11 December 2014

Contemplations on 2015

As for 2015, I’m expecting to see continuing interest in improving multidisciplinary collaboration using stuff like as Agile, DevOps, and Cynefin, and intrinsically linked to that, more interest in how to influence behaviour. My concern is the gap between understanding how to influence behaviour and actually doing something about it. The human condition.

I've noticed increased interest for security in 2014, although I haven’t investigated what’s driving it. I assume that’s going to be a 2015 topic.

It’s a no-brainer to expect continuing growth of (use of) external service providers and therefore the need for multi-vendor management (think SIAM). Because the market often does IT better, faster and cheaper than internal IT departments, we can expect internal IT to transform itself into a broker between demand and supply. Not everybody is suited for that role though – barring genetic manipulation – so consider your options carefully if you work in a centralized IT department. You have three options. If you want to continue doing traditional ITSM, quit and work for an external service provider – it’s their core business. Your second option is to help your IT department transform itself into a broker. Finally, if you have affinity with business processes and business people , jump the proverbial fence between IT and the business and help them deal with demand for, and use of, IT. And information, which is why I like to talk about I&T not IT.

Similarly, as business people become more IT-savvy, and they have more IT at their disposal without having to shop at the internal IT department, we’ll see more decentralized I&T functions within the various business divisions and departments. They’ll only use centralized IT if they have to or if centralized IT gets its act together and offers perceived added value. They will operate with the same degree of autonomy as the rest of their business activities, so expect more emphasis on effectiveness than enterprise-wide efficiency. I also expect that they’ll struggle with the basics of ITSM (incident, problem, change etc.) so that’s a great opportunity for seasoned ITSM practitioners to help them balance agility with an appropriate degree of predictability.   

We’ll see various versions of CIO’s in various relationships with CXO’s. Will governance of I&T be embraced by the board as more than an afterthought? Are I&T as business assets really as important as the CIO and his or her I&T minions think? Or does the board have better things to do? We’ll see.


Recap 2014

Well, well. This ASL BiSL year took me to 16 cities, 12 countries and 4 continents. In terms of communities, I spoke and networked at events organized by APMG, BPMA, itSMF, PMI/IIBA, SDI, SITS, The Open Group, UNICOM, and Yale. In addition, I delivered webinars hosted by APMG, BrightTALK, TFT, and UNICOM. 

Slowly but surely, there’s more interest in ASL and BiSL in particular from beyond the home market in the Netherlands. I've come to believe that ‘Going Dutch IT’ – in other words making a pretty formal distinction between IT supply as the responsibility of the IT function, and demand and use as the business’ responsibility – might just have been a bridge too far for other regions in the past, but now that many business divisions are investing in the their own decentralized I&T functions (see below), it seems to becoming more pertinent and interesting.

My major topics this year were:

1. The changing dynamics within the ITSM industry, with more dominant roles for external service providers and for business units who are investing in their own decentralized I&T functions. The traditional centralized IT department is under pressure and its best bet as far as I’m concerned is to transform itself into an added value broker. Otherwise it’s over and out. The future of the decentralized I&T fascinates me. It’s where demand and supply are merging into a new paradigm: ‘deply’ or ‘summand’. By the way, please note the use of ‘I&T’. I continue to promote treating information and relate technology as two intimately intertwined entities that nevertheless are better off when managed in their own right.

2. BizDevOps (also known as ValOps): predicting the next wave of multidisciplinary collaboration. We’ve seen organizations apply Agile to improve the speed and quality with which new functionality is developed, and DevOps that improve the speed and quality of deployment. But there are still a couple of gaps that need to be addressed. Firstly the gap between high-procedure and bureaucratic ITSM functions and the business users. All too often, users are left to their own devices (literally!), leading to avoidable productivity losses in business operations. Secondly, there’s a need for better business-business alignment. No, that’s not a typo. The managers or their delegates who specify user needs during development projects, often in the role of an Agile product manager, lack insight into the practicalities of business operations and use of information systems, leading to a lower return on investment than could have been the case. 

3. Building bridges between bodies of knowledge. The ASL BISL Foundation has explored how its Application Management and Business Information Management domains interact with Business Analysis (IIBA’s BABOK®), Business Relationship Management (BRM Institute’s BRMP®), Enterprise Architecture (referencing The Open Group’s TOGAF®), Governance and management of information (ISACA’s COBIT®), IT Service Management (AXELOS’ ITIL®), and the Service Desk (SDI’s qualifications). I’m currently taking a look at IAITAM (Asset Management), and the IMBOK (Information management).

