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Troy DuMoulin, VP, Research & Development

Troy is a leading ITIL® IT Governance and Lean IT authority with a solid and rich background in Executive IT Management consulting. Troy holds the ITIL Expert certifications and has extensive experience in leading IT Service Management (ITSM) programs with a regional and global scope.

He is a frequent speaker at IT Management events and is a contributing author to multiple ITSM and Lean IT books, papers and official ITIL publications including ITIL’s Planning To Implement IT Service Management and Continual Service Improvement.

 

The Guide

"This blog is dedicated to making sense out of the shifting landscape of IT Management. Just when we thought we had a good handle on managing technology, the job we thought we knew is being threatened by strange acronym’s like ITIL, CMMI, COBIT, ect.. Suddenly the rules have changed and we are not sure why. The goal of this blog is to offer an element of sanity and logic to what can appear to be chaos."


Hitch Hiker's Guide to the Galaxy

"In many of the more relaxed civilizations on the Outer Eastern Rim of the Galaxy, the Hitch Hiker’s Guide has already supplanted the great Encyclopedia Galactic as the standard repository of all knowledge and wisdom, for though it has many omissions and contains much that is apocryphal, or at least wildly inaccurate, it scores over the older more pedestrian work in two important respects.

First, it is slightly cheaper: and secondly it has the words DON’T PANIC inscribed in large friendly letters on its cover."
~Douglas Adams

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Thursday, August 30, 2007

The Rise & Re-Integration Of The ERP Empire - Part 3

Context: This series of posts represent a companion white paper I developed based on collaborative research conducted by Pink Elephant and BMC. The goal of this research was related to understanding the adoption of IT Service Management within organizations that support a major ERP suite. The results of this survey can be found on the Pink Elephant website at the following link: Survey Results

Trends For Organizational Design & Common Process Implementation

As was stated in an earlier post, many ERP organizations chose to replicate or re-create a subset of their IT organization as a separate and distinct function.  This enabled organizations to manage their ERP solution in isolation as a means of gaining higher control, availability and reliability for their key business systems.  However, over time many more business applications have become business critical as the majority of primary business processes slowly but surely become absolute in their dependency on digital automation.  However, rather than repeat the expensive solution that was applied to the ERP system, IT executives have had to address the root cause instead of the symptom because of the overall cost of redundancy.

Today IT organizations are re-organizing around a shared services model in part due to economies of scale, lower transactional costs, and a growing realization that IT has to evolve into a services organization.  To accomplish these goals, the senior leadership who manage these organizations are adopting new enterprise IT management roles, processes and tools that tie the disparate technology domains into a unified service organization.

A key tool being employed to achieve these objectives is the implementation of enterprise IT processes that span technology silos in support of service delivery, security, risk management, quality, control, and support.  These process projects in turn support the cost and efficiency-driven technology consolidation projects focused on shared data centers, shared business applications, and the inter-connectivity of common network backbones.

In support of this movement, a trend can also be observed towards integrated IT management tools in support of a shared service model that is strikingly reminiscent of the business case presented by SAP and its competitors over fifteen years ago.  From this perspective, we get a nickname for this tool trend called ERP for IT.

However, the largest hurdle that these trends face is the organizational and cultural changes they represent.  The survey clearly indicated that most SAP organizations struggled with culture, resistance to change and cross-organizational/silo collaboration.

Interestingly, these are the same major challenges faced by the ERP groups as they implement their business-focused process tools in the business units.

While these industry changes are positive for enterprise IT and its business customers, they present an interesting dilemma to the classic ERP organization.  For many companies, the creation of a separate SAP group was a necessity due to the lack of maturity in the general IT environment; however, what happens to the business case for retaining a separate and distinct ERP group when the general IT management organizations’ practices become mature enough to support business critical IT services?

