The future of Service Management?

One of the big challenges facing IT is how to move Service Management forward in light of the fundamental changes in the industry and consumer / customer requirements.

Obviously there is Digital and Cloud which are fundamentally changing the way services are delivered, but let’s not also forget there are fundamental changes in way Services can be managed utilising (to name a few):

• Autonomics -  Self healing systems / automation
• Advanced Monitoring – Supporting not just IT component monitoring but also business process monitoring
• IT data -Leveraging the vast amounts of IT data (and not just business data) that is available to provide not just historic but also future prediction of system performance (and failures) and future capacity requirements. Maximising the benefits learnt from the business data revolution for our own benefit.
• Service Desk evolution – Improved intelligence with increased scope through greater insight through data and automation driving higher 1st time fix and business outcome alignment
• Social media listening tools (for public facing services)

The challenge in the adoption of these innovations is how to take these innovations and implement them in an integrated and cost efficient manner to deliver (and this is the crucial aspect) Business “Value”? 

But what is “Value” to the Business. This can be financial, and let’s be honest the market is still very much cost orientated, but is this becoming an outdated and short-termist objective when put into the context of mid to long term business strategy?

Business “Value” is surely more than pounds and pence and how much can be saved through an innovation / outsource tender cycles or internal budgeting reviews?

Business “Value” has many aspects (speak to any business owner or CEO) e.g. Customer satisfaction, Customer retention, repeat business, business growth, end user satisfaction but ultimately business growth and profitability. All of which in the modern world are supported, directly attributable to or as a result of IT Services.

So how do we begin to incorporate the “Value” to the business derived from IT that can be used for measurement both contractually but as a wider metric to drive improvement?

Simplistically there are output measurements e.g. number of records processed, invoices produced. But is this Business Value?

I would say this is the first step but isn’t the real value in terms of transactions resulting in a positive business outcome e.g. invoices paid (Revenue Collected) etc where the value sits.

The crux of the issue seems to be how do you identify the part IT plays in delivering that Business “Value”? IT cannot be accountable for what it cannot control e.g. whether a customer pays their bill.

So do we need to widen the lens to look at the end to end business transaction and where IT underpins the process and model against the final outcome?

For example – Very simplistic!

Invoices produced – IT (paper / electronic etc)

Invoice paid – Customer (plus IT for various channels)

Customer invoice query – IT and End User

Invoice paid – Customer (plus IT support for various channels)

Bad debt identified – IT

Bad debt collection – End Users + IT

Ultimately the Business objective is to collect the total value of invoices (Business Revenue)

By looking at the flow there are a number of Business value measurements

• Timeliness and accuracy of invoices 
  • Number of customer queries / complaints attributable to Invoice quality (content)
  • Number of calls to Contact Centres / direct customer communication resulting from a business cycle (trending +or -)
• Revenue collected 
  • Debtor days - cash flow (trending + or -)
• Bad debt value
  • Debtor position (trending + or -)
  • Total revenue position as a result of the cycle 

I know that in the industry there will be comments that this is difficult to correlate to IT "issues" and that is true, but there is another overlay to this and that is whats happening within the Incident trends (and IT data) during this period. By linking Business "Value" generation with IT Informative data utilising lessons from business's data management we begin to drive not just IT Continual Improvement Plans but Enterprise (Business and IT) Continual Improvement Plans. 

So if it is so simple why is it not happening as widely as one might expect? It is not that these offering are not available in the market place, they are.

The fact is it is not simple due to many reasons and it is seen by many as expensive in terms of the costs (tools, processes changes)  and effort to really understand the business and the value derived from IT in a true end to end context. There is also the politics and organisational barriers to consider.  But if we fail to do this as an industry, are we really in a position to maximise the opportunities that the evolution in technology and data  continue to provide.

More importantly can the industry continue to be totally cost centric when there is always the continuing and increasing customer demand for quality and predictability (Warranty) of IT Services linked to business outcomes.

This then raises the question as to whether the traditional approach to RFPs / business cases is adequate in today’s technical and Service environment? A topic for another post...