4. Exploring which behavioural changes are needed with both IT and the business. I conducted various workshops and have complied the findings. The consensus us that the business should focus on specifying outcomes rather than solutions, setting priorities and taking decisions, and understanding IT capabilities and limitations. And that IT should pay more attention to understanding the business context, communicating in terms of benefits, costs and risks, and replacing ‘technical’ SLA’s by more meaningful reporting.

5. Contributing modestly to the Take Service Forward initiative’s Adaptive Service Model, which has certainly given me a better way of looking at organizations. It gives me great satisfaction to see that ASM is being taken seriously by various industry bodies.

From a learning perspective, things that spring to mind are how I’ve benefited from (1) dealing with uncertainly by using Cynefin (you’ll easily find a great talk by Dave Snowden called Models, Frameworks and Messy Coherence, hosted by UNICOM), (2) using service-dominant logic (read the academic paper ‘The service system is the basic abstraction of service science’), (3) understanding social constructivism (e.g. Vimeo presentation ‘Ken Gergen talks about Social Constructionist Ideas, Theory and Practice’), (3)  a new way of looking at life in general as formulated by Michael Foley (YouTube ‘This Extraordinary World’), and (4) Adam Smith's 1759 classic The Theory of Moral Sentiments revisited by Russ Roberts in his book ‘How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness’.

06 October 2014

Is the board on board?

At the annual itSMF Finland conference in Helsinki on October 2nd, I asked the opening keynote speaker, Frans Westerlund, CIO at Fiskars Corporation, about the attitude of the Fiskars board members with respect to IT. He said that he considered himself very lucky because the board members had a good understanding of IT and how to deal with it. He explained that many of them had learnt the hard way that you need to treat IT seriously in order to prevent disasters and ensure a good return on investment. He also mentioned being fortunate to be a permanent board member, instead of being invited to a board meeting just to report about IT, and often being the last and least important item on the agenda. I believe that it’s useful to distinguish between three scenarios:

Board on board
The Fiskars scenario is pretty much ideal, in which the board is conscious of the need to take ownership and is competent to govern IT. Unfortunately this is not often the case, as Frans intimated with his remarks about being lucky.

Lost at sea
The doom scenario at the other end of the spectrum is of course the unconscious/incompetent combination. Attempts by the CIO to ‘sell’ the governance role to the board have fallen on deaf ears, and only a (near) disaster will get the message across. The CIO and his or her team will just have to play a defensive game in damage control mode until the climate changes.

Waving, not drowning
A more promising scenario is when the board is conscious of the importance of IT and is managing but struggling with their governance capabilities. This is probably the ideal situation to play the BRM card. Not that you shouldn’t deploy Business Relationship Management in the other two scenarios, but you’ll probably get the most return in terms of capability growth.

According to the BRM Institute, Business Relationship Management is not only a role ‘Business Relationship Manager’ but also an organizational capability in the sense that many roles contribute to BRM, particularly the customer-facing ones such as those tasked with service desk and service level management. The Business Relationship Manager fulfils the role of an expert trusted advisor who has sufficient expertise in key business domains to be able to communicate the costs, the business value, and the risks of services in clear, specific, and meaningful terms using the language the business partner understands. The Business Relationship Manager is completely transparent about the costs, benefits (business value and ROI), and risks of a service. It is the Business Relationship Manager’s job to make sure that both the business partner and the service provider have complete clarity. Finally the Business Relationship Manager practices informed leadership, engaging from the moment the business strategy is formulated to shape its implications on the IT service delivery, overseeing its execution, and planning the next improved iteration. The Business Relationship Manager understands the business and service dynamics well enough to foresee and guide rather than be pushed around by changes.

CIO’s who recognize this opportunity to demonstrate their collaborative value are well-advised to invest in this strategic role. An important precondition is that ‘IT-as-usual’ is under control before you start talking about the strategic use of IT. If so, carefully select somebody who will serve as the strategic interface between the provider and one or more business partners to stimulate, surface, and shape demand for the provider’s products and services and ensure that the potential business value from those products and services is defined, realized, optimized, and recognized. Consider not only the technical proficiencies but in particular the relational competences and personal fit with the business partners.

