Business Service Management Hub

The Hub Commentary_

This is a great article and the biggest one of them all that I would add to include, “Align IT to the Business”.   Do we say, align sales to the business or align investment banking to the business or align claims processing to the business or distribution of product to the business?  Why is IT different?  IT is the power of the business, they are not separate.

Many of the cliches listed are because IT is not operating as part of the business.  For example 2 & 3, one where legacy processes define how things are delivered and one where it was likely over customized for a commodity process.  Another favorite of mine is the final #8, buying just because it comes from a big name regardless of cost.  All of these tell me that there is no business service management practice in place.

If IT were part of the business and operated as part of the business, most of these cliches would not exist.

I challenge you to become part of the business and make business decisions and the cliches would evaporate, service quality would improve and IT would start looking at driving revenue rather than looking for scapegoat cliches.  However, I post this as there is tongue in cheek humor to the article for a Monday!

How are you removing the IT cliches?

Michele

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Now that another season of NFL games has come to an end and our national summer pastime is about to begin, it’s time to swap one set of cliches for another. Sports broadcasting is replete with cliches—nice, comfortable, familiar, predictable phrases that connect current sports fans with previous and future generations of sports enthusiasts.  (Read Full Article…)

The Hub Commentary

The role of the C”I”O continues to evolve.  And the “I”s have it!  Infrastructure, integration, intelligence and innovation will need to be the focus of  next-generation CIOs.  As the article states, this is a year of innovation and the re-alignment of IT resources.  The shift is from keeping the lights on to growing the revenue with new products and services.

This impact IT operations in that they have to be ready to support and analyze the mission critical and need to automate the routine and mundane.  What I find most astounding in the article is as usual, Innovation comes in 4th.

5-10% of budget is allocated for innovation and growth where >70% of the budget goes first to infrastructure and just keeping the lights on.  This is the shift that needs to occur by optimizing and leveraging technology for integration and automation shifting the spend on infrastructure down shifting the spend on innovation and growth to 30% or better.

Innovation and growth has to come to the forefront this year and stop being the afterthought or the nice to have after everything else is done.

Randy

While next-gen CIOs will emerge from traditional technology backgrounds as well as business-leader backgrounds with technology expertise, the report says, current CIOs will need to master four emerging personas in order to compete in the new environment.  Read more

The Hub Commentary

SaaS is a delivery model and all services delivered by IT need to be categorized for their cost and value to the organization and the then the delivery model mapped to the service.  Highly custom, competitive advantage, differentiating services are not well suited for outsourced or SaaS delivery models.

Those services that are not unique to your organization and less integrated are very well suited for SaaS and outsourcing.  While you are likely offering a premium service to your organization, it is not necessary and outsourcing is just the ticket to standards and right sizing the service.

Many IT organizations hang on to the commodity because they have resources that can do it.  Just because they can do it, doesn’t mean they should do it.  Use your expensive in-house resources for the mission critical, unique, revenue driving services and shift the routine, commodity out of house.

ITSM and monitoring has often been something that could be offered as a service removing the infrastructure and the requirement for you to maintain resources that have knowledge of monitoring tools rather than you mission critical services.  We are fast approaching the day where much of the management is commodity and should be outsourced.

Are you right sourcing your IT management?

Michele

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Software-as-a-Service (SaaS) is more than just a cloud-based delivery model. It is a service approach that IT organizations are considering for meeting their IT service management needs. With a SaaS model, IT organizations can focus their staff and infrastructure on high-priority activities and initiatives while still enjoying access to IT service management productivity solutions.  Read more

The Hub Commentary_

Absolutely!  This is the crux of the problem with IT today and why it is “IT and Business” rather than I sell insurance.  I jumped the fence many years ago for this very reason and I developed and delivered an executive information system that reported on revenues, so I couldn’t have been closer to the business if I tried, but still felt a million miles away.  I started out life working for an outsourcer before going internal IT and thus I likely had a tainted view.