The answer of course is that the business case for the separate and sometimes redundant IT organization for managing a key but single business solution begins to erode.  This is demonstrated today as companies begin to re-centralize key elements of the ERP group back into the general IT resource pool.  Among the first elements centralized are the dedicated ERP infrastructure components.  These IT resources are often consolidated as part of the data center consolidation project under a central infrastructure and operations group.  With the integration of SAP into the general IT environment, it now becomes one of many business-critical application services supported by IT.

Troy’s thoughts, what are yours?

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Thursday, August 23, 2007

The Rise & Re-Integration Of The ERP Empire - Part 2

Context: This series of posts represent a companion white paper I developed based on collaborative research conducted by Pink Elephant and BMC. The goal of this research was related to understanding the adoption of IT Service Management within organizations that support a major ERP suite. The results of this survey can be found on the Pink Elephant website at the following link: Survey Results

HISTORICAL CONTEXT (IT & THE MANUFACTURING MODEL)
Silo-based organizational design finds its roots in the management principles derived from the manufacturing sector during the early industrial revolution.  With the advent of modern manufacturing processes pioneered by men such as Henry Ford, who brought to the world his famous Model T automobile, organizational design has focused on breaking apart complex processes into the smallest individual tasks for the purpose of specialization.  These focused tasks would then be organized into common groupings, resulting in vertically-oriented silos or business units based on a supply chain model.  In an IT context, this translates into management silos that are created around technology domains or platforms such as servers, databases or business applications.

The inherent challenge with organizing around this model is that while communication and information sharing occurs quickly and naturally in the vertical silo or business unit, the silos themselves represent significant barriers for collaboration and communication across these structures.  Since the lack of collaboration becomes embedded culturally, collaboration challenges can surface within the silos, which can create issues even within IT domain management groups.

Due to this organizational design model, early business application design focused on specialized point solutions targeted at the needs of the individual business units.  The result was a patchwork of poorly integrated solutions.  Seeing a business opportunity in this complex model, ERP vendors, such as SAP, offered an alternative solution that encouraged the elimination of the point solution model in favor of the integrated business suites we see today; however, as more of the core business functions and process outcomes became dependant on IT services and systems, the relative impact of IT organizational and process maturity became an issue. 

While today we see a clear trend in the adoption of best practices surrounding IT governance at an enterprise IT level, this was not the case fifteen years ago when the implementation of these ERP suites was becoming very popular.  Frankly stated, the existing technology-focused IT organizations were not capable of managing and supporting business critical IT services and systems at a level that did not place the business at risk.

To address this issue, many organizations literally created a separate (redundant) IT management organization under one executive structure to manage their ERP solutions as an end-to-end service.  We see the results of this approach today in the fact that many organizations have a separate ERP group with its own dedicated environment and data center.  Based on this need for mature management practices for IT services, you also find that most ERP groups are early adopters of best practice IT management frameworks such as CMMI and ITIL. This is supported in the survey results, where we see 71% of SAP groups acknowledging that they are adopting ITIL.  This percentage is somewhat higher than in other surveys analyst organizations conducted with the general leadership of IT management organizations.  You can conclude, from the development of these separate organizations and the subsequent adoption of best practices, that a primary motive for adoption of these models is Risk Mitigation.  Simply put, the pain of not having formalized control over the IT practices for service management has driven many of these changes.

It is important to note that while the ERP or SAP group may be an early adopter of formal service management, this does not mean that the other IT functions of the organization have come to the same conclusion.  It is very common to see formalized processes for application and service management exist only within this single group; meanwhile, at the same organization, the importance of formalized processes is barely acknowledged by Senior Management in the general application and infrastructure groups.

BUSINESS CRITICALITY & GOVERNANCES AS A DRIVER FOR BEST PRACTICES

The growing impact of IT failures on business process outcomes has not been lost on the governments and regulatory bodies of the world.  We see law after law being established for business governance and risk management that places stricter controls around how IT manages its affairs.  Concerns around accurate financial reporting, privacy, information security, data retention, national security and public safety are resulting in our industry becoming increasingly regulated.  Consider that as IT becomes critical for business survival, it also bears the burden of what it means to become a corporate and public utility.

