Thursday, March 25, 2010
Reaching For The Future with BSM
On The Path Towards Business “Oriented” Service Management
I had a very interesting discussion this week with Bill Keyworth (Editor-In-Chief) of BSMReview.com about the concept of Business Service Management (BSM) and how there seems to be many conflicting definitions around this popular term.
From my perspective: At a high-level BSM refers to the strategy, manufacturing and management processes/capabilities a Business Organization uses to deliver products and or services to an external consumer base. In this macro definition of BSM, the IT function works in partnership as one of many internal/external business support groups providing required and valued services to achieve the overall mission of the organization.
In essence Service Management as a general term is a customer-focused approach to defining and delivering service a customer wants without asking them to worry about the details of how it is achieved. Sound familiar?
“A service is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks.” (ITIL V3)
Unfortunately the confusion around the term Business Service Management often stems from one of the following incorrect assumptions:
- Business Service Management is analogous to IT Service Management or ITIL
- Business Service Management relates specifically to an ITSM Tool suite that supports the automation and management of IT processes required to deliver effective IT Services.
While both of IT Service Management and ITSM Suites support the goal of BSM they are enablers as opposed to the goal itself.
Consider that while IT is certainly a service provider the same can be said of other business functions such as Facilities, Plant Maintenance, Fleet Management, Human Resources, Finance, etc. Being a Service Provider does not make IT unique in a business context but it does focus the IT function on the value and purpose of the products and services it provides.
For Example: A Bank has a business service called “Branch Banking” which is supported by Several IT Services related to telephony, desktop automation, application services, Internet connectivity, etc. At the same time the business unit within the bank responsible for delivering Branch Banking also subscribes to services supplied by Facilities Management, Marketing, Human Resources and Finance. Not to mention that there will need to be an external call center to take customer calls related to service disruption, complaints and requests.
Every business function has strategic processes for defining requirements and portfolio, processes related to design and build, processes related to moving new products and services to a live state, and finally processes for supporting the ongoing management / maintenance of the products and services it provides to its consumers.
A key principle related to the general concept of BSM is the realization that all service providers deliver products and services according to a lifecycle and require processes that relate to strategy, design, build, transition and ongoing operations. IT Service Management as documented in ITIL version 3 highlights the concept of IT as a service organization and provides guidance around good practice related to the processes required to define and deliver IT Services. In this context the only thing unique about the ITIL library specific to the IT function are the examples and case studies used in describing the processes from an IT context.
Coincidentally many of the tools developed for use for IT Service Management are used by other business functions to support what are in essence the same processes in a different context. What is a company webpage other than a Service Catalog?
The challenge that IT has historically faced in this discussion is the self held belief that it is somehow separate and distinct from the business it serves rather than being an integral part of the business context as one of many peer service partners.
A Cultural Perception Of Separation
Much has been written on the concept of “Business and IT Alignment” or “Running IT As A Business.” However, the primary challenge with both of these mindsets is that it leads to an inaccurate IT worldview that presents the business and IT relationship as somehow separate as opposed to inter-dependant. We see this perception reinforced by both business and IT executives. The business will discuss divesting itself of its non-core competency without considering its very lifeblood for manufacturing and delivering value to its customers relies on digital automation. In turn the IT Executive will focus on running IT as a business to the point that they see themselves as an internal / outsourcer and end up getting treated that way.
To put this in perspective, it is important to first understand that information technology is only the latest of a series of technological advancements that have pushed business and commerce to new levels of automation and efficiency. The introduction of electricity, the advent of mass transportation systems and the more recent adoption of hydraulic based manufacturing technology have all gone through a similar model of adoption and integration with business processes. When these earlier technologies were introduced, they were seen as supplemental but separate from the business processes of their day and adopted in increasingly innovative ways until they became so intrinsic to the way business was done that separation was no longer possible. In the early phases of these technology adoptions, specialized management groups were often created alongside the business organization to manage and maintain these technologies. At one point the plant had a power generation department. (Concepts from Nicolas Carr’s “The Big Switch”)
Business planning at the boardroom level for a manufacturing organization would not occur without the inclusion of ‘business roles’ responsible for assembly line technology. However, this same organization – which is reliant on applications, networks and IT infrastructure to support these older technologies – would not even pause to consider the CIO as an appropriate participant in these planning sessions. This lack of consideration is because neither the business nor IT have yet realized that IT is now as much ‘the line’ as the older and more mature manufacturing technology.
Example Case: I recently did an ITSM executive session for a city transit authority. Half of the attendees of this session were from the IT shared services and application functions reporting to the CIO. They understood themselves to be part of the IT function and communicated clearly to me that they were part of IT not the business. The other half of the attendees had the title of “Engineer” who managed the key systems for running the trains and buses. They worked with applications; custom networks and servers still running NT 4.0 provided by external suppliers. This 2nd group insisted that they were not IT but part of the business.
My question to you the reader is who do you think has a better grasp on reality?
