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Wed, Apr 9, 2008 6:37 EDT

IT is transforming itself from a manufacturing to a service industry

Topic: IT Organization Management

Current Rating: 5 Comments: 2

Today the IT organization and the CIO are evolving from merely managing technology towards driving innovation and business growth. As IT becomes more and more integrated with the business, and perhaps, in some cases, even is the business, the actual technology elements that were for so long its focus are just far too removed to be truly business relevant. After all, does a car buyer really care about how many pounds of steel went into the car rather than what its gas mileage is or what the warranty program entails?

Who in the business unit really cares about server availability? Worse still, when individual groups, such as a network or server group, can't see how their area contributes to the greater good, they remain inwardly focused on metrics to justify their own capabilities (i.e. network availability, bandwidth or capacity) and the tendency then becomes to blame other departments when things go awry.

Transitioning to a business service oriented perspective can change the focus of IT to one which is fundamentally customer and business value centric. In order to do that, IT needs to assess everything it does for its customers and define them as "IT Services”.

Best practices such as the IT Infrastructure Library or ITIL, with its focus on service management processes that transcend organizational boundaries, have been helpful in enabling this transition. But even these can fall short if IT lacks two critical capabilities:

  • Firstly, the means to automate activities within and across ITIL processes so that the benefits of a service-centric approach can be fully realized. Without this, IT faces the danger of becoming “better organized” but is unable to actually deliver any improvements.
  • Secondly, and perhaps most importantly, a way to build an abstraction layer between what’s traditionally been managed as technology elements and the business processes. Business processes reference one or many IT services and are comprised of IT assets and a combination of people and projects.

It is only by building such a layer of abstraction that will enable IT's focus to truly change from their traditional asset perspective ("what we have"), to the new value-oriented perspective ("what we deliver"). Furthermore, aggregating data at a service layer reveals far more potent information sources and the knowledge needed to drive service improvement and shift the culture and mindset of the IT organization.

What do I mean by that? I'm talking about the CIO and IT having a "360-degree view" or a "unified view of services." Such a common and unified view can offer unprecedented insights across all of IT management: service levels, prices, costs, quality, customer satisfaction, risks and exposures, compliance, service consumers and more. Those insights span the core concerns of enterprise IT management, namely, efficient and effective governance, business service management and security management.

This 360-degree view is powered by what's known as a "Unified Service Model" (or "USM" for short). This USM can aggregate raw data associated with a service captured in the configuration management database (CMDB). It does so by gleaning data from a system's built-in best practice management solutions and by transforming that raw data into useful and comprehensive business information. That information, in turn, provides insights about the service across all of IT.

There’s an organizational aspect to this that should not be overlooked. Simply put, CIOs and high-level IT managers should begin empowering their staff to think of themselves as not just, say, database administrators, but also as critical players who support particular services for their customers. The role of an “IT Service Manager” is often used to organizationally embody the shift towards a service oriented IT culture.

Only when

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Wed, Apr 9, 2008 14:15 EDT
Posted by: Bob Kotch
Rating:

Let me offer a perspective on this post. First, the transformation the author references is not new – it has been ongoing for at least the time I have been active in IT roles – 30+ years. And it likely will continue into the future, without end.

Second, the author’s points are well taken. I call this phenomenon ‘connecting the dots.’

One role of an IT leader is to provide perspective – to link and connect all of the work going on within the IT organization to business needs and value added, as measured by the business. So one test of connectivity is as follows: if you are for example a network administrator, you can answer the question, in one or two clear declarative sentences, ‘How does what I do help the business and my internal or external clients?’ If you cannot provide that answer, I contend that is a leadership failure!

Additionally, being able to define how the value added of a position is to be measured – in terms that matter to the business – is critical. Is 99.98% server uptime necessary for business operations? Or is it stroking the ego of the data center manager? Again connecting the metric and target value to the business and its needs/value creation is a key leadership requirement.

Once IT defines and connects the dots, it can explain to its client base why what it is doing is critical to business success. That can translate to improved and more productive budgeting, capital planning and operational planning activities, and result in a closer alignment between the business and IT.

That is one man’s perspective – I would value hearing additional thoughts.

Bob Kotch
www.simassoc.biz
rak@simassoc.biz

 
Thu, Apr 24, 2008 8:40 EDT
Posted by: Ade McCormack
Rating:

I like the theme of the IT department moving from a manufacturing mindset to one more service focused. I love the idea of encouraging all technologists to understand the implications of what they do on the customer's condition. Conceptually this is not new. This is what the business-IT alignment evangelists have been pushing for at least a decade. The significance of this piece is that we are still not really there yet.

Worse still the nirvana scenario that the article promotes in my view is not enough. We need to move beyond alignment to entwinement. The IT function, once it has got to the 'trusted supplier' stage, needs to press the agenda forward to the trusted partner state. Only then will we move from IT as a tool for automating business processes (cost efficiency focus) to IT as a tool for gaining a competitive edge (cost effectiveness focus).

The article presents a pragmatic perspective on what most organisations need to sort out today. I am simply trying to say that CxOs need to be alert to what needs to happen thereafter.

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