When you develop, deliver and support technology based upon the market and your customer needs, constantly evaluating what the competition is doing and learning more about your customer’s business than your customer has, it brings a whole different perspective.

One day at a conference I spoke on the topic.  An audience member came to speak to me afterwards and said his IT had no relevance to his company.  I knew nothing more than the name of his company and that it was a candy manufacturer, so manufacturing.  I asked only 3 questions and had him understanding business value in under 5 minutes.  First, does IT have any hand in the automation of the manufacturing line (the heart of the business), not really an IT function.  Ok, next question, I suspect you have an ERP system, why Yes we do, xyz system.  Ok, I suspect sales, distribution and customer service play an important role.  He was now standing up straighter.  Well, uh yes.

In the fall of 1999 Hershey took a gamble on a new CRM and ERP system just before Halloween and learned the market will go to a different drug store to buy a brand of tooth paste, but when we want chocolate, we buy what is on the shelf and found themselves on the front page of the Wallstreet Journal.  Long story short, they missed the biggest selling season, Halloween, then Christmas, Valentines and most of Easter before the systems were up, running and integrated as designed.  Now he was standing tall.  Maybe IT is important and has impact on sales, revenue and growth.

Sometimes we get too close to our business to see the trees for the forest.  So while some bash the vendors, we work for food and we have to understand your business when you don’t and help you see it in order to see a business case for automation that can help you drive growth, so we aren’t all bad.  🙂  I cannot count the number of times I have helped an IT team build a business case as a former analyst, where if they understood their own business it would be easy.

This year it is an imperative to make this shift with the service provider explosion.  I challenge you to work for food!

Do you work for food or just operate?

Michele

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Wednesday’s post discussed the difference between people playing for food or playing for fun. The analogy applies to the difference between pro-athletes who play for food and college athletes and others who play more for fun. The idea expressed in that post was that food and fun are part of the IT/Business context.  (Read Full Article…)

The Hub Commentary

Trend No. 4  “Server-centric to Service-centric”, predicts that architecture will shift from in-house servers to a distributed model in order to separate infrastructure, systems, applications and businesses processes from one another.   Take a look at the seven other trends Accenture says will continue to transform the technology landscape  in 2011 and beyond.

Randy

“The role of technol0gy is changing: it is no longer in a support role.  Instead, it is front and center driving business performance and enriching people’s lives like never before.” The real value of the report lies with insights on taking advantage of these technology shifts to gain business intelligence and business value.   Review  full report…

The Hub Commentary_

This is a nice summary of a longer piece by my friend Glenn of Forrester.  Delivering high quality, high productivity while being flexible are the keys to success as we sit on a tipping point with technology.  IT must be flexible and must evolve to balance driving efficiency with driving revenue growth for the business.

The roles in IT will evolve from monitoring to using technology to automate and insure standard processes and configurations elevating the role of IT to business analysts.  Business service management practices will also evolve bringing IT closer to driving the business rather than just operating the business.  Much of the lower levels of IT are becoming commodity both from a infrastructure and a monitoring perspective and we need to rethink and evolve the roles and the management of the data center to be more flexible going forward.

Nice piece summarizing the great shift occurring in the data center in the coming years.

Are you driving change or slowing change?

Michele

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IT must industrialize infrastructure and operations — and IT workers must be taught to abandon their love affair with complexity, says Forrester’s Glenn O’Donnell. Consider these 10 pieces of advice on how to do it right.  (Read Full Article…)

The Hub Commentary_

Great article describing the business service management practices that all organizations should be looking at and going through as the industry is at a tipping point with new technology and an explosion of service providers.  There is no difference between IT and the business, it’s just the business as the article states.

The shift in metrics is a great example, it’s not server downtime that is relevant, it is the impact on the sales force and value of sales impacted by the downtime.  1-2% of revenue is spent on downtime each year and another 1-2% of revenue is spent each year for your resources to just react and maintain.  I discuss this in further length in this post.

Do you measure server availability or sales value impacted?

