Tag Archives: Service Management

When Everything Becomes a Service – Does ITIL Help or Hurt?


services-13For many years I’ve had an interest in the disciplines of Product Management and Service Management. These disciplines have been generally lacking in IT shops, though that is changing. Frameworks such as ITIL and standards such as ISO/IEC 20000 are helping sensitize IT professionals to Service Management, and methods such as Agile Development and Scrum are sensitizing IT professionals to the role of Product Owner, if not to the disciplines of Product Management.

However, my interest has been strengthened since reading the remarkable book, The Connected Company by Dave Gray with Thomas Vander Wal. Dave and Thomas have awakened me to a fact that I was subliminally aware of, but have reinforced for me why this is happening now. They have also drawn out for me some implications and subtleties I had not considered when thinking about the Service Revolution.

Everything is Becoming a Service

As the authors suggest:

Services cannot be designed and manufactured in isolation, like products. They are co-created with customers and are interdependent with wider service networks and clusters.”

They point out that most companies today have been finely tuned to “produce high volumes of consistent, standard outputs, with great efficiency and low cost.” Even some so-called ‘services’ are in reality “factory-style processes that treat people as if they were products moving through a production line.”

The Customer’s Experience of a Service is Key!

A product is largely experienced as it was manufactured. We may have subjective reactions to the product, but it does not change, other than through built in features. Services, however, change as they are experienced. This means that services cannot be delivered simply through efficient and operationally excellent processes. Services demand a ‘customer intimate’ delivery model that adapts to the ways the service is co-created by the customer and optimizes the customer experience.

The Strengths and Weaknesses of Standards and Frameworks Such as ITIL

My esteemed colleague at BRM Institute, Dr. Aleksandr Zhuk, just posted a wonderful short post titled “BRM Role and Service: ITIL Dyad Revisited.” As an officially certified ITIL Expert, ‘he knows what of he speaks’, as they say. Please check out his post – and tell us both what you think, and how these observations resonate with your own experiences.

 

Graphic courtesy of Augustedge

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Announcing the Business Relationship Management Institute!


BRMII’m excited to announce that I’ve joined forces with a couple of colleagues to begin a new venture – The Business Relationship Management Institute (BRMI). BRMI is a not-for-profit association for Business Relationship Management Professionals, providing professional training and certification, and facilitating exchange of knowledge and leading practices. My role as Principal with The Merlyn Group, my consulting firm and provider of the Symcordia® Knowledge Management and Collaboration platform, and my role as co-founder of Formicio in Europe will continue (yes, I’ve been a busy lad in my semi-retirement!)

Empowering the Emerging Business Relationship Management Role

Regular readers will be aware that Business Relationship Management (BRM) has been a recurring topic in this blog. It’s a topic I’ve been passionate about since the early 1990′s when a 3-year, longitudinal multi-company research study I was leading at Ernst & Young’s Center for Business Innovation surfaced the emerging BRM role as a key business-IT alignment mechanism. Those early beginnings culminate (or, at least kick off a new chapter) in the formation of the BRMI this week. Founded as a 501(c)(6) not-for-profit corporation, this represents an opportunity to connect even more deeply with the BRM community, and, corny as it may sound, ‘give back’ to that community and to the IT profession in the twilight years of my career.

How Did the Business Relationship Management Institute Come About?

It is said that the best stories narrate themselves. Founding Business Relationship Management Institute is just such a story. The three BRMI co-founders embarked on the journey to establish the Institute, years before we met each other.

I have been involved in the BRM profession since 1995, when I collaborated with professors from Oxford and Cranfield Universities in the United Kingdom and Nanyang University in Singapore to develop and teach a BRM program for a global oil company. I’ve continued to develop and lead training and development programs for BRMs and consult extensively on this subject via The Merlyn Group.

In 2010, Aaron Barnes, a senior BRM, who built and was leading a successful team of BRMs at a major big box retailer, felt the need for a forum for professional BRMs to share knowledge and develop their competencies. In January, 2011, Aaron formed the Professional Business Relationship Managers (PBRM) group on LinkedIn thus establishing a foundation for what would eventually evolve into the first official BRMI global community.

