Demonstrating Value to the Business

For many years the ongoing mantra emanating from IT journals, blogs from so called IT evangelists and IT conferences has been ‘the need for IT to demonstrate VALUE to the business’.

As IT Service Management professionals, we understand the commercial importance of IT needing to demonstrate business value. However the topic is often expressed in fiscal and business school language that resonates with the senior members of the IT directorate, i.e. Chief Information Officer (CIO), Chief Financial Officer (CFO) but sadly excludes our IT colleagues.

Typically for most IT professionals involved in day to day IT service provision this fiscal and business school view of value seems somewhat divorced from the day job. In fact, when we better understand the concepts of value and how customers ultimately determine whether the IT service provision is providing business value, then we can see a direct and strong connection between our day to day ways of working and the delivery of value for money IT services.

This connection has been recognised and emphasised in the new ITIL Practitioner Guidance publication. ‘Focus on Value’ now being defined as one of the new 9 guiding principles that help distil the core messages of ITIL.

However, to focus on value requires us to first better understand what actually constitutes value from the customer’s perspective. We can gain a good insight from the ITIL Service Strategy core publication which defines the characteristics of value as:-

• Defined by the customer
• Affordable mix of features
• Achievement of objectives
• Changes over time and circumstances

It further expands our understanding of value by explaining the ‘structure’ of value. The book explains how the customer view of value is derived from 3 aspects:-

• Value Creation – To deliver value, the IT services provided must enable the business to achieve their business outcomes. This is a given and is not influenced by low cost. Consider if you buy a cheap rail ticket the desired outcome for you is the train departs and arrives on time. The reduced fare is of no relevance if you arrive 2 hrs late and this completely disrupts your plans.

• Value Add – The terms value added, adding value, value add inter-alia are used where additional benefits have been provided to the customer which they were not expecting and have been provided typically at no additional cost. Consider here how CSI can make a significant contribution in demonstrating to customers the value add being provided from the IT service providers people and their capabilities. The greater the value add provided the more this begins to influence the customer perception of value for money.
• Value for Money – It is only when the customer starts to consider the ‘Cost’ incurred against the ‘Value’ and benefits gained that a sense of ‘Value for Money’ is formed. As stated above, business outcomes have to be achieved before value for money is considered. The additional value provided will also strongly influence customer perception. However, If customers believe their IT costs are too high and not competitive then regardless of how well their business outcomes have been met and the additional value provided, this will create a feeling of poor value for money and a view they could get the same service at a lower cost elsewhere.

The insight provided from the above provides us with some essential learning about the customer and how they determine value. What emerges is that the ultimate decision on whether the IT services utilised have provided business value and value for money remains solely with the customer and that their view of ‘value’ is a judgement that is significantly influenced +/- by perception.

There is no point telling the customer the worth of the IT services provided and the fantastic capabilities of the IT service provider organisation if the customer doesn’t see, feel and sense the value provided.
Remember the famous saying that “perception is reality”? Where customers are unsure of the value provided by their IT service provider then their perception is set accordingly. The danger here is that in the absence of value, then this brings into sharp focus cost. Being viewed by your customer as a cost is a precarious position to be in and likely to lead to low levels of customer satisfaction and being viewed as providing poor value for money. Loss of business is a possibility.
Good IT service providers will recognize the importance and relevance of positively influencing the customer perception of value and value for money as this is more likely to achieve high levels of customer satisfaction, instill over time customer loyalty and retain their customers’ business.

Managing customer perception and their expectations is now such a commercial imperative that this should be an essential tenet of the IT service providers Service Management strategy.

When we consider ITSM strategy the ITIL guidance offered is to base this on the four pillars of service management. The ‘Four P’s’ recognizes that the value to customers in the form of high quality IT services cannot be achieved without the ‘alignment’ of all People, Processes, Products and Partners. This in essence is the ‘raison d’etre’ for IT Service Management to ensure value is delivered to customers from affordable IT services that provide good value for money.

However, as we have already seen value and value for money are interesting concepts in that they are ultimately determined by the customer and significantly predicated on perception. An extreme view to make a point could be, that for the IT service provider regardless of how well they execute their service management capabilities, how reliable their IT services are and how cost effective they are at IT service provision, that this doesn’t guarantee that their customers will feel they have had value for money. This requires the IT service provider to be proactive in positively influencing their customers perception so they see, feel and sense the value being provided.

