Although companies throughout Canada recognize the importance of IT Service Management, for many it hasn't been a top priority -- until now. In the face of increasing cost pressure and a chronic shortage of talent, IT organizations must find ways to do more with less. And that's what ITSM is all about.
ITSM is a business-driven approach to managing and delivering IT services. Historically, it was largely synonymous with help desk-support. But in recent years, the scope has expanded to include all IT back-office activities, including but not limited to: operation of data centers, servicing internal technology infrastructure, data backups, software upgrades, and application security.
To understand the latest trends and practices in this area, Deloitte and itSMF Canada recently conducted an in-depth survey of more than 250 Canadian IT executives. The survey results show that ITSM is making significant progress in garnering proactive attention from the organization. The vast majority of respondents (over 90%) recognize the need to manage IT services, and a similar number acknowledge the importance of ITSM processes to overall effectiveness. The survey also shows that IT organizations still have a long way to go on their ITSM journey. Here are ten key considerations to help organizations get started.
1 MAKE PEOPLE ACCOUNTABLE Effective ITSM doesn't just happen automatically; it requires deliberate effort. There are a number of factors that have kept IT organizations from applying dedicated resources to it. One is that improvement initiatives such as ITSM are considered short-term expenses and produce an immediate hit to the bottom line, unlike computer hardware and other capital investments, which can be depreciated over several years.
A bigger factor is that Canadian labor has historically been relatively inexpensive and readily available. In that environment, it was cheaper and easier to throw extra bodies at an efficiency problem than to try to improve the process. However, this is no longer the case. As the US dollar has plummeted and enrolment in computer education has declined, qualified IT talent has become a scarce and expensive resource. To do their jobs, IT organizations must become more efficient. The good news is that almost two-thirds (64.5%) of the surveyed IT executives have already assigned responsibilities for monitoring service levels. But that's just a starting point.
2 TRAIN PEOPLE ON ITSM People assigned to it need to be trained on how to maximize the efficiency and effectiveness of their ITSM practices. The survey data shows that almost two-thirds (64%) of IT organizations only have a few of their ITSM staff trained or certified in improvement methodologies such as ITIL and COBIT. That won't be enough to take ITSM to the next level. In our view, everyone involved in this approach should at least have a basic understanding of ITSM improvement techniques. This helps create a culture of excellence throughout the organization, and gets everyone involved in looking for ways to improve.
3 CULTIVATE IMPROVEMENT OPPORTUNITIES There are countless opportunities to improve ITSM, and good ideas can come from anywhere: management, frontline staff, clients and end users. Yet the survey shows that most IT organizations (almost 60%) do not have procedures in place to identify and capitalize on potential improvement opportunities from users, IT staff and business clients. Without such procedures, organizations may be overlooking some of their best opportunities.
4 MEASURE THE RIGHT THINGS The old saying "You can't manage what you don't measure" definitely applies to ITSM. Effective measurement starts with understanding the key drivers of overall performance. In our experience, many IT organizations reward heroic efforts to recover services that are down, but lose sight of the larger goal of keeping services from going down in the first place. In the survey, almost two-thirds of respondents have yet to identify the key performance indicators (KPIs) that must be tracked to properly evaluate their improvement efforts. Similarly, less than half use root cause analysis to pinpoint the source of ongoing IT inefficiencies.
"If you're not doing root-cause analysis and fixing the cause of service outages then you will experience the same kind of service issues time and again, which is expensive for IT and frustrating for the business," says Ray Barham, Director Information Systems & Privacy Officer, TransCanada Corporation.
5 SHOW YOUR TRUE COSTS Shared resources without a clear cost attached to them tend to be overused. This phenomenon, known as the "tragedy of the commons", explains why fishing fleets put themselves out of business by over-harvesting the fish population. It also explains why so many IT organizations are overworked and underappreciated. Businesses tend to treat IT like a bottomless well to be tapped over and over again, without realizing that each trip to the well comes at a price. The only way for business users to truly appreciate the value of IT is if they pay for it. Yet almost two thirds of the surveyed organizations do not have a formal system for cost allocation and recovery. Without such a system, it is hard for people on either side to understand the value of IT, and to identify the best opportunities for improvement.