In late 2011, just as Aaron invited me to co-moderate the rapidly growing LinkedIn group, Dr. Aleksandr Zhuk, an expert technologist, professor, with years of experience in teaching online, and a fellow member of PBRM LinkedIn group, also saw the desperate need for a widely available BRM training and certification. Connecting the dots, Aleksandr conceived of a global professional organization to provide training, certification and serve all other needs of the rapidly growing BRM community. Business Relationship Management Institute was born.

In January 2013, Aaron invited Aleksandr to join us as co-moderator of PBRM group and all three of us met, for the first time, to exchange ideas on how to best serve the BRM community. As soon as Aleksandr brought up the idea of Business Relationship Management Institute, we recognized that each of us has already been working toward making it real. The time has come to join our forces to realize our shared vision for BRMI—a not-for-profit organization dedicated to serving the needs and protecting the interests of the global BRM community.

BRMI Logo

BRMI tri-petal, is a registered trademark of Business Relationship Management Institute.  The tri-petal symbolizes a well-balanced unity among the business relationship manager, the service provider, and the business partner.

Our Position on the BRM Role

In 2011, ITIL® and ISO/IEC 20000 standard for IT Service Management formalized the existence of a dedicated Business Relationship Manager (BRM) role and corresponding process, recognizing the need for BRM as a new best practice and IT Service Management standard requirement. According to ITIL®:

The role of the business relationship manager (BRM) was established to execute certain customer-facing activities in various processes, such as service level management. However, as the role matured it became clear that there was a discernible process to support the role…The purpose of the business relationship management process is two-fold:

  • Establish and maintain a business relationship between the service provider and the customer based on understanding the customer and their business needs.
  • Identify customer needs and ensure that the service provider is also able to meet these needs as business needs change over time and between circumstances.

ISO/IEC 20000 standard for IT Service Management adds that:

For each customer, the service provider shall have a designated individual [BRM] who is responsible for managing the customer relationship and customer satisfaction.”2 According to ISO/IEC 20000-2:2012, to be effective, “The BRM process should ensure that mechanisms are established to manage the relationship between the service provider and customer(s).”

At BRMI, we fully recognize the importance of structured well-tuned processes and agree with ITIL® definition of the two key functions fulfilled by the BRM. We also believe that ISO/IEC 20000 standard’s requirement for having a dedicated BRM for each business customer provides a solid guideline for establishing a well-balanced effective relationship between a business customer and a service provider with the BRM acting as advocate for the customer.

Yet, many years of our collective experience in the field also suggest that effective business relationship management is as much, if not more, about strategic-level leadership as it is about effective processes. Being a successful BRM means much more than periodically interfacing with business stakeholders and IT process owners by means of a process—regardless of how well-tuned this process might be.  An effective business relationship manager is, by definition, a master of building working strategic-level relationships, one who possesses all the interpersonal and business skills this entails.  Effective BRMs carry real strategic weight in their organizations. Therefore, the BRMs who deliver maximum business value hold senior management positions placed in well-balanced alignment with senior business and IT executives.

At BRMI, we also believe that, like anything else in the age of turbulent changes, the BRM role is not static—it evolves. Therefore, the BRM role is best approached through a maturity perspective—both the maturity of business demand for IT services and products, with regard to its ability to turn IT investments into realized business value, and the maturity of IT service provider and its ability to fulfill evolving business needs. Maturity of business demand and IT supply affect the BRM role and its ability to deliver results.

We will be exploring these viewpoints, and many other aspects of the BRM role through the BRMI blog. We’ll also develop an evolving “blog roll” of sites we believe should be in every BRMs reading list. We hope you will all join with us on the BRMI site in this global conversation about the emerging and evolving role of the Business Relationship Manager!

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Driving Business-IT Convergence – The Evolving Role of the Business Relationship Manager (Part 1 of 2)


WhitePaperCoverI’m seeing a surge of interest in the emerging role of the Business Relationship Manager (BRM) as a key position that sits between a shared services organization (most frequently IT) and its business partner.  This is an internal role that should not be confused with the similarly titled externally-facing role common in banks and financial services organizations. I have referenced the BRM role many times over the last 6 years, and covered the topic at some length in January (see ITIL and the Business Relationship Manager: Avoiding the Performance Trap and Design Thinking and Emerging IT Roles.)  Recently, I’ve been getting an inbox full of questions about the role, so I decided to satisfy that interest with a new 2-part post looking at how the role is evolving.