The premise:

  • The financial results, data and information of a company are a direct product of its business processes (many of which are automated within the ERP suite)
  • The business processes and their digital output were automated several years ago by IT services
  • The services are supported by IT systems and technology components
  • The technology is managed, or not managed, by the processes of IT Service Management
  • The IT professionals participate, or do not participate, in the processes that design, transition and operate IT services

The logical conclusion that can be derived from these statements is that if IT professionals do not manage their processes well, the financial results of the company suffer directly.

In the end, when the business process fails completely without its automating technology, there is no real ability to separate the two.  IT has quietly become the manufacturing line and the core utility for business success.  The challenge faced is that while this statement is true in practice, it has not been absorbed completely by the business or the IT organization’s culture.  This model of interdependency is what ITIL version 3 describes as the Service Ecosystem.

Look for next week’s post as we consider the resulting trends in organizational design and process implementation.

Troy’s thoughts, what are yours?

If the Universe came to an end every time there was some uncertainty about what had happened in it, it would never have got beyond the first picosecond. And many of course don’t. It’s like a human body, you see. A few cuts and bruises here and there don’t hurt it. Not even major surgery if it’s done properly. Paradoxes are just the scar tissue. Time and space heal themselves up around them and people simply remember a version of events which makes as much sense as they require it to make. ~ Douglas Adams “Dirk Gently’s Holistic Detective Agency (1987)“

 

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Saturday, August 18, 2007

The Rise & Re-Integration Of The ERP Empire - Part 1

Context: This series of posts represent a companion white paper I developed based on collaborative research conducted by Pink Elephant and BMC. The goal of this research was related to understanding the adoption of IT Service Management within organizations that support a major ERP suite. The results of this survey can be found on the Pink Elephant website at the following link: Survey Results

Executive Summary

Adopting IT Service Management – SAP User Survey

In February 2007, BMC and Pink Elephant conducted online research that examined how SAP enterprises are using the IT Infrastructure Library (ITIL®), and what they perceive as the greatest advantages and challenges in adopting this framework.  The results are based on responses from 240 people from different organizations who met the following qualifications.  Each respondent is:

  • Using SAP, Oracle, BMC, CA, HP or IBM software for ERP implementation
  • Implementing ITIL strategies
  • Managing the SAP environment as part of ITIL initiatives
  • Member of Application Development/Operations, Infrastructure Engineering/Operations, IT Business Management, IT Process Management/Service Support or Security Departments
  • Responsibility level of Executive, Director, Manager, Individual Contributor or Consultant

The data from this survey was released earlier as part of Pink Elephant’s vision for leading the way in IT management best practices.  This white paper builds on the survey results and examines the business reasons for the rise and separation of the SAP organization from the general IT function in the 1990s and early 2000s.  The current trends in IT organizational design show a reversal of that model, whereby these standalone IT functions are being re-integrated into the larger context of enterprise IT.  This re-grafting of an IT function that has been largely left alone to manage its own services in part of an emerging trend that is related to the IT industry’s transition from a technology to a service orientation.

The term Enterprise Resource Planning (ERP) has been generally applied to major business applications that represent an integrated suite of application modules focused on automating the front and back office processes of the business value and supply chain.  A key premise of these application suites is that integrated business processes are best served by integrated business applications, and that all source information from a common repository of record represents the assets and resources of the organization.  Based on this model, vendors such as SAP, Oracle Financials, Peoplesoft, JD Edwards, etc., have built compelling solutions.

In many of the organizations that participated in the online survey, a common pattern can be observed that shows why ERP groups are generally early adopters of formalized process in general and turn to ITIL specifically.

I invite you to follow the next series of posts as I provide my personal perspective on the history and current trends of these groups as they re-integrate into the larger enterprise function and its IT Service Management processes.

Troy’s Thoughts

 

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