Tag Archives: Service

You’re Talking About Value Wrong

August 1, 2021 Doug Tedder Leave a comment

“Value” is one of the most overused and misunderstood terms in business today.

It is often thrown around in meetings and on company websites but while many organizations talk about value, very few get it right.

Why is that? What is the problem with value? For starters, value is a perception. What is valuable to one organization -or one person – may not be as valuable to another. And many organizations don’t define value at an enterprise level. As a result, company initiatives are fractured and less impactful because everyone within the organization is using their own value measuring stick.

The second problem with value is that too many organizations equate value only with cost savings. This is a misconception that can cost organizations a lot of money and time with little to show for it. Fact is that organizations, just like people, are happy to pay for things that they perceive as being valuable – cost is secondary.

If you’re talking about value wrong or worse, not talking about it at all, here are three points that will help you reframe the value conversation.

Value does not equal cost savings.

When thinking about value, it’s easy to just think in terms of dollars and cents. It’s straightforward and unlike value, everyone knows exactly how much dollars and cents are worth.

Now, cost is a factor in value but it should not be the leading factor of value. Because in addition to a price tag, there are intangible costs with any transaction. These intangible costs include things like time to make the purchase, the ease of making a purchase, the time to get set up with a product or service, etc. These intangible costs factor into the value and depending on the end-user, they could mean much more than a specific dollar amount.

When you’re discussing value — whether it’s the value of your product or service, a new technology, or your own IT services, don’t forget the intangibles and factor those into the value.

Outcomes by themselves don’t deliver value.

In an article for SysAid, I explained the difference between outcomes and outputs in reference to ordering a pizza. The outputs are the operational measures, like when you order a pizza and it arrives on time and at the agreed upon price. The outcomes are the results that show the value of that pizza delivery, such as did you get the pizza you ordered, was it hot and fresh, did it taste good and so on.

More IT professionals are beginning to focus on outcomes instead of outputs, which is very important! However, outcomes alone don’t get the job done when it comes to value. Competition is too intense these days and consumers have a lot of options, and high expectations.

So what combines with outcomes to create value? The experience of the transaction.

Part of value is experience.

If you don’t provide or enable a good experience, you’re not offering value. The experience is just as important today. In fact, Salesforce found in a survey that 80% of customers say the experience businesses provide is just as important as its products and services. And Gartner found that 81% of businesses compete primarily on customer experience.

Customer experience is more important than ever and if you want to deliver value through your products and services, you have to offer a seamless and personalized experience for your customers.

The Role of Service of Management in Value

By this point, it’s clear that value isn’t just about a price tag. It’s a combination of understanding what’s important to your consumers and consistently delivering those results – along with a great experience. In short, someone finds value when they can say “I got the outcome I needed and expected and I had a good experience while doing it – at the price I was willing to pay.”

The connection between the experience and outcomes lives in your service management foundations. Service management is how you can monitor the experience and ensure you deliver the outcomes that a customer wants so they can recognize the value of your products and services.

Is your service management approach strong enough to deliver value? Have you done these things in the last 12 months?

Met with your key stakeholders to review and agree on a shared definition of value
Mapped your value streams with all stakeholders, not just IT
Audited your workflows to identify and implement improvements
Implemented continual improvement strategies

Service management is an ongoing initiative but it can — and will — help to deliver value if it’s done properly with buy-in from the entire team.

If you’ve been struggling with showing how IT delivers value to the bottom line and you want to elevate your IT organization, you need to be sure you’re talking about value correctly. Review your service management approach. Examine the customer experience. You may just find the areas where IT can fill any gaps and deliver the value your customer needs.

Leadership

A New CIO’s Guide to Mapping Experiences

June 18, 2021 Doug Tedder Leave a comment

Delivering and enabling business value is a large part of IT’s job. As such, the CIO must track how value flows, not only within IT, but across the organization.

It may sound easier than it actually is. Because value is tricky. For one thing, it’s not always well-defined. And it often gets lost in day-to-day operations as the business evolves. This often leaves end users wondering what happened to the value that they were expecting.

One of the first tasks of new CIOs is to determine what’s driving value, what’s not, and how improved value can be delivered to all stakeholders. But how can you do that? Where do you start?

In order to answer that question, we need to stop talking only about value. Instead, we need to include talking about the experiences of the customer, the user, and the employee.

Customer experience

As defined by Hubspot, customer experience is “the impression your customers have of your brand as a whole throughout all aspects of the buyer’s journey.” The customer experience factors into a customer’s view of your brand and it can impact the bottom line. A strong customer experience can increase customer retention, which will reduce marketing and advertising costs. And loyal customers often spend more than new ones as one study found that if a business increases customer retention by 5%, profits can increase by up to 95%. Additionally, according to a survey by Info Quest CRM, a totally satisfied customer contributes 2.6 times more revenue than a somewhat satisfied customer.