Defining the BRM Role

The BRM role is by no means ‘standardized’, even as the IT Service Management movement tries to place it in its standards as a rather tactical position, mostly focused on steady-state IT services.  High quality steady-state services are certainly an important aspect for any IT organization – table stakes, if you will, for getting a “seat at the business table”.  (Please excuse the double table metaphor!)  But once the business partner experiences the BRM as negotiator for and arbiter of services, service levels and the like, they are unlikely to invite that BRM to the next strategy offsite to help figure out how the business strategy should address increasing business digitization, for example!

We see common variations in BRM:

  • Seniority – and the level of business executive with whom the BRM partners.
  • Scope – and the number of business unit executives and managers the BRM works with.
  • Purpose – especially in the balance of the BRM focus between supply and demand.
  • Title (e.g., Business Partner Director, Account Manager, Client Relationship Manager, IT Business Partner, Business IT Partner, etc.)
  • ‘Supply side’ focus (i.e, many BRMs represent the IT organization, some represent HR, Finance, and so on.  A small number represent multiple “shared services”.)
  • ‘Demand side’ focus (e.g., Line of Business, geographic region, major business process, corporate functions, etc.)
  • Size of the BRMs team – from sole practitioner to leader of a team of 8 or 9.

The Typical BRM

While typical, as with averages, can be misleading, the most common model for the BRM includes:

  • The BRM sits at the intersection of IT and its business partner – representing the business partner(s) to IT and IT to the business partner(s).
  • The BRM stimulates, surfaces and shapes business demand for IT projects, services, capabilities and investments in order to maximize their business value.  This means taking a proactive role in educating the business partner, suppressing demand for low value activities while stimulating demand for high value activities.
  • Ideally, the BRM is a member of both business and IT leadership teams, contributing to both business and strategy and planning, identifying how information and IT can support and advance business objectives, and helping translate demand into supply.
  • The BRM partners with appropriate supply resources to ensure supply-demand alignment.
  • The BRM helps create project and program charters.
  • The BRM oversees initiatives and helps manage business process change to ensure that the value predicted by a business case is actually realized.
  • The BRM monitors business partner satisfaction and facilitates continuous improvement in the business partner experience with IT (or HR, etc.)
  • To accomplish all the above, the BRM typically manages a small team comprising “junior BRMs”, business analysts and other specialized resources required to ensure an effective business-IT relationship.

If that sounds like a lot of responsibility, it is!  In fact, at their best, IT BRMs are thought of as “mini-CIOs” and are often on a succession path to the CIO position.

BRM Responsibilities

Common responsibilities include:

  • Active member of both the business partner and IT leadership teams.
  • Joint accountability (with the business partner) for business case development and value realization.
  • Accountable for development and execution of the business partner IT investment portfolio.
  • Partnering with the IT Solution Delivery Organizations to manage expectations and ensure efficient and effective delivery of all IT services.
  • Accountable for business partner awareness of systems security requirements and responsibilities.
  • Orchestrating key roles on behalf of their business partner (e.g., Project Manager, Enterprise Architect, Business Analyst).
  • The BRM acts as a broker for needed resources and capabilities (e.g., Vendor Management, Service Management, Organization Development).

From Alignment to Convergence

I’ve posted on this important concept before – with all due credit to Professor James Cash, Harvard Business School, with whom I helped design and deliver a relationship manager development program some years back.  He first helped me to the insight that alignment was no longer sufficient – CIOs needed to recognize that business and IT were converging as every aspect of business strategy and operations was increasingly dependent upon information and IT.  Today, it is largely the BRM who operates at the leading edge of the convergence movement – a movement being accelerated by the ‘consumerization of IT’.

Teaser for Part 2

I’ll pick up in Part 2 of this 2-part series with examples of needed BRM competencies, a discussion of how the BRM role changes over time with increasing maturity (of both the BRM and her business partner) and how the way that the BRM engages with the business partner shifts the relationship from one of order taker to that of strategic partner.

Graphic courtesy of Acre Resources Limited

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ITIL and the Business Relationship Manager: Avoiding the Performance Trap!


order-taker

I have good news, and I have bad news!

