Thursday, April 28, 2011

The T in "ITSM" is Irrelevant

Nicholas Carr ("IT Doesn't Matter") was right. It has now been 8 years since Carr published the controversial article in the Harvard Business Review. In a way, it's almost funny to call it controversial today, since we now have a better understanding of what he meant. Technology in and of itself is no longer a differentiator. A new technology  innovation used to take years before being copied into the mainstream. Now that cycle has been reduced to months.

Consider the Microsoft touch screen tablet operating system. Wait, what Microsoft touch screen tablet OS? Microsoft plans to demo its first generation tablet OS this June, and they are receiving all sorts of flak about it. The demo will be about 14 months after the iPad's initial release in April 2010, and it will be another 15 months until the actual release. Today we call that a non-starter. Ten years ago that would not have been a bad cycle time. (Yes, I know Microsoft has had a tablet OS for years. I played with my first one in 1999. Please raise your hand if you think those tablets are even in the same market space as the iPad, Xoom, etc. Keep them up high so the rest of us can laugh at you.)

Carr's point was that, while there may still be innovation in technology, we'll all have that same innovation at our disposal in such a short time that it is not a differentiator from our competition. You could argue the point as being a bit hyperbolic, but the underlying truth remains. If technology innovation has any capability to provide differentiation, that window is very, very small. We all have the same technology innovations available to us: cloud, virtualization, mobile devices, social media, etc. The technology does not differentiate us from anyone else.

This is where Carr and I part ways. He makes a strong case for why the "T" in IT doesn't matter, but the "I" still matters greatly. Information is the key to business success. Or more directly, what information you gather or share, and how you use that information is what really matters. The technology you use to gather business intelligence doesn't matter, as long as you can gather the information that you believe allows for the best chance to make good business decisions. The keys to driving success in business intelligence are:

  • Knowing what decisions need to be made that will provide differentiation from your competition

  • Knowing what information you want/need to enable those decisions

  • Knowing where the pieces of data reside that come together to make that information

  • Optimizing workflows around how the data is gathered and used as information

  • Determining if your technology allows you to gather that data in accordance to the workflows

That's all the technology does. It either does or does not allow for the gathering of the needed data. If it does, make sure it does so in a cost-effective manner. It if doesn't, replace it with something that does. It won't be hard to find the technology that provides what the business needs. The technology exists, and it is at your disposal. It also exists and is at the disposal of your competition. No differentiation in the technology. The only differentiator is around the human elements of deciding what decisions to enable, what information is required, finding where the data resides, and deciding on the appropriate technology.

So of course technology matters; but it matters only in the sense that you either have or do not have the right technology for your business. The technology itself is a commodity. Does it matter what carpet shampoo housekeeping uses, as long as it meets needs at a low cost? Technology is now the same.

To bring this back to ITSM, we need to act in light of the reality that "information service management" and "technology management" are two distinct entities and efforts.  Information Service Management is about gathering requirements about how the business wants and needs to use information. How does it want to use information to connect with customers? Then make sure the necessary information is available to enable that goal, as well as allowing us to see how well the outcomes are being met. Your partners in the rest of the business don't care whether you use Exchange or Gmail, cloud or on-premises; as long as their information and workflow needs are being met in a cost effective way.

Information Support can re-focus the same way. Incidents are interruptions in a co-worker's ability to gather or use information. It doesn't matter to them whether they are printing to a Xerox or HP printer, using a virtual desktop or fat client. The more we make of that distinction, the more the business sees us as playing with the toys we want to play with, and forcing those toys on them. We could look at incident priortization based on the information and workflow impact, more so than whether it is a laptop or desktop, on site or remote, etc. How many of us in IT even know the workflows used by our peers to get work done? Knowledge and priortization based on information outcomes and workflows, leads to metrics reflecting the same thing. Our ability to provide (and demonstrate!) real value has the potential to skyrocket. Isn't that what it's all about?

Monday, April 18, 2011

Who Needs IT Financial Management?

Is there a process more discussed, and less implemented, than IT Financial Management? It's almost universally thought of as important, yet too hard or time consuming to do. If it is really that important, shouldn't we be actually DOING it? The reality is that IT Financial Management is that important, but we try way too hard to get it perfect.

IT Financial Management is a necessary part of Service Management, to the point where I'd contend that you aren't doing Service Management without a baseline level of Financial Management. How many IT shops have been asked to cuts costs over the past 2-3 years? Most of us? How many of us have reduced costs in a manner even remotely resembling strategic? How will you even know whether or not your cuts have impacted business outcomes? The reality for many of us is that we are frequently asked to cut (or at least optimize) costs, and we have no means whatsoever to determine whether our cost containment efforts help or hurt the business.

Those of us in the recovery business look at this as an excellent example of the definition of insanity: doing the same thing over and over expecting a different result.

We need to know, even at the most basic level, how much IT costs in relation to the services provided. Tracking costs by service allows us to make much more informed decisions around technlology investments. How much should we spend on accounts payable vs. ecommerce? How much would a new service cost, compared to the projected revenues?

But isn't calculating service costs too difficult? It depends on how detailed you need to get. For basic service costing, a solid estimate based on mutually agreeable assumptions is all you need. This is a process where a CMMI level 3 (or maybe even level 2) is plenty for most organizations. Large enterprises may receive more benefit than the cost of achieving CMMI level 4 or 5, but most of us will never recover the costs involved in trying to get there.

So, my main points are that Financial Management is a critical process that is often skipped, and that it doesn't need to be as hard as we usually make it. I will follow up with a post on a (relatively) simple way to do IT Financial Management.