IT Service Management is not Dead – ITSM in an Outsourced World

In recent years, there has been a lot of discussion on the future of internal IT Service Management capability within organizations moving towards an outsourced model for their IT services. Does this mean that there is a reduced need for ITSM within the organization?

In the words of Mark Twain – “The reports of my death are greatly exaggerated”. Whether you consider a traditional outsourced IT environment or a situation where multiple vendors are supplying cloud-hosted applications to the business, there is still a critical need for effective in-house service management practices…but changes are needed to fully exploit the value of ITSM in this changing landscape.

Add flexibility and agility to your repertoire of skills

One of the most important traits of a successful service management strategy in the twenty-teens is flexibility and the ability to change direction and focus without your customers ever realizing that this is what you have done. SaaS offerings give the business opportunities that did not previously exist to quickly deploy business applications, sometimes with minimal input from their internal IT provider. The in-house IT provider must quickly adapt and take on a service management role for these new business capabilities, giving their customers seamless access to support services.

The commoditization of IT services in the form of multiple ‘as-a-service’ offerings began over a decade ago and will continue to expand with a new ‘aaS’ acronym seeming to appear almost daily at times. As this trend began ITSM specialists globally wondered what this was going to mean for their profession. Would service management move to being something only practiced by cloud vendors? Would the in-house IT department and service desk become a dinosaur and just a distant memory.

These fears have not been realized and ITSM is just as relevant as ever, if not more so, but the way we practice it has changed and will continue to do so as the way our IT services are delivered to the business continues to develop and move to a more commodity-based model.

Prevent the extinction of your species

The IT department that does not adapt to this new way of doing things will quickly find itself in that dinosaur category as a focus on the ‘bricks and mortar’ of IT infrastructure will rapidly erode their value to the business. In this new landscape, the role of IT is to be an enabler, an innovator and a conduit between the business and the multitude of cloud providers that they will purchase their business capability from.

The fast-developing role of business relationship manager (BRM) is one that every IT department must foster. This role provides the gateway for IT to deliver value by translating business requirements into IT requirements and working with vendors to ensure that the delivered services meet these needs. When the business splinters its IT procurement into multiple areas of the organization they lose the ability to secure true value for money. Putting the internal IT organization into the role of service broker re-establishes the true value of the business, as one entity, rather than as a splintered group of individual business units.

Cloud services need to be fit for purpose

The IT department of any business is the repository of technical wisdom related to the organization. When business units take responsibility for procuring their own cloud services, independent of IT, there is a real danger that the infrastructure needs may be over or underestimated, or other technical considerations may not be taken into account. This could mean that the business will be either be paying for a level of service that they do not require or will be putting themselves at risk by have sub-standard processing power in place.

There is a perception issue here, and it is IT’s job to educate the business about cloud services and their relationship to the internal IT capability. What happens in many cases is that the business units do not equate the services they are purchasing from third parties as being ‘IT services’. They are simply purchasing business capability and the idea that this is something that they need to work with their own IT organization on this type of project does not register. Rather than deliberately circumventing their own IT strategy – a condition that is now being referred to as ‘shadow IT’ – they are working on a false assumption that this is not an IT purchase.

Keep SaaS acquisitions within business strategy

It is up to IT to spread the word that every service the business needs to function, with very few exceptions, is an IT service. Every acquisition of a service, therefore, needs to be considered as part of the overall IT strategy of the organization.

Where service provision is splintered, and business units deal directly with third parties, confusion over who is responsible for service support abounds. ITSM as a discipline has invested a lot of energy over the years in establishing the service desk as a single point of contact for all IT related matters. The model that seems to be organically developing in organizations whereby support for services is sourced directly from third parties is greatly diminishing the value of the internal service desk and causing confusion and a perceived reduction in support quality for the business.

Valuable time is wasted when customers have to stop and ask themselves who they need to contact for support when things go wrong. This question becomes even more difficult to answer when multiple services interact at various levels. Your customers will not need to consider who provides the service they are using when your internal service desk retains its place as the first point of contact for all IT related incidents and requests. This is the role that, in the customers’ eyes, cements the value of having an internal IT capability.

Take a holistic approach to services

In order to efficiently deliver against its own strategy the business needs to have its IT requirements managed in a holistic manner. This cannot happen when each individual capability is managed as a separate entity. Individual parts of the business do not function in a vacuum, they need to interact with other departments and with other IT services. These interactions are not something that the vendors of single services are equipped to support – this support can only come from an IT service that truly understands the way the organization functions, its strategic goals and the needs of its customers. This knowledge enables the internal IT organization to provide a quality of holistic service that cannot be delivered from outside the organization.

Keeping vendors honest

IT must develop its vendor management capabilities in order to provide real value in this new world of outsourced IT services. Monitoring performance and holding third parties to account for delivery against service level agreements is something that ITSM tools are well equipped to support. This is an area where real value can be added to these third party relationships as a result of the internal ITSM capability. This can only happen if the single point of contact is maintained at the service desk to ensure that all vendor interactions are recorded and channeled through the ITSM tool.
Vendors cannot be expected to know and understand internal business processes for all their customers. Where applications are customized to suit specific processes, considerable time can be wasted as vendor service desk staff familiarize themselves with the individual application setup. The downtime that is caused in this situation can be minimized, or even eliminated, when all first line support is managed internally. As well as improving time to resolution, this mode of operation will give the ability to negotiate a reduction in vendor support costs.

Know what you are dealing with

The first step in proving the value of your internal ITSM capability is for the IT organization to have a complete understanding of the landscape of all services consumed by the business. With this knowledge, a strategy can be created that allows IT to add real business value by undertaking the in-house management of these services and the associated vendors.

A full range of ITSM processes and practices are needed to effectively manage cloud-sourced services. A strong focus on vendor management and business relationship management will put your IT organization in a position where you can offer a brokerage, support and management service that will add significant and measurable business value.

David Mainville

David Mainville

David Mainville, CEO and co-founder of Navvia, is a passionate advocate of Service Management and a frequent presenter, blogger and well known member of the ITSM community. With over 35 years of experience, David has held progressively senior technical and management roles allowing him to “connect the dots” between the Business and IT. At Navvia, David leads the charge to bring innovative ITSM solutions to market focusing on Product Development, Marketing and Operations.

• Posted by David Mainville on Jan 13, 2015
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