The Good News…

The IT Infrastructure Library (ITIL) 2011 edition and the ISO/IEC 20000 standard for IT Service Management formalized the existence of the Business Relationship Manager (BRM) role and corresponding Business Relationship Management process as a new best practice and international IT Service Management standard requirement.  This is good – for professional BRMs around the world, for the IT profession in general, and for improving the business return on IT investments, as technology becomes ever more deeply embedded in business processes.

The Bad News…

(And I know I will get hate mail and lose readership for saying this, but…) As defined by ITIL, the BRM role comes off as somewhat tactical – not something to get business leaders salivating over their new partnership with IT, nor hungry to innovate business products and services!  Let me be clear – the ITIL vision of BRM is necessary – but from my experience, it is insufficient to drive real business value beyond a certain point.  It will help an IT organization with poor service quality get better.  But it will not help an IT organization with good service quality to excite and delight their customers with the new business capabilities that are enabled by information and information technology!

Business Relationship Manager Role

I’ve posted extensively on this role in the past – the BRM is a bridge between the IT organization and its business clients (just as a good CIO is a bridge between the IT organization and corporate leadership).  As such, it both represents the business clients to IT, and IT to the business clients.  This role has surfaced over the last 10 years or so and Gartner predicts that the fraction of IT personnel dedicated to Relationship Management and Change Leadership functions will reach as much as 15% by the end of 2013 and grow up to 20% by 2016.  LinkedIn hosts two groups dedicated to the BRM role.  One group – IT Business Relationship Management - currently boasts over 1,800 members.  The other group, Professional Business Relationship Managers currently has over 2,600 members!  (In the interests of full disclosure, I co-manage the latter group.)

I’ve conducted a significant amount of consulting, assessment and training in the BRM space, including designing and leading BRM training and development programs for global companies with over 100 BRMs (as well as for those with fewer than 5 BRMs).  From that experience, and from my ongoing activity on the LinkedIn groups, I’ve seen two distinct ‘flavors’ of BRM – “Tactical” and “Strategic.”

BRM and Business-IT Maturity

To help understand “tactical” and “strategic” BRMs and how they’ve come to be, I’ll use my Business-IT Maturity Model (BITMM).  I’ve posted at length about the BITMM.  In its simplest form (see graphic below) the model represents both business demand maturity (highlighted in red to the left of the learning curve) and IT supply maturity (highlighted in blue to the right of the curve. These never move completely in tandem – sometimes demand is slightly ahead of supply, other times it is slightly behind.  If demand and supply get too far out of whack, there’s usually a change of CIO (or a turnover of the IT organization to an outsourcer!)

Slide1

The number of maturity levels is arbritary, but for simplicity let’s use three – business efficiency, business effectiveness and business transformation.  Where a company is at any point in time is a function of factors such as:

  • the industry it’s in
  • current business leadership
  • competitive and regulatory forces
  • quality of IT leadership
  • quality of service delivery

For example, the financial services industry tends to be highly information-intense, so is generally demonstrated higher business demand and IT supply maturity than say, manufacturing companies, which have traditionally been less dependent on information.  All that is changing, of course, as businesses and governments everywhere become increasingly digitized.

The ITIL Connection

Improving service delivery quality is where ITIL focuses.  According to its current owners (The APM Group Limited) ITIL is “the most widely accepted approach to IT service management in the world.”  Originally developed under the auspices of the UK Office of Government Commerce (OGC), ITIL is becoming a popular approach to service management.  Often loosely, and occasionally rigorously followed, ITIL documents processes and practices for service management.  This focus on service management is crucially important in moving IT supply maturity up from low Level 1 to mid-Level 2.

The Tactical BRM

The graphic below crudely cuts the BITMM in half.  The lower half is what I refer to as the “tactical” BRM space – focused on business efficiency and effectiveness.  The conceptual dividing line between these spaces is important.  Around the mid-point of Level 2 maturity, the learning curve changes direction.  This is also a common “sticking point” (see my earlier posts on “sticking points”) where IT organizations often become trapped and their efforts at performance improvement taper off.  In some cases, they actually fall back in performance.

