Tag Archives: Service Portfolio

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!

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[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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The Seven Silent Killers of the IT Organization

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Early my career, a CFO asked me a very good question. “If IT can’t deliver a return on investment that is better than what I could get by putting corporate monies into a bank savings account, then why would I want to invest in IT?”

At the time, I didn’t have a good answer. In fact, I was a bit embarrassed. But looking back, I realize that he was absolutely right.

Is your IT organization delivering a good return on investment? Or is your IT organization being silently killed?

Where does IT spend the business’ money?

If I look at the broad categories of IT spend, there are three categories where IT spends the business’ money:

KTLO, or Keeping The Lights On, can be thought of as the cost of doing business. All other things remaining equal, KTLO is spend that typically fluctuates little on a year to year basis. This category includes spending on things like support contracts, salaries, training, regulatory and legal compliance, and maintenance and support activities to keep current systems running optimally.

Innovation represents investments in technology. This type of spend includes initiatives like new systems, new lines of business, technology enablement of new business products, mergers and acquisitions, or significant expansions of existing services. This can be thought of as “grow the business” or “transform the business” kinds of spend.

What is the third category of IT spending?

Break-fix. Break-fix represents spending related to failed changes. Recurring incidents. Major incidents. Failed deployments. Re-work. Poor quality.

When technology breaks, or changes fail, or an issue occurs that interrupts the business’ ability to do business, IT must stop whatever it is doing and fix the issue. Granted, some (hopefully limited) number of outages and failures should be expected. After all, technology ages and at some point, may fail. Business situations emerge in ways that software was perhaps not designed to manage. The bottom line is that when things break, IT has to fix what’s broken.

But here’s the thing. Regardless of whether IT is spending its time KTLO, innovating, or fixing, it all pays the same. To say it differently, an organization’s IT personnel are paid the same, regardless of what they’re working on.

Here’s the other thing. CFOs expect IT to deliver within its annual budget. IT doesn’t get more budget money to spend, just because it’s spending more money “fixing” rather than “innovating”.

If you’re the CFO, where would you like to see IT spending its time? Certainly not on “break-fix”.

What is the impact?

What happens when fixing issues and constant rework becomes (nearly) a way of life for the IT organization?

Well, two things.

First, remember those innovation projects that had been planned? When IT spends more time on “fixing”, those innovation projects get broken out into subprojects in the hopes of getting “something” rather than “nothing” done. Or they get delayed until the next budget cycle.   Or they get outsourced to someone else. Or they don’t get done at all. Why? Because IT is too busy with rework and fixing, it has no time to work on the innovation that the business requested.

Second, the reputation and credibility of the IT organization become damaged. While some in IT may be (briefly) recognized for their heroic efforts in “putting out the fires”, the longer-term damage is being done. IT becomes perceived as being too reactive, inconsistent, incompetent, and unreliable.

Are the silent killers evident at your IT organization?

I just finished reading “The Art of Business Value” by Mark Schwartz[1]. In the book, Schwartz described the abstracted total of IT capabilities for many organizations – software, infrastructure, the whole bit – as a giant hairball. This giant hairball is continually getting new pieces stuck to it – and not all of it pretty. The hairball clearly has value to the organization – it enables the business! – but the hairball is continually becoming more and more difficult to manage.

And, in my opinion, it’s this hairball that is silently killing IT.

“Break-fix” is just one thing that is silently killing IT. What are some other silent killers?

  • Uneven effort. There are often overlapping efforts by those in IT – multiple people doing similar activities. Or even worse – there are gaps in effort. Things that should be getting done, but are not.
  • Lack of transparency. No one is able to identify what happens to investments in IT. No one can adequately describe the value proposition of IT. All the business knows is that it spends monies on IT. It’s not consistently clear of what is coming out of IT.
  • Increased spending in KTLO. Because systems aren’t being retired, or new applications or technologies are continually being bolted-on to legacy systems, the cost just to keep the lights on rises from year to year.
  • Inability to respond to changing business needs in a timely fashion. IT is unable to deploy new or updated technology in the timeframes or in a manner required by business.
  • IT personnel lack business acumen. IT people think and talk only in terms of “bits and bytes” and have no ability to relate technology efforts to business outcomes and value.
  • Avoidance. From the business perspective, it’s too darn difficult to do business with IT. So, the business doesn’t invite IT to strategy discussions. “Shadow” technology projects pop up within business areas, or aspects of technology use are outsourced.

Silencing the Silent Killers

IT organizations are complex and ever-evolving. And while all of the current talk of IT needing to be more agile and responsive is well and good, the fact remains that most IT organizations are stuck grooming a hairball. And it’s that hairball that is killing the IT organization.   What can the IT organization do?