Various standards and frameworks provide board level guidance, amongst which:

ISO/IEC 38500:2008
The international standard for Governance of IT sets the scene for the board’s role by providing a principles for evaluating, directing and monitoring the use of IT in their organization. ISO 38500 assures stakeholders (including consumers, shareholders, and employees) that, if the standard is followed, they can have confidence in the organization’s corporate governance of IT. It also informs and guides directors in governing the use of IT in their organization and provides a basis for objective evaluation of the corporate governance of IT.

The COBIT framework helps enterprises create optimal value from IT by maintaining a balance between realising benefits and optimising risk levels and resource use. In particular, COBIT’s Goals Cascade is useful in translating strategic business goals into concrete goals for IT-related enablers.

ITIL® 2011
The ITIL framework is referred to by COBIT for more detailed guidance for the supplier of IT services. This guidance spans service operations to service strategy, and at the strategic level, the service portfolio represents the commitments and investments made, and the related value, outcomes, costs and risks.

Similarly, COBIT also refers to BiSL. This framework provides guidance from operations to strategy for both information management and demand and use of IT services, complementing ITIL’s supply-oriented guidance. At the strategic level, policies regarding data ownership and strategic use of information – e.g. Big Data and Social Media – are board level topics.

With the exception of ISO 38500, board members are not expected to understand these frameworks but the BIO and the Business Relationship Manager will make use of this guidance in their board level interactions. The board should foster a culture in which business and IT share the same table and have a joint vision. The board should also encourage effective behaviour. Examples of effective behaviour are that the business takes the lead by specifying and prioritizing desired outcomes from IT investments, and trusts IT to propose options for solutions. IT then communicates the various solutions in terms of the associated benefits, costs and risks, in order that the business can take well-informed decisions.

COBIT is a registered trademark of ISACA.
ITIL is a registered trademark of AXELOS Ltd.
BiSL is a registered trademark of the ASL BiSL Foundation.

05 October 2014

Behaviour that gets more business value out of IT

Defining desired behaviour is recognized as an essential part of getting more return on investment in training and improvement initiatives. It is the bridge between the problem that an organization wants to solve, and the competences and training that are needed to solve it. The 8 Fields Model that GamingWorks uses and recommends described this in more detail.

I conducted a workshop about desired behaviour at the annual itSMF Finland conference in Helsinki on October 2nd 2014. The question that the participants discussed, was “Which behaviour will get most business value out of IT?”. The participants focused on the behaviour that the business should exhibit, in their role of IT’s customer. They said that the business ideally:
·        Shares the strategy / big picture / longer-term plan with IT
·        Discusses the ‘why’ behind IT investments with the IT department and reaches agreement
·        Improves its understanding of IT and the IT dept’s capabilities
·        Trusts the IT department with the ‘how’
·        Formulates concrete and simple targets, and expected measurable value 
·        Defines and prioritizes needs and requirements
·        Leads and executes business change management and global portfolio management, in close collaboration with IT
·        Takes charge of the business’ information and its flow

In the past 12 months I have conducted two similar workshops together with SDI’s Howard Kendall for itSMF UK in Birmingham and itSMF Ireland in Dublin. The two workshops also considered the behaviour that IT should exhibit. Combining the findings from these three workshops, we have three groups of desired behaviour from the business, the IT function and the enterprise as a whole.

The business:
·        Has a good understanding of IT capabilities
·        Shares the strategy / big picture / longer-term plan with IT
·        Discusses the ‘why’ behind IT investments with the IT department and reaches agreement
·        Specifies outcomes rather than output
·        Prioritizes outcomes
·        Formulates concrete and simple targets, and expected measurable value 
·        Is the accountable owner of information systems
·        Leads IT
·        Doesn’t bully IT but trusts them to be their IT partner
·        Allocates more time to IT, e.g. explain situation to IT, train users, inform users about changes
·        Leads and executes business change management and global portfolio management, in close collaboration with IT
·        Takes charge of the business’ information and its flow

The IT function:
·        Has a good understanding of the business’ need and context
·        Communicates in terms of benefits, costs and risks, in order that the business can take well-informed decisions
·        Abandons ‘technical’ SLA’s and explains in more meaningful ways what they’re doing for the business, involving the business in designing the reporting
·        Regards itself not as a separate silo but as an integral part of the business

Finally, the enterprise fosters a culture in which business and IT share the same table and have a joint vision, and the business and IT talk to each other more often, creating more mutual understanding of pains, priorities, possibilities and limitations.

