itSMF Indy LIG: Making Business & IT alignment a reality!

Published on Friday 28 February 2014 by in News with no comments

At the inaugural meeting of the itSMF LIG in Indianapolis Doug Tedder ex-president of itSMF USA facilitated a Business & IT alignment (BITA) workshop using the business simulation Grab@Pizza to help delegates identify Critical success and fail factors and pragmatic take-away for making BITA a reality.

Business & IT alignment…or integration…or fusion, or whatever you want to call it is becoming increasingly critical as the explosive growth of, and dependency upon IT increases. For more than 10 years this has been a top CIO concern. Despite the enormous amount of investment and training in frameworks such as ITIL, Cobit, ISO2000 we still consistently fail to achieve this ‘alignment’.

Why this session and theme? Doug explains: ‘Business and IT alignment is a very relevant and necessary theme. Organizations continue to struggle. This instrument (simulation game) is a great way of allowing delegates to come together to share experiences, to test and practice their theory in a safe environment and discover new, pragmatic actions they can take away. In the simulation delegates experience both Business and IT roles, IT from strategy through to operations – allowing you to explore BITA from all perspectives’.

Paul Wilkinson of GamingWorks helped facilitate the session. Explaining that ABC (Attitude, Behavior and Culture) is the number 1 critical success factor. In world-wide workshops using the ABC cards this card scores number 1 in the business and IT alignment exercises.

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Business & IT is like an old married couple, they moan about each other and put up with their strained relationship. However there is one significant difference than with a marriage. In this situation only one of the parties can outsource the other!!!…and with the growing dependency upon IT and the impact it has on the business, business executives are critically looking at the relationship – If IT wants to improve the relationship it must find aa way to bring Business and IT together and have somebody perform the marriage guidance counselor role – perhaps this is the ‘Business Relationship Management’ role in ITIL’?

 

 

 

 

Grab@Pizza is a dynamic, business simulation in which IT and preferably Business managers can come together to explore Business & IT alignment. In this simulation a team of players plays the business and IT management team of an international Pizza corporation Grab@Pizza. The business wants to realize an ambitious set of business targets for revenue growth and customer loyalty through the successful adoption and deployment of IT.

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In the simulation IT must also manage and maintain the Infrastructure to ensure that it poses no risk to business operations and continuity. The game simulates a year in the life of the Grab@Pizza organization. The first fictive 6 months were dramatic in terms of IT and business performance. A Transformation is required. The delegates must work as one team to prioritize their IT investments and IT project portfolio for the remaining 6 months of the year. Failing to align business and IT will cause wasted costs, lost business opportunities and revenue, lose customers and damage the company reputation. Between game rounds the team will apply CSI (Continual Service Improvement) and assess their alignment capability, agreeing executing improvements. At the end of the session the team will discuss and explore success and fail factors they experienced and identify actions they can take away and apply into their own organizations.

What happened at Indianapolis?

In the first month of the simulation the business strategic initiatives aimed at realizing revenue growth were not realized. Instead of $19 million profit the business had made only $2 million. $17 million was lost because of IT outages and changes not being realized. It was clear that the team had displayed one of the top ABC worst practice cards chosen world-wide.  ‘IT has too little understanding of business impact and priority’. They were too internally focused, processes were not aligned – causing wastage and additional support costs and the business was not taking its role in governing IT decision making properly. All-in-all the team had created exactly the reason we were here today. Poor business and IT alignment. The CEO of Grab@Pizza was not amused!

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What did we experience and discover?

The delegates, the majority of who were somehow involved with using or deploying ITIL solutions were asked ‘What is the definition of a service?’ – because this sums up what business and IT alignment is all about and demonstrates why we keep failing. Only 1 person knew. We looked at the definition.

‘A means of delivering Value to Customers in terms of Outcomes they want to achieve without the ownership of specific Costs and Risks’. (VOCR)

Did anybody Understand what I wanted as CEO in terms of Value, Outcomes, Costs, Risks? Did anybody use this in prioritizing? In making investments? In making decisions“? No! was the answer.

Is it any wonder we struggle with alignment! The team then explored success and fail factors for making Business & IT alignment work.

Which ITIL capabilities can help both the business & IT use V,O,C,R as a common language?
BRM and Service Portfolio management was one of the conclusions. However only two of the delegates were actually exploring these ITIL areas in reality, yet they all recognized the symptoms discovered in the simulation and the need to address them.

All IT employees must know the impact of what they do on V,O,C,R. They must understand business cycle times or ‘PBA – Patterns of Business Activity’ and the impact on incidents on loss of productivity, revenue, business strategic initiatives.

Service Level Management was seen as a critical role not just for making and managing SLA’s but for helping IT understand these business drivers, the strategy, the impact. SLM must also represent and present IT interests and needs, helping business understand IT Risks. SLM must ensure that the Service operations understand the impact of outages.

