Tag Archives: Service Portfolio

The 2-Step Method to a IT Service Portfolio

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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.

 

  1. 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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The Opportunity of Failed IT Plans

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What went wrong in 2020?

I know, it’s a big question and most people would probably say “Everything.” Or at least, many CIOs would confess that the original strategic plans they had for 2020 were not executed.

There were many initiatives that just failed to get off the ground in 2020 due to COVID-19.

Now that 2020 is winding down — what happens to those initiatives? Should you try to execute on them in 2021? Are they even still valuable to your organization? Will you still have the capital for them? How can you afford them?

Smart CIOs know they can’t carry on as normal. Just because something was on the plan for 2020 doesn’t mean it should continue to be on it for 2021. Yes, strategic projects are still strategic, but it’s time to address whether the strategy has changed. If it has, the CIO has to know how to protect IT’s budget while shifting initiatives.

This is where the opportunity of a failed plan presents itself and where innovative CIOs can reset their priorities, align themselves with the rest of the organization, and ensure budget protection for 2021.

Revisit Your Organization’s Existing Strategic Plan

First, it’s important to understand what impact COVID-19 has had on your organization. This means more than just a workforce that is now working remotely. How did it impact the way your business operates and delivers value to customers? Did business models change? Did you add any new capabilities that are still contributing to ROI?

Now look at your existing IT strategic plan. Does it incorporate the changes made because of the impact of COVID-19?

It’s possible you could have some major changes to make to the IT strategic plan. For example, if your organization has added new revenue streams, then you may need to completely change the strategic plan to incorporate those new streams.

Look for Opportunities in your Value Streams

As you review what has changed in your organizations, you should also be identifying the opportunities for IT inside of this new strategy.

This exercise is best if you know the value streams in your organization (whether they are brand new as a result of COVID or they were already in place). If you don’t know the value streams of your organization, then now is the time to map them along with other members of the executive teams.

Remember, this is a chance for meaningful, impactful change. It’s no longer “business as usual.” We can’t say “Well this is the way it’s always been done” because organizations have proven they are capable of agility and making big changes quickly. When mapping value streams and looking for opportunities, don’t be afraid to open up to possibilities that might have seemed impossible a year ago. After all, most people would have said taking an organization completely remote in 48 hours would have been impossible this time last year but by now, most IT organizations have accomplished exactly that!

Fix any Value Leaks

Now, after you’ve reviewed value streams and are fired up about the new strategic projects you could bring to the organization in 2021, there’s a big question to answer: Where do you find the budget for it?

Some IT organizations were fortunate enough to have larger budgets this year while they enabled remote working — but those checkbooks won’t be as open in 2021.

Here’s what you can do right now to protect your budget in 2021

Look for the value leaks in your organization. Value leakage is a common problem in every organization but few leaders know to look for it. Businesses don’t operate on a consistent basis every single day. Value leaks can occur when changes in business workflows aren’t reflected in technology workflows, or people weren’t trained on new products or features, or when services or products aren’t retired appropriately. Value leaks occur due to poor communications, or when the organization fails to fully understand the costs and risks of any change, no matter how slight it may seem. If no one is monitoring value streams and measuring how value is delivered, then value will start getting dropped along the way.

In the context of protecting the budget for 2021, you can start finding and addressing the value leaks that are happening right now in 2020. When you start to fix the leaks, you can prove to the organization that you’re creating more value. The more value you bring to the table, the more you can justify your future budget and protect the budget for those bigger strategic projects you identify when mapping your value streams.

The Key is the Big Picture

The most important thing any CIO can do to seize the opportunity of failed plans is to not lose sight of the bigger picture. 2020 didn’t go to plan for anyone and every organization experienced shifts that will impact future strategies.

Your strategic projects from 2020 might still make sense in 2021. Or they might not. What’s important now is to look at how the organization delivers value to its customers and the opportunities for IT to enable and co-create that value. Then look at how IT can create even more value by fixing existing value leaks.

I think everyone will say that 2020 changed everything. But only the most innovative CIOs will be able to say that 2020 changed everything in the best way possible.

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Did You Pivot Or Are You Just Spinning in Circles?

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COVID-19 caught the business world by surprise. And it didn’t just change where organizations work (from an office to at home) — it has changed everything: economies, regulations, timelines, employee and customer expectations, the list goes on.

So what did the majority of organizations do in response to this swift and sudden change?

They pivoted.

I know that many seasoned leaders and CIOs have rolled their eyes at the word “pivot” in the past but, it’s 2020 and well, it just might be the word of the year.

