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Straight from the Top

Oct 4, 2007

Ken Turbitt,Sharon Taylor

Warranty is the assurance that the utility will perform at an expected level. An online order-entry utility, for example, may warrant in/out of stock and delivery time. Some services, such as online order entry, are consumed by external customers. Others, such as health plan enrollment, are consumed by internal customers.

The new ITIL guidelines re-categorize asset information defined in v2 under either the utility or warranty category. Utility and warranty act upon each other to create asset value. Assets have a direct impact on business value because they produce something of value for the business. As a result, you can weight the value of service assets based on business impact and use this weighting to prioritize actions according to the business value of the service assets involved.

Metrics Demonstrate Value

v3 expands the definition of “return” to include such key indicators as higher customer and employee satisfaction. The new framework helps you quantify, measure, and optimize both return-on-investment (ROI) and return-on-value (ROV). The v3 Service Strategy book provides guidelines for calculating ROI and ROV for a particular business context, enabling you to understand what these metrics cover and what they do not cover. It also assists in determining what generates value and how the definition of value must be accepted by both IT and business managers.

According to v3, you can evaluate the ROV of a project in eight key dimensions: competitive, financial, functional, process, relationship, strategic, technical, and/or usage values. You can develop a comprehensive picture of value using these appropriate key metrics to communicate the ROV of any projects you are championing. The v3 Service Design book guides you in determining the mechanics for measuring ROI and ROV, providing insight into:

  • What to measure;
  • How to measure it;
  • Which metrics to use; and
  • How to use the measurements to demonstrate achievement.
  • The bottom line is that v3 differs substantially from v2. While many of the changes are minor tweaks, others represent major advances in IT management. The good news is that all of your efforts in implementing v2 apply to the v3 environment. Moreover, the exciting changes in v3 will enable your enterprise to take full advantage of its investment in IT to make the business more innovative and successful.

    Sharon Taylor, president of the Aspect Group, is the chief architect and chief examiner for ITIL, the author of ITSM books, and regular columnist for a variety of IT management publication. Taylor also chairs the itSMF International Publications Executive Committee and is president of the North American Institute of Certified Service Management Professionals.

    Ken Turbitt, global best practice director at BMC, assists corporations in aligning with the best practices for IT. Turbitt was involved in v3 quality reviews, providing input to some of the authors.