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ITIL strategy – Framing the value of services (part I)

In this day and age, I still see many organizations that operate their IT departments as just that: IT departments – a group of employees who have the required know-how for operating a network, servers, client computers, and associated application software.  They are mostly unaware that they provide services to their organization, and their main value is contained within their own technical expertise and know-how. Luckily, such organizations have begun to embrace IT service management (ITSM) principles, and to transform the current mode of IT operations into services, effectively becoming service providers.

But, there is one challenge every service provider must face: elaborating on the value that their service brings to the table. Organizations that just started embracing ITSM principles such as ITIL and/or ISO 20000 will have a hard time, but organizations without any ITSM practice will find this task impossible to achieve. Disregarding the obvious calculation in financial terms, how do you express the value that services bring?

Value is more than just outcome

When embracing ITSM practices such as ITIL, one of the first things IT organizations implement is Incident Management, which enables them to track, record and prioritize incidents reported by the end-users. In order to effectively manage incidents, those should be reported to a central location (Help Desk or Service Desk), which now can be considered as a service, with clear and measurable business outcomes.

However, centralized communication between the Help Desk and end-users may not bring customer satisfaction, as in the previous mode of operation, end-users (customers) may have had their “favorite IT guy,” who is now virtually replaced with a faceless phone number and email address (you can read more about favorite IT guy in the following article: ITIL Incident Management – How to separate roles at different support levels). In such an environment, end-users will have the same expectations from the Help Desk as they had from their “favorite IT-guy”; resolving any issues in person within a few minutes of the issue being reported, knowing all specifics related to their work, function and equipment they use, and to have same personality or manners. If you ignore the intangible expectations, and focus only on measurable ones, there will be a perceived loss of value. This effect is shown in Figure 1.

Service_value.pngFigure 1 – Service value

Where does value come from?

There is little bit of misconception regarding customers wanting services; customers don’t want services per se, but rather outcomes that may arise from services provided. IT and associated technology is a fairly complex topic, so the task of IT management is to reduce and transform that complexity into a “black box” that produces the desired outcomes.

In our Help Desk example, the business is not interested in work rotation between Help Desk personnel, or training plans, or what happens when someone is on sick leave. From the business perspective, the Help Desk should be accepting support requests, and resolving issues in a timely manner disregarding the fact that two members are on vacation, and one of them is in training. As long as the “black box” is producing the desired outcomes reliably – it’s creating value.

Value comes mainly from utility (fit for purpose) and warranty (fit for use) elements, and in my next article (part II) I’ll try to explain how utility and warranty impact service value, and how value can be measured and quantified using methods outside of the ITIL framework, so stay tuned!