I posted yesterday on the distinctions between IT Product Management and IT Service Management.  Rich Lemieux commented and pointed us to his helpful and informative DITY Newsletter and to his article on the 5 domains of ITIL V3 suggesting that IT organizations organize themselves around these domains as the “five new silos of IT.”

A couple of push back’s – one minor and one major.  The minor is Rich’s use of the term “silos.”  I think this is probably a semantics problem – I doubt that he meant “silo’s.”  I pick up on this nit, though, because I’ve seen organizations in their fervor to move from functional silos to end-to-end processes wind up in process silos!  While this might be preferable to functional silos, any type of silo behavior is sub-optimal.  In these days of rapid change, critical need for agility, and a need to create exceptional customer experiences, silos just don’t cut it.  Everything we’ve learned about living systems, agility, and capability on demand tells us that free and fluid flow of information among the components of an organization is critical to the health and vitality of that organization. Silos tend to inhibit such flow.

Now the major push back.  ITIL and the notion that “IT organizations are becoming Managed Service Providers” is one of those Level 2 ‘traps’ I’ve referred to in the past (See, for example, Reaching Level 3: The Ambition Factor).  I agree that excellence in Managed Service Provisioning is key to reaching higher levels of Business-IT Maturity, and with it, higher business value.  But, if this is that an IT organization aspires to or achieves, they will be stuck in what I call “Level 2″ hell (see my earlier posts on our 3-Level Business-IT Maturity Model) and be under constant pressure to ‘reduce costs and show us the value!’

In a maturity model, Level 2 is a critical stepping stone to Level 3, but it typically fails to stimulate, identify and deliver against the real business value opportunities.  ITIL v3 is all about doing what you already do today, only better.  With new capabilities such as Web 2.0, 3.0, SaaS and cloud computing, and new business aspirations to become “Next Generation Enterprises”, IT organizations will have to reach beyond Service Management and into business innovation – both process and product.  ITIL is a necessary means, but does not take IT to its essential end.