The digital economy is upon us.
Regardless of industry, businesses are experiencing the impact of the digital economy. In the digital economy, the “store” is always open and customers expect that systems are “always on”. Customers can (and will) do business whenever and from wherever they want – using any internet-accessible device. Customers expect a differentiated, frictionless experience that provides value. Encountering system downtime or unavailability simply is out of the question.
What does this mean for IT? Simple – in the digital economy, the role of IT within an organization is more critical than ever.
The critical role of IT
IT has a critical role as an organization prepares for the digital economy. In the digital economy, the technology managed and delivered by IT is the crucial connector between a business and its customers.
But is the business ready to effectively leverage that technology and enter the digital economy? Is your IT organization ready? Maybe not.
One of the significant challenges presented by the onset of the digital economy is that many businesses don’t understand their processes. As a result, the details of how work flows within an organization is unclear. Critical systems are disjointed, resulting in bottlenecks and needless delay. IT finds itself trying to glue these poorly designed (or non-existent!) business processes together by throwing technology at the issue. Compounding the situation is that IT processes are often no better – IT processes are poorly designed, poorly documented, or even worse – non-existent. IT itself works as a collection of disjointed parts, with no clarity how work flows through the IT organization.
Yet, IT – good IT – is critical for the digital economy.
Can the IT organization move beyond acting as an ‘order taker’ and become the innovator, leader, and partner that businesses need in the digital economy? Can IT help business understand how work flows through an organization? How can IT proactively work within the business to eliminate bottlenecks? How can IT help the business deliver better business?
Good ITSM can help.
Hallmarks of Good ITSM
What does good ITSM look like? Here are some attributes of good ITSM:
- Reliability, consistency, repeatability – Businesses and their customers can depend on the services delivered by the IT organization.
- Measurable contribution to business value – The contribution from the IT organization delivers agreed business value quantified by relevant, meaningful measures.
- Defined and documented services that underpin how value flows through the organization, and enables businesses to make informed decisions about investments in IT.
- Data-driven, efficient processes – Data, not human intervention, drives process execution and improvements.
Where many of today’s ITSM implementations frequently fall short
Unfortunately, many of today’s ITSM implementations have fallen short for a myriad of reasons:
- ITSM was driven as an “IT initiative” and not a “business initiative”. To the rest of the business, ITSM investments were monies thrown into a black hole, with little to no identifiable business value in return.
- ITSM implementation was driven from a “tool first” approach, rather than from a business value and outcomes approach. Tools were purchased and implemented in the hopes of a “quick fix” for IT delivery issues, without first understanding the business challenges.
- The myth that ITSM is an “IT Operations only” or “Service Desk” thing and not part of business strategy or service and product design. What part of today’s business doesn’t have at least some reliance on the use of technology? None. Technology use is a critical factor in the realization of business strategy as products and services are delivered. Then how could ITSM ever have been approached as an “IT operations only” initiative?
- IT Services – how IT supports business value chains – were not identified or defined. Rather, “IT Services” were published as a list of things that IT does, like reset passwords or setup new PCs, reinforcing the notion of “IT as order taker”.
Such ITSM implementations are not ready to take on the demands of the digital economy. Because of this, internal IT organizations are at risk of being “left out” as business is forced to move ahead with other technology providers.
How service management must evolve to meet the demands of the digital economy
Good ITSM, however, isn’t quite enough to meet the demands of the digital economy. ITSM implementations have typically been inwardly focused. In the digital economy, good service management principles still apply, but the focus of ITSM must shift to an external, “outside in” approach – looking at customer experience. How should service management evolve?
- IT must shift from a “department” to a “capability”. IT must take on a leadership role and help business successfully exploit its technology capabilities. This means that IT must improve its business acumen and lead business process designs and improvements, leveraging ITSM principles.
- Service management must shift from being an “IT thing” to the way that business fully utilizes all parts of the organization. ITSM principles can help by helping business understand the complete value stream – how work moves through the entire organization to deliver value both to the customer and for the business.
Get Service Management Ready for the Digital Economy
The digital economy requires a holistic and collaborative effort from all parts of the organization. No single department alone can experience success without support and interaction from the other parts of the organization. Looking at a business from an “outside in” perspective, the customer does business with the business – not an individual part of the business. Effective service management will help a business act and present itself as a holistic entity and not a collection of parts. Here are four things to do to get service management ready for the digital economy:
- Identify and map value streams. Don’t just look at the IT contribution, but the complete value stream – how value flows through the organization. Identify what parts of the organization – sales, manufacturing, distribution, IT – are involved in delivering value. Mapping value streams helps identify services, and also helps align the organization along common goals.
- Identify and eliminate waste in current processes. Any waste – bottlenecks, variability, delay – will inhibit automation of processes and negatively impact the customer experience. Needless manual intervention is typically indicative of a lack of defined processes and not a need for human judgement.
- Identify and collect comprehensive service measures. Many current service management implementations only measure and report technology-centric measures. Service measures must quantify and report on the business value and outcomes delivered by the service – not just some of the components of a service. Relating measures to the organization’s mission, vision, and goals is a good way to ensure measures are business-relevant.
- Understand the customer experience. One way to do this is to develop customer experience journey maps. These maps describe how a customer interacts with a business, emphasizing the intersections between customer expectation, business requirements, and supporting technology. Looking at interactions from the customer perspective helps the business identify and implement improvements to both its services and processes.
The digital economy is the next evolution for business, regardless of industry. A strong service management approach will help ensure success.
Need to raise your service management game? Tedder Consulting can help you get ready for the demands of the digital economy – contact us today!
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