The Value of IT Services

You may recall from basic ITIL training that the definition of a service is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks.

Everyone understands what we mean by value, or do we?

This week I attended a Vistage presentation given by Mike Wilkinson of Axiavalue, an organisation dedicated to helping sales professionals, in particular, add value to their propositions. Mike says “We help businesses defend and grow their revenues and margins by understanding the things their customers truly value”.

Does that sound familiar? It should. It’s a key objective of Service Strategy.

Whether we are providing services internally or externally, we IT service providers must never lose sight of the fact that our customers always have a choice. We can only be sure of their continuing commitment to us by demonstrating the value of the services we deliver. So what do we mean by value?

The first thing we need to take on board is that our definition of value is irrelevant. It’s our customer’s definition that matters. They probably won’t be able to articulate it as a simple definition – and that’s why we need to bring our professional skills to bear, to identify and understand those things that our customers really value and then shaping our service offerings to offer those things. It’s called differentiation.

Value is all about the customer’s perception – which is why it’s important to communicate the value of our services to our customers. We need to continually remind our customers that our services are worth the money they pay for them.

We need to be aware that value, and the perception of value, changes over time.

IT services in the eighties and nineties tended to focus on delivering business functionality more efficiently. There was a fairly simple equation: does the business save more from these services than it has to pay for them (return on investment)? Nowadays, it’s more about competitive advantage. Can the business deliver value to its customers that its competitors can’t? It’s the job of IT services to support the business in achieving this objective. That’s value!

All we have to do now is deliver it!

Stuart Sawle

Banking the Green Dividend

In recent years, many organisations have reduced their costs and improved their effectiveness by rationalising their IT infrastructure:

  • Reducing the number of servers
  • Implementing load balancing
  • Deploying storage area networks and using storage more effectively
  • Reducing the number of software licences Improving resilience
  • Reducing maintenance costs.

This is, of course, to be applauded. Return on capital employed is a critical success factor for any modern data centre. Yet, these organisations often feel to realise another major achievement – gained as a result of their efficiency drive.

  • Data centre energy consumption is reduced significantly.
  • Less heat is generated.
  • Less energy is required to cool the server room.
  • The IT Carbon footprint is substantially reduced.

More and more organisations find that adopting a sustainability policy not only reduces costs, it actually increases sales! The British consumer is actively supporting those businesses that can demonstrate real and tangible Green initiatives.

The sad thing is that, for the most part, data centres don’t measure their carbon footprint. This means that they aren’t able to claim their full share of the credit when their efficiency programmes return a Green dividend.

The carbon footprint of the IT Industry is now greater than that of the global airline industry. Some 40% of the energy consumption within a typical administration complex is due to that used by the IT infrastructure.

We need to become Green aware. We need to be able to measure our carbon footprint. We need to be able to predict the improvement in greenhouse gas emissions and to justifiably claim credit for the improvements we have made.

The ISEB Foundation Certificate in Green IT is a good first step towards helping an organisation to achieve its sustainability goals.

Stuart Sawle