A core function of IT is to evaluate technology and look for opportunities to extend the value of the services portfolio focusing on practical advancements that are aligned to the mission of the business. Among the disruptive trends seen in the marketplace, those having to do with Big Data, the various flavors of Mobile Computing and “X-as-a-Service” stand out as being examples of technology-based opportunities for internal exploration.
The ability to evaluate these new technologies in a practical environment where their technological value and impact on business and IT operations can be assessed is extremely important. Deausiedingroshuowner of domain . IP checker In addition to evaluating the technical capabilities, IT must evaluate:
“Fit” in the production environment and the existing service portfolio or catalog;
A financial business case with certain caveats e.g., traditional ROI metrics may not be as applicable in these projects; and
The potential benefits of the technology at the risk of losing competitive advantage when competitors become early adopters.
Therefore, the research, development and new service introduction process needs to be a structured management model and a core competency required to provide highly competitive services.
New technologies have the potential to generate significant value to the business but it is usually a multi-step, iterative journey, and the investment risks are real. By establishing a robust operating environment CIOs can confidently lead the organization to embrace the opportunities the new technology can provide. Such an environment will drive the creation of value in the form of services that support competitive business growth.
Increasingly, competition is coming from more than traditional outsourcing providers. “The Business” (your customers) have unprecedented access to a range of technology options.
Available options range from infrastructure provided “as a service” from the likes of Amazon and Microsoft, to business process outsourcing to complete solutions such as Salesforce.com.
In the past, IT organizations had some control through requests to connect to the corporate network, options available today have no such requirements. Businesses can purchase basic infrastructure services or complete solutions “in the cloud” and never have a need to inform IT. To be successful, IT must understand these options and how they compare in terms of cost, reliability, security, etc. “Build versus Buy” is no longer limited to Applications – this is an evaluation that is applicable for nearly all IT services today.
Understanding the options available to the customer is critical to the continued relevance of the traditional IT organization. In fact, it may be argued that the traditional IT organization is doomed if it doesn’t evolve to more of a service broker model. If IT is to continue as a service provider, it must look like one to the business. This means moving from a cost allocation mentality to a price for service mentality.
A simple example highlights the difference. Three business units share the cost of an application running on a large, expensive server, each paying a third of the cost. One business decides to migrate to another solution leaving only two business units sharing the cost of the application and the large, expensive server. Traditionally, IT would increase the allocated costs to the remaining two business units by 50% each. But this isn’t how a business operates. A business builds capacity and then has the pressure to sell that capacity.
Formal commitments from “the business” may be required to ensure appropriate return on investments.
In order for IT to remain relevant to the business it must understand the market in which it is competing, and its customer’s expectations.
Whether it is through reading industry publications, being informed by consultants or through internal discussions, the question of how mature or established your organization is in alignment to the Information Technology Service Management (ITSM) model is an interesting one. One which we know you ask yourself from time to time.
Transforming to a best practices ITSM model represents a journey to the promised land of service excellence, process efficiencies and ultimately added value to the business. The good news is the promised land does exist. As the saying goes, a long journey starts with the first step.
So how do you know where you are on that journey?
There is a simple litmus test to gauge where your organization is in the establishment of ITSM. The first step is to pick a service with a moderate level of complexity (moderate level of complexity being defined as multiple components provided by more than one supplier). Next ask the following diagnostic questions about that service:
Was it designed to support a specific business requirement and is it orderable from a single service catalog item?
Is the price based on actual cost to deliver? Is it competitive? Can the same features and benefits of this service be purchased elsewhere for less?
Is there a named service owner who clearly has end-to-end ownership of the service?
Do the service components have documented processes and process owners?
Have KPI’s been established at the service level and are they actively governed?
Have SLA’s been established with suppliers that align to the KPI’s and have OLA’s been established between dependent suppliers?
Is there a process in place to forecast and manage demand?
Do you know the capacity limits in delivering this service and is there a documented process to scale?
Are the supporting foundation processes incident, problem, event, configuration and change management integrated at the service level?
Is there a process discipline in place to routinely evaluate the performance of the service and introduce service improvements?
This is not meant to be a self-assessment; rather it is intended to be a probing, thought provoking set of questions. The challenge in this quick test is that it is difficult to be objective. There is a natural tendency to justify why things are not quite what they should be and move past it. With this exercise I invite you to be critical.
So where should you be? If you answered not sure or no to one or more of these questions you may want to consider assessing how your organization as a whole stacks up to a best practice ITSM model, create a maturity baseline and a stepwise plan to build and measure planned progress.
The outline of a best practice ITSM model provides guidance and structure to assist IT in the transformation from a support organization to running IT as a business.
Embracing ITSM and committing to the journey will prove to pay itself off in dividends not to mention the agility of a predictable service delivery model.
“Running IT like a business” is an idea that has been around for years. With the increasing integration of technology into the business, the expectations of how IT is managed are rising. In order to meet those expectations, IT management must understand their true cost of IT.
No surprises here – isn’t this the basis for running a business? Why, then, is it such a challenge? Here are the typical reasons why:
Many IT leaders make the mistake of treating IT costs as an annual budget exercise.
Too often, costs land in a particular budget for convenience more than logic. And costs, on their own, are of limited use for purposes of managing a service.
How can you begin to face this challenge? The first step in “running IT like a business” must be to align costs with the services provided.
Understanding the component costs of these services – server hardware, server management, service desk, desktop support, etc. – is necessary in order to build a reasonably accurate service cost.
It is important to understand that “the Business” has a fairly simplistic view of IT services; Applications, Service Desk, Collaboration capabilities (video conferencing, web conferencing, etc.), etc. Effectively describing what is in a service as well as the drivers of cost in that service is necessary for success in any business. IT is no different.
In order to remain relevant, the IT organization must begin paying more than simple lip service to the idea of “running IT like a business”. This begins with an understanding of its costs of services provided.