value - Innovative Service Management Consulting and Training: Tedder Consulting

“What is the value of IT?”

It’s the question that gets asked over and over. But the question itself is not the problem – it’s a symptom. It distracts from the real issue: the absence of organizational accountability for IT value.

As a result, your organization gets the IT it deserves.

How organizations end up with the IT they deserve

Organizations end up with poor IT when:

Technology is viewed as a cost center
Leadership fails to modernize or invest
Business units and IT operate in silos
Digital transformation lacks clarity
Governance is weak or outdated
The human experience is undervalued

That’s not to say that all of this is the fault of the organization. IT can influence many of these issues by defining a service catalog. A service catalog is the authoritative, business-facing description of IT services—defined in clear, outcome-oriented terms that show how IT enables business value. A service catalog is not a list of technologies or a menu of request forms. It is a structured representation of what the IT organization delivers, why it matters, and how it supports business outcomes.

Without a service catalog, IT becomes invisible – a utility seen as a just a back-office function tasked with fixing technology and keeping systems running, rather than driving value. This mindset allows the business to avoid owning strategic technology decisions, deflecting responsibility for unclear business requirements, shifting priorities, poor planning, or the lack of business strategy alignment. As a result, IT is left to guess or assume what business outcomes the organization is expecting.

On the other hand, when the business and IT work as one team, the question of “IT value” disappears. IT value isn’t a question when:

Organizational leadership treats IT as strategic, not tactical
Investments (including technology) align with business priorities
Workforce readiness is cultivated
Innovation and foresight become cultural norms
Processes are designed to enable, not constrain
Systems are human-centric and intuitive

The key difference in the organization getting the IT it deserves – good or bad – is how business strategy and IT strategy are connected. The service catalog (or lack thereof) is the concrete expression of that connection.

What we have here is a lack of strategic alignment

As Mark Lutchen noted in Managing IT as a Business, technology only delivers benefits when implemented with an understanding that it changes how a company works. Among the principles discussed within his book, Lutchen advised that business and IT strategy must align to ensure that technology drives profits.

But when business strategy and technology strategy are treated separately, then the organization is constrained, if not prevented, from fully leveraging technology for business benefit. This approach results in bad behaviors within the organization, such as

IT is expected to align to a business strategy for which it had no input
IT is brought in at the last minute to strategic business discussions when it becomes apparent that technology is involved.

McKinsey’s research reinforces this point – without aligning investments to strategic technology trends, organizations chase hype instead of harvesting value. Many companies chase trends without developing internal capacity, resulting in minimal return.

Defining IT services and, subsequently, a service catalog not only provides a framework to evaluate innovation, but it also represents a mutually agreed understanding between IT and the rest of the business for ensuring that technology investments result in business value.

But the hard truth is that some organizations do not want to change the status quo. Some within organizations would rather bluster about “IT value” rather than taking action to establish and enforce accountability through strategic alignment.

Stop debating IT value, start aligning IT with the business

Defining IT services establishes the critical foundation for answering the question “what is the value of IT?” Start from the “outside” then work back “inside” the organization to answer the following questions:

What is the business of the business?
Who are our customers?
What do those customers need?
Why do those customers come to us?
What do those customers expect from us?
Who is accountable for ensuring that customers are happy?
What combinations of IT and non-IT people, processes, and technology enable us to do that?

The answers to these questions provide the foundation for defining services, and ultimately, a service catalog.

Earn the IT you deserve

Business-IT alignment is one of the strongest predictors of whether technology investments translate into outcomes such as business performance, operational excellence, and competitive advantage. IT cannot create value in isolation – it’s the partnership between IT and the business that unlocks it. A well-defined service catalog demonstrates that both share a common understanding of value, outcomes, and expectations – the foundation of alignment.

What is employee experience (EX)?

A recent Forbes magazine article described EX as “the sum of all interactions that an employee has with her employer during the duration of her employment relationship. It includes any way the employee “touches” or interacts with the company and vice versa in the course of doing her job. And, importantly, it includes her feelings, emotions and perceptions of those interactions.”

What companies are learning is that EX is a really big deal and is becoming a critical factor in the success of the modern organization.

Why all the fuss?

There are a number of reasons why EX is getting so much attention across businesses today. First, happy employees make for happy customers. This Harvard Business Review article discussed the strong statistical link between employee well-being and customer satisfaction. A study conducted by Glassdoor showed that a happier workforce is clearly associated with an organization’s ability to deliver better customer satisfaction.