No matter the industry, businesses have had to pivot. A few examples of this include restaurants acted as grocery stores selling fresh produce, meats and beer, among other things, gyms transitioned into online workout subscriptions, and distilleries began manufacturing and selling hand sanitizer. Even Chuck E. Cheese pivoted into a delivery pizza chain under the name Pasqually’s.

In big or small ways, every business has had to pivot. When done correctly, a pivot can create new revenue streams, keep businesses afloat, and deliver even more value to their customers.

However, organizations run into problems when they think they’re pivoting but really, they’re just checking off tasks, working for the sake of being busy or failing to innovate. In short, they’re not pivoting — they’re spinning in circles.

What’s the difference between pivoting and spinning?

Business pivots are meant to help a business recover from a difficult period that made their original business model less sustainable. It is sometimes seen as a short term move, but it can have positive long-term impacts on the businesses, depending on the business. Whether it’s meant to be short-term or long-term, a pivot is a deliberate and purposeful shift to create value for the end-user.

Deliberate and purposeful are the two keywords in that definition. It’s what makes a pivot different from a knee jerk spin. A knee jerk spin will not create value for your end-user or your business, but it will likely cost you time and money.

Here’s how to know if you made a pivot versus a knee-jerk spin. You pivoted if:

  • You relied on data to make decisions about where to shift 
  • You already had a clear understanding of how value flowed through your organization 
  • You understood what aspects of the business worked and leveraged those things to create new value streams

The difference between organizations that pivoted and those that are spinning is that the pivoting organizations already had a holistic view of their organization and how it delivers value. They understood their strengths, weaknesses, opportunities, and threats before the pandemic hit.

Organizations that made knee jerk reactions were in the day-to-day, siloed operational mindset. They didn’t know where they were to begin so they could change direction to move into a better place when COVID-19 hit. 

What Can CIOs Do to Stop Spinning?

If you are concerned that instead of pivoting, you’re just spinning, it’s ok. It’s not too late to slow down and make the pivot you need. Here’s how:

Identify the value you deliver to the end-user

What is the value that the organization delivers to the end-user? How does IT contribute to that business value? Are you able to connect IT services to the happiness and success of a customer? If no, then that’s where you start. Understanding where IT creates value in the organization is the first step to being able to find innovative ways to keep delivering it. 

Communicate with all key stakeholders

Are all of your key stakeholders in agreement with the value you deliver? Does the sales department see the same level of value that the marketing department does? Do your customers see the value your salespeople see? Every stakeholder needs to be on the same page here or else you’ll end up trying to deliver too much.

Map everything out

You can use a whiteboard or create a digital version, but you should have a clear map of your value streams and your customer journeys. It is imperative that everyone on your team can visualize where value is created, where it may be getting lost, and where there are more opportunities to create value.

Creating a customer journey and value stream maps are two exercises that will provide that holistic view of the organization you need to survive this pandemic and whatever comes next. They are collaborative exercises but once completed you’ll be in a better position to take actions that will help the business pivot to where it needs to go. 

Fill in the gaps

You can’t know where you’re going if you don’t know where you are. The truth is, even as we continue to move through this pandemic, we have no idea what will change in the future or what the next upending disaster will be. There is no such thing as “smooth sailing” forever. Another emergency will hit organizations and they’ll need to pivot. Taking the steps now to address where you are, lay your groundwork and create that solid foundation will strengthen you to not only pivot and survive in this emergency, but in future ones as well. 

 

If you want to ensure you’re making a pivot and not turning in circles, let’s chat! Book a free consultation to learn how you can leverage your wins and successfully pivot your organization.

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Let’s Stop Playing “Service Provider” and “Customer”

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The concept – at a high level –  wasn’t all bad.

The concept was that IT organizations should adopt a service-oriented mindset when it comes to working within the business.  The attitude of the IT organization must shift from “technology is cool” to “what’s best for our business”.

So best practice advised IT to become a “service provider” to the “customers” found within the business.

But in practice, IT taking on the role of “service provider” and treating business colleagues as “customers” sends the wrong message to the business – and within IT.

It’s the wrong message

When IT treats colleagues as “customers”, and colleagues view IT as a “service provider”, it puts up barriers with an organization.  Not only does it artificially separate the IT organization from the rest of the business, it makes working with the IT organization needlessly more difficult.  Under the mantra of “the customer is always right”, IT often jumps through unnecessary hoops to make the “customer” happy.  Being referred to as a “customer” gives some colleagues a sense of entitlement in their interactions with IT.  Some within the business make and have unrealistic expectations of the IT organization.

Perhaps even worse, the service provider / customer definition divides the IT organization.  The development team makes demands of the operation team.  The security team makes demands of the development and operations teams.  Demands all issued under the guise of “I am your customer – serve me”.

We’re really not service providers.  They really aren’t customers.

