Improving IT Service Delivery Why the IT leadership team needs a shared point of view

The challenge of improving IT service delivery has never been greater Improving the delivery of IT services is one of the most challenging aspects of running an IT organisation today © 2011 Copyright Formicio Limited 1  The expectations of IT users are changing – and becoming more demanding.  Advances in technology (eg tablets, virtualisation and cloud computing) create new opportunities that must be translated into business value.  There is the ever-present need to improve service quality and reduce cost.

And sustained change is as elusive as ever While there is no shortage of ideas on how to improve service – and suppliers willing to provide them – there is often a lack of real improvement. Change initiatives tend to be piecemeal and based upon instinct, rather than holistic and based upon insight. For many organisations delivering sustained change is as difficult and elusive as ever – resulting in many CIOs and their colleagues having to ‘seek new opportunities’. © 2011 Copyright Formicio Limited 2

Successful IT leadership teams have a shared point of view on what change is and how it will be delivered Leadership teams that deliver sustained change have talent and experience, but importantly, they also have a shared point of view. Having a shared point of view based upon contemporary thinking enables the leadership team to exercise collective leadership. Collective leadership comes from a common understanding based on a shared set of mental models, frameworks, practices and language. It’s about having a ‘star organisation’ rather than an ‘organisation of stars’. © 2011 Copyright Formicio Limited 3

So, what is a shared point of view?  Something that the leadership team collectively believe to be true and of value to the organisation they lead.  Based on a set of beliefs, more a philosophy than a methodology.  Something that shapes our thinking, what we communicate and how we act. © 2011 Copyright Formicio Limited 4 The following pages contain a point of view on improving IT service delivery that the Formicio team has developed and evolved over many years. We share it in the hope that it will help IT leadership teams develop their own point of view. We all have a point of view; we may not communicate it explicitly, and it may not be aligned with our leadership colleagues, but it’s very clear to our followers.

Improving IT service delivery – nine crucial elements 1.An organisation’s value proposition, operating model and mindset need to be aligned. 2.An IT operating model comprises a number of facets. 3.IT demand and supply matures over time. 4.‘One size does not fit all’ – authentic differences must be accommodated. 5.Best practice frameworks are useful but have limitations. 6.Behavioural change is more challenging than process change. 7.The role of leaders is to put in place the conditions for success – not come up with the answers. 8.Leaders should focus on introducing operating principles not practices. 9.Collaboration, not PowerPoint, drives engagement, sustained performance and continuous improvement. © 2011 Copyright Formicio Limited 5 Having a shared point of view provides a platform for change. It embraces a set of values and beliefs, and forms a basis for developing a change methodology and plan. It makes the implicit, explicit.

Operating Model Mindset Value Proposition 1. An organisation’s value proposition, operating model and mindset need to be aligned © 2011 Copyright Formicio Limited 6 What the organisation delivers to its customers and the value they get How people feel about their organisation, their role and prospects – the principal driver of behaviour The processes, organisation, governance and how performance is measured – basically how work gets done High performance is achieved when all three domains of capability are aligned

Org. Design Measurement Services Portfolio Sourcing Governance Processes IT Operating Model 2.An IT operating model comprises a number of facets, all of which need to be aligned Execu tive Coun cil Core Process Council Manageme nt Team Companies / BUs Organization SVP Governance – structures that orchestrate development, funding, adjudication and execution of decisions Organisational Design – structure of resources and individual competencies Service Content Richness Service Level Quality Standard Service Premiere Service Basic product set Prime hours Guaranteed coverage, e.g., - Response time - Repair time Basic product set 24 x 7 hours Premium coverage - Fastest response time - Fastest repair time Product set extension s Mobile User Advance d Technolo gy Introducti on Other Service Options Services Portfolio – aligned and segmented product and service offerings that meet business demand Measurement – that reflects outward- facing business objectives and key performance indicators Processes – effective and efficient processes delivering predictable and repeatable services Sourcing – segment suppliers, understand their value proposition, develop the right relationships and execute flawlessly © 2011 Copyright Formicio Limited 7 Manage IT Organisation Manage IT Supply Operate IT Infrastructure Disco ver Disco ver Busi ness- IT Pote ntial Deliv er Deliv er Busin ess Solut ions Oper ate Busin ess Oper ate Busin ess Syste ms Manage Enterprise Architecture Manage Enterprise Architecture Manage Business-IT Portfolio Manage Customer Relationships Manage Customer Relationships