04 October 2014

ITSM in 2020

When I was asked to participate in a panel discussion at the annual itSMF Finland conference in Helsinki on October 3rd 2014, I did some preparation. Unfortunately, I misread the topic and prepared to share my vision about IT Service Management (ITSM) in 2020, rather than my vision about itSMF and ITIL as requested. The good news was that ITSM is of course closely related to itSMF and ITIL. It added an extra dimension to the discussion in the sense that both itSMF and ITIL exist to serve ITSM. Both itSMF and ITIL should therefore be aligned with how ITSM is changing. We discussed that itSMF and ITIL should have different value propositions for each of the markets that they serve. I distinguish between internal IT departments and external service providers (ESP), and within internal IT departments I make the distinction between centralized IT departments and decentralized I&T departments within the various business divisions. ‘I&T’ refers to information and related technology: two intimately intertwined entities that should be managed in their own right. My vision for ITSM in 2020 is summarized in the following statements:

  • Non-differentiating IT services will be provided by ESP’s; differentiating application of I&T will be performed by decentralized I&T departments in the business; centralized IT will focus on governance and architecture
  • ESP’s will provide more and more of the services that IT departments used to provide - better, quicker, cheaper 
  • Centralized IT departments will transform into brokers – if they can integrate services better than ESP’s
  • Decentralized I&T departments will perform ITSM as part of their activities but the major part will be the application of I&T
  • ITIL will remain the same but will be applied selectively, depending on who uses it:
    • ESP’s need full blown ITSM but will they use ITIL? (does Amazon use ITIL?)
    • Brokers will focus on Service portfolio management, Business relationship management, Supplier management, Information security management
    • Decentralized I&T departments will be innovative but ‘immature’ in ITSM, and will benefit from the basics, e.g. incident / problem / change 

01 September 2014

Is the business the weakest link in the IT value chain?

Here are six questions that identify business responsibilities that are often less mature than their IT equivalents and therefore need attention to prevent them from being the weakest link in the value chain.

  • If the IT department identifies new technological developments, who identifies the opportunities to apply them to innovate the business?
  • If the IT department builds solutions, who identifies demand and specifies requirements?
  • If the IT department runs the information systems, who ensures that they are used effectively and efficiently?
  • If the IT department manages the service level agreement from a provider’s perspective, who manages the contract as the IT department’s customer? 
  • If the IT department’s Business Relationship Manager manages IT’s relationship with the business, who manages the business’ relationship with IT?
  • If the IT department manages the applications and infrastructure, who manages information and technology as business assets?

So how do you score?

17 August 2014

Governance revisited

As part of my preparation for a panel discussion entitled The Strategic Roles of Governance in Delivering Enterprise Capabilities for the Open Group Summit in Kuala Lumpur on 18th August 2014, I revisited the topic of governance. The term is often abused in an attempt to make something sound more interesting, with such ridiculous examples as "SharePoint Governance". Governance is something that governors do, not managers. It's the stuff that board members do: they direct, monitor and evaluate how their managers are running the business. Some highlights from various sources follow.

Robert Tricker wrote first book to use the title Corporate Governance in 1984 and defined the difference between governance and management as:  “Management runs the business; the [governance] board ensures that it is being run well and run in the right direction”.

Peter Weill defines governance as “Specifying the decision rights and accountability framework to encourage desirable behaviour in the use of IT” and identifies 5 critical IT domains:
  • principles
  • architecture
  • infrastructure
  • business application needs
  • investment and prioritisation

ISO 38500, the international standard for Governance of IT defines governance as “The system by which the current and future use of IT is directed and controlled.” and stipulates “Corporate governance of IT involves evaluating and directing the use of IT to support the organization and monitoring this use to achieve plans. It includes the strategy and policies for using IT within an organization.”
ISO 38500 refers to six dimensions that need to be addressed:
  • Responsibility
  • Strategy
  • Acquisition
  • Performance
  • Conformance
  • Human Behaviour

Weill’s ‘desirable behaviour’ and ISO 38500’s ‘human behaviour’ are key. It’s about directing, monitoring and evaluating what people actually do. Effective governance recognizes the inherent weaknesses of the human condition and takes appropriate measures.

