What does IT Value Look Like?

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If we don’t know, then how can we deliver it?

Question: Why do we struggle so much in understanding and demonstrating VALUE with IT?  Notice I did not say WITHIN IT. This is not simply an IT issue. It crosses the CHASM that is held in place by both Business & IT.  In this article I will be focusing on ITSM value, not broader IT value.

First let us look at the facts

Fact: The card below is still, after more than 15 years, the number 1 chosen ABC (Attitude, Behavior, Culture) card in workshops held across the globe with delegates representing more than 3000 organizations!…..you can see how old it is, the IT guy is holding a floppy disk! My daughter of 21 asked me ‘What is he holding in his hand’?

This card is regularly chosen by both Business and IT people in ABC workshops.

Fact: I have asked more than 15000 people at global IT conferences ‘How many are ‘doing’ ITIL®’? more than 85% of the hands go up. I then ask ‘Put your hands up if you can tell me the definition of a service according to ITIL®’?……about 5% of the hands go up. So what! I hear you say, that’s not important. Read the next bit.

A service is ‘a means of delivering VALUE(V) to customers by facilitating OUTCOMES(O) they want to achieve without the ownership of specific COSTS(C) and RISKS(R)’ – VOCR.

When I ask ‘Why is YOUR organization doing ITIL® – V, O, C, R’? Very…..VERY…. few know!
‘…to be more effective and efficient’ somebody will say.
What will that look like in terms of quantifiable VOCR’?
‘….Errr…..
’ is the answer.

Next time you are standing at the Coffee machine ask people the definition. If they don’t know then tell them. More importantly tell them in the context of what YOUR organization is hoping to achieve…..This is your first step in creating an ‘attitude shift’ towards thinking about Value.

One of the reasons for this lack of understanding can be related to another top scoring ABC card in workshops:

IT is still too internally focused. This was the theme of another blog ‘Most IT people couldn’t spot a user in a police line-up’! For those of you interested in ITIL®, this is why the ITIL® practitioner talks about ‘Focus on value’, ‘Design for experience’ and ‘Observe directly’ as guiding principles to help us finally break out of this internal focus, and identify what Value looks like.

This lack of business understanding was also confirmed in a CFO article ‘The IT Talent problem’ from 2013. Executives were asked ‘If you had a magic wand, what one (IT) talent problem would you solve’? More than 70 percent of readers would use their magic wand to do only one thing: give business skills to their technologists. Yes but that was 2013!?

…..A more recent finding in the Society of Information Management study still revealed a skills shortage, particularly ‘..who are able to bridge the communication chasm between IT and the business’. According to the 2017 Gartner CIO Agenda report, CIOs reported their top barriers to successfully show the value of IT – Talent being number one, citing ‘Business knowledge and acumen’. Worryingly the same issues CIOs cited four years ago in this same study. If you haven’t already started looking into BRM (Business Relationship Management) perhaps now is a good time.
Even more worrying in a CIO survey ‘40 percent of CIOs said the IT leadership team spends the majority of its time with the business, but only 20 percent of business leaders said that was the case’!

However, as I said it’s not ALL IT’s fault! A Cobit benchmarking study entitled ‘Benchmarking and business value assessment of Cobit’ revealed that ‘Ensure benefits delivery’ was one of the lowest scoring Governance processes. Revealing that the business must take more ownership for ensuring that value is realized from an IT investment. With the latest Industry trend being ‘digital transformation’ this becomes increasingly important. Two other top ABC cards underpinning this are ‘Too little business involvement in requirements specification and testing’ and ‘Everything has the highest priority according to the users’. The business also struggles with defining the business value up front. They often throw some loosely defined requirements over the wall at the start and then blame IT when they don’t get what they really needed. (See blog).

Baxter Thompson Associates concluded in their ‘UK IT Business Partner Survey Results 2016’ that ‘Value Management is unfortunately the least skilled competency in the IT Business Partner domain’. (In old school speak this is the IT delivery organization).

CIO.com’s 2017 State of the CIO survey revealed ‘59 percent of CIOs said IT collaborates with business units to build business cases for new technology initiatives, while only 24 percent of business leaders said that was the case. If we are not involved in the business case how can we possibly know the Value and benefits we must help realize and protect!? Once again confirmed by another top scoring ABC card.

The Trends in Business & IT & OT 2107/2018 Book published by the Business & IT Trends Institute revealed that ‘Business & IT-Alignment’ has once again attained the leading position in CIO challenges. The book also revealed top performance measures for CIO’s. The top 5 Global Internal metrics were ‘Customer satisfaction(internal)’, ‘Business cost reduction/control’, ‘Availability (uptime) – internal IT’, ‘Customer satisfaction (external)’ and ‘Help-desk performance’ with ‘Value of IT to the business’ scoring at number 15 (out of 30 indicators) globally! In Europe and USA this was at least in the top 10.

The book went on to ask CIO’s ‘What is the most significant change to IT in the future’? Overwhelmingly across the global responses ‘Contribution/Value to the business’ scored the highest.

AAAAAGGHHHH – No more ALIGNMENT!

I know many people will be groaning and moaning at the use of the term ‘Business & IT-Alignment’ – It is old school thinking, we should be talking about ‘Business & IT Convergence’. Whatever you want to call it we are STILL not there and a large part of it has to do with VALUE. If we do not understand it and cannot demonstrate it then we have a TRUST and CREDIBILITY issue which reinforces the ‘blame culture’ and the ‘them and us culture’ that are the pillars to the Chasm between us.

