ITIL and IT Operational Excellence

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June 2012
In This Issue:
Costly, Burdensome Projects

ITIL implementations have consistently ended in cost overruns, deadline extensions, and unmet promises. The emphasis on improving IT processes instead of leveraging technology for business improvements has jeopardized companies’ profit and revenue goals. ITIL projects have diverted critical IT resources to nonproductive IT investments.

Essential Best Practices

ITIL represents the evolving documentation of fundamental best practices for critical processes within IT organizations, and as such is mandatory for cost-effective security and management of IT infrastructure and applications. With business mandates to do more with less, proven IT service management processes are a strategic imperative.

"While the IT landscape can boast many successful ITIL implementations, it is also littered with cost overruns, frustrated IT staff, and dissatisfied end users."

-- Bill Keyworth, Guest Editor

Opening Statement

In the last 15-20 years, IT practitioners have come to recognize the contribution of "process" in maturing their IT operations. Indeed, since its initial publication in 1989-1996, ITIL® has become a byword within competent IT circles. Looking back, the UK Office of Government Commerce exhibited great foresight in capturing best practices for IT service management (ITSM) at a time when it was all too common to simply ignore the management of IT services. Yet the experience gained by implementing service management processes has surfaced passions both for and against ITIL projects.

Without question, there is value in documenting standardized practices for the IT service lifecycle. ITIL's commitment to sharing the benefits -- and problems -- of process implementation within an industry (IT) that is screaming for lower costs and higher skills is historical fact. It's also a fact that ITIL has spawned a large cadre of consultants as well as associations and events eager to perpetuate the promise of ITIL for a fee. While the IT landscape can boast many successful ITIL implementations, it is also littered with cost overruns, frustrated IT staff who couldn't focus on immediate customer demands, and dissatisfied end users whose business technology needs were put on the back burner as the IT organization completed ITIL projects.

THE PERCEPTION OF ITIL DEPENDS ON WHO'S ASKING

The beauty of ITIL is very much in the eye of the beholder. ITIL's strongest advocates are those who must implement ITSM processes within their IT operations environments as a matter of survival (or those who benefit from available consulting dollars). This middle management group intuitively understands the negative impact of inadequate processes on service delivery and operational costs.

Unfortunately, this task-oriented IT group has generally failed to package the benefits of more mature IT processes into a value proposition easily understood by IT's business customers, who are the final judges of IT's effectiveness and the people least enamored with ITIL projects. Caught in the middle are IT executives, who carry specific responsibility to bridge the gap between IT and the business community. It is they who must try to ensure their staff have the tools and processes required for success -- and who risk the wrath of their customer base if the ITIL projects are unsuccessful.

It's almost paradoxical that the IT service professionals known for resisting change in order to ensure a secure and reliable IT infrastructure are the same people who enthusiastically endorse massive changes to the customer-facing processes governing that technology environment. It is difficult to justify ignoring the immediate business demands of users in order to improve "process," and doing so creates inevitable internal conflict and dampens enthusiasm for ITIL projects. Addressing the complexities of ITIL V2 and V3 -- while minimizing cost and maximizing value of the IT service offering -- is truly a high-tension, high-wire act in the main tent of business expectations.

ITIL CONTROVERSY INEVITABLE BUT NOT UNMANAGEABLE

The controversy over ITIL ranges from "How can you not promote implementation of proven best practices?" to "ITIL implementations are costly and burdensome to the company's business." That controversy manifests itself in the following ways:

  • While ITIL focuses on documented best practices within IT organizations, too many ITIL projects have suffered from cost overruns, deadline extensions, and unmet promises.

  • While ITIL helps to cost-effectively secure and manage the IT environment, business customers would rather move forward with new technology to increase the competitiveness of their business.

  • While ITIL assists IT in doing "more with less" in managing legacy applications, ITIL projects too frequently divert critical IT resources to IT investments not tied to profit and revenue goals.

The most significant issue that undermines ITIL implementations is the business customers' perception of the IT organization. While the function of IT operations is becoming more effective and mature, the contribution of IT operations to the enterprise's business goals is increasingly being questioned. As current IT shops get better and better at the management processes and tools required for security and control of IT infrastructure, the back-office role of IT operations is becoming increasingly marginalized. This jeopardizes funding of strategic IT initiatives, potential technology contributions to the business, budget approval of essential IT resources, and continuation of critical legacy applications. The gap in IT's alignment with the business and IT's difficulty in maximizing shareholder value are curtailing not only buy-in for ITIL projects, but the opportunities for and careers of otherwise effective IT executives.

There is, however, an existing, compelling opportunity for IT. As competitive options (cloud computing, managed service providers, outsourcing alternatives, etc.) increase for IT's business customers, IT operations can reposition itself as the IT service provider of choice. While secure, reliable, and predictable IT operations (particularly maturity in ITIL best practices) remain critical to long-term success, effective IT executives will seize the opportunity to promote their unique business value to the enterprises they serve. Instead of focusing internally on technology and ITIL management processes, successful providers of IT services will focus externally on the quality of services they provide as perceived by their business customers.