Michele

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It is essential to focus on people in order to get value from consolidation. At Eisai, our divisions functioned as separate companies, with the mind-set to match. When we brought together all of the U.S. organizations, I quickly discovered gaps.  (Read Full Article…)

The Hub Commentary_

Surprise cloud leaders in the F500 multi-billion revenue organizations.  These organizations are listening to their businesses and building private clouds with their vendors and learning to save and drive growth with appropriate capacity.  Understanding and driving service value into their organizations and business service management practices to reap the rewards of new technology.

Competing for the data center with the explosion of service providers starts to change the game in how IT approaches and delivers services.  This is a long over due change for IT organizations in an effort to becoming part of the business and leveraging technology to both operate and power the business.

Michele

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The way you know you’re in the midst of a technology shift and market disruption is when organizations don’t behave the way you expect them to based on past track records. Cloud computing has been filled with surprises and unexpected behavior from the get-go.  (Read Full Article…)

The Hub Commentary_

Good question, does IT lead innovation?  It depends upon what you consider IT.  Application development and infrastructure architecture tend to be the outward face of using technology for a new or improved service that drives quality with the customer experience and/or new revenue with a new service.  However, while data center operations is often an afterthought, they should be part of the plan and build to insure success.

While data center operations does not develop new services and architecture, there is opportunity here to apply good business service management practices.  These practices  illustrate quality customer experience and speed to market with new services with control over risk with service enablement baked into the services.

IT led innovation is a team effort between applications development, infrastructure and architecture and data center operations as a single cohesive unit.

Michele

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The IT department won’t be able to lead business innovation projects if it has a bad reputation, says CA evangelist Steve Romero.  (Read Full Article…)

The Hub Commentary_

As an old COBOL, mainframe programmer, I still chuckle that the mainframe never did die as expected and I enjoy the commentary in this article about the processing power, thought in design and speed of the VSAM files over today’s relational databases and 4GL tools.  In those days, much time was spent on design for speed, use of space and read once for many output purposes.

As hardware and storage became cheaper and processing power increased, this attention to design has somewhat fallen out of fashion.  As the author describes, the portfolio and modernization must be evaluated as we have described in previous posts regarding the service, value and costs to the organization.  As a manager of a long time ago once told me, “Michele, just because you can re-write it, doesn’t always mean that is the right answer.”

The most interesting metrics as reported by Gartner in the article were that 60-80% of all business applications are mainframe COBOL and 90% of financial transactions are mainframe COBOL.  Astounding!

Michele

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With the exception of very small organizations, migrating to the cloud is not a simple switch that can convert them from an ‘ in-house’ data center to Cloud.  Large enterprises have to modernize much of their applications to adapt to cloud,…..  (Read Full Article…)

The Hub Commentary_

As a marketeer and IT professional, I’m not sure I see the connection between IT and social media unless the infrastructure is set up inside a business.  I say this as someone who has spent a great deal of time in recent months both studying and deploying inbound marketing via social media technologies.  As a business service management practice it relates in driving growth for the business, internally the technologies are useful in driving collaboration and efficiency, but only if there is value to the business for the objective of the practice.

I don’t see it as ITs role to set policy on the use or management of external sources for social media content.  I am fortunate to work for an organization that sees the benefit of the external conversation, has minimal policies and trusts employees to use good common sense in their external social conversations.  External social media is about creating the relationship with your customers, prospects, providing good information – it’s not about Tweeting for the sake of it or Facebook just to have a page.  There needs to be a business driver, otherwise it is a personal action.

The opening comments of it gets in the way of work and is a nuisance is perplexing to me.  It isn’t an IT concern to control or manage the external world.  It is company policy that should define what employees do via external channels.  That said, these external channels are inbound marketing, awareness, and leads generation.  This is the problem with IT, they do not control all technology and need to seek how to best leverage, evolve, exploit and support new uses of technology to drive business growth versus being the usual, eternal obstacle.