User experience

The user experience is very similar to customer experience but it is directly related to the product, application or service. User experience refers to the journey a user takes when they interface with a system whether that is an application, a digital service, a website or a product. In today’s digital world, user experience matters. 88% of consumers are unlikely to return to a site after a bad experience and a recent study found that a well-designed user interface could increase conversion rates by 200%.

Employee experience

According to Gallup, the employee experience is the journey an employee takes with your organization and is made up of all the interactions that employees have during their tenure at the organization. The employee experience matters because research shows that companies with actively engaged employees outperform competitors by 147% in earnings per share and happy employees are up to 20% more productive at work. Improving the employee experience can earn your company money.

The experience matters

Each of these experiences contributes to the overall value that stakeholders derive from an organization and all of these experiences directly impact the bottom line. If an experience is bad, there is no realized value from that experience. Therefore each of these experiences is very important to CIOs because better experiences means better value.

Luckily, there is a tried and true approach for enabling more value through creating better experiences. It starts with mapping the current experiences.

Whether you are mapping customer journeys or employee journeys, every mapping exercise will include the same steps. My recommendation is to choose one experience to map and improve before addressing the others. You’ll be able to use the lessons learned from mapping that one experience as guidance when mapping each of the other two. Also, you can iterate faster when only focused on one experience at a time.

1. Include all stakeholders

This is the first and most important step you can take when mapping experiences — get all stakeholders involved. These stakeholders will want to work with you if they understand how improving experiences will benefit them, so communicate those potential wins. For example, if you chose to map the employee experience, you can explain to HR that mapping and improving this experience can improve the onboarding experience, decrease employee turnover, and increase employee engagement — thus helping HR to hit their departmental objectives.

2. Map the value streams

How is value flowing through these experiences? For example, how does a user realize value from first touch with your website through purchase? What are the steps and who is responsible for each? Mapping the value streams that enable experiences will identify where responsibilities lie, what parts of the organization are involved, and where there may be gaps or bottlenecks.

3. Audit workflows

Once you have the team on the same page, review and audit the processes that underpin the value streams that underpin an experience. What’s going on under the hood of that experience? Approach these audits with an open minded curiosity, and don’t be afraid to ask why a workflow is designed the way it is. Let your team know that this is a discovery and learning exercise, not a blame exercise, and that you are simply building a clear picture of how work is being completed. Workflows, no matter how well they were designed, have a tendency to ‘drift’ over time.

4. Embed continual improvement

Where is the experience falling short or encountering friction?

This is the most critical question a CIO must be able to answer when it comes to experience. And it’s a question that the answer is continually changing, due to continual changes in marketplaces, stakeholders, technology, and more. This is why embedding continual improvement within the experience is so important.

New CIOs have a big opportunity to establish a mindset of continual improvement right from the start. Regularly survey end-users regarding improvement suggestions and feedback. Develop and maintain a continual improvement log for capturing, prioritizing, and publicizing improvement suggestions. Establish a regular cadence for designing and implementing improvements. Market the successes and lessons learned from continual improvement. Why? Because continually improving the experience continually improves value realization.

Applying the above four steps will provide great insight into each of the three experiences that are driving value within your organization. Even though the focus of each experience is different, the process of mapping these experiences is the same because they all revolve around people, processes, and technology, and how well each of these factors are working with the others.

What has been your experience with mapping experiences? I’d enjoy hearing about your discoveries and successes with experience mapping.

Digital Transformation

IT Reset: How to Re-Prioritize IT Initiatives During COVID-19

May 17, 2020 Doug Tedder Leave a comment

CIOs have had their work cut out for them over the last few months. The sudden shift to remote work has put pressure on IT to create solutions for remote workers using technology that perhaps was older or less capable, support overworked and stressed out IT technicians, and, in general, keep the business moving through the use of technology.

The priority at this time must be ensuring that technology supports essential business processes. But that doesn’t mean IT leaders should freeze any other initiatives until after COVID-19 has passed.

In fact, the worst thing any leader can do right now is “freeze” and wait until life “returns to normal.” There will be no return to the normal as businesses knew it before the pandemic. Even after the immediate threat has passed and businesses can resume working in offices, the way we work will be forever changed because of this situation.

There will be an expectation for the business to provide flexible work environments, more self-service options, tighter security, and better contingency plans for addressing future disruptions like this one.