So for the IT service provider to be successful requires more than just the Four P’s. It also requires a good understanding on how customer perceptions are formed and how these can be positively influenced so that customers can more readily recognize value and value for money from their IT service provider.
We therefore contend that Perception’ is now the Fifth P. How perceptions are positively influenced needs to be factored into your Service Management strategy and planning. In practical terms this should include:-

• Stakeholder analysis to identify and segment customer stakeholders into those who pay for the service, those who agree the SLA and those who use the service to help shape a targeted approach to 2-way communications.

• A communications strategy is required to ensure key stakeholders across the business receive timely and appropriate communication to enable the IT service provider to proactively demonstrate where they are making a difference to the customers IT services.

• Communications plans are devised for each Stakeholder grouping making use of the most appropriate communications channel, i.e. Face: Face, Email, Reports, Flyers.

• Reward and Recognition systems are geared to encourage people to focus on value to the customer and using their insight, knowledge and skills to identify and drive the low cost or no cost opportunities that help optimise service and costs for the customer.

• A CSI register(s) and supporting process is implemented to ensure all CSI improvements are captured, mapped to the relevant IT services and customers groups with benefits quantified in business terms.

To summarise and provide some final food for thought….. there is no value in value of your customers don’t recognise it and therefore no matter how good you are, if your customers can’t see, feel, or sense it, then you’re not delivering value and you are now seen as a cost!
This blog is a precis of a white paper “Recognising Customer Value” written by leading Sysop consultant Ian MacDonald and qualified as a finalist in the 2017 itSMF awards. To see the full paper, follow this link: http://www.sysop.co.uk/your-account/downloads?c=1

ITIL Practitioner – The Lessons for Business Relationship Management

I’ve been really busy these past several months: first of all developing Sysop course material for the new ITIL® Practitioner course, getting it accredited, getting qualified myself and finally delivering the initial outings of, what is becoming, a really useful and very practical course.

It has also set me thinking about our Business Relationship Management Workshop. The Practitioner syllabus and material has made me reconsider many of the practical areas of IT service management and how organisations can make sense of the documented best-practice and successfully adopt and adapt it to the benefit of their the employer organisation.

I have absolutely no doubts about the importance of the Business Relationship Management (BRM) role to the successful provision of IT services but I do wonder if the artificial segregation of the business and IT into customer and service provider is the most effective way of handling this critical relationship.

The Practitioner material does at least recognise two models of service provision – covering outsourced as well as insourced IT. In all it stresses the importance of stakeholder management and communication – vital activities regardless of which model is most appropriate for you as a service provider.

A key objective of the IT Service Management training that we offer is to foster an increased awareness of business priorities within the IT service provider organisation. Taking account of the key messages from the Practitioner material will add considerable value to our current BRM workshop and help bring ever close our ultimate goal of everyone taking ownership of the business, its mission and its goals?

This will certainly keep me busy over the summer months!

Stuart Sawle
http://www.sysop.co.uk

Green IT – Back on the Agenda?

It’s a funny old world certainly as far as coincidences go.

Coincidence Number 1

I was delivering a Green IT course last week and had just completed the section on “Greenwash” when the VW (and then Audi) emissions scandal brokeon the television news. It turns out that millions of motorists have been driving cars with much higher levels of emission than they had been led to believe would be produced.

Coincidence Number 2

Only days later, Bank of England Governor, Mark Carney, at a very prestigious event at Lloyds of London, gave a stark warning that climate change poses a huge risk to global stability. He said the challenges currently posed by climate change “pale in significance compared with what might come” and that this generation had little incentive to avert future problems. Evidence is mounting, he claimed of man’s role in climate change.

Looking to the future he went on to say that the after-effects of such disasters were likely to grow worse – forecasting that the challenges currently posed by climate change pale in significance compared with what might come with major global impacts on property, migration and political stability, as well as food and water security.

This, of course, contrasts starkly with the Conservative governments back-pedalling on its carbon reduction commitments – axing or watering down a host of green policies. David Cameron is being urged, by President Obama to step up the UK’s efforts to reduce carbon emissions and to follow the US lead which requires each of the 50 states to reduce greenhouse gas emissions from power plants, with an overall aim of reducing power sector emissions by 32 per cent by 2030, compared to 2005 levels.

Perversely the UK government warned, in 2012, there would be a 20% shortfall in electricity forecast for the years 2015-2017. This, they said, was due to a number of factors that would create “a perfect storm”.

