If you have not yet viewed Part 1 of this two-part series, click here to read “Determining the Business Value of IT Services”.
The primary purpose of an IT Service is to define and communicate how IT helps the internal and external business community do their jobs beyond specific technology devices. A successful IT Service allows the business community to understand and monetize the value that IT delivers answering the questions,
“What does IT do?” and “How well does IT do it?”
Creating IT Services also addresses three of the most emotional words in the IT vocabulary – “IT Business Alignment.”
The concept of creating IT Services was introduced by the IT Infrastructure Library (ITIL) Version 3 framework. The ITIL V3 IT Service Strategy book defines best practice for IT Service Management (ITSM). ITIL describes that a portfolio of IT Services as a structured list that categorizes technology and services provided to the business community.
ITIL books and experts recommend that creating an IT Service defines:
- a strategic view of the inventory of all available technology and IT services,
- what IT organizational areas are responsible for technology and IT service provisioning and support, and
- what processes and workflows can be improved and/or automated to make delivery more relevant to the business community, and at a market competitive cost.
The ITIL framework defines a service as:
“a means of delivering value to the business community by facilitating outcomes they want to achieve, without the ownership of specific costs and risks”.
Technology and IT Services, often referred to as the IT Service Portfolio, is the bundling of an IT organization’s people, processes, and technology-based capabilities into physical and logical entities that are meaningful, measurable and valued by the business.
Over the past few years, the IT Service concept has gained significant acceptance among CIOs that are being challenged to achieve greater IT simplification of their technology-based capabilities delivered to the business community.
In some cases, CIOs are also being asked to:
- show greater cost transparency about IT spending, and
- map IT spending to the objectives and goals of the business regarding value or contribution toward business goals and growth.
Oh yes, and by the way,
- kindly define and explain each available technology-based capability,
- what is their planned capacity and utilization by each business area, and
- identify the business value in commonly understood business language.
The IT organization can create significant operational efficiency that facilitate business growth by simplifying the value and measured use of technology. Simplifying IT goes far beyond adopting an on-demand Amazon style Service Catalog by first naming technology items as a service, and second, placing these services in a web portal – just like customers do when purchasing books from Amazon or music from iTunes.
To ensure that customers perceive the IT capability as a valued service, the team must bundle and define and measure technology-based items in terms of meeting company profitability objectives. They must also explain how they are able scale costs to match changing market pressures.
These pressures, and others, are what drive CIOs to offer innovations to the business, powered by the convergence of previous technology capabilities, such as cloud, mobile, and on-demand services.
So, before I provide details about how you create an IT Services, let me share some of our experiences – that is, if you are considering such a project.
- I recommend that you first ask and answer the following questions.
- Your answers to these questions will better enable you to develop clear and measurable IT Services.
Questions and Guidance
How are specific technology-based capabilities related to business processes and functions?
To answer this question, do an in-depth review of technology-based capabilities used by the business and the structure of how these capabilities are fulfilled in order to achieve the business customer’s desired performance, productivity, and/or revenue objectives.
The payoff for this effort? You’ve defined your services’ fulfillment strategy.
What is the desired value as a result of IT simplification?
To answer this question, develop an IT service fulfillment strategy that illustrates value to the business community from these at least two perspectives.
- Will this help with IT spending optimization?
To optimize the cost of IT capabilities, monetize them to determine what dollars can be reallocated for business growth opportunities or reallocated within IT to stabilize spending while providing greater performance and service to the business community.
- How does IT simplification improve business agility?
By simplifying the technology environment, it will actually increase the agility of the company by enabling a path to use newer technologies.
What IT Services are driving the most value, and what is the best cost?
You need to simplify to achieve innovation, and to add converged technologies at lower costs. Too often, within the business community, you see just one technology concept being applied at an unsustainable cost. When you deploy new technologies such as cloud, mobile, analytics and social, you drive business community innovation.
Now, back to the topic at hand. Creating a structured fulfillment IT Services strategy makes the IT simplification easier and actionable. Doing this provides the details and clarity necessary to understand the relationships and dependencies of services, and to be able to predict how services align to the business community.
A structured fulfillment IT Services strategy contains information about service:
- request processes, and
- availability and capacity.
This is typically complemented with the capability for the business community to order customer facing services – Amazon style.
To define your services, you need to know both your business community (the customers and users), and the value that each IT Service delivers based on the business community perceptions and expectations.
For details about how to define the value of IT Services, read Part 1 of this blog series, titled “Determining the Business Value of IT Services”.
When you define IT Services, and start with a review of your Service Desk incidents, requests or problem tickets. Creating an IT Services strategy will be a very challenging and a long project, with limited CSI (continual service improvement) measurements and analytics.
A properly constructed IT Service strategy starts and ends with clearly aligning IT to the business. In almost every case using this approach, we have observed the added benefit of facilitating a significant change in the perception of IT in the business community – from a reactive break-fix department to that of a highly reliable and cost-effective service provider.
Over the last few years, we have seen a wide range of IT Service creation initiatives – from the very successful to flat-out failures. From this broad spectrum of experiences and hard-won wisdom, we have developed the following best practice.
Even though the IT Services defined are unique for every company, the approach and resulting benefits are unsurprisingly the same.
When you use our “S.M.A.R.T.” approach, along with our cloud-based SUM™ (Service Utilization Manager) IT Services design tool, you can quickly – within weeks – create a structured IT Services and fulfillment strategy.
Strategy – Create a structured fulfillment “strategy” for greater IT effectiveness. A strategy that delivers the controls, constraints, and critical success factors that govern achievement of IT and business objectives, and the easy implementation and management of ITSM vendor tools for:
- process improvements and workflow automation projects,
- measureable service delivery, usage and support activities, and
- CSI (continual service improvement) measurements and analytics.
Measurable – Identify “measurable” IT service metrics. Services where the IT organization and service owners can monitor service utilization by the business community, and can be used to determine showback/chargeback cost effectiveness. Create measurable metrics that the business community will understand as contributing value to achieving their expected outcome and is scalable by them to meet the velocity of changing business objectives.
Actionable – Define the “actionable” steps required by the IT and other organizations to fulfill each service request. Define and document approval steps, escalation steps, rate tables, rules and controls, exceptions, and required functional groups. This can be the most challenging part, but is necessary prior to launching any type of process improvement or workflow automation project using any of the ITSM tool suites and platforms.
Relevant – Identify “relevant” IT services in terms of understandable and valued business community language. For example, when you are promoting the name of the IT service to the business community, and they ask you to explain what it means or the value it delivers, go back to the drawing board. At a minimum, each service that is documented in the IT Service Catalog should contain:
- a description of the service,
- instructions for the request,
- key steps for approval and fulfillment processes, and
- any service level information that is effective in setting expectations.
Transparent – Define “transparent” service relationships and costs. Know not only the related and dependent services, but also the cost and associated assets. Also, define the unit cost of each service. Providing this level of transparency requires a repeatable allocation method to consistently communicate service-cost vs. service-usage relationships to the business community.
Using the S.M.A.R.T. approach helps the assigned IT Services design team to avoid the following most common pitfalls.
- Rogue projects,
- Underutilized technologies,
- Who owns the cost and risk,
- Lack of perceived service value,
- Who are the users of the services,
- Creating too many services, and
- How to quantify service capacity and demand.
Our S.M.A.R.T. approach and cloud-based SUM™ IT Service design tool allows IT Service design teams to comply with tight budget objectives and to work smarter, not harder.