Social media is not something for IT to govern.  Until it makes a connection back to the organization, IT is not involved.  Once the connection back to the organization occurs, then there needs to be a business requirement and policy enforced – most of all support to leverage that relationship as best as possible to drive business growth as possible.  The external conversation is not for IT to manage or govern, that is a company policy.  Times have changed and building a relationship with your customers is relevant and expected.  So I disagree with ITs role in social media until it links back to the organization and the mechanics of that link.

So as the article slightly mentions, it is service to your customers and it is marketing to your prospective customers and thus business growth.  Drive business growth and create competitive advantage with better customer service with new technologies, ideas and avenues rather than being the usual obstacle.  So I challenge you not to find fault with social media, but…..

How do you use social media to grow your business?

Michele

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The Hub Commentary_

To the point of more with less and making the right investments.  This goes to knowing your services, cost and value.  All part of the practice of business service management and I agree we are at a tipping point for Open Source solutions and not just the collaboration, management tools too.

I find this interesting as I have been using Open Office for almost 2 years now and those of us who use Open Source know that these products got it right.  They publish in both formats.  So I can take advantage of Open Office, but I can publish in Microsoft formats to share with the non-Open Source world.  That is the smart model to gain traction in the market.

Do you continue paying the tax to the big guys or invest those taxes in growth?

Michele

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IT chiefs are increasingly turning to open-source software to help create a competitive advantage for the business, according to new research from Gartner.  (Read Full Article…)

The Hub Commentary_

Business service management practices have helped many organizations manage their IT infrastructure for the business services it supports and most importantly drives.  In my post regarding Finding your Services, this is a first step to linking services to service value within the business.

The article provides some simple, sound advice.  In fact, just last night I was speaking with a product manager about my days as a product manager and we always started new projects with a theme and objectives.  What part of the market were we driving to lead, meet or grow.  We balanced the must have customer quality as a small percentage and drove the largest portion of the spend on the next generation products that would both lead and grow the business.

IT is no different, it not a separate and distinct organization, it is the business.  It both operates and powers the business, but most importantly it must drive business growth.  Often times the case is IT spends no time looking for driving the business and concentrates solely on operating.  IT is becoming more and more of a commodity and those not driving growth and meeting the Service Value challenge in the coming year will be outsourced as the service providers know their Service Value.

Does your IT drive Service Value?  Do you know your Service Value?

Michele

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You’ve heard it before. The CFO asks “how do we know what value we’re getting from IT?” The business line leader asks “How do I measure the value of IT to my P&L, not just help desk tickets closed?” The CEO asks “How do I know our IT spend is allocated to best support our objectives?”  (Read Full Article…)

I’ve seen a bit in the news about support, the consumerization of devices in the workplace and virtual desktop infrastructures that has brought this post together.  We seem to ebb and flow with new toys in the workplace and standardization of support.  The plain truth is that the standard environment is the most cost efficient.  If the role did not dictate that a given device be provided by the company to the individual, why would we assume we must support it?  I understand it did not come with a capital expenditure and made the employee accessible, if they choose to be, however, it does carry a significant cost burden that is often overlooked.

Service and support is commodity.  It is something that can and should be easily outsourced and the service provider will either standardize the support or will tax the customer for the varying types of devices that are supported.  I know that sounds harsh, but in these days where we should be seeking to spend less on operating and more on innovating this is one of the easiest and biggest cost saving area.  In most IT Operations budgets, the service and support function represents about 10% of the budget.  Tools no longer need to be in-house and custom if the business would rather not outsource, there are good SaaS offerings on the market to at least alleviate the burden of supporting the tools, paying the big boys maintenance taxes and paying for customized support of a commodity function.

I’ll make another bold statement, we care too much about the “end user” for the wrong reason.  No one outside of a data center even really knows what an “end user” is, but we all know who is our customer.  IT has to make this transformation to drive business growth and this is one of those starting places in knowing who is really the customer.  Whether or not our “end user” in the business is really happy or not with IT services is a debateable point.  The most important factor is whether or not we are able to transact business and support our buying customers that grow the business.  This is the mindset shift that needs to occur.

