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The Business of Service Management
By Mitch Kenfield, Principal, CIO Advisory Practice, KPMG US
Straightforward, fast and uncomplicated are not the words that usually come to mind when the IT organization prepares to deploy new technology. While IT has become more innovative, implementing enterprise software has become more challenging—from managing a complex hybrid cloud environment to greater scrutiny of the value derived from the technology. To meet these challenges, IT functions need to expand beyond traditional IT Service Management (ITSM) and focus their resources on strategies that advance the full business of IT. These include, intelligent automation, predictive analytics, service portfolio management, cyber security, governance and compliance.
Transforming the IT function and implementing cloud solutions that deliver business value in months, rather than years, requires a substantial set of core capabilities— including product innovation, agile service delivery, cost optimization, data security and compliance, customer support, and service automation. Unfortunately, these areas are often siloed, under-emphasized, or simply immature.
The challenge we see is that while the technologies themselves have improved, there has been little to no innovation in the way these technologies are implemented. The industry— customers and service providers alike—is still using old approaches of implementation that were prevalent in the client/server heyday. The result? Too much customization, too long to get to production and a higher total cost of ownership.
The IT organization needs to expedite its core ITSM implementation process and get to production quickly by leveraging tried and tested out-of-the box solutions that accelerate results. Then, time and resources can be focused on innovation and strategic initiatives that drive business value to the enterprise. This is the “Powered Enterprise IT” approach at KPMG, which uses an 80/20 “out-of-the-box” implementation strategy, workflows, and standardized models and tools to realize agility and value much faster than a traditional build and run approach.
If you think of technology like any business, you have to forecast what products your customers will need, understand their value, get them out faster, provide exceptional support and product maintenance, and then refresh it all over again. It’s an endless cycle and expectations are faster, so IT capabilities need to be faster, more agile and more integrated.
The Powered Enterprise IT approach is based on the idea that the six core capabilities mentioned above apply to all organizations, and most of the details shouldn’t be argued over. Instead, organizations should look to leverage leading practices and establish a “Center of Excellence” for governance, so the organization can focus transformation efforts on its own unique needs—as well as on connecting the dots. Our firm’s view of Powered Enterprise IT is that these areas cannot be compartmentalized. They must be integrated and connected to truly drive the business.
For example, we recently completed a large business transformation for a client in the global hospitality industry, which initially focused on one of the six core capabilities—customer support, including ITSM. Eight functional areas within this capability were targeted as part of the initial transformation, within six months. In the next phase, the work began to expand to the other five areas. The premise is not to accelerate deployment, but to accelerate transformation.
The Biggest IT Challenges and Catalysts
Transforming IT creates challenges for all organizations, since legacy workflows and overly customized and configured environments are common and running IT as a business tends not to be well-understood. There are often many homegrown mentalities about how to run the IT business. For example, the organization may have implemented new technologies, but it did not transform the way it does business and, therefore, has not accelerated. It’s like going out to lease a new car with a ton of new features but not driving any differently. Some of the areas organizations struggle with are in the “protected” area of cybersecurity, governance and compliance, which also tend to be a catalyst that sparks the realization the organization has to change. If the organization cannot keep track of what it has and doesn’t understand the relationships between all of their services across different areas, the ability to mitigate risk and respond when a threat is identified will be suspect from the start.
The organization may already have invested a great deal in traditional customer support and ITSM, but those who have overly configured systems may find themselves holding back other opportunities to expand and improve corporate services across areas such as finance, HR and procurement. These capabilities don’t live in a vacuum. Rather, they live together and need to mature together for the full effectiveness across the board.
If you think of technology like any business, you have to forecast what products your customers will need, understand their value, get them out faster, provide exceptional support and product maintenance, and then refresh it all over again
From a technology perspective, the business of IT requires transformation across people, process and technology. On the technology side, there needs to be a core system that can help the organization transform via an out-of-the-box approach, such as Powered Enterprise IT. For KPMG, this technology is through Service Now, but there are other technologies that can add additional value and advance business goals.
Most important, this core technology and the process of predicting and controlling its architecture needs to be seen as critical to the business. The CIO of a large U.S. bank recently acknowledged that this system for IT will run an aspect of the business, just like the core HCM (human capital management) runs the HR business or the ERP runs the finance business.
This platform will run your technology business and needs to be treated as a mission-critical system. In most cases, it hasn’t been done in the past and you can now see the impacts. This is a challenge all CIOs clients must overcome in order to keep up with the pace of change.