will have to spend some (finite) amount of money. The typical e-mail system is capable of running hundreds if not thousands of mailboxes at the same time, and if your head count is less than that value, you are paying for 100% of service cost, but consuming only a portion of it.<\/p>\n

This is a common problem among organizations that run Internal Service Providers (ITIL Service Provider types \u2013 Type I: Internal service provider<\/a>),\u00a0which tend to become a source of great overhead, as shown in Figure 1 \u2013 as each Business Unit is responsible for providing its own common services such as HR, IT, Finance, or Legal.<\/p>\n

\"Shared_services_model.png\"Figure 2 – Shared services model<\/em><\/span><\/p>\n

As a complete opposite to the earlier mentioned practices, the\u00a0Shared services<\/strong> model targets the provisioning of multiple services<\/a>\u00a0to one or more business units through use of shared infrastructure and resources.<\/p>\n

As shown in Figure 2, within our imaginary organization, we still have three Business Units (BUs), each consuming 20%, 30%, and 50% of available resources, but this time they share a pool of resources, instead of each having its own dedicated resource. Consequently, Business Units will proportionally share service costs \u2013 effectively reducing them compared to the previous mode of operation.<\/p>\n

This practice alone represents a significant cost savings and may even be the greatest argument against the Managed Service<\/strong> model (outsourcing).
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