BSM Review 2011 BSM Maturity Benchmark Study
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BSM Review 2011 BSM Maturity Benchmark Study

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BSMReview, a Business Service Management community of business and IT professionals, conducted a survey to measure the maturity of BSM initiatives industry-wide. The survey provides a 2011......

BSMReview, a Business Service Management community of business and IT professionals, conducted a survey to measure the maturity of BSM initiatives industry-wide. The survey provides a 2011 benchmark for the adoption, perceptions and expectations of Business Service Management. The survey results validate the industry definition of Business Service Management, quantify its value to the organization and provide a means for organizations to assess the level of IT and business alignment based on market and business maturity.

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  • 1. 2011 BSM MATURITYBENCHMARK STUDYCopyright © 2011, BSMReview.com
  • 2. BSM Benchmark Survey3 BSMReview, a Business Service Management community of business and IT professionals, conducted a survey to measure the maturity of BSM initiatives industry-wide. The survey provides a 2011 benchmark for the adoption, perceptions and expectations of Business Service Management. The survey results validate the industry definition of Business Service Management, quantify its value to the organization and provide a means for organizations to assess the level of IT and business alignment based on market and business maturity. Readers will learn: Survey Sponsors  How other companies are assessing the value of BSM.  How your BSM maturity and initiatives compare to other  What others are doing to better align business with IT.  How others are measuring BSM effectiveness. The survey was conducted in the second quarter of 2011. With 157 completed responses the survey represents a good cross section of company size, industry and views from both IT and business personnel.
  • 3. What people are saying?4“IT agility is dependent upon extreme collaboration and transparency. Toolsand process cant get in the way of getting IT service management work Matt Frenchdone. IT staff must be able to resolve known business problems with limited Marketing DirectorIT resources. For ServiceNow, this BSM Review maturity report highlights the Service-Now.comdifferent kinds of business demands on IT and the resulting need for acollaborative platform that can bridge the gap between IT and business.” “As is typical for major transformations such as BSM, progress never Audrey Rasmussen seems fast enough and accurately gauging progress is a continual Partner challenge. This BSM Maturity benchmark study provides a view of the Ptak/Noel current “state of BSM”, giving BSM practitioners perspectives on their own “state of BSM” and how it compares with other BSM initiatives, as well as a benchmark to measure their progress.”
  • 4. What people are saying?5"The survey results captured in this BSMReview report confirms theimportance of IT Service Management adoption as a means of Troy DuMoulinfocusing IT strategy on business outcomes and objectives. Specific AVP Strategic Solutionsfindings reflecting that Business Service Metrics are best improved by Pink Elephantthe maturity of IT Management processes and ITIL adoption doesindeed point to an increased generation.” “Today’s business initiatives cannot relegate IT as an afterthought. At Vance Brown Cherwell, we believe that technology is needed for every aspect of CEO and Chairman business. The results of BSMreview’s 2011 survey confirms this need in Cherwell Software the business context of “RITE” … meaning that IT decisions and deliverables must be Relevant, Integrated, Timely and Efficient if IT is to successfully align with their business customers.”
  • 5. Survey Demographics 6Response Title Industry Sector Company Size 25% 17% 16% 20% 16% 43% 20% 15% 23% 47% 10% 18% Executive (CEO, CIO, VP) 5% Director/Manager 1 to 99 0% 99 to 999 IT Operations 1000 - 4999 IT Consultants 5000+
  • 6. About the Survey Demographics 7 The BSMReview survey was able to capture a reasonable breadth and size of survey demographics. From anBSMReview Insight industry perspective, there were significant participation from the financial services and technology industry segments, as well as ―cross industry‖ which tended to be IT consultants providing services to multiple types of companies. The survey also captured a reasonable response from manufacturing, health care, government and education enterprises. There was only a moderate response from retail, energy and telecom industries. However, survey responses demonstrated an unexpected consistency re: IT perceptions by both IT and the business communities that seemed to be independent of type of industry …thus confirming the horizontal demands for IT deliverables. The more interesting survey results surfaced in the role (executive, manager, staff or consultants) or function (IT or business) demographics and will be highlighted when and where appropriate. If there were noteworthy differences in responses to specific questions, it surfaced primarily in the role or function played within the organization. Another interesting result was the difficulty in determining the impact of size upon the responses. We expected there to be greater harmony between IT and business perspectives within smaller companies and less within larger enterprises. However, size seemed to have minimal impact upon the variation of opinions regarding successful alignment between IT and their business customers, as well as in the perception of business and IT maturity.
  • 7. Table of Contents8 Take Note  Executive Summary  BSM Maturity Assessment We identified survey summary data in the left  IT Investment Decisions sidebar with  Business/IT Culture ―Response”.  Service Level Management Conclusions and observations with  ITIL Adoption ―BSMReview Insight”.  Benchmark Conclusions  Final Recommendations
  • 8. Executive SummaryThis is the first benchmark study to assess BSM maturity industry-wide. Thestudy measures and compares IT and Business maturity, extracts independentoperational views based on department, role and titles and offers insightinto the current and future state of Business Service Management.