It has been observed that the most important word in the title of ISO 38500, ‘Governance of IT’, is ‘of’. IT is governed by another body, not by itself. IT departments manage IT, and are governed by directors at a higher level of authority.

While ISO 38500’s scope is limited to IT, COBIT addresses a broader scope, explicitly referring to information and related technology as two separate entities that deserve to be managed in their own right. COBIT’s definition exhibits similarities with ISO38500 because it also speaks about ‘direct and control’: “A structure of relationships and processes to direct and control the enterprise in order to achieve the enterprise’s goals by adding value while balancing risk versus return over IT and its processes”.

11 August 2014

What’s your focus: cars or drivers?

At the LEADit conference in Melbourne on August 13th 2014 I’ll be talking about the pressures that are driving change in IT Departments, and offering three scenarios for career development if you happen to work for an IT Department.

The pressures are twofold and come from opposite directions. First we've got an increasing number of external service providers who offer standard products and services faster, cheaper and often better than IT Departments. This is a natural result of standardization and commoditization of technology, and the specialization of suppliers. The other pressure comes from the IT Department’s customers: the business. Increasingly IT-savvy business people are putting IT Departments under pressure to perform better, faster and cheaper, and are bypassing IT Departments and creating their own IT ecosystem when the IT Department doesn't respond. The IT Department is in the squeeze between both demand and supply.

Given this situation, a plausible future for the IT Department is to become a broker. As Charles Araujo describes it in his book The Quantum Age of IT, there’s a transformation from IT Retail to IT Manufacturing. This entails a significant shift in competences and is not for the weak of heart. But the alternative is extinction. A hundred years ago, many organizations had their own electricity departments with their own generators and technicians. But as electricity became a commodity, they got replaced by external service providers. You get the point.

Another trend is the realization that while the IT systems and services have to be fit for purpose and fit for use, no value is actually realized until the users use the systems effectively and efficiently. Research in the area of productivity loss due to IT issues indicates that by better training and in particular monitoring how users actually use systems can produce productivity gains that are the equivalent of a 20% cost reduction of IT costs. But who ensures that the users are using the systems effectively and efficiently? To use a transport analogy, if the IT Department is in the business of building cars, who’s helping the drivers to get to the right destination? Think about your own organization. Yes, maybe you have super users but odds on that they’re pretty reactive. I’m thinking more about ‘super duper users’ who are tasked with proactive support and guidance. The domain where the super duper users reside, is not in the IT Department. It’s part of the business. Part of the IT ecosystem that I referred to earlier, where the business is developing capabilities to ensure that Demand and Use is just as strong as Supply.

Demand and Use is one of the three options that you could consider as a career move if you currently work for an IT Department. But you’ll have to ‘jump the fence’ and work for the business. The other is to stay put in the IT Department and transform into a broker. The final option, which I believe is best option if you want to stick to the IT Manufacturing part of ITSM, is to work for an external service provider.

12 July 2014

Planes, cars and drivers

I fly a fair bit. Usually economy. But for a recent trip to China I thought that I'd inquire about an upgrade to business class. Maybe I could spend some of my air miles. So on the day of departure at the airport I went to the ticketing office and asked the apparently simple question "Are there any business class seats available and what would it cost me?" The rest of this story hinges around the word "apparently"...

The very attentive lady who helped me kept apologizing for the time it was taking her to give me an answer. "What's the problem?" I asked sympathetically. "Well," she said, "it takes a lot longer with our new system. The system is quite beautiful but it you just can't use it. It used to take us about five minutes but now it takes five times as long". She was juggling with information on the screen and a stack of printouts on her desk, because it was difficult to find the information in the system. We got there in the end and it took half an hour - partly due to her having to call somebody because it was the last seat and she needed human confirmation that it was still available. Surprised by the time it took and the inefficiency, I asked whether this was a common transaction. She said that they do it multiple times a day.

The University of Twente in the Netherlands conducted research into productivity losses due to IT issues and discovered that 6% to 10% productivity loss is caused by IT problems, almost half of which is due to ineffective or inefficient use of the systems. Was the productivity loss in this case caused by lack of functionality for this task or did the ticketing agent simply not know how to use it? We will probably never know.

