The Balanced Improvement Matrix

Two weeks ago I presented to a customer how their IT improvement program can be improved by adopting principles from ITIL. I used this slide to illustrate another way to think about the issue.

Benefit-Change-MatrixClick to expand

Recipient of Benefits

The Y-axis who receives most of the immediate benefit of the activity. “Inside” refers to IT, either a component of IT or the entire department.

Outside refers to the outside stakeholders for IT services. Generally they fall into one of these groups:

  • Users: those who directly use the services. Generally the users also request the service.
  • Internal customers: those who request or authorize services on behalf of the users. Generally customers are the users, but sometimes they are distinct.
  • External customers: The ultimate customer who exchanges value with the organization.

Focus of Change

The focus or perspective of change describes where most of the change or improvement takes place. We are also describing this as within IT or out of IT.

The change or improvement may or may not be limited to the primary location. There are often spillover benefits for related stakeholders that are less immediate.

Examining the Quadrants

Inside-In

This quadrant describes change or improvement activities that are limited exclusively to IT. Some examples may include:

  • Code refactoring
  • Recabling
  • Process improvement
  • Service Asset and Configuration Management
  • Training

Inside-In activities may be thought of as “charging the batteries”.  External stakeholders will not see immediate benefits, but the benefits will accrue over time as the IT organization becomes more agile, flexible, efficient and effective.

Inside-Out

Inside-Out activities are those that modify the behavior of external stakeholders in order to maximize the capabilities of IT. Some examples may include Demand Management and Financial Management of IT Services, specifically charging for IT services in a way that encourages their efficient use.

Service Catalog Management and Service Portfolio Management also create activities in this quadrant, specifically those that describe prerequisites or costs to external stakeholders.

Outside-In

Outside-In activities are those that benefit external stakeholders by modifying the services or processes of IT. Service Level Management sits firmly in this area. The Service Improvement initiatives within CSI certainly fit here too. Alignment of IT with organizational strategy also reside predominantly in this quadrant.

Outside-Out

Does IT ever perform Outside-Out activities? With a few exceptions, yes, all IT organizations do.

Outside-Out efforts or improvement activities take place whenever IT acts as a consultant to the organization by bringing its unique capabilities and resources to business problems.

Some examples may include:

  • Strategic planning
  • Creating new lines of business
  • Due diligence of partnerships or acquisitions
  • Enterprise Risk Management and Business Continuity Planning

From an ITIL process perspective,  Outside-Out quadrant is best illustrated by Business Relationship Management (SS) and Supplier Management (SD), and some activities of Change Management (ST) and Knowledge Management (ST).

Optimizing the matrix

In no case did we ever claim that any one quadrant is better than another. IT departments of the last century received criticism for focusing too much on inward benefits and losing focus on the broader context in which IT operates. That situation was expensive, frustrating to users, and ultimately untenable.

IT organizations in this century must and do perform activities in all four quadrants. Neglecting any quadrant can lead to the following outcomes.

Benefit-Change-Neglect-MatrixClick to expand

Using frameworks such as ITIL, COBIT 5, or ISO/IEC 20000 to guide improvement initiatives can help IT organizations balance their efforts in all quadrants.

Service Management Is Dead

“Service Management is dead.”

That was my first thought when I read McKinsey Querterly’s “Capturing value from IT infrastructure innovation” from October 2012.

That was going to be the point of this blog post.

Then I read it again.

Conclusion 1: Innovation is more than just technology.

Conclusion 3: The path to end-user productivity is still evolving.

Conclusion 5: Proactive Engagement with the business is required.

Conclusion 6: Getting the right talent is increasingly critical

Conclusion 7: Vendor relationships must focus on innovation.

Getting the most from IT infrastructure has never been about technology (though technology is an important capability of IT). Innovating, maximizing productivity, and managing complexity evokes the mundane, at the expense of sexy.

It engages users.

It demands service.

It depends on process and automation.

It focuses on data and knowledge.

It understands and balances the needs of all stakeholders.

Technology is fun. Where technologists hang out are fun places to be. I know this may sound strange to those outside the industry, but the people who move technology are fascinating.

The most boring business events involve Project Managers and Risk and Compliance Officers. I have been to many meetings, and they are yawners, even for me.

That’s because project managers and auditors focus on the boring stuff.

Who are the stakeholders?

Who makes what decisions?

What do they want?

What kind of data do we have?

What kind of data we need?

Where is the data?

How do we use the data most effectively?

