Branimir Valentic When starting your entrepreneurship, what is your focus? Most probably, it’s the service(s) you offer and the clients who buy those services. Is that wrong? Certainly not – quite the contrary, that’s a business-oriented approach, and it’s a must-have if you want to succeed.
What happens with startups?
I witnessed a client of mine with a great idea, a few techie-oriented friends organized as an expert community, and a lot of work. The first year was excellent. They even made some people jealous. And then – it started. Here are the questions that were left unanswered:
- Why are there are so many discrepancies in customer expectations compared to services we deliver?
- Who controls finances, i.e., budgets and accounting for the services?
- How can we fulfill Service Level Agreement (SLA) requirements?
- Why did the server crash from last week wipe out almost all effort and success?
There are many studies and surveys that investigate this interesting phenomenon – why small tech businesses fail instead of scaling. Almost all findings point in one direction; i.e., when compared to other kinds of businesses (e.g., construction, agriculture, or finance) IT-related companies have almost the smallest survival rate after a few years (up to three) of existence.
There are many parameters that influence someone’s success in the marketplace. What I noticed in a few companies I worked with, and which were growing fast, is that they didn’t develop from the inside. ”The customer is king!” is still valid, but I think that there is a “but, ….” What I mean is that you can have the best service delivered and the best customers in the world, but if you don’t develop your organization from the inside, they will soon be “Ex.”
Managed scaling
I know, “You have to develop your organization from the inside” is (a) easier said than done, and (b) a very broad expression. Several times I found myself in the same situation: What to do first? Which way to go? How to do this – how to do that? …etc. In the beginning, I tried to “innovate.” But later, when I became familiar with ITIL and ITSM, it wasn’t necessary anymore. There is a (winning) match between ITSM based on ITIL and business scaling (i.e., growth) of an organization.
The usual problem with an organization’s growth is the dilemma between a state of chaos (usual description of tech start-up that faces increased demand for its product or service) vs. a process management-oriented company with efficiency of service asset usage. ITIL is, basically, a process-oriented approach to service management; i.e., it’s what you do and how you do it. So, here are five pain points a growing IT organization faces, and how ITIL can help:
#1 Strategic focus and process-oriented organization – use ITIL Service Strategy processes (e.g., Strategy Management for IT Service, Financial Management) to define your clients and your market segment, and to find a way to “get your head above water.” Your experts are OK (at least in the start-up phase), but a process management approach will help the organization avoid overdependence on a single person, be faster with time-to-market for new services, and have controlled changes of existing services.
#2 Lack of plans – no, I don’t mean to create activities (remember, the focus is on efficiency of resources) by generating plans for everything. There is a saying “If you fail to plan, then you plan to fail.” Ad-hoc is usual in the beginning, but every serious business needs plans and so do your services and resources. No guessing, but facts and figures. You have to understand customers’ demands and be prepared (for existing and future requirements) to answer with appropriate capacity and availability. ITIL Service Design has processes and methodologies that do exactly that.
#3 Focus on essentials vs. focus dispersion – often, and this is particularly true for startups, companies try to do everything by themselves. That often leads to situations when you can’t respond with the required quality, because you can’t be the best in everything. This is where third parties can jump in. The point is to keep them managed and their delivery in the scope of service (i.e., customer) requirements. For example, the Supplier Management process has mechanisms to ensure that.
#4 Excellence in Service Operation – trying to develop new features or improve existing ones (imagine –someone finally needs something from you, so let’s make the most of this situation) and fighting the battle within the live environment… well, it could get really tough, particularly when the number of users rises. Service Operation gives you an excellent foundation for a stable, controlled, and efficient environment that handles live services as required by SLAs. And, your customer will appreciate that (meaning – they will not go away, which is your foundation for further growth).
#5 Long-term customer satisfaction – this is about continual service improvement and customer relationships. Measure (if you don’t measure, you don’t know where you are or in which direction you are going) to control your delivery. Customers are here not only to pay for your services. They should be here to stay (as long as possible). Make strong connections between Service Level Management / Business Relationship Management processes and Continual Service Improvement.
Is ITIL only IT oriented?
“But, ITIL is more IT oriented” someone could argue. Well, you can see it that way. But, under the hood – there are items that can be reused in most companies, independent of their branch.
It’s true that (today) large enterprises made it from scratch, or better to say – from the garage. They had a great idea, a smart strategic approach, and a lot of guts. But, what they did is they started developing from inside the organization in parallel to their growth. And that’s one important distinguishing factor. ITIL and ITSM are here; one just needs to pick them up, and, most of all, know what to do with them.
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