There is a new paradigm in IT: Supporting a business that is completely reliant on IT.
With this in mind, IT failures are no longer just business facing, they are public facing. The difficulty arises when IT continues to do support the same way they have for years, as an infrastructure based organization with little regard to the service that is impacted and how urgent it is to the business. Many organizations I walk into still see all enterprise impacting outages as priority 1, and don’t have an impact/urgency pairing for externally facing services.
IT and the Business are not separate entities
This isn’t enough in today’s world. You can no longer break IT and the business apart in many organizations. The age of technology is so entrenched in business that the idea of IT operating separately from the business, without an understanding of the impact of technology on the success of the business is now archaic, yet many organizations operate like nothing has changed and are still unable to express where the money goes. One way to begin addressing these is by shifting to a “service provider” mindset. Or, to say it another way, transforming IT from infrastructure provider to service provider.
The most tangible difference between the two is that it levels the playing field between what IT provides and services the business can purchase from external providers. If you start looking closely at SAS offerings and shadow IT, they represent services the business can buy or has bought to fulfill needs they have, or which enable them to produce the outcomes they need to produce. If this sounds familiar, it’s at the heart of ITIL’s definition of a service.
Communicate your services clearly
Often, the services IT provides are not clear or as widely known as services advertised by third parties. In fact, IT often cannot clearly communicate the services they provide because they are still operating in an infrastructure provider mode.
If IT wants to shift to “Service Provider, ” there are three major deliverables to help them change the game:
- Define the business services provided and the value proposition for each.
- Distinguish how much it costs to own and operate each service.
- Compare the services IT services to the marketplace and determine how IT can be more competitive (or whether it would be better to purchase the service from another provider).
Identify your services
Let’s look at this in a bit more depth. Within many organizations, there are some clear-cut industry agnostic services provided by IT:
- Email and Productivity Services (document creation, storage and printing)
- Benefits Management
- IT Professional Services (often falling into development, operations and support)
There will also be any number of industry-specific services that organizations will need, like CRM solutions, Inventory Management, Website Sales etc. Any and all of these services, regardless of whether they are universal, industry specific or company specific can be provided internally by IT or by third party providers. In fact, we’re all aware that with the growth of Internet-based connectivity and cloud solutions, companies can buy almost anything they need externally, eliminating the need for IT. Or can they?
Behave like a third party provider
This is certainly the story that’s being told, but an IT organization that operates more like a third party provider is able to define and communicate the services they provide in a way that enables discussion about how best to “source” or budget the service.
This is why it’s so critical to be able to determine IT costs per Service. In order to compare value to cost or IT to an external provider, you simply must know what it costs to provide the service. It’s also important to define the service in a way that lets the cost be determined and which is comparable to competitors products.
Email and Productivity Services are great examples of this. You can buy a service offering Email and Cloud-based Productivity services for $15 per user/month for up to 300 users. It includes: a 25 GB Mailbox and Calendar, Access to MS Office, 25 GB of personal storage plus shared folder access (10 GB each, plus 500 Mb per team member), instant messaging and conference calling. The service level offered is 99% availability and telephone support with a 1 hour response (note that this is not full desktop support, just user support).
Compare ‘apples to apples’
If you broke out the cost of offering this service and support internally, how would it compare to this offering? Remember to do an “apples to apples” comparison. Here are a couple of things to think about when you determine costs so as to keep it “apples to apples”:
- The only networking costs that should be included are those that make the service accessible via the Internet (not to a user’s device).
- The availability target is only 99%. Most internal IT organizations have higher targets, which cost more money to support. If you offer 99.9% or 100% availability be sure to use this as a distinguishing factor.
- There is a limit to mailbox and storage space. If you routinely offer more, break out how much the first 25Gb of each costs. Then state how much is spent on expanded storage services separately.
The next easy one to compare is CRM. A popular SAS CRM offering is $125 per user per month for their Enterprise edition. What does your IT organization offer for CRM and how does it compare? This offering may work in small organizations, but as the number of people using the CRM package goes up, the price climbs. Looking at an organization I used to work for, we could have spent over $3 million on this product, while IT’s CRM budget was a fraction of this. Again however, unless we sat down and defined CRM as a service, then broke the exact cost out from other IT costs, we couldn’t have voiced this to the business.
Remember your professional services
When going through your Service definition work, don’t forget the professional services IT offers that are not related to a specific business service, for example:
- Telecom and Networking Services
- Desktop and User Support Services
- Procurement and Billing
- Program and Consulting Services, including R&D for innovative solutions
These can also be procured from outside providers or offered as internal services much like the business services.
Selling yourself to the business
By now, you’re probably asking “how does this address the new paradigm of support?” It’s simple: until you know what you provide and are able to communicate about it, compare it to competitive services and work hand in hand with the business to manage the overall service portfolio, IT provides little tangible value. They don’t know what you offer or how much it costs. IT is not “selling itself” to the business, so they hire the competitor. The new paradigm of support is driven by closer interaction with the business. When you start to operate as an integral part of the business in delivering the goods and services the external customers obtain from the company, you directly impact the success of the business.
Once you are in this position, you are working with other business executives to identify services needed and ways to deliver them cost effectively, along with determining the investments the business can make to grow or be more competitive in their industry. This is the new paradigm for IT – it’s one of being a contributor to the business (rather than being looked as as overhead or cost to be controlled).
This is a pretty advanced conversation for most organizations. Think of it as a goal for maturing your Service Management implementation. Next blog, I’ll return to the basics and offer some tips on getting started on your journey.