What are the risks, and how do we mitigate them?

Yawn.

For better or worse, this is the stuff that underpins business value; the foundation on which innovation is built.

Long live Service Management.

Confusion in the Ranks: IT Service Management Practice and Terminology

Abstract: The Information Technology Service Management (ITSM) movement is gaining adopters throughout the world, expanding from the 2005 ratification of International Standards Organization (ISO) ISO/IEC 20000. However, this concept grew out of older frameworks such as Britain’s IT Infrastructure Library (ITIL) and U.S. service level management (SLM). To further confuse the landscape, there are also related terms such as business service management (BSM), the Control Objectives for Information and related Technology (CobiT), and IT governance.

There is a lack of descriptive academic literature currently published, which has mainly focused on prescriptive pieces. This paper gives a background on the several contributing frameworks mentioned above, and reports on a survey U.S. IT managers to determine the extent of understanding of these terms and frameworks. The findings indicate that ITSM adoption and knowledge may be lower than some studies have indicated. There is also conceptual confusion about what constitutes ITSM, with conflation of terms and practices.

Reference: Winniford, M., Conger, S., & Erickson-Harris, L. (2009, Spring2009). Confusion in the Ranks: IT Service Management Practice and Terminology. Information Systems Management, 26(2), 153-163.

Link: http://www.informaworld.com/smpp/content~db=all~content=a910451171

Comments: The authors used a third-party research firm to interview 364 American companies whether they are or are planning to manage IT from a services perspective, which may include ITSM, SLM, or BSM. They found that a little less than half are implementing service management, and another fifteen percent are planning to to do so. The most recognized services frameworks, in order, are SLM, ITSM and IT Governance, followed by CoBIT. Only two-thirds of organizations implementing service management recognized the term ITIL, versus one-third of those not implementing service management. An interesting finding was that even among those implementing service management frameworks, a majority could not correctly identify a service they offer (i.e. quality, which is actually a measurement of service effectiveness).

Among the reasons for not implementing service management included not enough information, costs, belief it isn’t needed, and lack of management support. Less than twenty percent admitted they didn’t want the accountability, though in my experience this number is really a great deal higher.

In my opinion this is one of the better academic studies performed in the area of IT service management. The authors identified lower support for ITSM than purported by other authors in the area. They also identified much greater confusion and much lower awareness of ITSM among practitioners and academic researchers. My own personal observations working with 50+ companies is consisent with the findings in this paper.

Exploring IT Governance in Theory and Practice in a Large Multi-National Organisation in Australia

Link: http://www.informaworld.com/smpp/content~content=a910451709~db=all~jumptype=rss

Reference: Willson, P., & Pollard, C. (2009, Spring2009). Exploring IT Governance in Theory and Practice in a Large Multi-National Organisation in Australia. Information Systems Management, 26(2), 98-109.

Abstract: IT governance is critical to most organisations and has an influence on the value generated by IT investments. Unfortunately, IT governance is more aspiration than reality in many organisations. This research seeks to address the dearth of empirical evidence about IT governance in practice, presenting the findings of an IT governance case study in an Australian organisation. Recommendations are provided to assist organisations to maximise potential of IT governance and insights are provided for researchers.

Comments:

In his book Secrets and Lies: Digital Security in a Networked World, author Bruce Schneier frequently addressed the following comment:

In theory there is no difference between theory and reality. In reality there is.

For this research the authors interviewed 28 senior IT and corporate managers at an Australian MNE in order to address two questions:

  1. What is the nature of IT governance in practice?
  2. What factors contribute to differences between theory and practice?

Their analysis of the interviews identified four major themes that do not entirely overlap with theoretical models of IT governance. For example, although IT governance models frequently deal with risk management of IT-related risks, the subject organization restricts risk management activities primarily to the area of project risk management. The research highlights the importance of visionary leadership and key players in IT-business alignment, and also introduces the importance of historical context in the governance of IT and its initiatives.

Researchers and industry frameworks, such as COBIT and ITIL, frequently document practices that have little relevance in most organizations. For example, during my implementations of CMDB at customer sites, I emphasize the importance of aligning IT service, logical, and phsysical assets with the organization through relationships in a top-down approach. In practice most organizations ignore this advice and build the CMDB bottom-up through the identification of physical assets. In other words, their most pressing concern is to manage the “thinks they can kick” in a way that won’t achieve benefits the CMDB may, in theory, provide. These differences between the theoretical and practical are important, and I would like to see more research like this that covers practical application.