The Business Value of ITIL - The Instrumental Value of the Service Culture

Last time I wrote about the “Displacement of Goals” which is turning things from what were once intended to provide instrumental value into things that merely provide terminal value.  Our IT Service Management Culture (or “Service Culture”) has done the same thing.  We struggle to justify the business value of ITIL and in many cases rely on metrics related to the terminal value of our IT Enterprise rather than devote critical thought to instrumental value we provide to the business.  Too often we measure success in classic terms: time between failures, time to recovery, reducing the time to process changes, or mitigating the incidents related to change.  These may be instrumental for IT, but they are terminal for the Business.  We must be more concerned with IT Business alignment: being a line of business in support of organizational strategy and goals.

Notwithstanding the possible inconsistencies among business units which can be a challenge, IT should focus on the delivery of services and not products and how those services contribute to business goals rather than measuring availability of components such as servers, networks and applications.  As ITIL has matured and grown there is now evidence that support its benefits and value to the business, such as achieving good governance.  Additionally, the benefits of implementing ITIL best practices include consistent and repeatable processes for business continuity/risk management; controlling IT costs; improving internal user satisfaction; and ensuring regulatory compliance.  We are now in the “post-industrial society” where the knowledge worker is becoming more important than the service worker.  In the knowledge based economy, the ability to exploit and automate intangible assets, such as knowledge and business processes, has become far more decisive than simply managing static physical assets.  So ITSM practitioners can and need to make a clear case for the business value beyond mere cost savings, improved “processes,” and component availability.  The information is there.  The message needs to be delivered.

So, what does that business value look like?  Clearly, IT’s role as an equal partner in determining the most appropriate business strategy has increased as a result of ITIL, but business value falls generally into two categories: development and delivery of the proper IT Services to support the organizational business strategy; and more efficient and effective running of those services.  Let’s look at two examples of each starting with the most tangible: efficient and effective services.

For this tangible value of ITIL, the following assumptions are made for an organization:

 

·         All employees cost $50 an hour

·         Your organization comprises 500 Users

·         The total number of Incidents is 5,000 per year

·         The average time to fix an Incident is ten minutes

·         A working year has 200 days

 

Following the implementation of Configuration Management, the Service Desk has a much greater insight into the relationship between users, configuration items and incidents. The three people assigned to incident can be reduced to two, resulting in a savings of $80,000. 

The less tangible is showing the value of development and delivery of the right services at the right time to support the organizational strategy.  This comes through the more business-value focused ITIL version 3.  Where ITIL version 2 focused on processes, version 3 focuses on business value. This shift attempts to improve the linkage between the business needs of the organization and the IT operational processes that enable them. Hence, version 3 has a more strategic approach than the tactical approach of version 2.  For example, Service Portfolio Management, as described in ITIL V3, is responsible for the investment IT makes in its Services across the Services’ entire lifecycle.  It forces IT to answer questions like:

·         Who is the customer

·         What is the market space

·         What are the opportunities that IT can support the business to exploit

The business value here is to focus IT to think as a business partner and service provider rather than just an IT technology shop.  ITIL v3 and the IT Service Management service culture provides business value by providing the paradigm through which IT uses technology and processes as a means rather than an end.  IT can support and compliment (and sometimes drive) business strategy by designing and deploying the right services.  The business value is being a business partner rather than merely a technology provider.

We need to make this message clear and ensure the business understands this value and the Service Culture understands their role in providing that value.

 

 

 

 

Works Cited

Doherty, P. (2009).  Service Portfolio Management: Optimizing the Business Value of IT. White Paper Service Portfolio Management.  Computer Associates.

Harris, M. D. & Herron, D. E. & Iwanicki, S. (2008). The business value of it: managing risks, optimizing performance and measuring results. [Books24x7 version]

Šimková, E. and Basl, F. (2006).  Business value of IT.  Systems Integration.

The benefits of ITIL, (2008).  Pink Elephant

What is IT-business alignment? (2012).  Pink Elephant