“The Good, the Bad and the Ugly” of Implementing Service Management Date: April 2013 Prepared by: Alex Hernandez, ITIL® Master and Fellow in Service Management

Service Management

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Content

1. The “Bad and Ugly” Implementation 2. The “Good” Service Management Implementation

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Many organizations today want to, ultimately, improve service by delivering high quality service that supports the experiential outcomes expected by the customer. Unfortunately, this is easier said, than done. Let us first explore why many service management implementations go awry. Many organizations often want to get into just fixing the identified issues—operating in a reactive manner with a lack of customer focus—versus taking a step back and truly understanding the big picture of the current issues, and how to most effectively address the issues with a customer focus. Table 1 depicts where an organization usually resides from a scale of 0 to 5.

Attributes of an Incomplete Organization Attributes of an Optimized Organization Focused on Technology Focused on Customer Outcomes Firefighting Mode Demand-Driven Organizational Silos Enterprise Services and Process Unknown Costs Financial Transparency Technical Metrics Business Value 0 – Incomplete Service __________________________________________ 5 – Optimized Service

Table 1 - Reality of the Organization

The Bad and Ugly Implementation The bad and ugly implementation of service managements will have most, or all, of the attributes highlighted on the left column of table 1, which I refer to as the “Red Zone”. I compare bad and ugly service management implementations with the walking dead, meaning these implementations move along aimlessly with no direction, wreaking havoc on everything they come in contact with. The attributes of bad and ugly service management implementations include: • Focused on Technology – The attention of the organization is on keeping technology operational by

deploying specialists at any cost and on a best-effort results basis. • Firefighting Mode – The support personnel within the organization is in constant reactive mode, dealing

with outages and repairing applications and systems. This reflects poor planning or a lack of organization. This results in resources being ineffectively used, causing moral and performance issues.

• Organizational Silos – We call this the silo phenomena where the focus is inward and information communication is vertical. Lack of common goals between departments. Silos tend to limit productivity, provide greater opportunity for security breaches, and can frustrate customers.

• Unknown Costs – Large amount of the IT budget is dedicated to “keeping the lights on”, the balance is allocated to new projects. Little understanding of true IT costs and hence difficult to demonstrate ROI to the business. IT doesn’t always know what assets they already have in place, so they buy more. IT is often unwilling to say "no" to customer’s IT requests. As a result, often too much technology is purchased.

• Technical Metrics – The traditional IT approach for measuring and reporting availability is to present the results as percentages, but these are often at a component level and not at the service level. IT often measures far too many things that have little or no value to the business. Often no thought or effort is given to aligning measures to the business and IT goals and objectives.

In addition, bad and ugly service management implementations also share these characteristics: • Resistance to change • Unclear roles and lack of accountability • Minimum or no executive commitment • Difficult to use process and toolset • Short-term focus versus long-term focus • No integration of processes and tools • Being too ambitious

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• Failing to maintain momentum • Lack of centralized and integrated processes, service metrics and KPIs • Lack of communication and training for processes and tools • Not considering the organizational change impact of a service management transformation • Lack of governance and execution • Being process-centric versus service-centric • Lack of vendor integration and coordination

The Good Service Management Implementation Good service management implementations are harder to find, due to the required rigor and focus needed to pull them off successfully. When IT becomes a truly trusted advisor—Integrating their capabilities with the business to achieve customer outcomes—then that service management implementation is considered to be a good service management implementation. Table 2 highlights attributes on the right, which I refer to as the “Green Zone”. These attributes are essential to a successful service management implementation.

Attributes of an Incomplete Organization Attributes of an Optimized Organization Focused on Technology Focused on Customer Outcomes Firefighting Mode Demand-Driven Organizational Silos Enterprise Services and Process Unknown Costs Financial Transparency Technical Metrics Business Value 0 – Incomplete Service __________________________________________ 5 – Optimized Service

Table 2 - Reality of the Organization

• Focused on the Customer – Focus is on the customer and the services they are demanding:

o Every action is shaped by a relentless commitment to meeting and exceeding customer expectations regarding product and service quality.

o Customer interaction points and supporting internal processes are constantly evaluated and improved to meet or exceed those expectations.

o Every employee understands what he/she must do in order to maintain and add value to every relationship, with both the paying customer and those internal to the organization, who support meeting the customer objectives.

• Demand Driven – Manages processes from demand to supply to vendor coordination. Decisions about which services to offer and which to outsource in an understandable business language i.e. business and customer driven, financial not technical.

• End-to-End Processes – Processes are integrated, thus avoiding each process becoming a “silo” of activity. Those involved in each process work together, not as disconnected organizational units. Process integration avoids the risk that those involved are focused only on “their process”, without sufficient recognition of what other processes may need from them and what they could gain from other processes. Promotes consistency of approach across all service delivery components and enables more agile response to customer needs.

• Financial Transparency – Enables IT managers and teams to make better investment decisions, to eliminate waste, to provide more accurate chargeback models, and to show the value that IT delivers to the enterprise.