  • 9. Survey Highlights 10  Both Business and IT personnel agree on the high-level definition of Business Service Management, i.e. ITBSMReview Insight investments and capabilities are aligned with Business maturity and strategic goals.  However perceptions and reality are not what they seem:  Business personnel see IT as a Tactical, not operating as a strategic part of the business – operating at level 1 or 2 of the BSM maturity model  IT personnel see IT as Strategic, providing strategic business value to the business – operating at level 3 or 4 of the BSM Maturity Model  The 2011 Benchmark Study shows that businesses are maturing at a higher rate than IT and, as such, IT is struggling to keep pace with the business  There remains a significant ―information‖ gap between business and IT regarding how technology could, or should, be leveraged to support business growth and competitive differentiation  The good news is that the nearly half of enterprises have achieved pretty good alignment with their business counterparts and are meeting expectations  But, too many IT shops are in danger of being marginalized as the lack of investment in IT leads to less innovation and IT services that are inadequate to satisfy the longer term needs of the business
  • 10. A bit about the BSM Maturity Model11 BSM Maturity Model  Effective BSM (IT/Business alignment) Level IT Business Business Business alignment occurs when IT is operating Maturity Maturity Benefits Metric at a level that meets business 5 Pervasive Market Sustained Market imperatives Leadership Competitive Expansion  Maturity of IT Operations should move Advantage in a consistent pattern with Business 4 Optimized Competitive Product & Market Maturity Differentiation Service Penetration Leadership  An IT ―aligned‖ organization delivers the technology/services required for 3 Aligned Business Value Customer Profit customer focused business value that Acquisition & Maximization Retention ensures competitive differentiation 2 Predictive Secure & Cost Effective Revenue  The BSM Maturity Model can be Reliable Operations Focuses obtained by clicking here. Operations 1 Essential Business Technology Minimize IT Fundamentals Supporting Investment Business
  • 11. A Yardstick for Measuring BSM Maturity 12BSMReview Insight We derived the current state of Business Service Management by Leader Not Aligned Aligned Business Maturity evaluating survey responses along Strategic Business Strategic maturity continuum: Immature IT Innovative  Business Maturity - from sustaining market share to obtaining and holding the Aligned market leader position Not Aligned Sustain Utility Strategic IT  IT Maturity - from providing a Cost Efficient Immature Business low-cost utility infrastructure to delivering innovative technology for strategic advantage Utility Strategic IT Operational Maturity
  • 12. BSM Maturity – The Desired State 13BSMReview Insight The optimal or desired state of Business Service Management is when IT Leader operational maturity is aligned with the Not Aligned Aligned Business Maturity maturity of the business. Strategic Business Strategic  Good BSM alignment happens when Immature IT Innovative Business and IT are investing and operating at, or near, same level of maturity. Aligned Not Aligned Sustain  Poor BSM alignment occurs when one Utility Strategic IT or the other is operating at a higher Cost Efficient Immature Business or lower level of operational performance, creating costly inefficiencies and/or missed Utility Strategic opportunities. IT Operational Maturity
  • 13. 2011 Benchmark – The Current State 14BSMReview Insight 2011 Benchmark – Current Reality The degree of BSM alignment is greater Leader than we anticipated, but almost half of Not Aligned Aligned Business Maturity shops with immature IT are attempting to Strategic Business Strategic serve needs of more mature business Immature IT Innovative leadership. There were only a few cases where IT was Current Reality operating ahead of business maturity. Aligned Not Aligned Sustain The current reality is that IT is playing Utility Strategic IT catch-up with business maturity, and the fact Cost Efficient is that businesses are maturing at faster Immature Business rate than IT. The challenge for IT is to maximize the pace of change and demonstrate strategic value to the business. Utility Strategic IT Operational Maturity
  • 14. IT is at Risk at being Marginalized 15 As a result of disconnect between current and desired state, IT is at risk of being increasingly marginalized.BSMReview Insight Probably the biggest surprise was that a large majority of the businesses were perceived as having significant business maturity, particularly by the non-executive personnel. In spite of budget cutbacks, layoffs, loss of consumer buying power and increasing regulatory unknowns, these respondents feel that their companies are achieving their business goals and moving up the business maturity spectrum. While IT personnel see themselves continually moving up the ―IT maturity‖ spectrum, business personnel maintain in their responses that IT remains a tactical focus within their company, and are not operating as a strategic part of the business thrust. The survey highlights the dichotomy of business operating at an aggressive, mature ―business‖ level, while IT struggles at an immature level of response to the technology demands of their business counterparts. The danger in this conflict is that while IT is getting better and better at managing IT, they are in increasing danger of being permanently marginalized on the outskirts of “business” contribution. Interestingly, it was evident that the lower levels of IT operations are struggling to understand technology’s contribution within the bigger ―business‖ picture, yet were consistently demonstrating a more cynical perception of how technology was not being appropriately leveraged.
  • 15. BSM Maturity AssessmentIn this section we converge on the definition of BSM and assess both IT andBusiness maturity.