Slide2

So, in the pursuit of service management quality, the BRM has an important role, establishing a strong business relationship with the customer by understanding their business and customer outcomes.   But the focus is service management, as opposed to the strategic possibilities for IT capability to enable new or improved business products and services.  Service management applies most to ‘steady state’ IT services – not to transformational projects and programs on behalf of business units.

The Strategic BRM

The upper half of the BITMM is the “strategic” BRM space – focused on business effectiveness and transformation.  While an IT organization must be careful not to slip back on IT service quality and customer satisfaction, simply delivering ever-improving services will not transform IT into a respected, value-producing business partner. Sooner or later, IT service management efforts reach a point of diminishing returns. Something quite different is then needed to further improve the business return on IT assets and investments.  While the “Tactial BRM” tends to focus on IT supply management processes and activities, the “Strategic BRM” focuses on business demand management – stimulating, surfacing and shaping demand for services, activities and initiatives with the highest potential business value.  The “Strategic BRM” works closely with her business partner to ensure that IT investments and capabilities yield real business value.

Leverage the Standard Frameworks – But Don’t Get Stuck

The message here is that it’s ok to leverage standards and frameworks such as ITIL, COBIT and TOGAF – but essential to do so with intelligence!  They have their place – and a context for which they were intended – that often being UK government entities.  Nothing wrong with that, but it tends to be a context of control – not innovation.  Control can help you get from low Level 1 to mid-Level 2 – but not to Level 3.  What kind of IT capability does your business need – controlling or innovating?

Thoughts on a postcard, please!

Graphic courtesy of giffconstable.com

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To Whom Should Business Relationship Managers Report?


I recently received this question from a reader:

We are evaluating a strategy to centralize IT and implement Business Relationship Management (BRM) roles as part of the centralization. Where do you typically see the BRM’s reporting into in a centralized IT organization? Should they report directly in to the CIO, or can they be effective a level or two below the CIO?”

Rule #1 – Reporting Lines Are Weak Determinants of Success for the BRM Role

I have found reporting relationships to be a very weak determinant of success for the Business Relationship Manager (BRM) role. Far more important are the competencies (especially business knowledge and relationship skills) of the BRM and the maturity of the business executives they partner with.

Rule #2 – Heft Matters!

Notwithstanding Rule #1, the “heft” of the BRM role – the weight and implied authority it carries does matter.  There’s a couple of reasons for this:

  1. BRM’s are often on a CIO succession path (either explicitly or implicitly) – i.e., have the skills and wherewithal to be a CIO down the road, and the BRM role may be seen as a developmental step.  This has implications for who you chose to fill BRM roles, and for their career paths.
  2. The story a CIO tells the business executives when establishing the BRM role is along the lines of, “I am giving you one of my senior staff members to help surface, shape and manage IT demand so that you get the highest possible value from IT investments and assets. In return for this ‘gift’ I expect you to treat this BRM as a member of your management team.”

As a result, the most common reporting relationship for successful BRM’s is directly to the CIO.  In some cases, the BRM has a dotted line relationship to the senior business executive for the unit they represent.  In other cases, the BRM role is solid line to the senior business executive and dotted line to the CIO.

Rule #3 – Context Matters!

There are many other contextual factors to consider here, including:

  • What is the scope of the BRM role – is it primarily demand management (shaping, surfacing and managing business demand for IT)?  Or does the role include supply management, service management or other responsibilities?
  • Do the BRM’s act as Project or Program Managers for major initiatives?
  • Do the BRM’s sit on any governance bodies, such as Portfolio Management or Service Management?
  • How do BRM’s engage with the supply side?  How do they engage with Enterprise Architects?
  • How mature is IT supply?
  • Howe mature is business demand?

BRM’s Can Be ‘Game Changers’!

The BRM role is a tough one to get right, but from my experience, well worth the effort!  An effective BRM can:

  1. Elevate business maturity
  2. Ensure that IT resources are being focused on the highest potential value activities and initiatives
  3. Ensure that those initiatives capture the highest possible value

 

Graphic courtesy of Linda Galindo

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“But We Don’t Have the Discipline to Implement ITILv3!”


student_discipline_head_photoI was talking to a consultant recently about some process work he was doing with a large, global IT organization.  I asked him if they had adopted any formal service management framework and he said that when he asked them about ITILv3, they said, “We tried that, but we just don’t have the discipline to do it!”

