Six PDG (Pretty Darn Good) Reasons for IT to (truly) define Services

Share twitterlinkedinmail

How would you answer the following question?

“How does your IT organization deliver real business value?”

In the October 6, 2016 article, “Business value is key to IT success”[1], Mike Sisco describes business value as including five very specific things:

  1. Increase revenue
  2. Decrease cost
  3. Improve productivity
  4. Differentiate the company
  5. Improve client satisfaction

Does your IT organization have a role in delivering business value? Sure, it does. Does your business know what IT does to deliver business value? Unfortunately, in many businesses, the answer is “no”.

Is it the fault of our business colleagues that they don’t know what IT does to deliver value? In my opinion, it is IT’s job to educate the business regarding how it delivers value.

Can your IT organization articulate how it delivers business value? That’s often the challenge with many IT organizations, especially if they’ve not defined services in terms of business value and outcomes.

Services are about “outcomes”, not “things”

Too often, IT organizations will list things like PCs, application access, and password resets as its “services”. Do these things provide (some) value? Yes. But are they services? No.

A service is a means of delivering value for a customer (or business) by facilitating outcomes (or results) the customer wants to achieve[2].   I’m sure you’ve heard or read that definition many times before, but what does it mean? Think about it this way: A PC without application software, network connectivity, and the like does not facilitate an outcome. In fact, in such a scenario, a PC is nothing more than an expensive paperweight. But include the PC as part of a value chain (comprised of software, infrastructure, processes, and people) that results in increased company revenues or improved productivity or client satisfaction, and wham! – you’ve got yourself a service!

Many IT organizations struggle with the critical, fundamental concept of defining its services. The IT organization is unable to identify and map the combinations of people, process, technology, and suppliers – or value chains – that work together to deliver business value and outcomes. Because these value chains aren’t identified or defined, the IT organization struggles to articulate how it delivers value. As a result, IT is often left out of strategic business discussions.

Instead, many IT organizations list the things they do as its “services”. But when an IT organization lists “things” as services, it sends a distinct message to the business it serves. The message? “Welcome to IT – we are here to take your order”.

Is that how you want IT to be known within your company – just as “order takers”? If so, prepare to be outsourced – because by only listing “things” as “services”, you are describing IT as ‘cost’, and not as ‘value’. And your business will look to increase value by reducing cost – in this case, the cost of its internal IT – because it can get those “things” cheaper elsewhere.

Six PDG reasons to define services

Why define your IT services? Here are six PDG (pretty darn good) reasons:

  • Provide transparency into IT – Demystify what IT does, while at the same time, relate IT deliverables to business value and outcomes.
  • Identify what really needs to be managed – Too often, IT organizations attempt to control everything rather than manage the right things. By defining services, what really needs to managed in a CMDB and controlled through appropriate change management can be identified.
  • Enable management of IT as a portfolio, not as a “collection of things” – IT should be viewed as at a strategic investment, and therefore, should be managed as a portfolio. This means that investments in IT should be based on matching those investments to business objectives, developing policies that enable good decision-making, and balancing risk and reward. IT never has an opportunity to be managed as a portfolio if services are not defined.
  • Enable cost modeling – By identifying and understanding what makes up each service, needless redundancy and obsolescence can be identified. By eliminating this redundancy and obsolescence, IT reduces its cost – without impacting quality or results. Cost modeling also facilitates “like for like” comparisons of service solutions and “build vs. buy” decisions.
  • Enable the business to take advantage of IT services – Services provide value by facilitating outcomes. The more business can take advantage of the outcomes of IT services, the higher the value of IT. Defining services not only articulates the IT solutions available to meet business needs, it also aligns IT to business outcomes and helps lead IT in creating business value.
  • Get IT a seat at the table – Defining services helps both business and IT understand the role that IT plays in enabling and delivering business value chains – the activities within a company that result in a product or service that delivers value to a customer. Having the ability to discuss its services in terms of business value will help get IT a seat at the business strategy table.

Define your Services…or else!

So how can you define your services? Start by getting the answers to these questions:

  • What does your business do?
  • What are the activities within your business that result in a product or service that delivers value?
  • How does IT enable or support those business products or services?
  • What are the combinations of technology, process, people, and suppliers that enable or support those business products or services?

Getting the answers to these questions not only will help you define your services, it will also help you articulate how IT delivers real business value.

Want to get started, but don’t know where to start?  Perhaps a quick chat would help!  Click here to schedule a free, no obligation 30 minute session to talk about defining services at your organization.

Image Credit: Olivier Le Moal

[1], retrieved 12/12/2016.

[2] ISO/IEC, (2011). ISO/IEC 20000-1:2011 Information technology – Service Management – Part 1: Service management system requirements. Geneva, Switzerland: ISO/IEC.

Share twitterlinkedinmail

4 thoughts on “Six PDG (Pretty Darn Good) Reasons for IT to (truly) define Services”

    1. Hello Okan- Thanks for your question. What I can do is provide you with advice for how to identify services.
      Answer these three questions:
      1.) What are the activities within your business that result in a product or service that delivers value? I suspect there is more that your business does that results in value than “manufacturing a car”.
      2.) How does IT enable or support those business products or services? What is it that IT is doing – what outcomes or results are being delivered to the business – that helps provide business value? Does IT support or enable the business to manage production? Shipping? Payroll? Regulatory compliance?
      3.) What are the combinations of technology, process, people, and suppliers that enable or support those business products or services? The answers to this question provide the foundational definitions of the service.

      Every business is unique, even within the same industry vertical. While there may be many activities that are similar at the macro level, it is the details that differentiate one business (in your case, a car manufacturer) from another. This is the challenge – to develop a relevant and meaningful list of IT services (“Service Catalog”), you must to the work with your business to identify and define the specific things that IT does to provide the specific outcomes or results that your specific business requires.

  1. I’m very interested in how IT delivers value to business. And I think there is a big contradiction in the very formulation of the question. On the one hand, IT is seen as a business in business and business partner, ie. emphasis is placed on the IT divide from business. So, we want to fill the gap between IT and the business, and we are getting more and more deepened. On the other hand, technology is increasingly penetrating business processes and fully encompassing businesses. the output of each process and each delivered value is ultimately due to IT. Why then is it necessary to look at how IT delivers value to the business once IT is organically built into every business process. i.e. IT is the business itself. So, searching for the answer to the question of how IT delivers value to business is not an open door knocking?

    1. Thanks Alexander for your comments. While I fully agree that technology is becoming (already?) embedded into all aspects of a business, your comments point out the critical need for IT to define its services for a few reasons. 1) Many IT organizations either do not or cannot make the connection between what they do and how the business benefits. 2) Many businesses are simply not aware of how their IT organization contributes to business value. 3) Defining services is a great way to have a business conversation within the business about how to best leverage technology. Indeed it is an “open door” waiting for IT to walk through….

Leave a Reply

Your email address will not be published. Required fields are marked *