A new culture Club

If you are involved with managing the delivery of IT services in medium to large organizations it's most unlikely you have not yet heard the acronym ITIL. The Information Technology Infrastructure Library (ITIL) has rapidly become the first choice IT service management (ITSM) framework used by public and private sector organizations.

Now used as the basis for new ITSM standards, ITIL has been recognized by the British Standards Organization (BS15000), Standards Australia (AS8018) and the International Standards Organization (ISO20000), as the ITIL framework has earned its reputation as the premier ITSM guideline.

The IT Service Management Forum (itSMF), the largest industry/interest organization focused 100 percent on ITSM, is enjoying sustained growth. As well as being at the core of ongoing development of ITIL versions, itSMF globally is an accreditation body for ITIL auditors and trainers and a proactive user group servicing vendors and IT professionals.

According to Brian Jennings, president of itSMF Australia, the number of new corporate and individual members joining the organization is a clear reflection of the keen interest in IT service management from government and corporate clients.

"We have always enjoyed strong membership numbers, but recently there has been a big acknowledgement of ITIL in the IT vendor community at both the software and hardware levels as well as with service providers," Jennings said.

"Most of these companies are now providing services in some form or manner and realize that ITIL is the direction that a large number of organizations are taking, so [the vendors] are clambering to get aboard the bandwagon.

"Our organization was established in 1990 and its current growth spurt is a good barometer of the rising importance of ITSM as a business issue. Historically, ITIL has been pioneered and led by organizations in the UK and Europe but the growth rate in the US at the moment is phenomenal. Australia has always been at the forefront of ITIL adoption and the level of IT service management maturity amongst some Australian organizations is very advanced."

What's driving ITIL?

In a world which is increasingly subject to closer scrutiny in terms of governance, accountability, efficiency and productivity, IT operations now have to play their part.

Greater productivity with fewer resources is at the forefront of most IT strategies and ITIL-based processes have been adopted broadly to provide a platform for IT reform, improvement and alignment with business objectives.

Gaining more market share is another one for companies where using recognized best practices to deliver IT services differentiates them from their competitors. For the latter, ITIL lets such companies not only increase their internal efficiencies, but also drives productivity improvements for their customers.

IT service management analysts, theorists, practitioners and zealots have largely lent their support to the notion that best practice IT service management has the potential to deliver significant service quality and bottom-line benefits. Almost to a man, they will also tell you that achieving cultural change within an IT department and in the way it integrates with the rest of an organization is fundamental to realizing these business benefits.

There has been little hard data collected in Australia about how many organizations are implementing ITIL. One as-yet-unpublished study by Gartner shows that nearly half of Australian organizations have at the very least started to implement some form of an ITIL framework.

Steve Bittinger, research director at Gartner Asia Pacific, said it surveyed 60 client organizations in Australia with more than 500 staff and found that "44 percent of them had made some sort of ITIL commitment". That is not counting those considering it, just those that have at least started on the journey.

Bittinger said it is the forces of globalization and a new focus on governance in all aspects of business that is driving IT service management improvement projects in general and ITIL in particular.

"The forces of globalization make it pretty easy to find out what is best practice anywhere in the world," Bittinger said. "There is also a lot of pressure from outsourcing where suppliers are offering and delivering services better, faster or cheaper than the internal group.

"The globalization now dictates that IS organizations have to measure themselves against world's best practice in capability, efficiency and cost. There is no hiding any more.

"A lot of organizations have experienced budget crunches while also being expected to improve performance.

"Improving your processes is also one of the key ways to accomplish more with less money in relation to IT. ITIL is an established set of guidelines to process improvement in relation to the delivery of IT services."

David Dowling, executive director of Dowling Consulting, is a former Deloittes partner who now runs his own professional services organization with a strong practice in IS improvement. Dowling believes that a range of business issues around governance is behind the new popularity of ITIL and these are particularly relevant to all government agencies and publicly listed organizations.

He sees that, fundamentally, it is about addressing the absence of controls in business processes which is a hot key for all organizations as a result of some high-profile corporate collapses and government departmental scandals.

"ITIL is viewed as something that can be used to establish governance across a range of problems and issues that organizations perceive IT is subject to," Dowling said. "It is no different to what is expected from any other part of the business.

"The IT department is just another extension of business processes and therefore has to be subject to the same level of governance and auditable controls which require a framework for process development. ITIL facilitates that which in turn sets benchmarks which position an organization to strive for improvement."

Cultural change the key

Therein lies the key. High levels of governance, accountability for performance, rigid asset management and integration with the rest of the business are not features of the traditional IT operation. It has been more about a culture of fighting fires and making do with what you are allocated.

According to Ken Doughty, a former CIO of TAB Limited, realizing the potential business benefits of implementing ITIL is a completely different kettle of fish to any other IT project. Doughty is a renowned ITIL champion, conference presenter and author of ITSM papers who is credited with steering a series of successful ITIL projects at TAB. These projects reaped an audited 14 percent reduction in IT operational expenses and $4 million worth of bottom line savings over two years.

