Strategic Fit of It Service Management

IBM Academy of Technology Academy TechNotes ATN Volume 2, Number 9, 2011 Strategic fit of IT Service Management iven the crucial role that IT (Information Technology) plays in businesses today, IT departments have a significant responsibility to ensure that its value is optimized. IT optimization can be obtained through the adoption of the IT Service Management proposition by IT operations. G Pietro Della Peruta However, IT Service Management concepts and tools are complex changes to introduce to an organization. To achieve the right fit of such concepts and tools it is important that the introduction is congruent with the company’s operating mode. The Company Operating Mode concept was introduced in the seminal work of Nolan and McFarlan on the â€Å"IT Strategic Impact Grid† (Harvard Business Review, October 2005, Information Technology and the Board of DirecTurnaround mode is characStrategic Dependence: Current value of IT on tors). According to the IT terized by the business havbusiness Strategic Impact Grid, ing a low strategic dependHigh companies operate in Low ence on IT which has high four possible modes: strategic impact. Firms in Turnaround Strategic High support, turnaround, facturnaround mode expect a IT Governance Focus IT Governance tory, and strategic. These new system to change their on system s and Governance modes determine the on business business. New systems promapplications Strategic Im pact: services Scope of IT current value IT has for ise major process optimizaFuture value of IT on operations the business (i. e. strategic business tion and service transformaSupport Factory Managem ent dependency) and the tion as well as cost reducBusiness Applications Focus future value IT has for the tion. IT operations are charservice and system m anagem ent m anagem ent business (i. e. strategic acterized by a great attenLow impact). To optimize the tion to efficiency, and they Legenda IT Managem ent Mode value of IT, for each are mostly process driven. Business Focus System Focus Com pany Operating Mode Company Operating Mode, The IT operations focus is on Focus of IT a well-defined level of IT the systems with attention to operations service management (IT IT governance processes (i. e. service management mode) needs to be implemented ITIL). y the IT operation. The IT service management mode is Strategic mode is characterized by IT having high stratecharacterized by the focus of IT operation (i. e. system gic dependence and high strategic impact on the busifocus or business focus) and by the scope of IT operations ness. Firms in this mode require dependable systems and (i. e. management focus or governance focus). When a must exploit emerging technologies to hold their comcompanyâ €™s currently adopted IT management mode petitive position. IT operations are seeking effectiveness does not match the operating mode the company is in, and efficiency. IT operations focus is on managing busithe IT department must modify the way IT services are ness service from a business point of view (effectiveness) managed in order to optimize the value of IT. as well as using a process driven approach to manage Support Mode is characterized by IT having low strategic the IT (efficiency). This means IT governance and business impact on the business which has a low strategic deservice focus. endency on IT. Companies in support mode are least dependent on IT. In this mode systems operate mostly in About the Author: Pietro della Peruta is an Executive IT Archimaintenance mode. Service interruption might not protect, IBM Software Group, a member of the IBM Academy of duce serious consequences. For a company in support Technology, and has 20 years of experience in systems mode, systems and applications are monitored and some availability and p erformance management. est practices exist for recovery from performance and availability problems. IT operations are focused on systems and applications resources, and the scope of operations is management.  © Copyright IBM Corporation 2011 Factory mode is characterized by the business having high strategic dependence on IT which has low strategic impact. Companies in factory mode are more dependent on information technology. If systems fail for a minute or more, there is an immediate loss of business. Increased response time has erious consequences for both internal and external users. IT management in the factory mode is characterized by a high level of effectiveness via tailored control of business service quality. KPIs (key performance indicators) are defined at business level more than at IT level. IT operations have a business focus but still a management scope. In factory mode, the focus of IT operations is more on managing the business services than on the systems or the applications as single entities. For more information please visit the Academy web site.