Positioning service management (in IT)

As a prequel to an upcoming series of service management related posts, I thought it might make sense to set the scene, explain the context, ask for feedback, and adjust the approach as required. What I’ve written here is my view of the world, based on what I’ve seen and experienced in my 20 years of working in IT, many of these years in the space of service management.

To explain the position and role of service management, I must start with the customer. Most things, I believe, start with the customer — the closest we have to an objective view on where we as a service provider should be heading.

In the context of an organization — let’s call it CorpOx — with a separate IT department, any team or organization using the services provided by that IT department is their customer. We can talk about internal and external customers — this separation is just a categorization (for ease of management) and does not mean that one type of customer is more important than the other. I do acknowledge that the word “customer” is a loaded one — more on that below — but if we can accept it for the time being, we can focus on what matters most — which is customer value.

Who is the customer?

Internal customers are those teams who work in CorpOx and use IT (enterprise software, office network, email, workstations/laptops, mobile connectivity, etc.) to get their work done. IT helps them to achieve their expected outcomes. Traditionally, only teams outside of the IT department have been considered for this role, whereas I would argue that other teams in the IT department can also be customers for specific IT services.

External customers are those who consume the services provided by CorpOx. Historically, when IT was seen as just a supporting function in most organizations, the line between IT services and business services was clear, and external customers rarely consumed IT services directly — rather, these (or outputs from these) were bundled into business services, even in technology companies. Again, IT helps external customers to achieve their expected outcomes, which might be less clear due to various layers of separation between the IT department and the customer.

Service provider — the internal IT department in this case — has to help co-create and deliver value for CorpOx and CorpOx’s customers acting as part of CorpOx, rather than using the “IT and the business” lens, which is unfortunately still very common in many CorpOx-like organizations. If the IT department takes the concept of “customer” too far, sees itself and behaves as separate from the rest of the business, and truly believes they are there just to deliver what is asked and only then, they run the risk of becoming a mere order-taker and will be seen as incapable (or unfit) to be of strategic value for the organization. A common result of this situation is the outsourcing of IT in its totality, removing it from the strategic management layer — not necessarily a wise move in today’s world for any organization.

Understanding customer value

Customer value is a central concept in service management. The IT department in CorpOx needs to understand what is the value their organization expects and requires from IT services. There is no one book or a single MBA degree program to tell you what constitutes “value” in a specific organization, but as a general guideline, an organization that is set up, as a whole, to deliver value for their customers and help them achieve their expected outcomes is probably off to a good start. Everything that happens inside the service provider’s organization should be geared towards that objective — a highly aligned well-functioning organization understands its value streams. And, for that, CorpOx really needs to understand their customers.

It is difficult to build a high-functioning IT department in an organization that is not itself high-functioning. If the organization doesn’t understand its customers and doesn’t know what initiatives, activities, and improvements help to increase the value they can provide to their customers — that is, there is no clear strategy — there is nothing for the IT department, or any other department for that matter, to align to. This way, an organization is likely to grow into a number of locally optimized functions that often look busy, consume many resources, but fail to move the needle.

Enter service management

Service management is a way to open and hold a conversation with the customer, understand (and continually adjust that understanding) of what is of value to the customer, and increase the value through continual service improvement. Service management talks about delivering services — rather than just technology (e.g. “Here’s your server”) or just product functionality (e.g. “You can now tip your driver”). A service model provides a holistic view of an end-to-end value stream, of all the resources and capabilities required to deliver the service, and helps to avoid local optimizations.

IT service management, as a specific application of the concepts of service management, focuses on improving the use of IT as an organizational capability — a strategic one, at that. The services any organization provides are increasingly more reliant on IT, and for quite some time, IT has not been just a back-office function anymore. In CorpOx-like organizations, the IT department (or parts of that department) were often behaving like a “black box” that asked for more money every year while the business value of what was achieved with that money was unclear. IT service management aims to clarify the value from IT investments, and help leverage IT well beyond looking at the IT department as a cost center, and beyond talking about the “alignment of IT and the business” (there are historical reasons for why this is even a thing, and why we rarely if ever hear of e.g. “aligning Finance and the business”).

IT services are a vehicle for co-creating and delivering value — not an objective in themselves. IT services are an abstraction layer to improve the governance and management of IT capabilities, meant to ensure investment in IT is aligned with the strategy and objectives of the organization, as it is very easy to overspend on technology (e.g. hardware, software, but also processes and procedures which can grow like weeds unless kept in check).

The changing role of IT

There’s a specific challenge with IT service management I’d like to tackle. And by a challenge, I do mean a challenge, not “a reason why it doesn’t work”. Because it does. The challenge has to do with how organizations have been set up to manage their IT.

In most CorpOx-like organizations, where the IT department looks after assets used directly by corporate customers, they also look after the rest of the IT infrastructure — server hardware and software, databases, contracts with ISPs and other vendors, etc. In this model, all of IT is centrally managed and over the years, significant effort has gone into standardizing everything that can be standardized.