  • 16. What best describes your definition of Business Service Management? 17 The definition of Business ServiceResponse Management is gaining consensus, but BSM Definition Response there remains a need to better define BSM to achieve market clarity and expectations. BSM is measurable activity for aligning IT with business objectives 34.9%  2/3 or 66.7% defined BSM as a: BSM is a business-oriented approach to IT 31.8%  Business-oriented approach to IT operations and deliverables operations & deliverables  Measurable activity for aligning IT with BSM is a (mature) process oriented approach to IT Business objectives 17.1% service management  Rejected, but still existing in the industry:  Running IT as a business (11.6%) BSM focuses on "running IT as a business entity" 11.6%  Process approach to ITSM (17.1%)  Managing application performance (3.9%) BSM is managing and analyzing application 3.9% performance
  • 17. Increasing consensus that Business needs to drive definition of BSM 18 For almost a decade, the discipline of Business Service Management (BSM) has been largely focused onBSMReview Insight resolving the lack of strategic alignment between the business community and the IT organization. Vendors, standards bodies, user organizations, and consulting houses have all attempted to capture the promise of BSM — with notable success. Yet the existence of multiple definitions of BSM illustrates the current confusion surrounding this IT discipline. The statements which focused on the business driving the definition of acceptable IT service management were the predominant responses within the BSMReview survey:  35% - ―BSM is a measureable activity for aligning IT with business objectives‖ …note the emphasis on metrics focused on achievement of business goals  32% - ―BSM is a business-oriented approach to IT operations and deliverables‖ …note the focused approach coming from the business perspective and not IT’s Other definitions paled by comparison. Confining the BSM discussion to ITSM processes captured less than half of either of the above responses. Running IT as a business was less than one third of the above responses. Focusing BSM attention solely on application performance was one tenth of the above answers. This growing consistency in the expectations of BSM’s contribution to IT and business working more effectively together is a positive industry direction.
  • 18. What best describes your company’s business goals? 19Response Response Options Exec IT All groups tend to view their company’s business (Strongly agree or agree) View View goals as very mature - meaning the company has a unique competitive differentiation and is a market The company does only what is necessary to sustain the business 55% 30% leader. Business Maturity – Level 1  Strong agreement that their businesses are The company focuses on tactical operations that secure short-term value to stockholders and employees 55% 55% operating at levels 3 & 4 (mature businesses) Business Maturity – Level 2  Good agreement that their business are The company emphasizes strategic initiatives that operating at level 5 (market leader) maximize long-term profitability and business value 82% 80% Business Maturity - Level 3  Yet 55% of executives also feel that company is The company focuses on creating product and service only doing what is necessary to sustain business leadership for competitive differentiation 82% 80% Business Maturity - Level 4  Whereas IT staff and mid-level managers strongly disagree with this statement The company is recognized as the market leader and uses that unique competitive advantage to enter new 73% 67% markets Business Maturity - Level 5
  • 19. Are Company’s Really this Mature? 20 The consistency which all groups view the maturity of the business as ―very‖ mature was surprising. FewBSMReview Insight respondents felt that the primary business objective was to focus on ensuring the business was secure and reliable and delivering the short term value (profit) most prized by stockholders and employees. Yet almost 9 out of 10 respondents felt that their company was ―focused on creating product and service leadership for unique competitive differentiation‖ or ―emphasized strategic initiatives that maximize long-term profitability and business value through customer emphasis.‖ Even more surprising, 7 out of 10 identified their company as market leaders with a competitive advantage that could not be replicated and provided unique entrees into new markets. Given the state of the economy, the need to retrench, to ensure cost-effectiveness and still preserve revenue options, this strategic, mature state of the business was a welcomed finding. However, one interesting contradiction involved nearly 60% of executives and business respondents stating that the company was only doing what was necessary to sustain the business, which would negate unique competitive differentiation and market leadership. Even more interesting was the finding that nearly 70% of IT staff and mid-level managers completely disagreed with the ―only doing what was necessary‖ statement … implying a more correct understanding that you can’t have it both ways. A company cannot be constrained to doing only what was necessary to sustain the business, yet characterize that same business as a market leader with a unique competitive advantage that could not be replicated by any other business competitor. It was intriguing to find that the IT worker bees ―got‖ that contradiction and the executives and business respondents did not.