I speak a lot at IT conferences and share this story to illustrate how IT departments are often oblivious of what happens on the shop floor. And how little effort is spent on ensuring that users actually realize the the systems' potential value. To use a transport analogy, if the IT department is in the business of building and supplying cars, who is helping the drivers to get to the right destination?

21 June 2014

itSMF Ireland's Initiatives for Business IT Collaboration

On August the 19th 2014, itSMF Ireland hosted a workshop that was conducted by Howard Kendall (Service Desk Institute) and Mark Smalley (ASL BiSL Foundation & APMG-International). In the workshop, forty itSMF Ireland members – divided up into seven discussion groups – explored how collaboration between the business and IT could be improved. The results are listed below and can be summarized as:

  • IT needs a better understanding of the business needs and context
  • IT should abandon ‘technical’ SLA’s and explain in more meaningful ways what they’re doing for the business, involving the business in designing the reporting
  • IT should regard itself not as a separate silo but as an integral part of the business
  • The business and IT should talk to each other more often, creating more mutual understanding of pains, priorities, possibilities and limitations
  • The business should stop bullying IT and start trusting them to be their IT partner
  • The business should communicate in terms of problems, no solutions
  • The business should allocate more time to IT, e.g. explaining situation to IT, and training users

Asked which bottlenecks could impede these improvements, several participants suggested "pressure to deliver" as the main reason, while one participant said “we don’t value thinking”.

Involving the business more in all things IT is a high change priority, and somebody suggested thinking about what you’d do if you had the luxury to start from scratch (instead of just patching things up).

A final comment was that unless you have everybody at the table and have their buy-in, you won’t achieve much (we’ve been working with separated silos for too long).

Details per group:

Group 1
• IT collaborates with the business (getting insight into needs, wants, wishes, desires)
• IT benchmarks whether they are delivering what the business wants
• IT increases engagement with the business
• IT bins the SLA
• IT makes IT easy (inspired by Amazon etc)
• IT stands up and shows (doesn’t hide; shows users what IT does; sells IT; shows what IT can do)
• IT promotes IT as a business enabler

Group 2
• IT understands the business
• IT uses better reporting to give feedback, explaining what they do
• IT regards itself as part of the business

Group 3
• IT embeds ITSM in all business projects and vice versa
• IT uses business-oriented dashboards with design input from the business
• IT designates an IT service owner and the business designates a business service owner
• “Division of business and IT is irrelevant”
• IT communicates, communicates, communicates

Group 4
• Business creates business awareness
• Business and IT ensure strategic alignment
• The business invites the CIO to sit at the top table (but not as a minister without portfolio)
• Business makes IT aware of business pain
• IT makes business aware of IT pain
• Business makes IT aware of users’ needs
• Business shares knowledge with users, enabling users to fix own issues
• Business and IT communicate better especially about changes

Group 5
• Business stops bullying IT
• Business and IT collaborate more
• Business and IT agree what is important
• Business asks IT to help them understand what they want
• Business allocates more time to IT (e.g. explaining to IT, training users)

Group 6
• Business gives IT problems, not solutions
• Business trusts IT to be the IT experts
• Business shares strategy/plans/goals early
• Business revisits project scope regularly

Group 7
• Business listens
• Business communicates
• Business keeps it simple

13 May 2014

Information Management Workshop at The Open Group Amsterdam Summit

25 attendees at The Open Group Amsterdam Summit participated in a workshop about Information Management on May 13th 2014. A short version of GamingWorks’ BookStore® business simulation was played, in which the participants were divided up into three groups: Business, Information Management and IT. The game simulates a bookstore that is tasked with improving its revenue and profit by introducing new products and services than depend heavily on information and related technology. Business, Information Management and IT have to collaborate effectively and efficiently to translate business demands into working functionality.

After playing the first iteration of the game, people remarked on the similarities with real life, for instance “I only heard at the last minute that I had to develop the application” and “The business wants a cloud but doesn’t know why”. Somebody made a comment that he wished that his company had such effective feedback loops as in the game. The ‘CEO’ made a wistful remark about this fictitious (and closely collaborating) enterprise: “I had the company that I’d like to work for”.

As usual when playing games, the first iterations are interspersed with minor issues such as the Information Manager interrupting discussion with “Why am I not part of this meeting?” and somebody in a project planning meeting saying “Where’s the project manager?”.