All of these shifts provide IT with a rare opportunity to hit pause, take a step back, and reassess priorities. Adobe’s CIO Cynthia Stoddard advises, “CIOs now have to rethink priorities, or at least reorder them, and we must reinvent ourselves now as virtual leaders.”

Here are a few ways you can reset your priorities and identify what initiatives you should take on right now.

Cybersecurity

One of the first priorities should be your level of protection against cyber threats. Security is imperative for continuing essential business operations but this unique situation has increased the risk of cyber threats. “Zoom bombing” became a trend over the last few weeks as uninvited guests crashed virtual meetings and get-togethers, often disrupting the session with violent rhetoric. While Zoom quickly adapted to protect its users, this may be just the beginning of more frequent cyber-attacks and threats. As more of the world moves online, hackers will most likely increase the intensity and sophistication of their attacks. CIOs should review their cybersecurity protocols and ensure the proper procedures are being followed.

Productive Remote Work Environments

In addition to cybersecurity, CIOs need to make sure that every person in the organization is equipped to do their job remotely. This might mean you need to more heavily invest or leverage self-service technology or AI. Large investments or initiatives around new technology may have been on the back burner but now is an ideal time to reassess whether you need to make those investments now.

It’s also not just about providing technology. You may need to equip your team to handle and manage it. Are your knowledge bases relevant and up to date? Knowledge bases may not be seen as high priority, but techs will no longer be able to just walk down to an office to troubleshoot a problem. More of the organization could be turning to knowledge bases to navigate technology while they work from home.

Service Delivery

Another area to review is your service delivery processes. There are many facets of connectivity that are out of your team’s hands right now, including different hardware and software being used by team members with different levels of connectivity. Like I mentioned earlier, a service technician can’t simply walk down to an office to troubleshoot an issue. If there were any gaps in your service delivery processes before COVID-19, they are likely more apparent and problematic now. Take this time now to address those important issues.

Refocusing priorities will allow you to emerge from this situation more efficient and capable than you were. This will enable you to refocus on those more urgent tasks.

I mentioned in a previous blog post that CIOs and IT leaders need to focus on enabling outcomes instead of simply delivering outputs. Even though the way we work is rapidly shifting, this is a perfect time to reassess how IT can drive outcomes. We’ll never go back to work as before. So, instead of looking at this situation as a blow to current initiatives, look at it as the perfect time to re-prioritize and prepare for the new future.

ESM, ITSM

Four Steps for finding your misplaced Service Owner

May 1, 2018 Doug Tedder 2 Comments

Has your IT organization defined services and named service owners?

Have you identified the right person as the service owner?

How do you know?

Let’s start from the beginning

What is a “service”?

According to ITIL®, a service is “a means of delivering value to a customer by facilitating the outcomes that a customer wants without the ownership of [specific] costs and risks”.[1]

A service is not a discrete unit of delivery, but an on-demand flow that is (should be) continually improved to deliver the outcomes required by the ever-changing needs of business.

A key service role is that of the service owner. The service owner “owns” the service – that is, the service owner is accountable for the quality of outcomes resulting from the consumption and use of the service.

Many organizations have identified IT people as its “service owners”.

But who decides if a service is delivering the desired outcomes? Who decides if the service quality is adequate and appropriate? The customer.

That confusing “customer thing”

Who is the customer?

That’s the thing that seems to cause all kinds of confusion within organizations – the term “customer”.

Who is the customer?

The ultimate buyer of solutions.
The ultimate judge of quality and outcomes.
Who the business is trying to entice and retain in the buying of the products and services.

This means that for many services, IT can’t be service owner.

If the service is an “IT service” – that is, the service is provided by IT and consumed within an organization, then yes, someone in IT is (better be!) the “service owner”. But many services that involve the use of technology result in outcomes that are delivered externally – to the true customer. This means that a lot of IT’s work is done in support of delivering value to a customer that is outside of the business.

But typically, IT is not directly involved in interactions with the customer.

Finding the (true) Service Owner

So, who is the service owner? How about the value stream owner?

In their book “Value Stream Mapping”, Martin and Osterling define a value stream as being “the sequence of activities required to design, product, and deliver a good or service to a customer, and it includes the dual flows of information and material”.^[2] They also describe a “value stream champion” as “someone who’s accountable for the performance of the entire value stream. In a hierarchical organization, [this person] is a step or two closer to the work than the executive sponsor”.^[3]

ValueStreamGlobal.com describes the role of a value stream owner (VSO) as “an experienced manager or executive servant leader who is accountable to senior management for improving the value to non-value ration of a product family within an enterprise”.^[4] Among the responsibilities of the VSO are^[5]:

Ensuring the Value Stream itself is correctly identified, defined, mapped, optimized, managed, and improved over time…. Including specific definition of the product/service family and related components
Coordinate with business functional areas that contribute to the creation of value in the flow.
Demonstrate to senior management that the outputs of the value stream are competitive in the marketplace and meet current customer* demand. The value stream must be able to quickly adapt to changing market conditions.
Maintain a holistic view of the organization and understand where in the large scheme of things their value stream fits… includes not sacrificing one area for the sake of optimizing another, but to optimize the whole.