  • 20. What best describes your company’s view of Technology? 21 Large majority of employees view technology Response OptionsResponse Business IT View as critical to company’s success - yet IT feels (Strongly agree and agree) View much more can be done with technology to We use technology to create product and 84% 55% enhance competitiveness service leadership in our industry  Every role views contribution of technology in We leverage technology to focus on very positive way customer acquisition and retention 84% 75%  Healthy disagreement that technology is limited to performing basic business functions We use technology to ensure cost 91% 80% effective operations  Using technology as a unique competitive advantage was agreed to by business & Our technology provides us with a consultants (83% combined) unique, sustained competitive 83% 30% advantage  but disagreed by IT oriented roles (70%) We limit the use of technology to basic 42% 67% business functions
  • 21. How does your company recognize the benefit from technology?22 ― … is a key component to delivering quality with speed to market‖ ―… allows us to provide exceptional patient care‖ ―… enables top line revenue growth and margin improvement‖ ―… improved finding of Oil & Gas and the development of these assets‖ ―… reduced operational costs and customer satisfaction‖ ―We are a technology center …technology is our livelihood‖
  • 22. Conflicting Views of Technology Contribution 23 There was a strong, healthy majority of respondents that deemed technology as critical to the company’s success.BSMReview Insight However, there were significant differences between the business and IT people regarding the best or correct view of technology’s contribution. For example, 83% of business respondents agreed that technology provided the company ―with a unique, sustained competitive advantage‖ while only 30% of the IT respondents felt that way. A second example involved 84% of business agreeing that technology was used by their company ―to create product and service leadership in our industry‖ while only a slight majority (55%) of IT felt that way. Why would there be such a difference in their viewpoints? Yet, the percentages were swapped for the statement that the company ―limits the use of technology to basic business functions‖ with only 42% of business agreeing while a much larger percentage (67%) of IT expressed stronger agreement. Again, why this discrepancy between the two camps? Apparently business personnel grasps the impact technology has upon competitive advantage and product/service leadership where that perspective is only available to a smaller subset of the IT organization. However, the reverse disparity between business and IT regarding ―limiting technology to only basic functions‖ implies that IT has a better grasp on the opportunity that technology brings to the corporate objectives and nearly two-thirds of IT are responding that technology’s contribution to business value is mismanaged or misunderstood.
  • 23. IT Investment DecisionsIn this section we discuss how IT investment decisions are made and assess, towhat extent, those decisions are aligned with the business.
  • 24. What BEST describes how IT technology investment decisions are assessed and made within your organization? 25Response There tends to be a strong feeling IT investments are a collaborative effort, especially with top 38.6% management in the company.  Majority of Business, IT and Consultants 24.6% (Executives and Managers) felt that IT investment decisions were jointly sponsored by 14.0% 13.2% IT and Line-of-Business executives and that 7.9% CIO and CEO were working in tandem  However, IT Staff felt IT was making IT decisions based primarily on cost justification Sponsored Limited to Jointly CEO and CIO is solely by IT cost sponsored CIO are trusted to or sponsored solely by IT. justification by IT and working in make with our CFO LOB tandem independent executive decisions
  • 25. IT investment decisions, differing perspectives 26 Probably one of the most telling symptoms of IT/Business alignment involves how IT investment decisions areBSMReview Insight made and by whom. Identifying annual budgets for IT operations, approving IT projects, and maintaining adequate IT staff required to ―do‖ the job … all whisper the true agreement or disagreement between IT and their business customers. If IT projects are continually turned down and IT is expected to work miracles in keeping legacy systems performing while constantly investing in new, mission-critical applications without adequate funding, then there is no adequate IT/business alignment. In this case, there was generous agreement between all functions (business, IT, system consultants) that IT and Business were jointly making IT investment decisions and that the CIO and CEO were working toward common goals. The disparity surfaced in the roles that individuals played within the enterprise -- 82% of mid-level managers and 63% of executives (…healthy majorities) supported this perception of harmony in IT investment decisions. Yet only a minority (45%) of IT was able to support such claims with the same minority (45%) feeling that IT investment decisions were based primarily on cost justification. Again, the obvious conclusion is that IT staff is not getting the business insight or cooperative perspective that is shared at the management level and IT staff therefore cannot be expected to share in the apparent optimism of the management group. We conclude that this is a management communication issue that can easily be addressed.
  • 26. What are the top obstacles that your company faces in terms of aligning business and IT investments? 27Response Both IT and business see poor alignment due to the general lack of understanding of the Lack of budget and resources ―value of alignment‖. 50.9% applied to creating alignment between business and IT  The lack of understanding is rooted in Lack of business understanding of Ineffective Communication (47%) 53.5% the value of IT alignment  The lack of understanding is no doubt affecting the level of commitment Lack of IT understanding of the 43.0% value of business alignment through Budget/Resources applied to alignment (51%) Ineffective communication of business strategy to IT management 47.4% team
  • 27. BSM Immaturity Surfaces as an Obstacle 28 Certain obstacles that are frequently identified as causing a disconnect between IT and business were onlyBSMReview Insight selected by a small minority of the respondents. These include:  IT making budget/investment decisions in a vacuum (17%)  Business units making their own technology decisions (26%)  Business receiving weak support from IT executives/staff (17%) However, the survey responses clearly identified the ―lack of understanding‖ of the value of IT alignment by the business or the value of business alignment by IT. Almost half of all respondents identified ineffective communication of the business strategy to the IT management team as a primary cause of this lack of understanding. Just over half of all respondents also identified the ―lack of budget and resources‖ being applied to improving alignment between business and IT. Unfortunately implying that corporate decision makers were not recognizing the need to plan and invest in improving business/IT alignment.