Another symptom of this chasm I found in a CIO article ‘ Communication between IT and non IT workers in a state of crises’.  A recent blog I posted confirms this.

Results of more than 100 organizations participating in our Grab@Pizza business & IT-Alignment simulation reveal 2 of the top scoring improvement action to take-away are ‘Gather more Business understanding on impact and priority’ and the need for ‘business related metrics’ as opposed to internal IT metrics.

The good news is that many of the Best practice approaches and frameworks recognize this, COBIT even breaks Strategic business & IT goals down into effective metrics:

The bad news is that we rarely align end-to-end these practices. What do I mean by that?

I attended an ISACA national conference in South Africa. 400 people attending.
The latest King IV report was presented – the Corpotrate Governance of IT – A changing landscape’.
One of the main conclusions: Focus on OUTCOMES, not just the tick in the box (Too much emphasis placed by auditors on the controls). A shift from ‘doing’ to ‘achieving’. What does King IV mean for ITSM? More reporting – but reports focused on Value and OUTCOMES.  ITSM was seen as a critical enabler, however, there was no itSMF representation at the event to share findings, or ITSM delegates to explore solutions TOGETHER (End-to-end).

I attended the BRMI conference in Amsterdam. One of the main conclusions: ITSM is crucial. It is the fundament upon which strategic BRM is built. As Vaughen Merlyn stated ‘ITSM is fundamental otherwise BRM will fail, if the BRM does the ITSM role BRM will still fail’. Not having ITSM capabilities is ‘the fastest & most efficient shortcut to fail BRM role’. There was no itSMF representation (other than Barclay as a speaker) at the event to share findings, or ITSM delegates to explore solutions TOGETHER (End-to-end).

At itSMF events I attend around the world topics such as BRM and COBIT are sometimes presented, mostly by an ITSM champion or training organizations explaining what they are. There is mostly no BRMI or ISACA representation at the event to share findings, or to explore solutions TOGETHER (End-to-end).

In short……SILO thinking! No End-to-end alignment of goals and a shared understanding of Value.

BRM – the GLUE in the game

BRM is a capability that can help fill the ‘Business understanding’ issue within ITSM. Peter Lijnse a champion of BRM stated in his article X Marks the spot, findings the sources of valueThe essence of successful Value Management is understanding where value can be created’, suggesting 4 Value source classifications. Once again it comes down to ‘Understanding’ as opposed to ‘Assuming’.

BRM is championing the need to break out of the outdated and wrong paradigm of ‘Business & IT-Alignment’ to ‘Business and IT Convergence’, and a shift from a Service mindset to a Value mindset.

This view is echoed by Mark Schwartz in a reference to his book ‘The Art of Business value’ – ‘….This customer service view of IT is no longer appropriate, nor is the very distinction between IT and the business, since the two together form a single enterprise trying to realize business outcomes’. He goes on to discuss in the book an ‘outdated belief that IT organizations are the passive recipients of business requirements from the business….we need to give the team ownership over business value discovery and interpretation, not just over delivery on requirements’. (the team being comprised of business & IT stakeholders).

So what can you do to gain more ‘Business understanding’. One tip is to send everybody from IT into the business for 1 day  to learn how IT is consumed and the Value creation it delivers or the Value leakage incurred, again changing the ‘internal mindset’, exploring and understanding value from the customer, or rather. The business perspective. Let each person present their findings to their team. Then apply some pragmatic CSI (Continual Service Improvement) to explore how to improve Value and reduce value leakage.

If we want to be a trusted advisor, or partner to the business it starts with demonstrating an understanding, and building trust and credibility”.

Here are 3 other examples related of using the ABC of ICT cards in a dialogue between IT and the Users, the business and the CFO to understand business impact, priority and value.

How VOCR helped save 1.2 million Euros:
https://www.axelos.com/news/blogs/march-2016/adopting-a-value-based-outside-in-approach-to-itil

How ABC helped focus incident priority ‘on the impact to the citizen’ (a workshop with 60 Council IT users):
https://www.axelos.com/news/blogs/february-2016/making-itil-practitioner-guiding-principles-live

How ABC gained commitment for ‘Service Portfolio Management’ and joint business cases between business & IT:
https://itsm.tools/2017/01/19/improving-business-value-serious-play/

How to gain Business AND IT commitment to the BRM role and capability, and create a shared understanding on the need to identify what VALUE really is.
http://www.gamingworks.nl/brm-superhero-organizational-capability/

This is my second blog exploring VALUE(s). My first blog on the subject of values was in 2012 and looked at ‘Corporate Values’, which is still, if not even more relevant now!

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Paul Wilkinson

Paul has been actively involved in ITSM for more than 30 years in the roles of managing consultant, Service development manager and as ITIL developer. Paul was co-author of the ITIL publication “Planning to Implement IT Service Management” and was a member of the ITIL advisory group for ITIL Version 3. Paul is also co-director and owner of GamingWorks, the company that developed the internationally renowned ‘Apollo 13 – an ITSM case experience’ ITSM simulation game as well as Project management, Business & IT-Alignment and DevOps business simulations. He was also co-and developer of the ‘ABC of ICT’ (The Attitude, Behavior and Culture of ICT) publications, having conducted ABC workshops and simulation workshops with delegates representing more than 5000 organizations world-wide.

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