“Value stream owner” …. sounds like a “service owner” to me.

Why IT isn’t (always) the Service Owner

If the service owner owns a service from end-to-end; that is, from point-of-origin to point-of-consumption, this means that (in most cases) the service owner cannot reside within IT. While IT may manage and perform activities as part of service delivery and support, IT cannot possibly own a service from point-of-origin to point-of-consumption. Why? Because IT does not have customers – the business does.

IT typically acts upon business needs. Rarely (if ever!) does IT lead business initiatives or interact directly with the (true) customer.

Therefore, the value stream owner must be the service owner. IT’s role may be that of service manager (responsible for particular aspects of the daily operation of a service), but in the situations where value and outcomes are realized by the true customer, IT cannot be the service owner. IT controls only a portion of any given value stream involving the true customer. If IT tries to take ownership of services for which it cannot adequately or appropriately be accountable, it is setting both itself and its business colleagues up to fail.

But on the other hand, since IT does own “IT services”, then IT cannot be passive and wait for something to happen or for someone else to provide IT with its “marching orders” regarding those services. IT must step up and take ownership – in the complete context. This means making the tough decisions like investing in security versus the risk of getting hacked. This means decommissioning infrastructure from the environment as services transition to a retired state. As the owner for IT services, IT must drive value add, eliminate non-value-added activities, and also drive efforts that are necessary but non-value add – and live with the consequences of those decisions.

But the same applies for any service owner, not just IT service owners. A service owner must drive value added activities, eliminate non-value-added activities, and drive efforts that are necessary but non-value add. And live with those decisions.

That might be a different way of thinking for some. For some, it may be downright scary.

Because with ownership comes accountability and great responsibility.

What’s in the way?

The idea of a service owner being outside of the IT organization may be a bit scary to some. What’s in the way?

Attitude – Sometimes the thinking is that if it’s anything involving to technology, it is automatically an “IT issue”. Or conversely, if a colleague didn’t request a feature or ask the right question, then that’s a “business issue”. Organizations must look holistically at how value is created and delivered – there is no room for a “us and them” attitude.
Fear of losing control – Sometimes the IT organization feels that if it doesn’t own services, they will no longer have control. The fact is IT really never has been in control. Yes, IT is a part of nearly every value stream – but cannot own all value streams from end to end. It isn’t (should never have been) about control – it is about collaboration.
Lack of acumen – There’s often a ‘lack of acumen’ within the organization. IT often lacks business acumen – an understanding how the business works, what influences the business, or understanding the environment in which the business competes. Business colleagues often lack technical acumen – how technology works, how technology could be or is currently used within the organization, or are intimidated by technology.
Lack of clarity regarding the value stream – While many may have a deep understanding regarding their particular contributions to a value stream, often there are only a few that have an understanding of the end-to-end view of the value stream.
Services really weren’t defined – Rather describe services in terms of value and outcomes, “services” were defined as activities and things.

Four steps for finding misplaced Service Owners

Here’s my four-step approach for identifying and enabling the success of service owners.

Identify and map value streams – Identify and document how value flows through an organization. Mapping the value streams provides a holistic view of the organization.
Identify the value stream owner – While many contribute, who ultimately is accountable for the delivery and quality of the value stream?
Understand the relationship between technology and the value stream – This provides the context for services and where IT “fits”.
Define the service portfolio – Captures how technology underpins and enables value streams and enables fact-based decision-making.

Taking these steps will remove barriers within organizations by depicting how the members of the business work together to deliver value. It also moves the business to act as a complete business – not collections of parts – by enabling the mindset shift to “our value streams”.

In the digital era, all parts of the organization must work together seamlessly to deliver true customer value, and identifying the true service owner is critical to value delivery. Our Organizational Value Stream mapping workshop helps you visualize how value flows through your organization, so you can identify the true service owner, correct where there may be bottlenecks and missing handoffs, and ensure smooth interactions with your customers in the digital age.

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

Photo credit: Pixabay

[1] “ITIL® Service Strategy”. TSO, 2011. London. P. 13

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

[3] Ibid.

[4] https://valuestreamglobal.com retrieved 2/13/2018.

[5] Ibid

*There’s that word again!

Agile, ITSM

Fund Services, not Projects

March 2, 2018 Doug Tedder Leave a comment

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!