The business must communicate longer term strategy and be actively involved in investment and decision making for changes. Which changes will be authorized because of business needs? which changes because of IT needs (e.g to prevent downtime, remove threats and risks because of weaknesses in IT). The business must help IT understand the impact of downtime in business terms.

somebody must know what is costs when IT functionality isn’t working….so why don’t we make that knowledge available?”

The Service Desk needs to look wider than just calls and call volumes. Service desk investments should not be simply based on historical data but also look to other processes such as ‘Capacity growth patterns and usage causing incidents’; ‘Changes implemented and the level of change testing’; ‘Changes from IT operations and Problem management that were NOT implemented’; ‘Business related changes across business applications that may cause growth in incidents’.

Problem management cannot work in isolation with Incident management, but must also work with capacity management. Which changes and activities has capacity management and IT ops initiated to remove incidents? which changes relating to problems and known errors will be or have been implemented and what is the impact on incident trends?.

Problem management changes were often ignored or swept aside. Problem management is a CRITICAL processs for managing business risks and must learn to communicate business cases in terms of VOCR for changes arising from problems and known errors. Problem management needs to be represented in the Change Advisory Board.

The Changes implemented and the change calendar were not aligned with agreed VOCR. IT Operations forced through a change in the admin systems which could have waited a month. But because nobody understood the Business cycle times wrong priorities and resource allocation was made.

Prioritizing changes is more than simply ‘who shouts the loudest’!”

IT must be proactive. Not simply investing in Service desk measures, training and technology to handle more incidents and faster resolution of incidents but take measures to REDUCE and REMOVE incidents and RISKS to business. IT must demonstrate these capabilities and the relating business impact (on Outcomes e.g. increased business productivity, improved business revenue and growth, reduced costs and wastage).

The IT manager in the game was running around from SILO to SILO and process manager to process manager because processes were not aligned and clear metrics and reporting had not been agreed. Metrics, measures and reports that enabled ‘decision making’, metrics and measures relating to VOCR – not simply call volumes and repair times, changes implemented and on the calendar.

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The IT manager in the game literally hung up the telephone on the supplier who wanted to talk about emerging technologies, rather than understanding the emerging technologies in relation to the business strategy and what the business was trying to achieve. The IT manager needed to make a business case for emerging technologies, for example a business case that related to business cost savings and what these would be. In the game the IT manager could have helped save business costs by $2 million per month.

 

 

 

IT financial management needed to help IT process managers such as Problem, Change and Capacity understand how to make business cases for the investments in changes – helping IT think more in terms of return on investment.

Bits, Bytes and Bandwidth have to relate to bottom line bucks”

What next?

As Tricia Cawthon, President and Wilbur McVay, President Elect of the itSMF USA Indianapolis Lig explained, the LIG focuses on core values ‘Connect. Learn. Grow’. The session had connected the delegates from different industries, the simulation had helped them share, experience and learn, gain new insights and create new knowledge, but the important thing is how would they use this to help them and their organizations grow?

At the end of the session we explored discoveries to take away: ‘What did you discover or apply today that you will now take away and do differently in your organization’?

  • Demonstrate that IT is stopping incidents from happening.
  • Use and communicate VOCR – make sure people understand BUSINESS impact of what we do.
  • Focus on RISK and RISK reduction to gain more business trust and credibility – invest more in Problem management and demonstrate its value and impact.
  • Improve communication between business and IT through using BRM and Portfolio.
  • management with VOCR as a common language.
  • Help teams Understand PBA and associated Costs of outages, articulate these more in what we do, why we do, why we NEED to do. Use SLM and BRM to enable and communicate this.
  • Ensure IT and Business understand the business strategy – not just short term. Ensure IT can demonstrate how its strategy will support and enable business strategy. Ensure IT reports are related to this.
  • Ensure that VOCR is embedded in CAB decision making.
  • Make right data available to right people at the right time to enable decision making. Ensuring internal IT processes agree and deliver this.
  • Relate what we do to the strategic objectives. Understand and show how we all contribute towards this.
  • Ensure SLM is representing both IT and the Business.
  • Start investigating and promoting service portfolio management.
  • Need to promote IT governance. The need to make implicit responsibilities and accountabilities explicit in all areas of decision making.

Was it valuable LIG event?

“This was the best IT training I’ve ever participated in. I had some real revelations about the importance of IT / business alignment and how to put IT Service Management into the proper focus.
Brian Quick Director – IT Infrastructure and Security

The question now is ‘Will delegates take the ownership and responsibility to make change happen in their organizations to bring Business & IT alignment a step closer to reality. Or will they succumb to one of the top ABC resistance cards : ‘Not my responsibility’.

The itSMF will invite the delegates back to share their journey and their experiences if they apply these improvements. Helping members learn from each other and sharing new best practices.

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