There are two types of IT organizations. One type of IT organization takes orders, manages service tickets, and provides technology and technology support. The other type of IT organization is a strategic partner within the organization that makes impactful contributions to the bottom line is part of business innovation discussions and facilitates real business outcomes and value.
While there are many differences between these two types of IT organizations and how they earned their perceived reputations, one of the biggest differences is that the strategic IT organization takes a business-like approach to operating.
A foundational element of IT operating like a business is having an up-to-date IT service portfolio. Think about it – successful businesses define and maintain a portfolio of products and services. They use this portfolio to help make decisions regarding how they serve various market spaces, to understand their strengths, and make decisions regarding strategy and where and how to invest. But unfortunately, many IT organizations ignore their service portfolio altogether – much less define services in terms of business value and outcomes.
The service portfolio can kickstart a whole new era for the IT organization—and it doesn’t have to be time-consuming! In fact, I have an easy, two-step method for getting started.
What is the IT service portfolio?
According to ITIL®, an IT service portfolio is “the complete list of services that are managed by a service provider. The service portfolio is used to manage the entire lifecycle of all services.”
In short, the IT service portfolio has all the information about the products and services IT offers, used to offer, or that are in development – all in one place. The service portfolio is – should be – a critical source of information to enable organizations to make data-informed decisions about investments in technology. But few IT organizations develop and maintain their service portfolio. Why?
- They feel overwhelmed – Some IT organizations find themselves consumed by day-to-day work. As a result, they may feel that they are just too busy to take on an initiative that may not seem like it would have an immediate impact on daily work.
- They struggle to elevate their mindset – Some IT organizations have become accustomed to being reactive rather than proactive when it comes to the strategic planning and use of technology. It may be difficult for those organizations to envision a world in which IT is aligned within the business, shares the same vision, and collaborates to plan and manage technology investments.
- They don’t know how to start – Technology use is already well-established within an organization, and defining a service portfolio appears to be too big of a challenge.
Why is an IT service portfolio important?
A service portfolio is where strategic IT organizations begin to set themselves apart. Of the many benefits of an IT service portfolio, one of the most important is that it helps establish IT as an integrated, strategic partner. The service portfolio becomes the source of truth for the organization, providing critical information regarding what and how technology is used within the organization.
Other benefits of defining a service portfolio include:
- Relates technology use and investments to business results – A good IT service portfolio connects how the use of technology delivers and enables business outcomes. This helps organizations use facts, not perceptions, to answer questions like:
- “What investments have we made in technology?”
- “Do we realize business value from our use of technology? Are we incurring unnecessary technical debt?”
- “Are our technology solutions effective? Are we realizing our organizational goals?”
- Enables a holistic view of technology use – Organizations – regardless of size – often suffer from not having a big picture view of its use of technology. That’s because technology solutions are typically implemented to address a need or challenge for only one part of an organization. Could there be opportunities to leverage an existing capability in a new or different way to address a challenge in another part of the organization? A service portfolio would help organizations answer that question.
- Enables data-driven strategic decisions regarding technology – The IT service portfolio serves the same purpose as a business portfolio when it comes to organizational technology-based products and services. Just as a business portfolio provides critical strategic data, the IT service portfolio provides the definitive source of truth for making decisions about technology investments, new and existing products, and services, withdrawal of existing products and services, identification of technical debt, and customers and stakeholders.
My 2-Step Method for Starting Your IT Service Portfolio
You’re probably thinking that an IT service portfolio has to be in-depth. After all, it’s supposed to include the “complete list of services” that IT provides.
So where do you start? It can start with two simple steps.
- Map your top 2-3 critical value streams
Mapping value streams is one of the most important exercises for any organization, regardless of whether you want to define an IT service portfolio.
Value stream mapping results in identifying, visualizing, and mapping all the steps in a product delivery process. It’s a cross-functional initiative that is crucial for everyone’s success. And instead of only a few people knowing how value is created and delivered within an organization, many people know. It’s a great way to get everyone aligned and recognize the cross-functional nature of work within an organization.
So start your IT service portfolio initiative by mapping the top 2 or 3 critical value streams within your organization. Why critical value streams? Because by identifying those critical value streams, the initial service portfolio makes the most significant impact for the organization – and shows immediate, tangible value.
2. Identify the IT products and services that support those value streams.
Once these critical value stream maps are defined and documented, then business and IT leaders can identify the IT products and services that support or enable these value streams. This is the opportunity to define the business outcomes and value of those value streams. And those definitions can then be applied to the IT products and services supporting those value streams. What are the business outcomes of these value streams? How is the value of these value streams determined? How does technology enable those outcomes? What should be measured that would indicate value – and can these measures be captured and reported by technology? How are decisions being made along the value stream?
The answers to the above questions will indicate what information needs to be collected and maintained within the IT service portfolio.
And that’s how to start an IT service portfolio in two steps.
You can do this!
The idea here is that you don’t have to overcomplicate the process. Many organizations don’t even attempt to create an IT service portfolio because they believe it’s overhead that distracts from the “important projects”. In reality, how can you evaluate the true impact and value of a project without the information that would be found in an IT service portfolio?
And don’t try to complete your service portfolio in a single go. In fact, when developing a service portfolio, I would advise following the ITIL Guiding Principle of “progress iteratively with feedback”. Approach the service portfolio as a living document that gets updated every quarter using this 2-step method. For each iteration, identify the (next) 2-3 most critical value streams, map those value streams, then identify how IT products and services support those value streams. Then write it down. Viola! You’ve just grown your service portfolio without overwhelming your IT team – or your business colleagues. And you’ve added more valuable information from which your organization can make strategic decisions about technology investments and use.
Tedder’s Takeaway: Why It Matters
An IT service portfolio is the foundation of a strategic IT organization. It provides facts and transparency regarding IT products and services and elevates IT beyond being “order takers” and into trusted partners.
Need help building your IT portfolio? Let Tedder Consulting help! From value stream mapping to identifying and defining IT products and services, Tedder Consulting can get your IT organization on the path of strategic business partner! For more information, contact Tedder Consulting today.
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