I was thinking about this admission from a multi-billion dollar, global enterprise, and thinking about analogies.

Businesses that Can’t Deliver What they Promise

Supposing, when you booked a flight, the airline said,

That flight might not get you to the destination you are paying for.  In fact, it might not get you anywhere with safety!”

Or, when you booked a hotel room (can you tell I travel a lot!), the hotel operator told you,

We can’t guarantee a room will be available, or that it will have clean sheets and towels.  We will try, but we really don’t have the discipline to ensure it!”

Or going to a hospital for surgery, and the admissions officer asking you to sign a waiver acknowledging that,

I understand that my surgery might not be performed by a board certified surgeon.  Or by anyone actually qualified to perform the needed surgery.  We will try to do no harm, but we don’t have the discipline to ensure it.”

For all the criticism we might throw at airlines, hotels, and even hospitals, by and large, these organizations have the processes, controls and disciplines to mostly do it right the first time.  IT service management is hardly open heart surgery, but the IT organization is being paid a significant amount of money to deliver services that people depend upon.  The customers of these services expect that they are being delivered consistently, reliably, accurately and at the best possible cost.  I can’t imagine what they would say or think if they knew this was not necessarily the case – that their service provider “did not have the discipline” to do it right!

Process and Service Management Discipline – Not Optional!

I’ve posted before about ITIL and about it being necessary but not sufficient.  I’ve never posted anything that implied that process discipline is not a critical success factor, or that ITILv3 is not a highly effective framework for bringing process and service management disciplines to an IT organization.  I do acknowledge that any process improvement methodology when applied without a modicum of intelligence can go overboard.  We see this in a phenomenon I call ‘death by Six Sigma‘ when the race to green belt certification leads to hundreds of mini process improvement projects without any overarching change architecture.  We saw it with Total Quality Management, and the Baldrige Award and Deming Prize winners that got into serious difficulty as the end of the prize became more important than the means to make money!

Do you have the necessary discipline to provide the best possible services at the lowest possible cost?  If not, what can you do to develop some commitment to do it right, and the discipline that comes with that commitment?  If the answer is “nothing,” how can you look your customers in the face?

Marketing Mix and the IT Organization


Inspired yet again by Chris Brogan, I’m trying an experiment with a video post.  I’ve posted before on IT and marketing disciplines and I though this might be a good topic to create a small series (3 or 4) of short video posts on the 4 P’s of marketing as they apply to the work of the IT organization.

I have to confess that the mechanics of getting this done first time around have proven quite challenging!  I’ve done quite a lot of video editing in the past, shooting film on a camcorder and editing it on my home iMac using iMovie HD.  For some trivial logistical reasons, I wanted to do my video posts on my Lenovo laptop with my Microsoft webcam and using the free Windows Movie Maker software, which I’d never used before.  I had all sorts of problems – especially with sound.  Some of these were learning curve issues, others related to “free” software with a less than perfect user interface (compared iMovie) and pretty weak help support.  Anyway, here is my first effort.  Let me know what you think – is this worth the added production effort?  (I find writing so much easier!)  Thoughts on a poscard please…

Managing IT Infrastructure vs. Platforms


platform-4-626.jpg

I was in an interesting discussion with one of my consulting clients recently.  I was with a group of IT managers responsible for their firm’s shared IT assets.  This is a large, global enterprise that has been on an aggressive journey over the last 5 years to transform business-IT maturity.  By any measure, they have been successful – rationalizing and consolidating a patchwork of data centers, networks, systems and dispersed IT groups – some “official parts of an IT organization”, others “shadow IT organizations” operating outside of IT budgets and controls.

In essence, this group is responsible for the firm’s “infrastructure.”  We talked about the definition and meaning of “infrastructure” in order to get a handle on their scope of responsibilities, and how these might change over the next 3-5 years.  A typical dictionary definition of infrastructure is: “the basic facilities, services, and installations needed for the functioning of a community or society.”  For IT infrastructure, I find Professor Peter Weill’s definition especially useful:  “The base foundation of budgeted-for IT capability (both technical and human), shared throughout the firm as reliable services, and centrally coordinated.”

Let’s examine the keys to this definition.