If IT was really a service provider, it would find itself competing in an open market place within a business.  IT would have the ability to (really) sell its services at market rates, scale as needed, and invest in new and emerging technology as it deemed fit. But that is not the reality of enterprise IT.  IT has a budget that has been allocated and agreed within the business to which IT must adhere.  This means is that IT really cannot scale resources or significantly alter or add services without agreement and funding from the business it serves.

If “the business” was truly the customer, they could shop for IT services, both from within and external to the business.  “The business” could contract with whatever service provider it chose and not be concerned with interoperability, security, maintainability, and every other -ability with which enterprise IT must be concerned.  But in reality, “the business” is (mostly) a captive user of its organization’s IT services.

IT is not a “service provider”.

The “customer” is not an internal group or person.

So, what are we?

What we are is a business.

A business is an organization aligned by purpose, vision, and goals, with each member working for the benefit of the organization and for the success of all other members of the same organization.   It takes all parts of the business – HR, Marketing, Sales, Manufacturing, IT – for a business to have success.  No single part of a business can stand on its own and be successful without interactions with and cooperation from the other parts.

By working as an integrated entity, a business has unlimited potential.  But what a business does not have is unlimited resources.  And when a business loses sight of the fact that it does not have unlimited resources, it often looks like this:

  • Multiple “number 1” priorities

o   But no additional staff is allocated to help

o   And no postponement or cancellation of other initiatives

  • Lack of investment in “keeping the lights on” – not doing the “care-and-feeding” needed to maintain current operations
  • Quality is often sacrificed to meet target dates

And then, IT often becomes an obstacle for getting something done.

Then in an effort to keep up (or dig its way out), IT overcommits and takes on additional work without fully understanding the demand or impact on its (limited) resources.  And when IT can’t deliver, then IT is looked at as being too slow to respond or react to business needs or changes in the business environment.   IT becomes the “black hole” where business innovations go to disappear.

But here’s the conundrum.

Business – by definition – is an opportunistic endeavor.  Success in business means being in the right place at the right time with the right solution.

But to be in the right place and the right time with the right solution means that a business – including its IT capability- must be prepared.

Become opportunistic – holistically

To be opportunistic means that a business must be prepared.  Because when an opportunity does come along, the business has to be able to make a decision based on the best information available.  But too often, business decisions are made based on “gut feel” or seeing only part of the big picture.

And especially in the digital age, technology – managed by the IT organization – is critical for business success.  Here are four things to do to get prepared.

  • Drop the “service provider / customer” speak. All members of the business are on the same team – there can be no “us” and “them” within an organization.  And to be clear, the customer is not part of the organization.  The customer is who a business is trying to entice to do business with the business. The business is the service provider to the customer.  Stop referring to internal resources as “service provider” and “customer”.
  • Define the service portfolio. A service portfolio articulates and establishes a shared understanding about how the business is using and is planning to use technology-based solutions from IT.  But more than that, the service portfolio provides a holistic view of resource commitments, current and future value, and the total cost of ownership for providing those technology-based solutions-all in terms of business outcomes.
  • Map the value streams of the business. Mapping value streams facilitates visualization of how information and material flow throw an organization to create or deliver value to a customer.  A value stream map helps help “connect the dots” regarding how the various parts of an organization (including IT) work together to deliver that value.
  • Share knowledge – all knowledge. Being prepared to seize opportunities depends on having available, timely, accurate, and relevant knowledge from all parts of the organization, throughout the organization. Knowledge is the basis for good decision-making.

How does doing these four things help?  It’s about being prepared to make a timely and informed decision when opportunity knocks.  A business that does these four things not only understands what it is doing today, but also has the needed insight into how its capabilities could be leveraged when presented with an opportunity.

It’s time for another mindset shift

The service provider / customer concept may have been a good way to start the mindset shift that many IT organizations needed.  It’s now time for IT organizations and businesses to stop playing service provider and customer.  The business landscape is rapidly changing, and technology is becoming the cornerstone of a business in the digital economy.  Being prepared is the best way to take advantage of the opportunities presented in the digital economy.

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Fund Services, not Projects

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Businesses are demanding more speed, agility, and responsiveness from their IT organizations. The work that IT does must provide the means for business to quickly realize value.

What does this mean for IT? Roy Atkinson sums it up nicely when he says that IT “must go faster”.

In response, many IT organizations are adopting Agile methodologies to help them “go faster”. But soon after the Agile decision, many IT organizations soon encounter one of the biggest challenges of all.

“How do we pay for this?”

A long-standing challenge that many IT organizations adopting Agile methodologies often encounter is the drive for agility using Agile conflicts with traditional budgeting and project cost management and accounting.[1]

Surely someone has figured this out.