So perhaps it is more appropriate to refer to the adoption of IT Service Management principles as a move towards Business Oriented Service Management. A focus on BSM elevates the role of the IT function from one that considers itself simply as a cost center managing information technology in mythical isolation from the business to one that understands its role as a critical partner in the business value chain.
Perhaps IT should refer to any function in the business context as a “Partner” and reserve the term “Customer” for the external consumer of the organization it serves. (Despite what ITIL says!)
Troy’s Thoughts What Are Yours?
“People do not want quarter-inch drills. They want quarter-inch holes.”
Professor Emeritus Theodore Levitt, Harvard Business School
Friday, March 05, 2010
Supplier Managers and Olympic Hockey
The Supplier Manager Is Like the Coach Of An Olympic Hockey Team
Its funny how our current focus areas are usually the product of several streams of consciousness. I suppose it all comes back to the old saying about the product of our efforts being greater than the sum of it parts.
As a Canadian I am still enjoying the afterglow of the most successful Winter Olympics in Canadian history, with a record breaking Gold Medal win. This feat was topped off by the entire nation watching the Canadian Hockey team win the final medal game in sudden death over time. (What a rush!)
My second stream of thought has been focused on the topic of Supplier Management. A subject I decided to research and write about early in the new year as it began to dawn on me that there is a growing strategic requirement to successfully integrate external suppliers of both classic and cloud based IT services into our IT value chain and management models.
I understand fully that we have been in the business of outsourcing both operational and strategic services to external suppliers for some time now. The question of course is how successful have we been at this up to this point. This is further complicated when we treat them like outsiders versus adopted family members. A challenge I have written on before: Your IT Outsourcer - A Brother of Another Mother
The difference I see today is that this landscape is about to get a lot more complex now that we are also moving to off premise cloud services for both business and technical services.
Having just returned from a very successful Pink conference where I spoke on the topic of ITIL in the Clouds I made a statement that I had initially written on this blog: Choosing to use cloud services is a choice to outsource multiple slivers of your IT value chain. In my article on this subject as well as in my session I made the case that it is critical to integrate our suppliers into the ITSM Management processes for delivering services to our business partners in a secure, reliable and cost effective manner.
For this reason I personally believe that Supplier Management is the most important / strategic Service Design process for companies to get right for the next decade and beyond.
So how does the concept of Supplier Management relate to Olympic Hockey you might ask? (I was hoping you would )
Consider for a moment how an Olympic Hockey team is formed. A Senior Management group selects players from multiple teams and assembles the best possible talent from all of these different sources to create what they hope is a team cable of great success. However, the challenge that an Olympic hockey coach faces is that while they have assembled star players into this new team they come from very different hockey clubs. Each club has its unique style, culture and ways of getting the job done. What they have to do is to take these individual talents “suppliers” and get them to start playing as a cohesive team with a common play book. (Enter a company’s IT Management Framework)
In my weird way of looking at life the Coach for an Olympic Hockey team performs the same role as a Supplier Manager in multi-sourced IT Management environment. The Supplier Manager helps an organization to pick the right players for the value network and then ensures and contracts that they agree to operate by the common play book (ITSM Processes).
Otherwise what you get is a lot of individual talent moving the puck towards the goal as a team of isolated individuals. Any Olympic hockey team that cannot make this transition from talented individuals to a cohesive team approach will never get close to a medal round let alone ultimate success and glory.
If you think about it for a moment this scenario is exactly what we are faced with every day in IT organizations that have multiple suppliers that are not integrated well.
To close this article let me share with you a case study that I picked up at the Pink conference this year.
As I was running from one of my speaking sessions to the next I was stopped in the hall by a person from a company that we had done ITSM consulting with in the past. He was very excited about telling me about a project related to Supplier Management that he had recently been involved in and asked if I would have some time to sit down and discuss it. Not being able to stop on route I made a lunch appointment with this person and I am so glad I did.
At lunch he let me see a manual that he and a team of people had created to help manage and consolidate over 81 separate supplier contracts in a sane and consistent way. In this manual they had created common Service Definitions. (Eg. Database Administration) Instead of each supplier providing their own definition and set of attributes for this service they were asked to bid on a single common definition. This allowed the organization to multi source the same service to several provides without risk or variance between serve offerings.
Also in this manual was a detailed description of the core ITIL processes that the organization had defined / deployed and the expectations of involvement that were required of all suppliers around policy, process, roles and key performance indicators. Example: Incident, Problem, Change, Service Asset & Config, Release and Deployment, etc) In short a common play book for all parties regardless of what team they originated from.
This was the most beautiful ITSM thing I have seen in a long time. (Sigh: I know but it’s the life I lead) I wish I could declare who this was but he asked for anonymity. My hope is that he can present this project at next years Pink’s 2011 Conference.
So in closing I would ask you if you have an Olympic Hockey Coach / Supplier Manager working on your team that is not only focused on getting the best players for the cheapest price but also defining a strategy to take individual talent and build it into a team with a common vision, goal and play book for success!
Troy’s Thoughts What Are Yours?
”Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results.” ~Andrew Carnegie