The Elephant in the ITIL Adoption Living Room?

At the Annual itSMF UK Conference on 9-10 November, I attended a presentation from PA Consulting called ‘Re-energising ITIL – what to do after the project has gone’. I listened to the presenters with interest but couldn’t help thinking more deeply on a theory I’ve had for a while: that organisations can’t, or won’t, continue to adopt ITIL after the project-employed third parties have left.

Interestingly, the thinking on what Ovum terms ‘internal ITIL inertia’ came about not from the fact that so many organisations say they ‘do’ ITIL but in reality only ‘do’ a small number of the processes, but rather from vendors finding traction in selling additional functionality (modules) as part of the upgrade process. The hypothesis is that many organisations are buying into these additional modules and associated services because they hadn’t got any further along the ITIL journey on their own and just don’t have the time and resources to continue with ITIL adoption after the initial project once the vendors and consultants have left, with the situation relevant to both ITIL v2 and v3 adoption scenarios.

While the PA Consulting presentation was valuable it didn’t really touch on or acknowledge this hypothesis. The re-energising activities suggested were sensible but didn’t consider the possibility that an organisation would have neither the impetus nor the momentum to continue to push its ITIL adoption forward on its own. Ovum, however, considers this to be an extremely important issue that continues to be conveniently ‘ignored’ by the itSMF, IT vendors, and ITIL-adopting organisations, with a ‘build it and they will come’ mentality that fails an organisation post-project.

After the presentation, PA, some other attendees, and I discussed potential causes that included: ‘ITIL snow blindness’, that project closure is deemed to equate to ITIL adoption, that the newly adopted ITIL processes max out the IT function, and many others. Ultimately, however, Ovum believes it is because IT functions are simply organisationally incapable of pushing ‘ITIL Phase 2’ forward by themselves, whether because of a lack of internal resources, or the need for external vindication of the need for change (and assistance in the setting of direction and delivery), that IT just cannot stop the fire-fighting to step back, or a raft of other possible reasons. It is also naïve to assume that the ITIL Continual Service Improvement (CSI) process is actively being used by organisations to take forward their adoption of ITIL after the initial project.

Many people, including IT analysts, offer advice as to why ITIL projects fail but this is almost always with respect to potential barriers to the success of the initial project rather than the activities beyond. It raises a lot of questions. How should, and can, organisations ensure that ITIL continues to grow post-project? Having a second project seems sensible but so many organisations are sitting there thinking they have ‘done ITIL’, so why would they need another project? How do we fix this mindset?

Ovum believes that the oft-quoted ‘ITIL is a journey’ mantra, while sexy, is something that is perhaps too difficult for organisations to accomplish themselves. Something like ‘ITIL adoption is a series of externally supported change projects that cumulatively improve IT and business operation and culture’ would be a more accurate and effective way to describe it.

Many will say ‘just adopt CSI early’ but Ovum does not see this happening. Ovum would prefer that collective time and resources be spent understanding the generic causes of and potential solutions to this ‘internal ITIL inertia’ for the benefit of all.

Originally published on www.ovumkc.com

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What’s Holding up ‘True’ IT Financial Management?

As 2009 draws to a close, one cannot help think that it has been a year of ‘what should have been’ for the IT Infrastructure Library (ITIL) discipline of IT financial management (and in many respects for its ITIL v3 Service Strategy sibling Service Portfolio Management). This is not only an analyst-observed opinion, IT Service Management (ITSM) tool vendors are also reporting reluctance on the part of customers to invest in this ITIL discipline at what should be the ideal time to increase the level of IT financial control.

The downturn in the economy has impacted us all in many ways and IT operations are no exception. The financial crisis has not only affected what IT has had to spend on business-as-usual activities, but has also started to increase the focus on what IT costs and what it ultimately delivers to the organisation. Ovum has no doubt that in 2010 CIOs will continue to be faced with many of the same challenges that dogged them in 2009: reducing IT costs and wastage, providing IT governance-mandated visibility and assurance, and demonstrating business value and IT’s level of business alignment or integration.

Ovum appreciates that for some organisations, IT financial management is not an issue, particularly if the IT function is subsumed within the finance function and is therefore subject to greater financial scrutiny because of its organisational position. For others, however, the art (or science) of finance is still a foreign language, with IT people not really ‘understanding’ finance in the same way that finance people often don’t understand HR, or HR people don’t understand marketing. Most, if not all, IT organisations budget (even if it is only ‘last year plus or minus x%’) and account for IT expenditure, but how many understand IT service costing, ‘getting under the skin’ of IT services to determine the resources they consume and how cost drivers impact the overall cost of service provision?

Taking a step back from IT, the parent company would never survive without an appreciation of the cost of products and services including the cost drivers, the fixed and variable costs, direct and indirect costs, margins, and supply and demand (yes, it is a foreign language). So why should IT, which has long espoused the idea of running itself like a business, be any different, particularly when the days of the ‘internal IT monopoly’ are long gone?

The earliest barrier to IT financial management (other than being oblivious of, or uneducated in, the need to do it) was the enabling technology. However, in recent years most ITSM vendors have added or beefed up existing products in this area. So what’s holding up the deeper adoption of this long-standing ITIL discipline?

In Ovum’s opinion, a common barrier is the lack of understanding of finance as a discipline within IT because of both the ‘language’ issues and the comprehension of the ‘detail’ of accounting practices in a larger sense. An IT function might be fortunate enough to have a financially gifted team member, but it is more likely to need to embed a finance person within the team or utilise a finance person with a good grasp of IT operations within the finance function. Either way, it is imperative that IT and finance work hand-in-hand to address the issue of IT service costing.

Beyond this, however, Ovum considers there to be a reticence within IT to start to unearth the true costs of IT service provision. For some services the cost of provision will be seen as disproportionate to the business’s perceived value of what they deliver in terms of business value. However, as with most changes, there will be pain en route to the desired future state. ITSM vendors are reporting that the US is seeing a rise in corporate demand for IT chargeback capabilities and the required understanding of what IT services cost, so how long until this trend is replicated in Europe? In Ovum’s opinion, it is often better to provide answers, however embarrassing they might be, before others start to ask awkward questions.

Originally published on www.ovumkc.com