IN THIS ISSUE

In this issue of Cutter IT Journal, our six authors have focused on reasonable courses of action to enable ITIL to better satisfy the business customer's goals, and they provide specific recommendations on how IT operations can balance the conflicting demands of ITIL projects against the burgeoning (and sometimes overwhelming) demands of business users. Interestingly, the authors individually develop a consistent theme that the long-term survival of internal IT operations requires immediate changes in positioning and delivering these ITIL processes.

First up, Matthew Burrows addresses the perceived versus actual impact of ITIL in delivering the business outcomes demanded by IT's end-user customers. He explores how the IT service provider can accommodate the business challenges presented by cloud computing, business process automation, external customers directly interacting with systems, financial instability, cost reduction, regulatory demands, outsourcing, and the potential death of email and growth of social media ... just to name a few. Burrows argues that our ITIL efforts must always be focused on what the end customer is trying to accomplish: "If we don't demonstrate how we help them achieve their outcomes and business objectives, it doesn't matter how many training certificates we have or how well we use things like ITIL. Our days are numbered!"

In our second article, Bob Multhaup explores the "black hole of IT" as seen by legions of business users throughout the world and notes IT's historical inability to demonstrate how ITIL creates acceptable, cost-controlling boundaries around that abyss. Multhaup paints ITIL as a "populist" movement of the IT masses who wanted to use ITIL to reduce IT inefficiencies and "get organized around services." While demanding that IT services be defined only through the eyes of the customer consuming the services, he advocates capturing the financial impact of ITIL implementations in delivering this business-oriented (not IT-oriented) portfolio of services. Multhaup lays out the essential ingredients of "ITIL with a shot of capitalism" and explains how defining IT in terms of the common services IT provides to its customers can help "dev" and "ops" begin to resolve their traditional tribal warfare.

Next, Anthony Orr compares ITL V2 and ITIL V3 and asks if there is a mandate for one over the other. He reviews the cost and business advantages as well as the liabilities involved in implementing ITIL V3. He justifies moving to ITIL V3 even as he acknowledges that some organizations are still laboring with the basic processes of ITIL V2. Orr examines industry issues behind the development of each of these two ITIL editions, which resulted in two unique visions that have surfaced in the deliverables and recommendations of ITIL V3 versus ITIL V2. Finally, he explores the difference between implementation and adoption of ITIL and analyzes the impact that the maturity of the IT organization plays in the success of ITIL projects.

In our fourth article, Randy Steinberg questions the legitimacy of ITIL projects -- and asks if current IT service process implementations are turning existing IT organizations into commodity shops that will be unable to satisfy the business demands for technology's future use. However, based on past successful IT turnarounds, Steinberg affirms the possibility that IT organizations can articulate the cost assumptions of technology delivery and consumption -- and thrive within the future of IT. He makes five specific, tactical recommendations that allow IT to provide cost transparency to the business and enable IT leadership to identify its services, the costs of providing them, and the demand for those services. These steps, he argues, will lead to IT's finally being managed as a service business.

Next, Malcolm Fry asks, "What's the ITIL score?" Wryly observing the sports fan's mania for all manner of statistics, and noting the widespread use of statistics in our own lives, Fry argues that the one truly important stat is the score. He then goes on to say that our ITSM efforts require a similar focused statistic -- namely, the service focal point (SFP), which "should provide a common focus for the whole of IT." Fry explains how two well-known concepts (KPIs and CSFs) form the basis for achieving the SPF, then distills the notion of an ITSM score still further, suggesting a "Good Day/Bad Day" metric that quickly communicates to senior management how well ITSM is performing. ITIL enters into this process by providing clear ITSM objectives for IT organizations to focus upon, as well as standard approaches to the IT functions that are needed to deliver those service goals.

In our sixth and final article, Bill Phifer examines the use of ITIL V3 when transitioning software applications from creation (i.e., development) to implementation, management, and change (i.e., operations) -- a classic devops discussion. Noting the enormous cost of operations and application maintenance/enhancement versus the much smaller cost of application creation, Phifer makes a strong case that effective ITSM requires process support that goes beyond mere application development. He delivers an objective evaluation of CMMI-DEV and shows how ITIL's V3 process for application lifecycle management provides a highly advantageous complement to traditional and proven CMMI benefits. As Phifer notes, "The end goal is that applications be designed to run -- that is, architected, designed, and built in full awareness of the intended operational environment in which they will execute."

In summary, the difference between ITIL implementations being perceived as "essential best practices" for cost-effective ITSM versus "costly, burdensome projects" that hamper the achievement of critical business goals lies in leveraging ITIL as a customer service enabler. Rather than promoting ITIL solely as a means of reducing IT operational costs, IT must show its business customers the positive impact ITIL service initiatives have on their own business function -- be it revenue generation, profit maximization, product development, distribution cost, manufacturing efficiency, or supply chain enhancement. Whatever business metric drives the business user must also guide the ITIL initiative. The articles in this issue all show how to better achieve that delicate yet essential balance.

ABOUT THE AUTHOR

In this issue of Cutter IT Journal, our six authors have focused on reasonable courses of action to enable ITIL to better satisfy the business customer's goals, and they provide specific recommendations on how IT operations can balance the conflicting demands of ITIL projects against the burgeoning (and sometimes overwhelming) demands of business users. Interestingly, the authors individually develop a consistent theme that the long-term survival of internal IT operations requires immediate changes in positioning and delivering these ITIL processes.