  • 28. Considering how your company makes IT financial investment decisions, please indicate your level of agreement with the following statements. 29Response Strongly agree Agree Disagree Strongly disagree IT investment decision criteria is highly consistent with views expressed on company 5% 5% 7% goals – that business goals and IT investments 13% 15% 21% 23% are focused on Maturity Levels 3 and 4 36%  Significant disagreement (63%) that decisions 50% 47% are focused on cost containment – particularly by 62% 55% mid-level/staff and IT (68-78%) 42%  Significant agreement that decisions are based 25% 18% on revenue contribution (68%), profit margins & 5% 6% 12% 7% 5% customer relationships (67%) – particularly by Solely based Determined by Focused on Prioritized to Create unique business & consultants (88-96%) on cost revenue maximizing optimize technology containment contribution profits and market infrastructure and cost strengthening penetration for unfair containment customer competitive relationship advantage
  • 29. IT Investment Decisions - Quotes 30 Best CaseResponse ―IT investments are determined by added value, effectiveness and efficiency of the business‖ Typical Case ―Investments build a global infrastructure and product set that should improve efficiency and drive business‖ Worst Case ―IT investments are always reactionary‖
  • 30. Business Goals Impact IT Investment Decisions 31 The survey identified a strong cause/effect relationship between the ―business‖ goals of the company and theBSMReview Insight resulting IT investment decisions. Those companies that had strong identification earlier in the survey questions for business goals of long-term profitability and business value as defined by customers (Level 3 Business Maturity) or product/service leadership and competitive differentiation (Level 4 Business Maturity) ...expressed significant agreement that IT investment decisions were based on revenue, profits and customer relationships (77- 83%), particularly by business and consultants (88-96%). To a lesser extent, there was also healthy disagreement (63%) that IT decisions were focused on cost containment (Level 1 and 2 Business Maturity). This disagreement was particularly expressed by those most affected by the IT investment decisions …namely mid- level IT management and IT staff. Fortunately, the consistency between the cause (business goals) and the effect (IT investment decisions) provided good validation of the earlier assessment of what was driving the business agenda of companies surveyed …meaning that individuals within IT are gaining a better understanding of the impact of IT on the business, even if the company’s behavior frequently did not follow through with that increased understanding.
  • 31. Business/IT CultureIn this section we explore how business and IT work toward an alignmentand uncover some interesting perceptions of IT based on role and title.
  • 32. How is business operations involved with IT? 33 48%Response Biz View IT View Functions (Business and IT Operations) are fairly 43% consistent regarding business involvement with IT. 37% 38% Differences surface in roles -- with Executives feeling 34% Business more involved and IT staff feeling Business is 30% 30% 30% much less involved. 22% 22%  Significant agreement (all roles & all functions) that ―business holds IT accountable for continuous business improvement though technology‖  Exec (41%), Mid-level (39%), Staff (53%)  Business (48%), IT Ops (43%)Business expects Business accepts Business requires Business insists Business holds IT  Yet, significant difference between IT and IT to operate IT operational regular IT upon accountable for Business exists regarding that "business acceptslike a utility and requirements updates measurable continuous IT operational requirements and finance has no other and finance regarding IT results within 6- business approves minimal budget." interest in IT approves investment 12 months of IT improvement minimal budget targets and investment through operation results decision technology
  • 33. How is business operations involved with IT? 34Response “Business expects IT to add value, but IT seems to be interested in protecting turf. IT accepts little responsibility for anything.” “Depends on Business Unit, some just want a utility and others want active participation.” ―Business evaluates impact of IT as a service differentiator.‖
  • 34. Better IT Communication = Better Alignment 35 There was healthy agreement that ―business holds IT accountable for continuous improvement throughBSMReview Insight technology.‖ Disagreement with that statement is almost like disagreeing with motherhood and apple pie. However, the more interesting part of the survey results identified the disparity between IT executives and IT staff on the statement ―business expects IT to operate like a utility and has no other interest in IT‖. The executives, who have the better connections with their business counterparts, disagree with this statement 88% of the time, whereas IT staff, who have the least common connections with the business, disagree only 44% of the time. The resultant conclusion is that while the business feels their issues and requirements are being heard by IT executives, this communication is not being passed down to the worker-bees … thereby not empowering them to alter behavior as they interact and serve their customer base. The issue here is not the business’s communication to IT, but IT executive’s communication to IT staff.