  • Dirty, coal powered power stations that fail to meet agreed emission targets must close by 2015.
  • Existing Magnox nuclear power stations are reaching the end of their life.
  • Wind, renewables and AGR nuclear plants will not cover the shortfall.
  • Reduced demand due to the recession has delayed the build of new capacity. Even if the building programme is restarted, it is unlikely that any new plants will be online before 2017.

Coincidence Number 3

Chancellor George Osborne has been touring China try to attract Chinese partners to help build Britain’s first nuclear reactor in over twenty years. Even so this is not likely to be on stream until at least 2025.

Whatever way you look at it, we must all do whatever we can to reduce our energy usage.

Worldwide, the carbon footprint of IT is actually larger than that of the airline industry – and it’s growing. As more and more of the developing world adopt information technology, the carbon emissions generated will increase with it.

Data Centres continue to grow exponentially and even though the latest servers are more energy efficient, the number deployed is ever-rising as too is the number of desk-top and mobile devices. In these circumstances is it not incredible that few IT Managers are held accountable for the energy cost of the IT deployed to support the business. Sure, they have initiated hardware rationalisation projects but the outcomes of these projects are measured in cost savings not energy and savings or carbon reduction. We must push ‘Green IT’ higher up the strategic agenda.

Let’s hope that the latest breaking stories will rekindle the interest in running and managing greener IT departments and that I will welcome many more students on our Green IT course Details here – particularly as we are now one of the very few organisation that offers it.

Stuart Sawle

Sysop

Attaining Service Management Maturity

I enjoy the conversations I have with students attending our ITIL® courses. They normally revolve around the maturity of their organisation compared to documented best practice. This has led Sysop to put a survey in the field to see if we could establish the overall take-up and maturity of IT service management. The results are somewhat alarming:

OVER 50% OF COMPANIES ARE NOT READY FOR MAJOR INCIDENTS!
• Over a third have an IT-business alignment problem
• 37% point to low or no IT professional development
• 13% have no Change Manager

33% of respondents say they ‘need to do more to align their IT with the business’, with 4% admitting that their IT-business alignment is ‘poor’. Almost two in ten also say that management has ‘no understanding’ (5%) or a ‘poor understanding’ (14%) of the importance of IT to the business.

You can read the full report here: http://www.sysop.co.uk/your-account/downloads?c=10.

So what do you do if you think your organisation is deficient?

Remember that IT Service Management is, for the most part, a cultural change. To bring about this level of change requires patience and tenacity. I would endorse the methodology suggested by Dr. John Kotter – it has just eight steps.

Step 1: Establish a Sense of Urgency
Help others see the need for change and they will be convinced of the importance of acting immediately.

Step 2: Create the Guiding Coalition
Assemble a group with enough power to lead the change effort, and encourage the group to work as a team. Make sure this group includes a senior management sponsor, management buy-in is key.

Step 3: Develop a Change Vision
Create a vision to help direct the change effort, and develop strategies for achieving that vision.

Step 4: Communicate the Vision for Buy-in
Make sure as many as possible understand and accept the vision and the strategy.

Step 5: Empower Broad-based Action
Remove obstacles to change, change systems or structures that seriously undermine the vision, and encourage risk-taking and non-traditional ideas, activities, and actions.

Step 6: Generate Short-term Wins
Plan for achievements that can easily be made visible, follow-through with those achievements and recognise and reward employees who were involved. If you are a million miles from having a Configuration Management System, despite the fact that it would be wonderful, to have one in place don’t even try to start with this! Look at the areas that you already do pretty well but could do better, this will give you a good starting point.
Approach the task by trying to see which gaps in your processes you could bridge with least effort.

Step 7: Never Let Up
Use increased credibility to change systems, structures, and policies that don’t fit the vision, also hire, promote, and develop employees who can implement the vision, and finally reinvigorate the process with new projects, themes, and change agents.

Step 8: Incorporate Changes into the Culture
Articulate the connections between the new behaviours and organizational success, and develop the means to ensure leadership development and succession. Remember the advice of W. Edwards Deming: gradual, incremental changes are most easily assimilated.

Check out our acclaimed Service Management Workshops. http://www.sysop.co.uk/training-courses/69/tutorled-courses#c72

Stuart Sawle

http://www.sysop.co.uk

ITIL® is a registered trademark of AXELOS Limited.