  • Budgeted-for implies conscious analysis, planning and funding.  This is critical for IT infrastructure given its characteristic that it tends to be invisible until it breaks.  Therefore, an effective IT infrastructure management group has a hard time getting funding for improvements – “If its working fine, why do you need more money?” is the typical refrain.  (Public infrastructures suffer the same fate – hence our bridges are falling down, and, as an Atlanta resident, I have to suffer continuous drought conditions while 20% of the water traveling from reservoirs to homes is wasted through leaky water pipes!)
  • Both technical and human helps correct the common misunderstanding that IT infrastructure is all cables, computers and disc drives.
  • Shared throughout the firm as reliable services introduces the notion of ‘firmwide sharing’ which sets scope, and ‘services’ which takes us to the disciplines of Service Management, and frameworks such as ITIL.
  • Centrally coordinated tells us something about how IT infrastructure is managed – note here, its not necessarily centralized management, but central coordination, implying Enterprise Architecture and Governance.

The big question for this group is how should they evolve over the next 3-5 years, given all the changes in the business ecosystem (Next Generation Enterprise, anyone?)  One of the key elements of IT’s contribution to business success and growth in the next few years is through the notion of “platforms.”  A platform is a set of assets whose roles and connections are defined so that they can be configured in a variety of useful ways.  My company, BSG Alliance, recently kicked off a new multi-company research project, Platforms for Business Growth, so the research team has been giving a great deal of thought to IT-enabled business platforms for some time.

“Platform thinking” originated with manufacturers who wanted to build a variety of products using standard designs and interchangeable parts. It then migrated to the software industry.  For example, as Microsoft Windows operating system became popular, partners began developing products to work with the Windows platform.  Today, companies such as Amazon offer their ecommerce systems as a business platform, YouTube provides a platform for embedding video clips, and Apple’s iTunes/iPod has become a successful entertainment platform.

A key element of platform thinking is easy and open connection and collaboration with customers and suppliers.  Customers want to collaborate in the creation of customized products and services.  Business partners offer an ever-growing variety of services to leverage. A flexible platform is an engine for growth – because the business is more nimble and responsive, because it is better able to connect and collaborate, and because it maintains a larger portfolio of “options” for innovation and future action.

So, what are the differences between IT infrastructure  and IT-enabled business platforms?   Building a business platform certainly depends upon a sound infrastructure.  But platforms also depend upon clearly defined and published specifications and ground rules for what assets do and how they connect.   As IT infrastructure requires the mastery of IT Service Management,  IT-enabled business platforms, on top of IT Service Management requires the discipline of Product Management.   For many IT organizations, this is a new and unfamiliar discipline – one rooted in the disciplines of marketing, and therefore quite foreign to the world of IT.  I will get more into the distinctions between Service Management and Product Management in a subsequent post.

The “Unwritten Rules” of Project, Program and Portfolio Management – Part 2


 23326570.jpg

I’m going to continue on this theme of “Unwritten Rules” as a powerful way to understand what drives behavior, and with that understanding, be able to change the rules, and thereby change behavior.

Yesterday, I posted on the Unwritten Rules that are common to organizations where Program Management is practiced versus those where Project Management is practiced.  (I’m ignoring what people in these organizations actually calltheir practices – I’ve seen shops who think they practice program management who are barely practicing project management!)  Today I want to explore IT Portfolio Management as a key discipline for driving up Business-IT Maturity, and one that most enterprises struggle with.  In fact, as with my comment on language above, there are many more shops who use the term IT Portfolio Management without actually following any real sense of the discipline.

Let’s compare the unwritten rules around IT portfolio management behavior at two different (fictitious) companies – WorstPort, Inc., and BestPort Corporation.  While fictitious, the examples I will use are drawn from a composite of real clients I have worked with – with a little “poetic license” to help make my points!

At WorstPoint, Inc., the predominant unwritten rules that impact IT portfolio management behaviors include:

  • “You can only change IT investment behaviors for new projects.  Everything else is just ‘water under the dam,’ so don’t bother trying.”
  • “The business unit heads have all the power and the money – the best we can achieve is to have an IT portfolio for each business unit.”
  • “An IT portfolio is simply an inventory of all our projects.  Collect the data once a year and get it into the IT Portfolio Management tool so we can report on it.”
  • “We draw a line somewhere in the IT portfolio (the project list) each year based upon budget and resource levels – things above the line get done, things below the line get revisited the following year.  If you want to score points with your business partner, help them get their pet projects (or projects that you really want to get approved) above the line.”
  • “We could never include our steady state services under our IT portfolio – there’s over 200 of them!  And our business partners don’t know enough to make decisions about these services, so including these would only complicate our portfolio management efforts and confuse the customers!”