The majority of the participants being architects, several comments were made about the relevance of architecture: “Don’t think solutions, think architecture”, “Architecture happens, one way or another – if it’s not top down it’ll be bottom up”, and “Architecture is about feasibility and change”. Alignment of Architecture and IM was also mentioned including the question how to organize architecture across Business, IM and IT and the need for a reference model. Somebody stated that Architecture should be part of the CIO Office: “You need someone (EA) with a vision of the whole”. An aside about the CIO Office: “What will the CIO Office look like when everything is in the cloud?”

One of the interesting topics that was discussed in length was how Demand and Supply is organised across the whole IT value chain (Business, Information Management and IT). Is Information Management part of the business and therefore Demand? Or is Information Management the front end of the IT function and therefore Supply? Somebody commented that it doesn’t make that much difference – they’re just part of the whole process. Another valuable comment was that Demand/Supply is not just a ‘line’ but encompasses activities such as planning. Maturity was also referenced, in particular its influence on the positioning of Information Management and IT: “When you’re immature you’re just an order-taker”. Another valuable point was how positioning has changed – in the beginning IT was about ‘support’ but we’re moving through ‘aligned’ and ‘integrated’ towards ‘co-creation’.

The final take-away was the finding that in real life the Business and IT are often so isolated from each other that major improvements can be made just by getting the two parties to talk to each other more often. This is why organizations often use BookStore® game ‘in house’ to improve the collaboration between various departments.

The BookStore® workshop was facilitated by Christian Nissen and Mark Smalley. 

26 March 2014

IT Value Chain

 Issue: Technically-oriented people often find it difficult to ‘sell’ their initiatives to decision-makers, resulting in missed opportunities, frustration and a poor image for the IT department.
Guidance: The IT Value Chain is a way of articulating the outcomes of an IT initiative in terms that make sense to business people, e.g. more business, better business, cheaper business.

IT Value Chain

The IT Value Chain is a way of articulating an IT initiative in terms of benefits for both the business (IT’s customer: the user organization) and the IT organization. Being aware of how an IT solution impacts the ‘bottom line’ is beneficial to both the design of the solution and to how to ‘sell’ it to the business. 

Business goals
In the example above, based on a generic commercial enterprise, the bottom line performance is expressed in terms of profit, which is of course the difference between revenue and costs. Costs (the red lines) are either related to IT or the business. Revenue (the blue lines) comes from selling more products and/or services, and/or selling better products at a higher margin. Business goals are expressed simplistically as more, better and/or cheaper business. These goals apply to many commercial enterprises but can be adjusted to accommodate other relevant aspects, for instance capital investment. Public organizations are usually driven by different goals; for instance the criminal justice system in England and Wales aims to "reduce crime by bringing more offences to justice, and to raise public confidence that the system is fair and will deliver for the law-abiding citizen”. So the right hand side of the IT Value Chain should be constructed accordingly. Identifying the enterprise’s goals is an important part of the IT Value Chain process because it focuses the attention on the right aspects.

Business benefitsThe left hand side of the example shows how the outcomes of an IT initiative can be split up into two parts: business benefits and IT benefits. Business benefits have been broken down into better functionality, quicker time to market, and fewer and shorter outages. Better functionality can have service multiple business goals. Better functionality can simply mean that business processes can be executed more efficiently, by automating manual work and reducing labour costs. But better functionality can also contribute to better customer service by providing employees and/or customers with information that enhances the customer experience, for instance by giving insight into current waiting times at a hospital department. And better functionality can also contribute to achieving more business by giving access to new markets through different channels.A quicker time to market means that the IT solution is delivered promptly, enabling the other benefits to be achieved earlier, and for instance beating a competitor to a new market.Fewer an shorter outages contribute to business efficiency but also to a better customer experience, and in turn to better business. Just as the business goals can differ from enterprise to enterprise, these benefits can also differ.

IT benefits
In addition to the business benefits, there are benefits for the IT organization, that translate into lower costs and/or an improve capability to deliver the business benefits. The IT benefits in the example are a more flexible, more productive, and cheaper IT organization. Investment in Agile could make an IT organization more flexible. Investment in tooling lead to better productivity. And application rationalization could reduce IT costs. But just as the business goals and benefits can differ from enterprise to enterprise, these benefits can also differ.