Fifty Years – A Major Milestone

I don’t normally like admitting to my age – but this week I am celebrating a pretty major milestone – 50 years in IT. I’ve always considered myself particularly lucky to have begun an IT career when the industry was in its infancy, when we were fresh-faced, young and pioneering.

I left grammar school at 16 with a handful of ‘O’ levels and had been intrigued by computers for some little while. Luckily, for me, a neighbour friend was an IT Operations Shift Leader at Dunlop and suggested that I apply as a trainee operator. I took to it like a duck to water. Operating large mainframes which were tape-based was demanding work physically. The tapes were 3.600 ft zinc spools and some 100 tapes per shift needed to be mounted / demounted on the eight tape decks on each of the huge LEO III mainframes. Understanding what was going on came much more easily. I had a natural aptitude for IT and in that respect it has never been hard work.

I was just 19, when my boss asked me to set-up and run an offline job-assembly function. The goal (successfully achieved) was to improve consistency and reduce job-assembly errors. This work caught the attention of a senior colleague who head-hunted me to join him as Chief Operator at Halfords in the centre of Birmingham. The small ICT 1901 mainframe here was a step down from the sophistication of the LEO and, at the tender age of twenty, I had the challenge of supervising the operation of three shifts, job and data control.

I began to take an interest in the George II operating system and pioneered its implementation to streamline operations and reduce mis-operation. This led to a change of career as I learnt how to program in PLAN – an assembler language proprietary to ICT 1900 mainframes. I loved it and determined a short while later that I could earn much more money as a freelance programmer.

Very soon I was assigned to a major development project for Woolworth – all in COBOL. I hadn’t written a COBOL program in my life but I had, at least, covered the basics in a college course. My PLAN and GEORGE II experience stood me in very good stead and I quickly earned a reputation as the technical guru. I could understand diagnostic dumps when many of my colleagues found them perplexing.

I was a freelance programmer at Woolworth for nearly three years when the new Data Centre Manager asked me to join the management team and establish a competent technical and operations support department – again with the principal objective of improving consistency of service and reducing error.

Now I was really in my stride. I had some very competent technical guys but the challenge was to develop the operations support group, exploit the operating system and bring real business benefit to the organisation. This opportunity was enhanced when I led the project to migrate the George II workload to the newly launched ICL 2900 range under VME.

This was exciting pioneering written large! Woolworth IT developed a reputation for leading-edge technology and practices and I was often invited to speak at User Group conferences and joined working parties to help steer ICL development plans – most of them focusing on reliability, consistency of service and error reduction – a bit of a recurring theme here.

My responsibilities at Woolworth increased and I was given responsibility for not only the Rochdale data centre but also the data centres in Swindon and London. Life was certainly getting exciting!

In 1985 everything changed. A new IT Director changed the technical direction from ICL to IBM. Senior IT professionals with extensive experience of IBM operations were parachuted in and I was offered a very attractive package to go do something else – and that something else was Sysop.

The early days of Sysop saw an increasing fruitful partnership with ICL. We pioneered the development of storage management systems to exploit the capabilities of automated tape libraries – always looking at ways to help clients reduce cost, improve reliability, and improve storage management.

Then along came ITIL®.

In 1990 Sysop was one of only three companies who offered training in IT Service Management. The other two no longer exist – which makes Sysop the world’s longest exponent of ITIL. Sysop consultants have travelled the world, working with clients in across Europe, Australia, South America, USA, the Middle East and South Africa.

We continue to innovate and see ourselves as a new breed of IT educator. My team champions the alignment of IT with business, promotes the pivotal role of the IT professional and believes that the primary purpose of training and education is to change behaviour in the workplace.

Our mission is to provide a more creative and stimulating, world class educational environment that addresses vital areas of IT service management. Our training and education is designed to make ITIL more accessible, digestible and relevant for its clients, while its practical workshops can be tailored to the specific needs of the client organisation.

Our goal is still to help our clients improve their IT services focusing on reliability, consistency of service and error reduction – Now that does sound familiar?

Am I going to retire? Not while I’m having so much fun!

Stuart Sawle
http://www.sysop.co.uk
ITIL® is a trademark of AXELOS Limited.

Is the Service Provider / Customer Model Flawed?

I’ve been busy of late preparing our recently announced Business Relationship Management Workshop. The workshop programme has set me thinking about many of the practical areas of IT service management and how organisations can make sense of the documented best-practice and successfully adapt it to the benefit of their the employer organisation.