  • 35. How do business and IT interact or cooperate in your company? 36Response IT is trusted to do the "right" thing in While IT feels responsive, there is definite lack of trust 26% 25% leveraging technology for business benefits & cooperation between IT and Business regarding meeting the needs of the business. Business effectively leverages IT for core operating processes (supply chain, CRM, 30% 33% product innovation...)  The majority of IT roles (52%) view IT as responsive to reasonable business requests, but are not expecting IT has a history of success in automating 26% 25% miracles, while just 30% of Business responses see IT as business process improvements responsive. IT is recognized for contributing to reduction in production costs of existing products & 33% 34%  Generally the scores reflect the lack of trust and services cooperation between IT and Business Business feels IT is responsive to reasonable  Roughly only 25% feel that IT can be trusted to do 30% 52% IT requests, not expecting IT miracles the right thing in leveraging technology for business benefits, and feel that Business does not trust IT and has minimum confidence in IT meeting Business needs Business does not trust IT and has minimum 19% 30% confidence in IT meeting business needs  Business less supportive of all descriptions of Bus/IT interaction …ranging from 19-30% Biz View IT View
  • 36. How do business and IT collaborate? 37Response “IT has a history of not delivering on time or on budget & when on-time, functionality doesn’t work” “The business submits work requests, IT determines required and available resources, and business prioritizes projects” “We are a large organization, so trust is higher in some areas than others. Executive level is NOT yet supportive of a single approach or point of view” “Business is beginning to participate in governance activities to prioritize IT projects”
  • 37. Evidence of Collaboration is Minimal 38 Responses to this question seem to confirm the unfortunate trend that while IT is getting better and better at whatBSMReview Insight they do …and are recognized for their responsiveness, the value of their business contribution is becoming increasingly marginalized. This set of questions focused on how business and IT were actually collaborating. Yet some of the lowest scores on the survey were in response to some descriptions of how business & IT collaborates. There was minimal agreement that ―business trusts IT and has confidence in IT meeting business needs‖. Yet in a similar question with the statement reversed, there was only minimal agreement that ―IT is trusted to do the right thing in leveraging technology for business benefits‖. The only plausible explanation for the contradiction is that business really doesn’t trust IT to meet business needs, but they do trust IT to leverage the use of technology, which a much more restrictive contribution from an IT point of view. Other examples of IT not being effective in their collaborative behavior include:  ―Business feels IT is responsive to reasonable requests‖ achieved fair agreement with most roles, but business respondents did not support this premise with 70% disagreeing.  Minimal agreement with the following statements:  ―IT has a history of success in automating business process improvements‖  ―IT is recognized for contributing to reduction in production costs‖  ―Business effectively leverages IT for core operating processes‖
  • 38. What is your opinion of IT operations? 39 One of the most interesting responses in the survey Strongly Agree/AgreeResponse with significant contradictions (safe vs. strategic) and disagreements (real-time visibility & early adopter): Is core to strategic business 70% 74% execution  Strong agreement (all roles, all functions):  IT operations uses only proven, safe technologies and Is an early adopter of leading edge 36% 86% is not an early adopter of leading edge technology technologies  IT operations is core to strategic business execution Provides real-time visibility into 48% 96%  Differences surface: business impact of technology issues  Business (96%) agree that IT provides real-time visibility into business impact of technology issues, Uses only proven, safe technologies while IT is less convinced (46% of IT responses) 66% 75% that have been validated and  Business perceives IT is an early adaptor of leading tested elsewhere edge technologies (86%) while IT disagrees (only 36% agree) Has little to no technical strategy (services are managed to be "good 48% 50% enough") IT View Biz View
  • 39. Technology Understanding is a GAP 40 This set of questions provoked some of the most interesting responses in the survey. For example, there wasBSMReview Insight strong agreement that ―IT operations uses only proven, safe technologies‖ and is not an early adopter of leading edge technology. However, there was also strong agreement that ―IT operations is core to strategic business execution.‖ It seems an anomaly that IT uses only safe technologies and can still be ―strategic‖ (…implying long-term vision) to business execution. The disagreement between IT and business respondents regarding how IT ―provides real time visibility into business impact of technology issues‖ serves to highlight how the various roles in the company affects their point of view. In this case, executives agree with this premise most of the time whereas mid-level IT management and IT staff don’t see it that way. Apparently IT is delivering real time visibility to business impact …but only the executives seem to see it, as it is somewhat invisible to the mid-level and staff positions. There was some disagreement regarding IT being ―an early adopter of leading edge technologies.‖ The business perspective has strong agreement with this statement while IT staff largely disagrees. Implication being that IT staff have a better grasp of what is considered leading edge technologies and executives operate under older, different definitions of what constitutes ―leading edge.‖
  • 40. Service Level ManagementIn this section we explore the impact of service performance and outages onbusiness operations.
  • 41. What is the level of impact of performance and service outages? 42Response Business Impact IT View Business IT and Business View View IT and Business have different, sometimes Lost Revenues High High opposing views on how IT service outages and performance impact business operations Poor Customer Retention Medium High High Both agree on lost revenues and employee productivity, but Increased Time-to-Market Medium Medium Decreased Business Agility Medium High  Business places higher impact on poor customer retention and decreased business agility (business issues) Employee Productivity High High  IT Operations places higher impact on Increased Cost to Business Medium Medium visibility by external customers (perception Operations issues) Visibility to External Customers High Medium
  • 42. What is the level of impact of performance and service outages? 43Response Role/Title View Business Impact Executive Mid-Level IT Staff Opposing views surface on how IT service s outages and performance impact business Lost Revenues Medium High Medium operations based on role and title. Poor Customer Retention Low Medium Medium All roles (Exec, Mid-level, Staff) agree that High IT issues have highest impact on employee productivity, but Increased Time-to-Market Low Medium Medium  Mid-level roles tend to have greater Decreased Business Agility Low Medium Medium awareness of IT issues on lost revenues, customer retention, increased cost and Employee Productivity High High High external visibility Increased Cost to Business Medium Medium Medium Operations High Visibility to External Customers Medium Medium Medium High
  • 43. Limited Alignment of ―Business Impact‖ 44 Both IT and business strongly agree that there is a high impact of IT performance and service outages on lostBSMReview Insight revenues and employee productivity. Agreement is a nice thing. However, business places a higher impact of IT performance and service outages on poor customer retention and decreased business agility. IT places a higher impact on visibility to external customers. The implication might be that IT understands there is a negative impact to external customers not being able to interface to the company …but business carries that loss of external visibility to the business issues of retaining existing customers and in maintaining business agility …issues that IT might have difficulty comprehending. In moving to differences as expressed by role within the company (…executive vs. mid-level vs. staff), a even greater disparity surfaces. For example, there is widespread agreement among all roles that there is a high impact to employee productivity from IT performance and service outages …that being the only high impact assessed by IT staff (?). Conversely, executives rated the business impact of lost revenue, poor customer retention, increased time-to-market and decreased business agility lower than mid-level or staff personnel. Given the dominance of those metrics within existing IT organizations, the implication might be that executives understand the need for more business-oriented ―alignment‖ metrics sooner and more clearly than mid-level and staff personnel.