Desired attitude and behavior

Being aware of the importance of translating the output of IT initiatives into outcomes that are formulated in such a way that business people understand them
Realizing that users often exhibit irrational (‘normal’) behavior and that just communicating in terms of logic may not be effective
Engaging with business people to identify the relevant business goals and in so doing, to demonstrate commitment to supporting these goals 
Talking about the IT solution ‘above the line’, i.e. in terms of the benefits and how they affect the business goals
Monitoring the actual results in terms of the benefits and the business goals

Additional guidance

COBIT®5 guides enterprises in rigorous governance and management of processes and other enablers related to demand, supply and use of information and technology. It provides excellent guidance for assurance of benefits realization, risk optimization and resource optimization.

Managing BenefitsTM has been carefully designed to complement existing Best Practice in portfolio, programme and project management such as PRINCE2®, MSP®, P3O® & MoP®. It consolidates existing guidance on benefits management into one place, while expanding on the specific practices and techniques aimed at optimizing benefits realization.

The underlying structure of the IT Value Chain has been inspired by the DuPont Analysis and Capgemini’s Benefits LogicTM.

COBIT®5 - www.isaca.org 
Managing BenefitsTM - www.apmg-international.com
DuPont Analysis -  www.wikipedia.org 
Benefits LogicTM - www.capgemini.com 

17 February 2014

3 career options if you work in a traditional IT department

IT departments are under pressure from two sides. On the supply side from multiple external service providers that are encroaching into the IT departments’ space and eroding jobs. And on the demand side from the business that is claiming a more dominant role and is engaging external service providers directly, but that at the same time is struggling with their new responsibilities. No, you weren’t expecting this and no, you probably don’t welcome it. But it’s happened and it’s called progress. If you work in an IT department, you have three main options.
  • If you want to continue doing IT service management as you always have done, go work for an external services provider.
  • If you have feel for logistics and retail, stay in the IT department and develop the competences that will help the IT department fulfill an ‘IT Retail’ function. With increasing technological standardization, ‘IT Manufacturing’ has moved from the IT department to the external service providers.
  • If you understand the business and get along well with business people (or ‘normal people’ as my wife likes to call them), jump the fence and move across to the business, where business and IT are morphing into a new function.
Things will change, they might just change without you. So go reinvent yourself.

Multi-supplier value streams (questions, not answers)

About a year ago, I compiled 90 questions that 27 world leaders in IT believe that people in IT Service Management should be asking themselves. The compilation is available here.

From that list I've selected eight that pertain to Multi-supplier value streams, the topic that the Pink Think Tank explored at the Pink14 conference in Las Vegas in February 2014 (Twitter #pinktt). I trust that they are worth thinking about.  

Rob England, IT Skeptic, Owner & Managing Director at Two Hills Ltd, NZ
  • How to better manage multi-party value chains? Especially cloud environments and XaaS providers
Troy DuMoulin, Vice President Professional Services at Pink Elephant, USA
  • Consider the premise that today’s Enterprise IT functions are made up of a mixed group of diverse suppliers (internal and external) and becoming even more diversified and complex as we integrate cloud and online services. How in the world will an organization keep all these moving parts synchronized in order to play their designated part in the larger value service system or even get them moving in the same direction?
  • How can all players in the IT value system achieve shared values, priorities and practices in order to deliver service in a harmonious fashion?
  • How can you create a shared IT Operating Model that outlines the key elements of the value stream comprising Demand, Plan, Build and Run?
  • Which Enterprise IT Governance Roles are needed to ‘conduct’ all the various parties participating in the Service Orchestra?
Steven de Smet, President itSMF Belgium & Manager at Capgemini Belgium
  • Trends and recent rumours predict that IT as a department will disappear, the business will control IT themselves with a maximum of XaaS, cloud and mobility solutions. The purchasing department will manage these contracts. What will be the future for ITSM?
AN Rao, Senior Vice President at Cognizant Technology Solutions, India
  • As deals get unbundled and go into multi-vendor sourcing and as the traditional on-premises moves into a hybrid environment, how are CIOs planning to construct their service integration and multi-vendor service management arrangements and contracts ? How would they measure the success of such an arrangement in supporting the business?
James Finister, EMEA Competency Lead for IT Governance, Service Integration & Service Management Excellence at Tata Consultancy Services, UK
  • Both IT departments and the business have a track record of failing to leverage benefit from large suppliers. How then will they manage the shift to multiple supplier ecosystems - and should they?