  • Define the service portfolio. Identify and capture the business outcomes, total cost of ownership, needed resources, and business value of what IT does in the service portfolio. Not only will this illustrate how technology provides business value, it will also help identify areas of technical debt and help with informed decision-making regarding the use of technology within the organization.
  • Develop business acumen. Understanding the business of the business – and the contribution that technology makes to the business – is critical for survival of the IT organization. Talk with business colleagues in business terms!
  • Formally define processes. If there ever was anything close to a silver bullet for IT challenges, having defined processes might just be it. First, defined processes help IT understand what is to be done and by whom. Defined processes document and enable flow. Lastly, defined processes enable automation, which helps IT become more responsive to business demands.
  • Make regular payments on technical debt. Unabated, the IT hairball will only become worse. IT must dedicate focused efforts to pay down the organization’s technical debt. This should include activities such as kaizens, re-architecting systems from being monolithic to being more modular, and allocating part of all new project spend toward retirement (and shutdown) of non-necessary legacy systems.
  • Unleash your “inner salesperson”. If you’re unable to promote the value of IT, you can’t expect anyone outside of IT to perceive value. Continually sell the value proposition of the IT organization.   Be able to answer why investment in IT is a good thing for the organization. What will your CFO see as the return in the investment of the business’ monies into IT?

What makes the silent killers of IT so dangerous is the fact that IT organizations don’t recognize them…until it is too late. Don’t let your IT organization fall victim to these silent killers. My five actions for stopping the silent killers will help IT demonstrate a good return on investment for the business.

Don’t let your IT organization fall victim to these silent killers!  Tedder Consulting can help you flush out and remove the silent killers of IT organizations with workshops, assessments, process design, and more.  Don’t wait – contact us today!

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

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The Five Decisions your business makes every day about your IT Organization

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Your business is making decisions about IT. Everyday. From board meetings to daily interactions.

What are those decisions?

  • Invest – A great outcome for IT. The business is willing to spend more or invest new monies into IT. Perhaps the investment is to achieve competitive gain or advantage or enter into a new market space. Regardless, a decision of “invest” indicates that IT has proven itself to be a good partner and a good steward of corporate assets.
  • Use and Maintain – Also a great outcome for IT. Solutions provided by IT are working and IT has proven itself to be a reliable service provider, always ready to help.
  • Leverage and exploit – Another great result. The business envisions ways to use IT to break through business barriers through innovative uses of existing (and perhaps, new) technology. IT is seen as a strategic asset and differentiator.
  • Retire – A ‘retire’ decision could be good…or bad. ‘Retire’ is a good decision when the business recognizes that a solution provided by IT has reached the end of useful life. A ‘retire’ decision is even better when those solutions are being replaced by a new IT investment. But ‘retire’ could be a bad decision for IT, if investments in IT have not realized expected returns or continued use of an aspect of IT is deemed problematic.
  • Avoid – The worse decision for IT. A decision of ‘avoid’ says that IT is just not responsive, provides little or no value, or is just too hard to do business with.

What decision did your business make about IT today? What information did the business use to make that decision? What part did IT play in that decision? Did IT even have a seat at the decision table?

Is technology just a “business tool”?

From a business perspective, technology is a tool that can be used to drive value, increase productivity, or reduce costs. It’s gotten to the point where, just like buying a cup of coffee, a business can get technology in about any flavor it wants — anywhere. Just look at the number and variety of “-aaS” businesses that have emerged over the past few years. Moreover, many aspects of technology have become highly consumerized. This consumerization is evidenced by the ease of use and ubiquity of technology solutions such as smartphones, laptops, tablets, public Wi-Fi – even things like home networking, website construction and cloud storage. The question has become “why should the business get its technology from your IT organization?”.

Should technology be more than just a business tool? Does your IT organization want to be more than a tool? Shouldn’t IT be seen as an asset to the organization?

Making the IT organization a “strategic asset”

If something is to be considered an asset, it must have tangible value. But “value” is tricky, because it is a subjective thing. Value is a perception – the perception that what is received is worth more than the investment and costs it required to receive it. Value is not just about the dollars and cents. Who decides the value of IT? The business that IT serves–not IT. So, how can IT be proactive in influencing that decision?

Defining services, in terms of business value and outcomes, is a critical first step for proactively influencing business decisions about IT. When IT doesn’t define its services in terms of business value and outcomes, it doesn’t help itself. In fact, without such service definitions, IT hurts itself because it commoditizes and obscures what it does. Because a clear mapping of how IT services enable or support business value chains doesn’t exist, the impression of business partners is often that the technology needed by the business can simply be obtained anywhere.

Defining services is crucial for influencing business decisions. But it can’t be the only step.

What decisions do you want your business to make about IT?

What else can IT do to positively influence the everyday decisions that business is making about the IT organization?