  • 44. How have IT service metrics changed in the past 12 months? 45Response  High consistency between IT and Improved or Stayed the Same Business regarding how service metrics Business View IT View have changed, with two exceptions: 95% 90% 90% 84% 80%  IT feels time between service slowdowns 77% 70% 70% 73% 60% 70% 65% 65% 66% has marginally improved (65%) compared to optimistic view of Business (90%) – implying slowdowns are not visible to Business community  Business responds optimistically (65%) Service Time between Service Time between Number of Business staff Understanding regarding IT/Business alignment whileavailability service performance service issues or satisfaction of IT/Business IT responds on average that services outages and/or slowdowns incidents with services alignment response times and/or reported managed by IT requirements have not improved, mostly stayed the brownouts operations same
  • 45. Business/Executives View Metrics Improving 46 There is both good and bad news in these responses on metrics. On one hand, IT has been able to maintainBSMReview Insight good service and support during one of the worst economic downturns in history … or IT is doing more with less. On the other hand, IT has not made significant improvements from the BSM perspective of IT moving to higher levels of business maturity -- where typical IT performance metrics have yet to be replanted with business oriented IT metrics. Business perceives a healthy improvement for Service Availability and Service Performance metric, and IT confirmed Service Availability as reasonably improved. Executives viewed Service Availability, Service Performance and Business Staff Satisfaction as experiencing healthy improvement in the last 12 months. However, IT Staff was not nearly as positive. Interestingly, IT staff felt metrics declined only 7-8% of the time …the lowest of any group. Those responsible for tracking the metrics have a more restrictive view of how these metrics might have changed for the better. The result of the business and executive assessment indicates a more positive perception exists … or they don’t care about the metrics identified.
  • 46. What actions should be taken to improve IT performance metrics? 47 Belief by all roles & functions that processResponse improvement is the best way to improve service metrics which supports continued industry focus on ITIL best practices.  Investments in new solutions or technology, or upgrades of existing technology is 66.3% supported by only 29-31% of respondents  The vast majority, 66%, of respondents believe that IT operational metrics can be 38.4% improved by improving service management 16.3% processes. 29.1% 31.4%  We believe that this indicates better awareness and expectations of ITIL and Outsource 12.8% service Invest in higher adoption rates of ITIL processes service Improve management service Invest in new management technology Upgrade  That is a huge change from 10 years ago, solutions management existing Dont know processes when the focus was largely on tools. technology
  • 47. Improving IT performance metrics - Quotes 48Response “Find better ways to leverage existing technology” “The things that declined are good things” “Need to hold staff accountable” “Meetings and more meetings … but nobody with the guts to truly change.” “We’re implementing an improved ITSM toolkit and plan to soon have metrics available.”
  • 48. Focus on ―Process‖ to Improve Service 49 The important finding is that all roles and all functions believe strongly that implementation of serviceBSMReview Insight management process is the best way to improve IT performance metrics (66%). This is a huge and significant change from 10 years ago when a tool or technology was expected to resolve all service management issues. It is a good change. The highest score on process (72%) came from mid-level managers. This is an important endorsement of ITIL best practices …but possibly not ITIL implementation projects as evidenced by the lowest process scores coming from business (56%) and IT staff (58%). The business is seeing the length of ITIL project implementation impeding responsiveness to their business needs, and the staff is seeing the diversion of resources from high priority tasks. The minimal willingness to outsource (16% of respondents) to improve metrics identifies a critical, yet-to-be- resolved impact on cloud service providers. This implies an unwillingness or inability to hand off portions of IT service management to an outsourcer … not from the perspective of reduced cost and faster provisioning offered by Infrastructure-as-a-Service providers, but from the perspective of managing cloud services to satisfy business objectives.
  • 49. ITIL AdoptionIn this section we explore how ITIL v2 and v3 process adoption isprogressing.