I have absolutely no doubts about the importance of the Business Relationship Management (BRM) role to the successful provision of IT services but I do wonder if the artificial segregation of the business and IT into customer and service provider is the most effective way of handling this critical relationship.

There are numerous other examples of specialist service departments within business organisations: HR, Finance, PR, Estates, and CSR. The heads of these departments would be horrified if they were not considered to be part of “the business”. So why does IT continually place itself at arms-length?

I am reminded of the story of the US politician who visited NASA. A keen gardener himself he was interested in the activity of the man working in the neatly-tended flower beds. Approaching this man, the politician enquired as to what he was doing. “Sir”, came the reply “, I’m helping to put a man on the moon!”

Part of the answer is our attempt to design one model that covers outsourced as well as insourced IT. Part of it could be the sheer size and intensely specialist elements of IT. Part of it could be the attitude of the business itself – not understanding IT and therefore introducing intermediaries to translate business language into technical requirements and vice versa.

A key objective of the IT Service Management Training that we offer is to foster an increased awareness of business priorities within the internal IT service provider staff. Should we not, therefore, strive to achieve the ultimate goal of everyone taking ownership of the business, its mission and goals?

There lies the rub!

I suspect that even if we achieved this magnificent goal, the business would still want to deal with the ‘techies’ at arms-length. It is an imperfect world. This is why we need IT professionals who can bridge the divide. We need IT professionals to fill the role of Service Owners, Service Managers and Business Relationship Managers. These professionals essentially take on the responsibility for continually seeking opportunities to exploit Information Technology to further the aims and objectives of the business.

Until the day dawns when the technology is understood by everyone, when business objectives can be achieved without whole armies of technical staff, we will need these vital intermediaries.

Stuart Sawle
http://www.sysop.co.uk

Flawed IT Disaster Recovery Plans

Many IT Disaster Recovery plans are fundamentally flawed.

Many I.T. managers tell us that their board / senior management expects IT services to be restored within 48 hours or so of a disaster, Sysop research indicates that it may actually take six months before all services are returned to normal.

Incorrect assumptions
The mismatch between expectation and practical delivery is caused by a number of incorrect assumptions, including:

  • that non-critical systems can be recovered in similar timescales to the “mission critical” systems for which formal ITSCM plans have been developed.
  • that all applications can be recovered to readily available “commodity hardware”.
  • that suitably-qualified IT personnel will be available to support the recovery in the numbers required.

But crucially, the most significant factor is the high support effort required to sustain the newly-recovered applications. This support commitment will drastically reduce the resource available to recover the remainder of applications. Most IT departments have around 20% of their applications defined as “mission critical” in a total population in excess of 50.

Some 80% of applications will take more than two weeks to recover; 50% will take more than a month; 25% will take more than three months.

IT Services Need to be Available in a Crisis

Experience of major contingencies (i.e. those that affect more than just IT infrastructure) reveals that emergency co-ordination teams need effective IT immediately. As the precise nature and impact of the contingency cannot be predicted, IT specialist resource is needed to provide emergency co-ordination teams with their requirements in an efficient and flexible manner. This activity will always take priority over the recovery of routine IT. As organisations become increasingly IT dependent it becomes even more necessary for routine IT (and the data / information upon which management depend) to be available to manage the crisis.

I.T. departments do not have the luxury of staff employed to do little, indeed most I.T. staff already have a very full support workload. As the recovery process succeeds the recovered applications will begin to demand at least the amount of support resource they required before the disaster. It is more than likely they will require significantly extra resource to cope with the difficult circumstances of a recovered operation.

As the I.T. department responds to the support load of the recovered systems, less resource will be available to perform recovery activities. The recovery process will slow and may actually grind to a halt.

Taking this factor into account I estimate that some 80% of applications will take more than two weeks to recover; 50% will take more than a month; 25% will take more than three months. Indeed it could be almost 6 months before the final applications are recovered.

My contention is that no organisation can wait this length of time for even non-critical systems to be recovered

The ITIL® framework provides sound guidance on IT Service Continuity Management but isn’t able adequately to deal with some of the practical considerations – particularly as these related to organisations with limited resources and budget.

That is why Sysop consultants have developed a practical workshop to help clients explore better ways of protecting the organisations for whom they work. More information: http://www.sysop.co.uk/training-courses/61/practical-workshops

Stuart Sawle
www.sysop.co.uk