So supporting the latest version of iPhone from whichever provider and carrier and how happy our “end users” are when we re-image their machine because it is far cheaper to re-image to standard than figure out what they downloaded that broke something.  It’s about keeping the business productive, growing and making the customer of our goods and services happy and buying.  We should be automating the operations and shifting this attention, focus and resources on the growth side of the see saw.

I know this post is a bit controversial.  This is something that happens with each new toy that comes to market and budgets loosen, we forget the good efficiency practices we put in place in lean times.  I’ve answered hundreds of inquiry calls on this subject just before this function gets outsourced, the services are cheaper because the service provider will impose a standard and tax for the luxory.  We should be doing the same with good business service management practices shifting our focus and resources to the growth of business.

Are you taxing for the non-standard or spending more reacting and maintaining?

Michele

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Network World — Cost-saving technologies remain a priority for IT in 2011 and virtual desktop infrastructure (VDI), with its ability to streamline operations, is one of the technologies at the top of the list.  (Read Full Article…)

The Hub Commentary_

Did you take advantage of the investment opportunity to grow your and reform your data center?  Loosening of budgets and increased spending should be leveraged not just for your new toys, but should keep in mind that the new toys need to be managed and the management factors that service enable your data center should be baked in from the start and not an after thought.

We are in a time of growth to drive the business and part of that growth enablement is automating the commodity of operations in order to re-focus and move your resources from operating to growth of the business.

Are you still using high dollar resources to operate or are you driving to growth?

Michele

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Global IT market grew by 8% year over year to cross $1.5 trillion at constant currency, including telecom services, the information and communications technology (ICT) market grew by 6% to $3 trillion in 2010, according to a new report by IDC.  (Read Full Article…)

The Hub Commentary_

This is the second offering like this I’ve seen in a week.  The first was the British Airways announcement with the software and service provider vendor.  This is a classic example of  a shift in the market and commoditization of some back office functions.  Great examples of business service management functions and knowing which services are commodity for cost versus those that are value and differentiate your services in the market place.

These are offerings and movements that enterprise IT shops should watch and take notice of in determining what is really value add and unique and most of all needs to be unique in your organization.  Leverage service offerings for the commodity services and accept standard processes so as to drive down costs and evolve your organization and roles to drive business growth with technology.

Are you merely powering the business or are you driving the business with technology?

Michele

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Supports energy and network providers in their daily back office business with its portfolio of modular IT offerings

Deutsche Telekom has introduced complete Software as a Service (SaaS) package via the Internet for the energy industry.  (Read Full Article…)

Business service management practices are about understanding your costs and the value of services to the business so that IT manages as services appropriately.  I can hardly read an article these days that isn’t cloud or as-a-Service related.  I enjoy these and the transformation it is driving as it is long over due for most IT organizations.  When I wore an analyst hat and I would field inquiry calls regarding outsourcing, I would always start by saying you don’t outsource for cost savings.  I find these days with the flexible payment and contract options that we are being short sided and seeing these offerings as the low cost option.

Unless you are hideously inefficient, it really isn’t cheaper.  You outsource for change or to right source the services in your organization and drive standards.  Let me explain a bit more.  When you move portions of your IT to the cloud, a service provider, as-a-Service option, to a managed service provider or a full service outsourcing organization, they are still in the business to make a profit and you need to factor some time and resources (costs) to manage the provider.  The estimate to manage the provider is 3-7% of the cost of the contract, generally.  So this is one piece to factor into the overall cost, but change that is too difficult to create in your environment is another factor.  Short story of it, implementing standards.

So in some cases it may drive down costs with lower cost resources and standards, but that isn’t an apples to apples comparison to your current service offering.  However, it is the right reason to move the commodity to a service provider because we come full circle – not all services are created equal.  In-house data centers find themselves staffing the services with expensive resources and managing the services very similarly across the board.