  • Look at and manage IT as a portfolio – Many IT shops are managed from a list of projects, an annual budget, and an organization chart. As a result, there is little consideration for the strategic use of technology – it’s more about getting projects done within allocated resources. Without portfolio management, those projects often compete for the same resources and in some cases, those projects actually deliver opposing outcomes. Portfolio management takes a different approach through the application of systemic management of the investment, projects, and activities of IT organizations. It formalizes the strategy for the use of technology, and as a result, helps business realize the right returns for the right investments in IT.
  • Establish or enhance your business relationship management (BRM) capability. A BRM capability enables IT to proactively promote its value across the business. The four pillars of BRM –Demand Shaping, Exploring, Servicing, and Value Harvesting[i] – helps businesses realize value by surfacing demand, identifying value, effectively servicing to meet demand, and ensuring insights into and continual improvement of value within the IT portfolio of services, capabilities, and products.
  • You tell the story – don’t just leave it for someone else to do. Be an ambassador for your IT organization. How? By understanding your company’s mission, vision, and goals (MVG), and then identifying for yourself how IT contributes to the achievement of the MVG. But don’t stop there – identify how you and your contributions contribute to MVG. When your story becomes personal, it becomes much more compelling and powerful for those that hear it.

If IT does not tell its story – someone else will. And that story may not reflect the value that IT is delivering. By defining services in terms of business value and outcomes, managing IT as a portfolio, leveraging BRM, and each IT team member being a brand ambassador helps IT tell its story and positively influence the everyday decisions business partners make about IT.

Can your IT organization tell its story – in terms of business value?  Do you know how IT delivers business value?  It’s not about  taking calls at the Service Desk or producing reports – it is about services defined in terms of business value and outcomes.  If your services aren’t defined in this manner, Tedder Consulting can help.  Want to know more? Contact Tedder Consulting today!

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[i] Business Relationship Management Institute, “The BRMP® Guide to the BRM Body of Knowledge”, Van Haren Publishing, Zaltbommel, Netherlands. 2015.

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A Cure for “Bad ITSM”

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Is your business suffering from “bad ITSM”?

What does “bad ITSM” look like? Some examples:

  • Every request for change (RfC) goes before a change advisory board, because there’s no criteria or models defined that would facilitate reviewing a RfC any other way.
  • “Services” are not defined. Instead, the IT organization has a list of the applications, systems, and activities that it supports or performs. Many of the items on that list  appear in what is being called a “service catalog”. There is no discussion of how the things on the list add value or provide required outcomes to the business.
  • “Service level agreements” are just whatever IT configured within its ITSM tools. No documents describe the value of what IT is doing or how that value is measured or reported. There is no evidence of reviews with the business regarding what is configured within the ITSM tools as “service level agreements”, much less any signed agreements between the IT organization and the business it serves.
  • New projects and applications are primarily evaluated based on cost and resource requirements, instead of desired outcomes, opportunities for improvement, and current investments and capabilities. As a result, IT winds up trying to do all projects instead of the right projects- often using the same resources that are already being used to support existing applications, systems, and activities.

Look familiar? You’re not alone. Unfortunately, the above scenarios describe many ITSM implementations – “bad ITSM”.

What is the cause of bad ITSM?

Usually there is no single cause of a bad ITSM implementation. In some instances, a business case was never developed and agreed. If the business case was developed, it focused only on buying technologies rather than articulating  the business value and return on investment of the ITSM implementation.

In other cases, a holistic approach to implementation was not used. In these situations, the implementation took on a ‘frankenstein’ approach. The IT organization identified a solution looking for a problem, took some data from here, a tool from there, drafted a couple of resources that weren’t doing anything else and somehow cobbled it all together into some sort of ITSM thing.

Sometimes the initial implementation was very successful. But due to a lack of communications or an agreed plan or management support, the ITSM train lost momentum. The sense of urgency quickly faded and the organization moved on to the next big thing.

But there is good news, even in the face of the bad ITSM implementation. The good news is that you’ve started. But if nothing changes, “started” is where the ITSM implementation will “stop”.

What is the cure?

Like many medicines, the pill may be bitter and hard to swallow. But if the right medicine is used, the result will be improved ITSM health.

The tendency with many bad ITSM implementations is that the organization looked at process improvement only at the process level. The ITSM implementation gets lost in the details of the process and optimizes only a few parts (or a single part) of the overall IT value stream. ITSM becomes the bottleneck rather than the  enabler.

The cure? Stop looking at ITSM as a collection of parts.   Good ITSM is not just about implementing this process or that tool. Good ITSM must be all about the business you’re serving – in its entirety. This means you must take a “big picture” view and drive ITSM from the top-down.

Why? Because the better your ITSM implementation helps the business achieve its the goals and objectives, the better your ITSM implementation will be. But to do that, IT organizations have to take a different approach to ITSM to ensure the “big picture” view.

