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Making Sure the IT Business Equation Adds Up

Today, it's more important than ever IT costs be on target with business value. So, how do you keep the servers running, align with business needs and ensure that business value takes center stage? Our Datamation writer takes a look at how to make it all happen.
Dec 22, 2003

Michael McGaughey

The market has not been good to IT during the last few years.

Technology staffs have been thinned to the point of breaking. Support for current technology is spotty. Outdated technology is being held together with baling wire and duct tape.

And on top of all of that, the atmosphere has changed. IT shops find themselves doing less planning, designing and controlling, and more scraping around to fight fires, keep the lights on and survive.

But IT has not been let off the hook for the quality and delivery of IT services.

In fact, IT is being asked to do more. Just do it with less. In a recent CIO Magazine quick poll regarding demand for IT, 78 percent of respondents said that requests were increasing.

The recent economic news tells us that the sun is rising. But it is rising on a nervous, albeit smarter market.

The mission of IT has become clearer: the intentional management of business value. And the key enabler of this mission is alignment. The point is that the cost of IT must be clearly aligned with the return of value to the business. That means IT must go beyond the traditional reporting of system availability and performance.

In a 2002 Gartner Inc. survey, the top three priorities of IT executives pointed to the need for a stronger alignment between IT and the business. Not surprisingly, Gartner has led the charge with its call for Business Service Management -- a concept that highlights the need to align the cost of IT with the realization and management of business value.

While the vision is certainly promising, the concept is still immature. In fact, it leaves out the most significant aspects of real-world IT.

To date, the model offers no guidance for the management of the day-to-day operations of IT, where viruses, blue screens, crashes, code hangs, hardware failures, and network congestions have to be handled. And those kind of day-to-day issues impact the cost and business value of IT.

So, how can IT define a model which ensures that business value takes center stage, and which offers a framework for managing IT operations and infrastructure to that business value?

The answer may lie in combining the operability of ITIL's IT Service Management (ITSM) framework with the vision of Gartner's Business Service Management (BSM) model.

The BSM model articulates the requirement for defining the success and performance of IT services in terms of business value, such as revenue, cost, risk management, market share, business processes and products. The ITSM framework offers best practices for the day-to-day world of IT: the key operational processes which ensure the integrity, quality and delivery of IT services and the underlying infrastructure IT services depend on.

The ITSM framework includes processes for managing changes and releases, controlling configuration data, managing the resolution of service incidents and problems, defining and monitoring services and service performance, the control of IT cost and charging models, and the proactive planning and management of service availability and capacity.

This new combined approach offers IT the best of two industry-recognized models. It allows for the end-to-end alignment of business value and IT cost (called for by BSM) and it accounts for the best-practice management of day-to-day IT operations (called for by ITSM). It also creates a new, more mature framework for the management of IT that focuses on four key functions: infrastructure, operations, services and business.

In this new framework, the business function focuses on value and partnership. It ensures that IT is accountable to the enterprise for the delivery of business value. And the focus of the service function is clarity and performance. It manages the definition and delivery of distinct services that IT offers to meet business requirements for business value.

Thirdly, the operations function focuses on efficiency and control. It provides the framework for managing the day-to-day operations of IT for maximum quality and effectiveness. And lastly, the focus of the infrastructure function is quality and reliability. It allows IT to design, deploy and manage component assets to support operations and service delivery.

The framework provided by this new combined approach also highlights that the value proposition for IT can be articulated in terms of three points of translation between the functions.

The first point of translation is between the business and service functions. This ensures that the organization translates intentional and planned business value into distinct and measurable IT services. The second point is between the service and operations functions. This serves to translate the design and management of IT services into the management of detailed and robust IT operational processes required to support service delivery. The final point is between the operations and infrastructure functions. This allows the organization to translate IT operations into the specific infrastructure required to support operations.

This new framework ensures that IT and organizational concerns are put into proper order. It points out that IT services are intended to deliver business value. It highlights that IT operations are designed and managed to support the delivery of IT services. And it makes clear that IT infrastructure exists to enable the continued delivery of IT service and the effective management of IT operations.

Combining Gartner's Business Service Management vision with ITIL's IT Service Management model offers the best opportunity to clearly align IT with the return of value to the business. By defining a framework that combines the two, organizations can make the value and cost of IT part of the overall business management equation.

Michael McGaughey serves as the Service Management Framework Architect for TXU, the leading energy retailer in Texas. With 15 years of experience under his belt, he is responsible at TXU for defining the IT Service Management Framework and other business process based frameworks for IT business management.

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