Is our emphasis on Service ‘Management’ wrong? Should it really be Service ‘Governance’ rather than ITSM or ITIL?
An imagined chat in a lift
Chairman of the Board: You’re one of those ‘Service Management’ consultant’s, aren’t you – you were at yesterday’s presentation..
Consultant: Yes, that’s right, we were presenting on ITSM and ITIL.
Chairman: Perhaps you can help me understand. I know our Operations is in a mess, and I understand that this ITIL framework is supposed, somehow to sort it out, but I don’t believe in silver bullets – it’s been tried before and failed – and, in any case, the training seems to be for techies and first-level management, so why should I even know it exists?
Consultant: I understand your confusion. Part of the problem is exactly that, people think it is about technical stuff with a bit of management thrown in – and, quite understandably, the board isn’t particularly interested. This is why it hasn’t worked and isn’t likely to work. Actually it has the wrong name, ITIL should be known as ‘Service Governance’.
Chair: Governance? I know that Cobit is involved with IT and the auditors use that for IT governance, what has ITIL or ITSM to do with that?
Consultant: I didn’t say ‘IT’ governance. I said ‘Service Governance’ – the governance of services that give value to the business. What ITIL is supposed to do is to help the organisation govern business services so that they comply with policy and deliver value. You should be aiming for excellence in managing the delivery of value under sound governance.
Chair: Really? Nobody told me. You mean that they’ll enable us to pass audits for Sarbanes Oxley, Basel, and King III even for IT? Do you really mean deliver business value?
Consultant: Yes, and yes. Not just for IT either. The idea behind the metaphor of a ‘Service’ is that the board can see the ratio of value delivered to the organisation relative to the cost for each service. That’s what the ‘Service Portfolio’ is there for. Then the board can decide which services are uneconomic or unproductive and replace them while investing more in the services that deliver good value for low cost. Meanwhile, all these services are specifically designed to comply with corporate policy, including reducing risk.
Chair: So we’d actually know what we were paying for our sales, manufacturing and financial systems and what business value they were delivering? And… I’m not sure if I’ve got this straight, the services would actually be designed to reduce operational risk, so our mess would be sorted out? If this was true, we’d be in some kind of business heaven – but I’ve not seen this happen with the ITIL exercises we’ve done – why not?
Consultant: Yes, that’s exactly what it is supposed to do for the business. It can only work, though, if it has full support of the board. If it doesn’t then it can’t operate under proper governance and, when things go wrong there’s no board authority to put them right, so the risks remain known at the technical or management level, not escalated to the board risk committee, so you have the operational mess you described at the start.
The lift gets to its destination
Chair: Look, this is my floor, but join me for a few minutes, this is interesting, nobody has put it like this before – Service Governance is exactly what we should have.
After some further discussion
Chair: If I understand you properly, to get this Service Governance going as a programme, I should appoint a ‘Director of Service Governance’ and have the CIO report to him, instead of to the Finance Manager, and I should announce to the company that we will be using ITIL advice to achieve excellence in Service Governance, aiming to be certified in ISO 20000 in three to five years time. Is that right?
Consultant: Well, yes – but not quite so fast. It would probably best for the board to go through a short training course or simulation or group exercise to get them on board with the idea and to make sure you’ve got good answers for the press conference.
Chair: Please set it up with my Secretary asap. We need this!
Should we be talking about Service Governance?
That imagined conversation in a lift is a fantasy, but not one that is that far from reality. Boards of Directors are concerned with governance – the change in regulatory climate, both after the Enron scandal and as a result of the world-wide economic slump, has made directors vulnerable to things that go wrong with governance, they are, potentially, exposed to the risk of criminal charges personally.
The aim of ITIL, as expressed by the Service Strategy book, is to turn ‘Service Management’ into a corporate strategic asset. Every ITIL process and service is designed to serve the objectives of the business and reflect their value and cost in the Service Portfolio. This is a board concern and a matter directly of good governance. The board sees Operations (not just IT operations by any means, though it is a major culprit) as an area that is difficult to govern. Mere management advice seems, to the board too low-level, too operational itself, to achieve the sort of improvement that they require.
So it is necessary, to make it clear to those running organisations, that what is being talked about in ITIL is not technical stuff, nor is it just management advice, it is, actually, a means of achieving good governance for the organisation as well as operational excellence – and the metaphor of a ‘service’ is used to make operations transparent to the board – not the murky pool into which money disappears, as it is seen today.
The transparency of the service model is crucial as it allows decisions to be taken on services at a board level – the essence of sound governance. With the board understanding cost, value and risk – not the detail of the management or the technology. It is vital that requirements are understood and governed through an integrated process, as they govern the understanding and measurement of the business value delivered.
A long history of ITIL training being given to individual technical contributors, mainly, as if it was a technical subject, or, at best, to the management team in IT, means that the message has been poorly communicated and so it has been impossible for boards of directors to support the service initiative – because it has been seen simply as operational management, not Service Governance.
This has all been known for a long time, but recent changes with the management of the ITIL Best Practice framework have led me to these thoughts again, with the hope that, perhaps, an initiative could be started to understand how to position Service Governance in the market and how to communicate its importance to the custodians of organisations.
The message is more complicated than this brief article is suggesting, I know that. Other advice is also very important to achieving good Service Governance. I believe that Enterprise Architecture (TOGAF, for example), the management of value (or should that be the ‘governance of value’?) and the management of risk provide important adjuncts to ITIL, as does the management of portfolios, that provides a strong basis for the business driving the investment portfolio that includes the service portfolio. Services ought also to be governed under the umbrella of sound programme management.