  • 50. What ITIL v2 process capabilities are you using today and planning to use? 51 No big surprise here!Response  Implemented  IT has largely implemented, the core ITIL processes: 79% 66%  Incident management 60% 54%  Problem Management  Service Request Management  Change management Incident Change Problem Service Request Management Management Management Management
  • 51. What ITIL v2 process capabilities are you using today and planning to use? 52Response ITIL V2 Planned  To a lesser extent, respondents either 40% 43% 41% implemented or plan to implement 30% 27% 35%  Service Level Management 21% 28% 13% 25%  Configuration Management  Release Management  Planned for the future include:  Capacity Management  IT Service Continuity Management  Availability Management
  • 52. What ITIL v3 process capabilities are you using today and planning to use? 53 Interest (…and understanding) is maturing with ITIL V3.Response There seems to be a higher correlation between V3 and Top ITIL 3 Planned improved Business/IT alignment catering to more mature BSM levels 3-4. 35% 36% 41% 44% 49% 54%  High ―planned‖ anticipation for a few V3 categories:  Knowledge Management  Service Catalog  Service Asset & Configuration Management  Service Portfolio Management  Operation Processes were also high in ―planned‖ expectations:  Request Fulfillment  Event Management  Assess Management  Healthy interest in plans for three other Processes:  Service Management and Reporting  Continual Service Improvement  IT Financial Management
  • 53. ITIL v3 process capabilities using today and planning to use? 54Response Not Planned or Dont Know Our initial surprise to this question is the number of respondents that indicated that 62% 58% 57% they either had no plan to implement or 54% 52% 52% 48% didn’t know. We see ITIL V3 is more relevant to organizations at BSM maturity levels 3 or higher, and most of our survey respondents are at level 2.
  • 54. ITIL v2 and Adoption of ITIL v3 55 There are no surprises in responses from V2 of ITIL. The top four categories of ITIL implementations includeBSMReview Insight Incident Management, Problem Management, Service Request Management and Change Management, confirming the maturity of IT is currently focused on secure and reliable operations for a Level 2 business maturity achievement. The V2 ITIL ―planned to implement‖ story is a good indication of where short-term investments are anticipated. Configuration Management (CMDB), Service Level Management (SLA’s) and Release Management top the chart of next set of ITIL implementations ...all topping 40% of planned investments. Although the existing implementations of ITIL V3 processes sometimes reaches one-third of respondents, the ―planned‖ implementations tell the story of what is being considered for short term investments. The top four include Knowledge Management – Transition (32% now & moving to 73%); Service Catalog - Design (20% now & moving to 72%); Service Asset & Configuration – Transition (21% now & moving to 70%); and Service Portfolio Management – Strategy (15% now & moving to 59%). IT Management using these V3 processes are attempting to move the IT organization from Level 2 Predictive to Level 3 Aligned and Level 4 Optimized business maturity levels in order to better satisfy the business demands of technology.
  • 55. Conclusions and RecommendationsIn this section we wrap up on the 2011 BSM Benchmark with some overallconclusions and industry recommendations.
  • 56. Conclusions 57  Business is maturing (moving beyond consistently ―reliable‖ to ―customer driven‖ and ―competitivelyBSMReview Insight differentiated‖) at a faster rate than their IT counterparts are maturing in their ability to meet business expectations.  IT needs to better understand the business context in which their company is immersed and business should better understand how technology can be leveraged for competitive advantage. The disparity between business and IT views of business maturity and business drivers is too significant to ignore.  Business has a more optimistic, but dated view of technology’s contribution. IT needs to create additional focus on ―marketing‖ IT to their business customers. If IT doesn’t articulate their unique differentiation and core value proposition, then business will continue to have inappropriate expectations of IT and will move toward competitive alternatives like outsourcing.  We found that respondents who had experienced some type of cross fertilization (business or IT liaison roles) demonstrated greater awareness of the communication issues and better understanding of the value of aligning IT investments with business objectives.
  • 57. Recommendations (part 1)58  Create a BSM Alignment Executive role who is measured on improving To begin to BSM Maturity (strategic and operational alignment) realize the  Consider integrating Business and IT liaison roles potential of  Benchmark both company and IT maturity to assess the current state of BSM, we alignment and determine next steps recommend  Utilize BSM Maturity Model as a assessment template you consider taking the  Conduct a State-of-the-Business workshop for IT following  Ensure IT executives/mangers have a solid understanding of the company’s business strategy, goals and competitive challenges actions:  Strive to put the business in terms that IT can consume and execute on  Select 1 or 2 specific IT initiatives that will results in near-term business value
  • 58. Recommendations (part 2)59  Conduct an annual ―Technology for Business Summit‖ that enlightens line- To begin to of-business executives with what is possible from a technology/service realize the point-of-view potential of  Provide vision and insight into technology trends that can improve competitive BSM, we differentiation and customer retention recommend  Cloud computing, mobile computing, social media, etc. you consider  Bring the consumer/customer experience into play taking the  Develop an IT Marketing Strategy and Plan that builds a positive, following trusted IT brand identity with the business actions:  Be clear about who you serve, what value you uniquely offer and how you will improve customer satisfaction, retention and loyalty  Utilize proven marketing strategies/tactics and measure results
  • 59. Credits60 Authors/Editors Sponsors  Rick Berzle  GoToMarket Publishing  rberzle@bsmreview.com  858-271-4351  Bill Keyworth  Editor-in-Chief, BSMReview  bkeyworth@bsmreview.com  949-600-6255 Copyright © 2011, BSMReview.com
  • 60. 2011 BSM MATURITYBENCHMARK STUDYCopyright © 2011, BSMReview.com