Now let’s look at the kinds of unwritten rules that shape IT portfolio management behaviors at BestPort Corporation:

  • “Most of our IT costs are associated with ‘keeping the lights on and trains running,’ so we have to apply the disciplines of portfolio management to everything we do.  Making choices between investing in our IT infrastructure and adding new applications are essentially business decisions, with our advice and guidance.”
  • “Portfolio management is how we balance investment decisions across the enterprise – what should be common investments that support the enterprise, what should be the investments for given business units or for enterprise process, and so on.”
  • “Portfolio management puts factors like risk, payback period, level of investment, and options thinking on the table.  This leads to a much richer business discussion than simple ROI or NPV estimates.”
  • “Not all customers need 7×24, ‘platinum level concierge service’.  They need to understand the marginal costs of premium service levels, and make the right trade-offs as business decisions.  That’s why we include our services under the umbrella of IT portfolio management.”
  • “Services we expose to our customers must be packed into high level bundles that are meaningful to them, such as ‘Onboard new employee.’  That way, our customers can understand them, and participate with us in a service provider/consumer relationship, and make the appropriate service level trade-off decisions that meet their business needs.  This also will help drive appropriate customer behaviors as responsible service consumers”

Think about the unwritten rules around IT portfolio management at your company.  Poll you business executives – what do they believe these are?  What behaviors do these unwritten rules drive?  Are they the behaviors your stockholders would want for long term value generation?  If not, how might you go about changing these unwritten rules?

IT Service Management vs. IT Product Management


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In an earlier post, I discussed the differences between and relationships among Project, Program and Portfolio management – this continues to be a popular post.  Today I’d like to explore the differences between IT Product Management and IT Service Management as they pertain to IT and to business-IT maturity.  This thread is inspired in part by my colleague Roy Youngman’s post on Program Management and SOA and also addressed an issue that comes up from time-to-time in my client conversations.

Product management is best thought of as a marketing discipline.  Some people consider Proctor & Gamble as pioneers with this discipline.  Product Managers own the responsibility for managing the lifetime value (costs and revenues) of a given product or product line.  They try to gain a deep understanding of the market for their product, and of how customers use that product.  They make decisions on when to upgrade a product, what should be in the upgrade, and so on.  They work closely with engineers, product specialists and developers, but are the ultimate arbiters of how a product evolves over time.

In the world of the IT organization, it is important to distinguish between product and service.  In his excellent book, “The Invisible Touch: The Four Keys to Modern Marketing” author Harry Beckwith argues that:

  • Products are made; services are delivered.  Products are used; services are experienced.
  • Products possess physical characteristics we can evaluate before we buy; services do not even exist before we buy them.
  • Products are impersonal; services are personal.  A service relationship touches our essence and reveals the people involved: provider and customer.

With this distinction, I think it becomes clear that most IT organizations deliver services rather than products – often procuring products from the marketplace (e.g., hardware, software packages) then wrapping them in services (support, installation, configuration, etc.) that are delivered and experienced by customers/clients.  This distinction is not moot.  It explains why frameworks such as ITIL talk to service management at length, but are silent on product management.   Many of the concepts in ITIL are drawn from leading product management practice, but are oriented towards services.

This also highlights the importance of the experience that IT customers feel when they interact with IT services – for a thorough treatment of this topic, check my colleague Frank Capek’s blog Customer Innovations.   As Business-IT Maturity increases, the overall customer experience with IT services improves, and improving this customer experience is an important aspect of driving up maturity.

However, some IT organizations also deliver pure products to end customers, and in those cases they need to also understand product management.  In some cases, the IT products are embedded in, or have embedded in them the products or services of the business.  For example, a medical devices manufacturer might embed analysis tools in a line of diagnostic machines.  It is likely that the business will have a Product Management function, and IT must work closely with them.  In other cases, IT will own the Product Management role, and must become masters of leading product management practice.