Turns out that someone has…. Well, almost.

Problem solved… well, not quite

As I was thinking about this challenge, I started to do some research. I found an article titled “Lean Budgets” which does go a long way toward resolving the challenge.   The article proposed a set of practices that fund and empower value streams rather than projects, while still maintaining financial controls, by establishing portfolios of value streams. This approach seems to address many of the challenges faced by IT organizations adopting Agile approaches.

But I think the problem is not quite solved.

If we only focus on application development and do not consider the total cost of ownership of a service, we’re not providing the full story to the accounting folks. And accounting folks do not like surprises.

If we make funding decisions based only on the application development perspective, isn’t that like buying a new car, loaded with lots of features, but not considering the other costs involved with owning the car? To really understand the total cost of ownership of the car, we also need to consider fuel cost, taxes, licensing, upkeep, and so on. Only then can (should) we make a judgement regarding the value of purchasing (or investing) in that new car.

To bring it back to IT terms, while application development is an important aspect of designing and instantiating a service, it does not represent the entirety of service provision – things like the underpinning infrastructure, on-going maintenance, vendor agreements, and consumer support. Application development is only one part of the cost.

The key is that we have to look at the complete IT value stream, not just the software development component of that value stream. In other words, we need to define services that reflect the complete IT value stream.

A value stream map paints the “big picture”

The key to getting this holistic view is to map the value stream – the complete value stream.

A value stream represents the sequence of activities required to design, produce, and deliver a good or service to a customer.[2] The value stream includes the dual flows of material and information.[3] Application development is just a portion of an IT value stream. Shouldn’t the IT value stream also depict how underpinning infrastructure enables information flow? How external vendors are involved? How consumer interactions are managed?

In my opinion, the short answer is ‘yes’. Value stream mapping, when applied to the IT organization, is a great way to fully understand how the outcomes provided by IT enable business value. In other words, IT services.

Enter the service portfolio

Can a true service portfolio help?

By defining a service in terms of the complete IT value stream provides a holistic view on which real value can then be evaluated. Looking at these IT value streams within a service portfolio provides an organization with a much different perspective and more complete way to evaluate value.

And as Mark Schwartz states in his book “The Art of Business Value”[4], value is “whatever the business decides it is.”

It is not for IT to decide what is and is not valuable to a business. But it is for IT to present a complete picture of what it does – application development, end-user support, maintenance and support, and more – to contribute to business outcomes. This is why defining services in terms of the complete IT value stream is important.

But there’s more that goes into a making a service portfolio even better. A good service portfolio can be enhanced by underpinning it with things like:

  • Customer portfolio – Who is buying what services? What revenue is resulting from provisioning of the service?
  • Supplier and Contracts Portfolio – What vendors are involved in the delivery of what services? How much is the organization spending on vendor support?
  • Application portfolio – What applications support what services?

Providing this information in a service portfolio facilitates informed business decisions about investments in technology by providing the holistic view of services.

Then organizations can fund services, not projects. Fund services, not just application development.

The best of both worlds?

Make no mistake – Agile can provide many benefits for both the IT organization and the business it serves. But by defining the service portfolio and funding services and not projects, organizations can realize the best of both worlds.

This approach allows the IT organization to exploit the benefits of an Agile approach:

  • Smaller and more manageable iterations of work
  • Value delivery more quickly and more frequently
  • The product owner, representing the business, provides guidance regarding desired features and business direction.

The IT organization also realizes the benefits of a service portfolio. A service portfolio:

  • Clearly describes how IT underpins business value
  • Enhances the perception and reputation of the IT organization being a good business partner
  • Enables the business to make informed decisions about IT investment.

The business also benefits:

  • A service portfolio provides business colleagues with a holistic view of IT services
  • Investment decisions can be made based on the ‘complete picture’ of an IT service
  • Based upon service investments, the IT organization can use the best approach to meet business requirements – Agile or otherwise.

Defining a service portfolio is just the way that a business can have the best of both worlds – agility and control.

Need to modernize your service management environment and incorporate emerging practices like Lean and Agile, while still leveraging your existing investments?  With our Next Generation ITSM consulting service, Tedder Consulting can help you get the best of both worlds – contact us today!

For more pragmatic advice and service management insight, click here to subscribe to my newsletter!

Picture credit: Pixabay

[1] “Lean Budgets”, www.scaledagileframework.com retrieved 1/28/2018.

[2] Martin, Karen and Mike Osterling. “Value Stream Mapping”, McGraw Hill Education. 2014. New York.

[3] Ibid.

[4] Schwartz, Mark. “The Art of Business Value”, IT Revolution Press. 2016. Portland, OR.

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