• Business Value – Business value realization is dependent on the ability of IT to understand and develop the appropriate value chain to support the business needs. The value chain is made up of elements including suppliers, service providers, customers, finance, etc. IT must understand the link

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between these value chain elements and their supporting technical components and processes, if they are to enable the business to achieve their objectives and to realize value.

In addition, good service management implementations also share these characteristics: • Defines IT in terms of services rather than systems. • Provides a single, definable, repeatable and scalable documented checklist for service management that

flows across the IT services. • Clearly identifies roles and responsibilities for the organization that is executing service management. • Balances quality and cost to meet customer requirements. • Service acceptance criteria supports ability of IT to properly support service provisioning. • Institutionalizes the improvement program. • Institutionalizes communication interfaces between service management processes and technology

domains. • Strong focus on relationship management, improving relationship of IT with the business (Trusted

advisor role versus technology provider role). • Integration of configuration management and change management minimizing disruptions to customers

and users. • Strong organizational change management execution, readiness and communication to effectively

achieve adoption of service management as a program and not just as a project. • Integration and implementation of effective service management technologies to enable and automate

service management processes. • Executive management commitment in terms of involvement and funding—taking a long-term approach. • Holistic, integrated reporting, linking business metrics to service metrics, and service metrics to service

management process metrics. • Strong awareness and service management training and readiness program:

o It is recommended that courses beyond the ITIL Foundation certification be considered to further expand and deepen the knowledge within the organization in service management practices and principles. Figure 1 illustrates a typical training curriculum within an organization.

Figure 1 - Typical training curriculum within an Organization

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You reap rewards here…

More importantly, good service management implementations never lose sight of the fact that the primary reason we are in business is because customers find value in our services. Ultimately, there is no reason for a business to exist without the customer. We must always keep our finger on the pulse of our customers’ needs, thereby building truly solid relationships with them. The discipline of service management helps an organisation to understand customer requirements, centralize operations, standardize processes and reduce costs. If done properly, these supporting elements will assist organisations in achieving customer satisfaction, profitability and loyalty as depicted in Figure 2. Customers are primarily interested in a service that is consistent, accurate, timely, cost-effective, quality-based and value-added.

Figure 2 - Focus on the Customer

The following quote from Peter Drucker provides us a clear focus on service from the customer perspective.

“Quality in a service or product is not what you put into it, it’s what the customer gets out of it.”

Peter Drucker

In closing, when embarking on a service management implementation, an organization needs to, first and foremost, understand the business drivers for service management that will best support the organisation’s vision, mission and goals. Applying service management without first understanding your current organizational business drivers and primary pain points, will result in a lot of frustration and a large disconnect between IT and the business. Secondly, the organization needs to assess their current state in the areas most relevant to supporting their primary business drivers. Once the organization understands their current state and what their ideal future state will look like, they can then focus on building a holistic roadmap to effectively implement service management within their organization. When implementing service management, an integrated approach needs to be taken to ensure that that the organisation is getting the most value from their established service management system (SMS). Continual service improvements to the SMS needs to occur through the effective establishment of metrics and measurements that are actionable, and that truly provide a good barometer on how the organisation is performing and the direction it is moving in. Lastly, the organisation has to make sure it takes a programmatic approach to implementing service management to keep the momentum going and not just treat it as a one-time project. Figure 3 below is the continual service improvement approach that a good service management implementation would follow.

The Customer

Loyalty

Profitability Satisfaction

Understand Requirements Centralize Operations

Standardize Processes Reduce Cost

If you do the right things here…

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Figure 3 - Continual Service Improvement Approach1

About the Author

Alexander Hernandez, ITIL® Master and Advisor to ITpreneurs. Alex has more than 20 years of professional experience in numerous high-end engagements, involving business process transformations in the areas of Service Catalog, IT Service Continuity Management, Cloud Computing, Information Security Management, Organizational Transformation, Service Desk, Incident/Major Incident Management, Problem Management, ISO/IEC 20000, Capacity Management, as well as a host of other high-profile Service Management Projects. His other achievements include:

• Alex is one of the first (of ten) individuals worldwide to achieve ITIL Master

Certification. • He authored one of the first ISO/IEC 20000 implementation books. • He achieved his Fellow status in Service Management (FSM) through the

PRISM Institute. • Alex is currently authoring a practical handbook on ISO/IEC 20000 and ITIL,

which will be released in November

1 Rance, Stuart, ITIL Continual Service Improvement, 2011 Edition, Published by The Stationary Office (TSO) for the Cabinet Office under license from the controller of Her Majesty’s Stationery Office, United Kingdom, © Crown Copyright 2011.

Business ObjectivesWhat is the vision?

Where are we now?

Where do we want to be?

How do we get wehre we want to be?

How do we check our milestones have bee reached?

Assessments

Measurable Targets

Process Improvement

Metricus and Reporting

How do we keep momentum going

Awareness, branding and

communication

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