Branimir Valentic It’s not a secret that IT has become a very expensive “toy” these days. So, whatever you do in IT is put under a microscope, and everyone expects to see a return on this investment.
ITIL and/or ISO 20000 implementation is not an excuse. Quite the contrary, when you present your plan for the ITIL/ISO 20000-based IT Service Management (ITSM) implementation (and later maintenance), every manger will ask – “How this can be profitable?”
Productivity, of course
The profit stems from the increase in productivity – well-defined and managed processes are a prerequisite for operational efficiency, and therefore cost savings (decreased costs actually increase the profit). Take, for example, a situation when the customer calls the Service Desk, a competent technician takes the call, he has an overview of the user’s assets (i.e., Configuration Items), and he either resolves that incident while the user is on the call or knows exactly to whom to forward that incident. In parallel, he opens the Problem record, because only a temporary fix can be implemented immediately and the root cause must be found. Once the root cause is found, a Request for Change is raised, and the change that eliminates the root cause of that incident (and all such future incidents) is implemented. And, all that happens within the agreed resolution time (agreed and documented in the Service Level Agreement). Sounds efficient, doesn’t it?
On the other side is – an inefficient organization. Chaotic processes, undefined activities, roles and responsibilities . . . such a situation causes waste of resources (what I often hear in such a situation is – “We don’t have enough people”), which costs money. The situation went goes in the opposite direction (cost generation instead of cost savings, leading to decrease in profit).
Smiles and revenue …
Another benefit? A smile, but on your customer’s face. The point is that a satisfied customer pays their bills, and that stabilizes the company’s profitability. But, a flat line in revenue is usually something that doesn’t fulfill management’s expectations. They want to see an increasing curve. A satisfied customer is your best marketing tool. I witnessed many times when satisfied customers recommended their service supplier (i.e., your company, which implemented ITIL/ISO 20000), and that created additional revenue. Having satisfied customers means that your ITSM is fit to answer any and all challenges your customers send your way. Being fit for business challenges means that you don’t need a big investment in ITSM to satisfy new customers – you just need to apply what you already have. Besides additional revenue, new customers mean better utilization of your resources, meaning an increase of your ROI (Return on Investment) in ITSM (employees, tools, etc.).
OK, but how do you achieve high (as possible) customer satisfaction? Here are a few hints:
- The above-mentioned efficiency of the company’s ITSM (which is required to be on the highest possible level) is a must-have.
- Aim for no downtime of the services (or to keep it as low as possible) – downtime causes users a lack of productivity, and (be sure) they don’t like that. ITSM takes care of service availability much, much before a customer starts using the service. Once they do, ITSM is permanently working on increasing availability.
- Service optimization – think about how many times IT services are oversized, meaning assets supporting IT service were purchased either without thorough analysis or “to be on the safe side.” ITSM monitors, measures, and suggests improvements. Another result could be selling excess capacity, which also increases profitability.
To win a new customer? Always!
But it’s not that easy. I have seen lately tenders where ISO 20000 compliance is required for company’s to be able to respond to tender. So, if the company wants to win new customer, it needs to get certified to ISO 20000. By gaining new customer, your company gains new revenue. Logical question is whether implementing ISO 20000 costs more than profit made with new customer. Usually, the answer is – no. Particularly if you consider the fact that tenders are published regularly, and once you have certify against ISO 20000, you don’t need to do that every single time you respond to the particular tender.
Beside tender, companies implement ITIL or ISO 20000 to show the market (and attract new customers) that not only their services are excellent but also what’s “behind” them i.e. ITSM for those services.
Information security and profitability?
Yes, information security also has touchpoints with profitability – namely, security management (within the scope of the ITSM) addresses (among other things) prevention of security incidents. Or, if they can’t be prevented and do happen – that their impact is kept to a minimum.
Profitability? The consequences of security incidents are usually costly. For example, an inability to use IT services for, e.g., a few days, leakage of data, loss of credibility and reputation … Quite often, the consequence is loss of customer(s). The fact is that, usually, prevention (by implementing ITIL/ISO 20000) costs less then resolving the security incidents.
Complexity of ITSM
None of the above-mentioned elements exist alone. Quite the contrary, they are related. For example, productivity, i.e., efficiency has a satisfied customer as a consequence, who recommends your company to others, so you gain new business and increase profitability from the investment made in ITSM.
No matter whether you earn your money directly selling ITSM services (e.g., maintaining other organizations’ IT infrastructures) or ITSM is part of the product you sell (e.g., I have a customer who sells a solution for logistics and ITSM covers the whole lifecycle of the product) – you need to invest in ITSM. Implementing ITSM based on ITIL or ISO 20000 creates an obligation to keep the status quo of the quality achieved, as well as to keep the costs of ITSM as low as possible.
So, ITSM is a company’s strong tool to succeed in business. Yes, it costs some money, but it also influences the profitability of the company—we expect, positively. The point is: management doesn’t ask anymore whether something is profitable; rather, they set it as a mandatory request.
Use this free ITIL Return On Investment (ROI) Calculator to perform a cost-benefit analysis of the implementation.