It is easier and less expensive to recruit, retain, and grow employees when there is consistently positive EX. When companies create outstanding experiences for their employees, people want to work for and stay with these companies.[1]

Another Forbes article discussed the correlation between good EX and profitability and value. For example, the stock prices of companies appearing on Fortune’s 100 Best Companies rose 14% per year from 1998-2005; stock prices only rose 6% for companies not on this list. A Globoforce-IBM study found that organizations that scored in the 25% on EX saw 3x return on assets and 2x return on sales.

Indicators of good EX

But here’s the thing. EX cannot be directly measured. Think about it – how can you measure how someone feels? Sure, you can conduct surveys or interviews and get a general impression of how employees feel about their employers and work environment, but this approach has some level of subjectivity.

Secondly, many organizations are under a mistaken perception that EX is just something to check off a list. But EX is not just about employee appreciation lunches or passing out gift cards, nor is it something that is just the responsibility of an HR organization. Rather, it’s the entire organization that influences and promotes EX.

Good EX is largely the result of an organizational culture that values employee contribution, collaboration, well-being, purpose, and other factors within the workplace. It truly does come down to how employees feel about their organization, their management, and their job.

Good EX might be indicated by high net promoter scores, high employee retention rates, or smaller time-to-hire measures. As mentioned above, good EX may even show up on the bottom line in the form of increased profits or market value. But none of these indicators are scientific measures good EX.

One thing for sure however – just as with a positive organizational culture, people know good EX when they experience it. Can good enterprise service management help enable that positive employee experience?

What is enterprise service management?

During his recent Cherwell Software CLEAR 2020 keynote address, Sam Gilliland, CEO of Cherwell, discussed how taking an enterprise service management (ESM) approach has helped many organizations weather the service support and delivery challenges caused by the pandemic. By having an organization’s service providers, such as IT, Facilities, HR, and others utilizing a common platform, those organizations were not only to respond to the operational challenges presented by the pandemic, but they are also able to thrive despite those challenges.

But what is ‘ESM’? Is it just dropping the “IT” from ITSM and replacing it with an “E”?

ESM is about taking an enterprise, not departmental, approach to managing, enabling, supporting, and delivering an organization’s products and services in a way that co-creates value and delivers measurable business outcomes.

In a nutshell, I believe that good service management can enable a better EX. Good service management brings transparency and measurability into organizational operations. Employee can see for themselves how the organization is performing, and how their contributions result in organizational success.

ESM encourages collaboration and teamwork by enabling and supporting holistic workflows. Each part of any organization must work well for all other parts of the organization in order to achieve success. Conversely, organizations whose departments work in isolation from others cannot react to or respond as quickly to changes in marketspaces and business as organizations that think and work holistically.

By having these holistic workflows in place, employees can be confident that they are doing the right things right. Holistic workflows also help employees avoid having to make multiple individual requests with individual departments within the organization just to achieve needed outcomes.

3 things to do to help service management enable better EX

Is your organization’s approach to enterprise service management enabling a better EX? If not, here are three things you can do:

Automate the obvious – not just within IT, but across the organization. Those simple, but repetitive and tedious tasks currently requiring human intervention can be better served by automation. Automation in turn enables employees to work at their own pace on their own schedule, which is a satisfier when it comes to EX.
Identify and map enterprise value streams. Most value streams within an organization cross departmental boundaries. For example, take onboarding a new employee. Not only is HR involved, but also IT and Facilities. Where are the handoffs? What work can be done in parallel? Mapping and understanding how work and value flows through the organization is critical for enabling positive EX. Are there any gaps or delays in how work and value flows through the organization? How does technology and process enable those value streams – and are there opportunities to optimize those value streams?
Develop employee journey maps. Employee Journey Maps (EJM) are similar to customer journey maps but are focused on the employee’s journey with an organization. Where does an employee encounter friction? Can the use of technology or automating processes eliminate that friction?

While good EX is largely the result of nurturing the desired culture within an organization, ESM can augment that experience through proactive management of work streams, well defined and streamlined processes, and delivering valuable products and services. Yes, good ESM can make for better EX!

[1] https://www.socialchorus.com/blog/future-of-work/the-employee-experience-in-2019/

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Why Your Organization Gets the IT It Deserves