Doughty said there was a complete cultural reversal at TAB which was essential to the success of the ITIL change program.

"It was not only about moving from being a reactive organization fighting fires, as we started to be proactive in our service delivery and thereby delivering strategic outcome," Doughty said. "We also had to break down the barriers between the IT department and the rest of the business. "At TAB, IT is no longer seen as a dark empire which nobody understands. It is a services facilitator and a business enabler working to clearly defined processes and objectives.

"One of the key ways we developed this culture change was to identify ITIL champions in all areas of the business and train them.

"The IT staff were also trained in ITIL and they became our evangelists in the back end of the business. They were intrinsically involved in the whole change management committee and decision-making process. We had never done that before and it clearly helped us sell the concept to senior management as well as setting us up for ongoing communication."

Gartner's Bittinger said he has reviewed a number of case studies where cultural change was indeed at the core of realizing business benefits from ITIL-based IS improvement programs. He believes cultural change goes well beyond just the important step of becoming proactive.

"I would not pick reactive and proactive as the primary dimensions," Bittinger said.

It's all about process

"While it is true that these are important, they are really just IT dimensions and that is not exactly where ITIL sits. The cultural change that I see as more important and more challenging to a lot of organizations is to really understand what it is to be process-driven.

"The adopted processes are a potential pitfall in ITIL implementation because they are not defined by ITIL. They are left up to the individual organization. A lot of IT organizations have historically been organizationally structured around functional areas - such as networks, data centres, helpdesk and the like - each of which requires a degree of specialization and expertise to be a leader in delivering that type of service.

"ITIL comes in and tends to cross those boundaries. It is not a functional focus. It is a cross-organizational process focus that crosses many traditional boundaries. The challenge for organizations is to learn 'how do we work more effectively as a matrix style' of organization."

It is also apparent from the number of services providers now aligning themselves with ITIL-based processes that IT organizations now have to adopt the same business approach and be able to demonstrate their competitiveness.

Understanding the project lifecycle

According to itSMF Australia's Jennings, ITIL projects do not have a fixed lifecycle. They are ongoing exercises that rely on detailed planning "from concept to maturity". Just as a capability maturity model in software development can not reach the optimum "5" rating, where full maturity is reached, so too does an effective ITIL strategy never really end.

"It is a fundamental approach within this framework to recognize that the process of improvement is continual," Jennings said.

"While there has to be a vision of what you are trying to achieve at the end of your ITIL project, there will always be new ways of refining ITIL itself and individual implementations for better IT service management.

"Organizations that do not have a vision of where they want to be are simply not going to get the benefits available."

Doughty, who now works as an independent ITSM consultant, has seen a lot of ITIL projects grind to a halt because of poor execution in the planning phase and a lack of project governance through the lifecycle of the project.

"A big mistake that a lot of organizations make is to go for the big bang theory," Doughty said. "Trying to do it all at once is not the way to go. What we did at TAB was to clearly identify the ITIL components that were most in need of attention first.

"By finding where there was pain and relieving that, we were able to deliver some real and immediate value to the business. Our big concerns were around problem, incident and change management and by addressing these issues we were not only able to improve services but also deliver something to the bottom line.

"Doing that meant that all of a sudden we had the whole business onside because they were getting a better response from the IT department and we were delivering profit to the bottom line. These benchmarks gave us the ammunition to justify further resources being allocated by the board.

Dowling too emphasized that his experience showed an ITIL project is not a one-time implementation. Much like traditional quality approaches such as Six Sigma or TQM (Total Quality Management), you have to implement it and fine-tune it so that it is dependent on a range of measures that have to be put in place starting with a benchmark setting.

"You don't simply implement the ITIL process and think that is the end of it," Dowling said. "You implement the base part to get you to level one and use it as your benchmark. In short, the first mission is to move to a nimble stage from where you can start planning ahead instead of chasing your tail.

"Sometimes you have to look at the whole concept and accept that it isn't the whole answer. It is merely the start of the answer. You can't simply say that we have ITIL procedures in place and then start to clock up the business benefits.

"If people expect that because they have implemented ITIL, they are going to reap immediate business benefits - they are being delusional. The business benefits are usually derived from the use of IT and the use of systems and the use of systems and technology."

Gartner's Bittinger agrees you have to get personnel across the entire organization to buy into the continuous improvement mechanism without becoming too bureaucratic.

"You can get too religious about ITIL," Bittinger said. "You need to have just enough bureaucratic process so that everyone understands what the process is and how to tell whether it is working and delivering the desired results.

"You have to start with the end in mind. That end is to demonstrate to the rest of the business that you can deliver service improvements and cost savings. It is not the role of management to come up with all the answers.

"They do, however, have to ensure the workforce is well trained in process thinking and process improvement and that their suggestions are acted upon with appropriate resources allocated."

By providing a national and international forum for subject matter experts, to share and discuss best practices and new ideas in this part of the IT industry, itSMF Australia is the non-profit organization leading this cultural change in ITSM in the country.

Go to www.itsmf.org.au for more information on itSMF Australia and links to key ITIL/ITSM Web sites.

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