So this is the driving down cost of the equation in right sourcing and creating change and standards, on the other side of the coin I read a lot about supporting the devices of our employees.  By not taking on the capex of buying smart phones, tablets, etc., but taking on the expensive support cost to support the devices of our employees.  I can guarantee you the service providers will tax you for this non-standard practice.  I can see the debate on both sides, you deemed they didn’t require the device or accessibility for their role, but they allowed themselves to be accessible if you support the device.  I would caution against this practice without fully evaluating the security and support costs of doing so.

We are in the midst of great change and there will be an ebb and flow as budgets loosen.  I find it exciting times and also find that there will be real success stories and others that may not enjoy the same success.

Are you right sizing your services and sourcing options?

The Hub Commentary_

Open Source is gaining in adoption.  I find this part of the business service management swell and transformation trend to evaluate the automation and driving down of operational costs to focus on the use of technology to drive business growth.  Just look at “Watson” on Jeopardy, powered by SUSE Linux.  It’s the Watson analytics that is relevant, not the cost of an operating system to drive it.

This same transformation will cut across the whole of the IT commodity monitoring and support functions with SaaS service and support tools and open source monitoring tools that have been on the market for quite some time and proven stable.  If you aren’t leveraging it, I guarantee your competition is using it.  It’s time for IT transformation and re-thinking that which is commodity and that which drives and differentiates your business.

Have you stopped paying the Big Boys the taxes to monitor your command center yet?

Michele

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Vendors of proprietary software are fond of warning potential customers that open source software isn’t ready for business, typically citing subpar features or a higher total cost of ownership (TCO).  (Read Full Article…)

The Hub Commentary_

Consolidation can have short term gains and costs with longer term gains when approached as Arthur describes in his post.  Its all about balancing operating and growing the business and business service management practices.

Many approach consolidation much like new technology, virtualization, for the short term cost saving to remove hardware and software licenses from the equation.  However, when done right it with investments and spending upfront, there are greater gains in the longer term.  Arthur mentions SIRVA and how they spent to consolidate and gain and ends with a reduction in staff by a third.

Who really removes people?  It is possible and generally is why IT does not turn inward to automate and drive efficiencies in their own organization as they do when applying technology for automating other parts of the organization.  As was noted in today’s earlier news commentary, the roles in IT start to shift as service managers and analysts applying technology to the business – not “bulb monitors” watching the commodity operate.

These are interesting times and it will be interesting to keep this years Fortune 500 edition and compare it to 2012 and 2013 and see who takes over each industry and is leading with the use of technology.

Michele

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It isn’t often that the phrase “do more with less” is literally true, but that is exactly what’s happening with the latest round of data center consolidation.   (Read Full Article…)

The Hub Commentary_

I would agree that IT is commoditizing and the role of IT leaders is evolving much like my good friend Siki indicates where commodity services can be done elsewhere and which then frees the evolved IT resources to sit at the table as Diane describes to apply technology to business choices.  This is the practices of business service management in action.

In the featured post, Finding your Services, I describe first classifying your services based upon their contribution and cost to the business.  How you deliver (source) that service then becomes the next choice.  Just because you have technical capability in-house to deliver the service does not mean you keep it in house.  Many services are becoming commodity and should be shipped out of the data center.  On the other extreme, where you are seeking to deliver new and innovative services to the market to drive growth, but you may not have the expertise in-house to deliver it timely enough, you may also choose to seek outside assistance.

Again, it becomes a balancing act between operating and growth and weighing the cost and value of in-house versus external options.  Then the new role of IT becomes that which is described by both Siki and Diane, one of the facilitator of services that both operate and drive the business.  We are in unique times of role evolution and this will become uncomfortable for the traditional IT staff.

Are you driving business with technology or just operating?

Michele

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This week I saw two articles that captured the two visions of IT that will dominate the future. Both were interviews with senior IT leaders, one a CIO of a major technology company, the other a senior executive with a leading system integrator. One article depicted a vision of IT as a future of standardized, commodity offerings, while the other portrayed IT as a critical part of every company’s business offerings.  (Read Full Article…)