6 PLAN AHEAD. DON'T JUST REACT Many IT organizations are so busy fighting today's fires that they don't take time to plan for tomorrow. That's generally a mistake. Business demand for IT services is only growing. At the same time, the IT talent needed to satisfy that demand is becoming increasingly scarce. To bridge this widening gap, IT organizations must take a more pro-active approach to improvement and planning. The vast majority of surveyed organizations (78.6%) have not allocated a specific budget for service improvement. Almost half say they are reactive and respond to demands for new capacity only when the need arises. And only 12% model future capacity requirements based on projected business requirements. These IT organizations are likely to find themselves increasingly out of step with the demands of the business.
7 DEVELOP MORE ROBUST AGREEMENTS Service level agreements (SLAs) are formal or informal contracts that define expected services and service levels. Performance targets are mutually determined by the business and its IT service provider, and serve as a baseline for managing the relationship. According to the survey, the vast majority (84.2%) of organizations have SLAs in place. However, many will not reach their full service potential because the SLAs lack specific service-level definitions, omit entire categories of management, exclude contingency plans in the event of some unforeseen disaster, or lack procedures to assess supplier performance. In a complex service organization, it is hard enough to identify the root causes when adequate service is not being delivered. It is even more difficult when services and service levels have not been properly defined.
"Many IT organizations make the mistake of equating SLM with signing SLAs. While SLAs are critical components of the process, they are the wrong place to start, and can cause more harm than good if created in isolation and without context," said Deloitte's Geoffrey Cann.
8 ALIGN ITSM WITH BUSINESS STRATEGY Until recently, many ITSM initiatives were driven by compliance requirements, however the survey results suggest that compliance will not be the central driver of ITSM adoption in the future. Instead, the focus is expected to be on availability management, which includes: configuration and change control (50%), service level management (50%), and release management (40%). To succeed in the future, IT organizations must be proactive and focus on projects that address key business issues and deliver clear business benefits. Process changes that reduce system downtime or accelerate delivery of new business functionality through better change management are prime examples. Business cases should be built around business benefits, and then used as a baseline for evaluating project progress and performance. This business-driven approach can help IT improve its image as a true business partner, not just a service delivery group. It also makes the business case more compelling.
9 MODIFY THE IT SERVICE MODEL TO FIT CHANGING BUSINESS NEEDS The survey results suggest that IT service level reviews do not occur frequently enough to meet fast-changing business requirements. At least once a year, senior IT leaders should review the IT service model to determine if service levels and cost drivers are appropriate to the business needs, and whether the underlying processes are sufficient. These reviews help IT leaders assess their improvement opportunities and justify funding to improve productivity and efficiency.
10 GET GOODAT MANAGING IT TALENT Enrolment in computer studies has sharply declined over the past five years, making it increasingly difficult for IT organizations to hire the talent they need. Also, IT organizations face a wave of retirement over the next several years as Baby Boomers begin to leave the work force en masse.
To address this challenge, IT organizations need to improve their talent management capabilities. IT organizations must develop multi-year workforce plans that consider critical workforce segments and talent gaps. They must also implement tools and processes to increase productivity and deliver more value with fewer people. To fuel this process -- and to foster employee growth and development -- key personnel will need ITSM training and ITIL certifications.
To satisfy the future needs of the business, IT organizations must learn how to deliver more services and higher quality with fewer resources. That's what ITSM is all about. ITSM has made great strides in recent years; however, it still has a long way to go. In order to reach its full potential, it must move beyond the help desk and become a standard discipline for managing all back-office IT services. ITSM is a journey, not a destination. The 10 key considerations listed here can help keep you on the right path.
Debbie Gillis is a senior manager in Deloitte's Calgary office and leads Deloitte's technology practice for Calgary. She can be reached at: firstname.lastname@example.org
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