In another type of an organization — let’s call them UniCo — the role of the IT department is very different, if the department exists at all. There might be a (small) team that looks after corporate customers and the hardware and software they use to get their work done (i.e. “enterprise tools”), but the IT infrastructure that supports business services is managed by different teams.

The tension is building

I might be rushing ahead a bit too fast here, though. In many UniCo-like organizations, what is offered to customers is a product, and IT infrastructure is managed by product teams. Sometimes there is a dedicated Operations team to do that, per product, and sometimes it is the developers themselves who are responsible for (the automation of) server provisioning and imaging.

In addition to the Operations team, there is also the product management team, responsible for setting development priorities and balancing the effort between feature development and technical debt removal. Above them is a strategy/portfolio team who allocates funds between products or product components. At the other end, there is the customer support team, dealing with questions and complaints from end users. And somewhere, there might be a security/compliance team. And perhaps there is also a dedicated QA team, if all quality gates have not yet been automated. All of these teams are using their own tools, and many of these teams might have the desire to manage their own IT infrastructure, too.

An attempt to apply the UniCo approach in a CorpOx organization is often a source of tension or outright conflict between the DevOps movement and “traditional IT”, with the change management process (and the CAB) being the most frequently used battle ground. The solution to this conflict is most likely in the convergence of two mind-sets — one that has proven itself “in the wild” in today’s business environments but is struggling with scaling (or “scaling”), and one that has a lot more people who know about it than people who actually do it.

Avoiding local optimization

The challenge with the UniCo approach is that DevOps, if taken too literally, becomes a huge local optimization in itself. This is one of the reasons we have recently seen conversations that want to go “beyond DevOps” — be it BizDevOps, BizDevSecOps, or anything else along these lines. The conversations become more frequent in organizations that (are forced to) shift their focus from user acquisition to (paying) customer retention, bringing the question of understanding the whole value stream to the fore. We might need to take a step back and look at the principles underpinning the DevOps movement — those from lean and agile, but also service management — to better understand how to solve the new challenges and move forward.

On the other hand, the frequent challenge with the principles of service management in CorpOx-like organizations is that they, well, haven’t really used them. While some capabilities (e.g. event management, or incident management) are in place and seem to be working, some other capabilities (e.g. change management) seem to be completely disconnected from the rest of the organization, and there is no sign of an end-to-end holistic view of services, or even a basic understanding of value streams. There is also a lack of understanding of customer needs and customer value — if it’s even discussed.

Understanding the customer — a core tenet of service management — requires an acknowledgment that the needs of the customer are ever-changing, because their business environment is ever-changing. This reality applies to all kinds of service providers — to the internal IT department acting as a service provider inside a CorpOx-like organization, and to UniCo-like organization providing services to their customers.

A never-ending task

The strategy for providing IT services is a living object, something that requires constant adjustment to ensure the current and foreseeable needs of the customer are met, and to extract maximum potential value from the investment in IT. This second aspect requires an IT service provider to become a trusted partner and an advisor for their customers on how to get more out of IT. It is the role for (and the expectation from) a good IT service provider to push the envelope, rather than copy others and chase past innovations.

Yes, the internal IT department in CorpOx can choose not to fulfill these expectations — but then the risk of being seen as a cost center, losing a voice at the C-suite level, and being outsourced (in parts, or as a whole) is high. That being said, an organization is probably better off outsourcing their technology management to external service providers, rather than keep funding the internal black box. This statement comes with a caveat, of course — if “the business” is unable to understand the (potential) role and value of their IT department, then how likely are they to become smart customers (rather than cash cows) for external service providers?

In case of UniCo, the failure to understand their customers will quickly drive them out of business, or force them to pivot if there’s any funding left. As organizations in this space mature, they shift their focus from delivering new functionality to better understanding and delighting the customer. New functionality does not necessarily lead to higher customer satisfaction, and can, if not well thought through, cause a loss of existing and potential new customers.

Product management meets service management

In these maturing organizations, product management gets gradually closer to the customer, opening continuous communication channels and constantly gathering feedback. They make an effort to better understand the customer, and ensure the gathered information doesn’t get stale. Customer service teams, on the other hand, are leveraging the power of social media to provide a better experience when something has gone wrong, feeding those insights back to the product management team. The whole picture gets closer and closer to an end-to-end holistic view of a service, rather a collection of stand-alone teams with conflicting priorities and lack of visibility.

When looking how to better combine lessons learned from CorpOx and UniCo, and address the current challenges in both, there are a few pointers that I believe might be helpful:

• Focus on your customer and their needs today and in the future
• Take responsibility for the experience your customer has
• Understand and manage the end-to-end value stream
• Ensure the services you provide are continually improved
• Don’t overthink

There is also a rather recent list of 9 guiding principles for better IT service management for those brave enough to venture deeper into the domain.