IT organizations are challenged more today than ever to provide strategic value to the business.  This includes justifying and quantifying value and implementing transformative IT initiatives that can help the business trim costs while being more agile and innovative.  What better way to accomplish than by establishing a framework of IT as a business that maximizes the value of services provided as would be expected of any business by its customers?

IT Service Management (ITSM) is a best practice discipline to “run IT like a business”.   It organizes IT activities through development of a services catalog, the value of which the business can understand.  It allows for stabilization and optimization of IT operations through deployment of an Information Technology Infrastructure Library (ITIL) based standard operating processes such as incident, change and event management.  It provides transparency for the business through the use of service level management and consumption-based chargeback.  ITSM establishes the foundation for benchmarking against industry averages and leads to a better assessment of sourcing decisions by aligning services offered with those of third party providers.  Overall, ITSM is an internal set of specialized capabilities for delivering services end-to-end to maximize the value of IT.

The Problem
It’s evident that disruptive technologies and trends are impacting the effectiveness of IT.  The cloud is providing users with more supply options for IT service delivery.  There is duplication of effort and resource utilization in environments with weak governance attributable to growth in “Shadow IT”.   Commercialization of IT coupled with more tech-savvy employees is leading to higher user expectations making it more difficult to satisfy demand.  And most important, business demand on IT continues to expand while outdated structures and processes continue to impede IT efficiency and effectiveness.  

Advances in technology are not the challenge. Rather, IT needs a new model to optimize technology advances and integrate them with business processes to provide maximum value to the business.

Many IT organizations have little structure, formalization, or standardization in the way services are managed and how desired outcomes are achieved, leading to a number of issues:

  • Processes are ad-hoc and compliance is inconsistent
  • There is no formal methodology for planning, designing, transitioning, and operating services within the established portfolio
  • The lack of a service management focus creates an inefficient and ineffective service delivery model that does not provide value to the business

The Solution

Running IT like a business requires giving customers (AKA “the business”) a choice wherever possible, and requiring them to fiscally own their decisions.  CIOs and IT leaders can set up internal IT as an external provider with incentive to offer needed services at the right price with one major advantage over external providers — the opportunity to become a strategic partner with the business and drive value.

Creating an IT service strategy is foundational to running IT like a business.   The core of the strategy is to establish a clear set of services and service disciplines.  

Defining a service

My experience in two major change efforts to deploy ITSM is that IT staffs that have operated in a more traditional model are challenged with the concept of an internal service.  To initiate the strategy requires understanding what a service is and how it is delivered.  The following exhibit illustrates this.​



Other Considerations

  • Critical success factors:

     -  Executive and business leadership buy-in

     -  CIO commitment and sponsorship

     -  A culture that can accept change

     -  A solid business case for why ITSM is needed

     -  A robust communications plan

     -  Strong and innovative IT leadership to facilitate the change

     -  A close partnership with IT and Corporate Finance to manage funding and enable the deployment of consumption-based chargebacks

  • Managing business expectations is important to balance the real business needs for services and service levels, versus establishing world class services that provide more than what the business needs and/or can afford
  • Business relationship management is a key role to establish prior to beginning the planning and deployment in order to build communication channels and relationships between the business and IT.  Ideally, the role of a business analyst would exist to establish business requirements against IT capabilities
  • Critical reminder: a successful strategy is not about the technology, it is about business outcomes and perceived value

 “Every time we call something a service when it is an underpinning contract, a process, an activity, an organizational unit or a function, we take our collective eye off the one service that matters – the one delivered to the customer.”  - Unknown Author

Results that make a difference


Three-phase deployment roadmap framework

Before any strategy can be implemented effectively, the current state needs to be stabilized.  You need to “walk before you run” to evolve an operating model that runs IT like a business.  Therefore, a practical three-phase approach is to:

  •  Phase 1- Stabilize the current environment: Establishing a strong foundation of operational processes before you invest in more advanced processes and expand your service management practices.  See Phase 1 Roadmap.

  • Phase 2- Manage technology platforms proactivelyBeing “Proactive” means that actions are taken to either:  1) Avoid service issues (incident prevention), or 2) Improve system operations/performance (e.g., capacity planning, performance tuning).  See Phase 2 Roadmap

  • Phase 3- Become a trusted service provider to your lines of businessThis group of processes entails becoming a Service Provider to your lines of business. This means understanding business requirements and demand for services to customize the catalogue of services offered to the business.  Identifying and documenting service levels allows a service provider to deliver on availability and performance.  See Phase 3 Roadmap

Each phase has a minimum set of requirements that should be in place for the people, processes and tool components of the new operating model.  These requirements allow for deployment at the appropriate maturity level to satisfy the strategic needs of the business.  Phase 1 is necessary to sustain current operations.  Phase 2 improves operating effectiveness that may or may not be considered a strategic focus to some companies.   Some businesses may have affordability issues to invest in what is required to get to Phase 3.  Phase 3 is necessary to truly maximize investments in technology and as a result, strategic investment prioritization is critical.

Solution Implementation

The following implementation approach should be considered to establish your ITSM strategy.

Summary of Key Deliverables