Get the “big picture”

Having trouble seeing the big picture? Here’s a few techniques that will help.

  • Use “Outside-In” thinking.   An “Outside-In”  mind-set  looks at a business from the customer’s perspective, then designs the processes, tools, and products based on what the customer requires. Good ITSM must take the same approach – look at ITSM from the business perspective and define how IT contributes to what the customer requires.
  • Develop Value Stream maps. What is a value stream? A value stream “comprises all the people, activities, departments, and hand-offs necessary to create and deliver value to the customer, be it a product, service, or information”. [1] A value stream map illustrates that a process (or processes) is a part of a larger ecosystem. Using value stream maps can help prevent a ‘tunnel-vision’ approach to ITSM that results from focusing on process improvement at the expense of the overall value stream.
  • Define the Service Portfolio – really.   I almost didn’t suggest this approach because many organizations don’t get the concept of a “service” correct, which then contributes to “bad ITSM”. But I also believe that ITSM can be used to help ITSM, and defining a service portfolio is a great way to see the “big picture”.   A well-defined and maintained service portfolio demonstrates that the IT organization understands how the services it provides contributes to the success of the business it serves. As business conditions change, the service portfolio changes as well. In other words, IT sees (and is part of) the “big picture”.

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[1] Michael A. Orzen and Thomas A. Paider, The Lean IT Field Guide (Boca Raton: CRC Press, 2016), p 22.

 

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Eating an Elephant: Service Catalog vs. Service Portfolio

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During my recent BrightTalk webinar, “Five PDG (Pretty Darn Good) Reasons to Define a Service Catalog”, I was asked for my thoughts regarding starting the Service Catalog when the Service Portfolio was not in-place or defined.

The Service Portfolio is made up of three components:

  • Service Pipeline – Services that are being discussed or designed, but are not yet available for deployment
  • Service Catalog – “Live” services or services that are available for deployment
  • Retired Services– Services that are or were in-use, but are now no longer available for deployment

As you can see, the Service Portfolio represents every Service within an organization.  It is a significant commitment by an organization, moving from a mentality of “my component” to “our services”.  Many organizations struggle even to define their “live” services, much less those services that are (should be) retired or in the pipeline.   “Services” are often confused with “products” or “activities”; both of which may be components of a services, but in and of themselves, are not “services”.

From my perspective, defining and maintaining a Service Portfolio is much like the proverbial “eating of the elephant”. You can’t eat an elephant in a single bite.  Likewise, you won’t be able to define a Service Portfolio in a single bite.   So which to do first–Service Catalog or Service Portfolio?  My advice–start with the Service Catalog.

Why?

First, this will force you to come to grips with the definition of “service” – the valuable outcome(s) that customers want without having to own the specific risks and costs of delivering and supporting that outcome.  So what is a “service”?  To use a simple analogy, consider an oil change.  The customer simply wants the oil changed in their car—they don’t want to worry about the disposal of the used oil, the maintaining of the inventory of oil and oil filters, being trained on how to change the oil, and all of the other things that are needed to deliver that outcome—having fresh oil and a new filter for their car. Defining what is and is not a service is the crucial first step.

Secondly, it allows you to focus on those things that should be known and familiar – the things the IT organization is doing today – as you start to win hearts and minds in the cultural shift to an outcome-based, value-added, service-oriented IT organization. It helps the organization recognize and understand how their specific contributions enable those outcomes to be realized by the customer.

Okay, so now “how”?

First, establish the “boundaries” for the Service Catalog. A service is either “in” or “out”.  As you identify services, determine whether those services are “in” – as in “in use”- or not.  If a service is “in”, it goes into your Service Catalog.  If a service is “out”, then this service should appear somewhere else in the Service Portfolio.

Then, for those services that are “out”, or somewhere within the other parts of the Service Portfolio, the choice is either “coming” or “going”. Simply put, if the service is “coming”—under development, being discussed – then that service definition should be included in the Service Pipeline.  If the service is “going”, then the service definition should appear in Retired Services.

Once you’ve completed this exercise, you’ve developed the basics of a Service Portfolio. Keep in mind that you won’t get this done in “two weeks”—it will take some time, thought, planning, and discussion.  To really exploit and embed the concept, you’ll need to decide things like how and when new projects are represented in the Service Pipeline.  Likewise, you’ll need to decide when and how Services move from the Catalog to Retired Services.  Use of the Portfolio for evaluating emerging business needs against existing solutions will need to be decided.  Service Owners must be named to maintain service descriptions, represent the service throughout the organization, and manage the lifecycle of the service.   A critical success factor in this work is to include the Customer as part of the definition and design of the Service Portfolio.    Who better than the Customer than to help us understand the outcome and value that a service should provide?  By including the Customer, acceptance of the portfolio approach and your chances for success improve dramatically.

One bite at a time…

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