ITIL Series Part II: Benefits of the ITIL
In the last article (link) we provided a brief introduction to the ITIL and some of the differences between the ITIL V2 and V3. This posting addresses the benefits of adopting the ITIL as a basis for best practice in your IT organization.
First question, why ITIL?
The ITIL has become the de facto world-wide standard for IT Service Management. One of the advantages this provides is widely accepted common definitions for IT terms, many of which can have significant ambiguity. For example, what is SERVICE? There’s the service in SOA (Service-oriented Architecture), or SaaS (Software as a Service) or WS* (Web Services). The three uses of the term refer to 3 different uses of the word. So, what is a SERVICE? Is it possible to come up with a single unifying definition that ties the 3 uses together?
The last article included the ITIL V3 definition of a service, specifically, "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." With this definition, even the separate usages of the term Service in SOA, SaaS and WS* have a common concept and meaning: "A means of delivering value to customers…."
What does the rest of the definition of a Service mean?
It starts with the concept of value. What is Value? The ITIL applies the term to a combination of Utility and Warranty. Utility is fit for purpose, what it does, functionality; Warranty is fit for use expressed in terms of a combination of Availability, Capacity, Continuity, Security. In other words, a service is valuable if it does what customers want and expect (Utility) and it’s there when it’s supposed to be (Available), with the right level performance (Capacity), has the proper level of security, and can be used in an expected time frame if there is a disaster (Continuity). Value is created when these are all present in appropriate balance.
The service has value because it predictably and reliably (warranty) does something (utility) the customer wants or needs, it facilitates outcomes that matter to the customer. It doesn’t stop there, it also relieves the customer from specific constraints. Specifically, it means the customer does not have to worry about the direct costs associated with provisioning or providing the service. In addition, the customer is buffered from the risks the might occur if an component necessary for the delivery of the service fails.
Bottom line: The service makes it easier for the customers to focus on and accomplish their jobs (tasks) without having to worry about what’s happening behind the scenes.
The notion of constraints needs further elaboration. As previously mentioned, the customer does not own the direct costs or risks associated with the service. But that leads to a question: If the customer doesn’t own them, who does? The answer is the service provider.
Think about your electric utility. You get home when it’s dark outside, flip the switch, you want the lights to turn ON. You don’t care if a pump failed or a relay needed to be replaced at the power station, neither of these events is or should be your problem. You expect the service provider, the electric utility, to take care of these issues. Yes, you pay for the electricity you use, but it’s the electric utility that bears the direct costs for the pump, and also the risks associated with what might happen if the pump failure was not fixed. In effect, the service provider (IT or electric utility) spreads both the costs and risks across all customers.
Now take the ITIL definition of Service, the use of the term in SOA, SaaS, and WS* has a overarching common root that is applicable in the three uses. It has specific application for each of these three — 3 different ways to facilitate customer outcomes and deliver value.
There is an entire glossary in the ITIL the if used, reduces ambiguity in conversation not only within an organization, and more importantly between organizations (including partners and suppliers).
Competitive Advantage
Best or good practice, as noted in the last article, provides a repeatable way to efficiently (right amount of resources) and effectively (reliably produces the desired outputs) accomplish a task or achieve desired objectives. The ITIL talks about costs savings because of the combination of efficiencies and effectiveness that make up best practice; the ITIL does not specify how much you might save. The amount of the savings depends on lots of factors, including the variation between best practice and actual practice inside the organization. Cost savings/reduction is just one of the potential advantages.
Have you ever had the experience of using a software package that didn’t do exactly what you needed, but were stuck with it anyway? The software could have been designed and built the right way, but it didn’t do the right things. The ITIL also provides a process called Service Level Management (SLM) that is part of Service Design. One of the goals of SLM is to make sure the developers build the things the customer actually expects and wants. The ability to meet customer expectations consistently is also a competitive advantage, and over time a differentiator. SLM also negotiates Service Level Requirements and Service Level Agreements (SLA) with customers. The agreements, if properly negotiated and followed, provide assurances to the customer that the service works as expected, and if/when there are problems, they will be addressed in an agreed time frame and manner. When IT meets the commitments in the agreements, it helps create the expectation in the mind of the customer that future commitments will be similarly met. This creates a degree of customer loyalty.
The ITIL also provides a set of processes in Service Transition that are specifically designed to move new or changed services from development into the live environment in a controlled and measured way to assure expected value is delivered to the customer. The overall goal of these processes is to improve both the number and quality of changes that are put into the live environment. When properly applied, this allows the organization to be more flexible and adaptable to changing market conditions and business needs.
The ITIL Change Management process (part of Service Transition) specifically addresses the fundamental reality that today, Change is the new normal. The specific goal of the process is to provide a formal way to analyze, approve, evaluate, and review changes. The overall goal is to make sure that new or changed services that become part of the live environment have minimal negative impact on the live environment. In too many organizations, the IT staff spend what could be productive time chasing and fixing problems introduced by one or more changes. The ITIL Change Management process (and related processes) are specifically tasked with minimizing change-related problems. The resulting reallocation of resources provides a competitive advantage.
How business reacts to change, handles change, adapts to change, manages change becomes critical for survival. The ITIL framework provides a basis for handling more Change that align with business need. This enables the business to be more flexible and able to respond faster to changing market conditions and be more responsive to customers — a clear competitive advantage.
Want more about specific benefits of the application or the ITIL processes from another source, check out this article
by Hank Marquis about Availability Management.
Another view of competitive advantage
In Management, Tasks, Responsibilities, Practice (Harper & Row; (c) 1974), Peter F. Drucker wrote the following:
"Asked what a business is, the typical businessman is likely to answer, ‘An organization to make a profit.’ The typical economist is likely to give the same answer. This answer is not only false, it is irrelevant."
After an explanation of why his last statement is correct, he adds this:
"To know what a business is, we have to start with its purpose. Its purpose must lie outside of the business itself…. There is only one valid purpose for business: to create a customer."
That was 35 years ago and nothing has changed from the business perspective. Today it’s almost impossible to have a thriving growing business without technology. As long as the IT department is inward focused with an, "I manage IT," attitude, it cannot be a participant in the "Drucker Purpose" for business, creating customers. The ITIL addresses a fundamental morphing from the, "I manage IT," perspective to a more business aligned focus that restates the IT purpose this way: "I deliver IT-based services to support the business." In other words, IT joins the business purpose to create a customer by, "delivering value to customers by facilitating outcomes customers want to achieve…."
Many IT organizations think they support the business. However, ask your employees and customers if their view of IT is consistent with, "supporting the business" versus protecting the IT infrastructure. How are changes managed in the organization? In a controlled way that facilitates a high volume of successful changes, or do changes create fire-fighting opportunities? Is there an "us versus them" mentality either in IT or the business? If even one of these seem like a familiar scenario, then IT is inward focused; IT isn’t a valuable asset to the business. One possible consequence: can you say, outsource?
Coming attractions
In the next installment I’ll expand on some of the points made in this post and look at an approach to adopting the ITIL.
As always, questions or comments… please send them to:
David.Moskowitz@gmail.com