3.IT demand and supply matures over time © 2011 Copyright Formicio Limited 8 Demand Supply Support Improve Innovate Time Business Transformation Level 3 Business Demand Inter-enterprise solutions Business growth through innovation and differentiation Flexible, agile business capabilities Business intelligence Customer experience orientation Level 3 IT Supply Open platform for innovation Converge business and IT functions Flexible and agile supply Finding new value in information and IT Business Effectiveness Level 2 Business Demand Enable business and partnerships Enable collaboration / Break down silos Consolidated management information Integrated process orientation Level 2 IT Supply Establish common infrastructure for operations, business processes and collaboration Deliver on time, on budget Build credibility Improve service / solution delivery Internal networks + Internet Business Efficiency Level 1 Business Demand Foundation systems Cost savings Operational information Functional orientation Level 1 IT Supply Provide basic services / solutions Stabilise operations and support Improve business processes Closed internal communications networks Value IT’s operating model needs to evolve as the relationship between IT and the business matures through the levels

4. ‘One size does not fit all’ – authentic differences need to be accommodated  Shared Service operating models need to deliver a high degree of Common and Shared solutions, while recognising the need for authentic differences.  Authentic differences are those that result from a genuine need to meet different legal, regulatory and market conditions.  The number of authentic differences needs to be controlled through appropriate governance.  While the goal of shared services is typically to reduce operating cost, they are increasingly seen as a platform for growth, eg to rapidly integrate acquisitions. The extent to which shared service organisations can provide common solutions depends on the extent to which the enterprise has common and shared business processes Dedicated and specific to business units Common to all business units (clients) Corporate only Common to some business units (clients) Business Units (Clients of shared services) Shared Services Corporate Functions © 2011 Copyright Formicio Limited 9

5. Best practice frameworks are useful but have PRINCE2 © 2011 Copyright Formicio Limited 10 It makes sense to use some of these frameworks, especially ITIL in the infrastructure space, but they are only part of the answer. The challenge is knowing which aspect to leverage and how to implement, own and continuously improve.  Each focuses on something specific and has a different purpose.  They overlap in places and use the same terminology within a different context.  They are intentionally generic and cannot predict things like what tools will be used.  They are complex and hard to implement across an enterprise.  They are committed to ‘document-thinking’ not ‘open content’.  They tend to focus on ‘running IT as a business’, not converging IT with the business.

6.Behavioural change is more challenging than process change © 2011 Copyright Formicio Limited 11  Establishing the value proposition and changing the operating model alone will not transform performance; it is people with the right mindset who make great organisations.  A mindset is a set of assumptions, methods or systems held by one or more people, or groups of people, which is established so that it creates a powerful incentive within these people or groups to continue to adopt or accept prior behaviours, choices or tools.  Mindsets are created and changed by: –Leaders: through the way they are seen to act and behave –Communications: through the messages people see, hear and believe –Policies and procedures: through the behaviours they reinforce –Learning and development: through the capabilities and confidence it gives people to perform.

7. The role of leaders is to put in place the conditions for success – not come up with the answers © 2011 Copyright Formicio Limited 12  For transformation journeys to be successful, a number of ‘critical conditions for success’ need to be put in place and sustained over time.  Like gardening, if the conditions are not in place (eg soil quality) the plants will not grow and disappointment will follow.  It is the role of leaders to define, put in place and sustain these critical conditions for success.  A periodic assessment can identify the conditions, determine to what extent a leadership team is aligned about their importance, and the actions they need to take to strengthen any particular conditions.

8. Leaders should focus on introducing operating principles not practices © 2011 Copyright Formicio Limited 13  Operating practices are very difficult to transfer between organisations as they are context-specific and the context is different between organisations.  Operating principles are transferable across organisations, and the application of the principles in a specific context (ie within a specific organisation) establishes practices that are ‘fit for purpose’.  Operating principles are conscious choices made by leaders that define how they would like their organisation to operate.  For each operating principle there is an equally valid alternative choice.

9.Collaboration, not PowerPoint, drives engagement, sustained performance and continuous improvement © 2011 Copyright Formicio Limited 14  Improved organisational clarity of understanding from a single source of ‘truth’  Encourages multi-contributor collaboration  Eases search and discovery – shares knowledge A wiki approach enables a culture of continuous improvement – empowered people sharing their knowledge and passions and taking pride in what they do. Semantic Wiki

We hope you found our point of view helpful We encourage you and your leadership colleagues to develop a shared point of view. It will take time and you won’t all agree at the outset, but it will be of great value in the longer term. The Formicio Team © 2011 Copyright Formicio Limited 15

© 2011 Copyright Formicio Limited 16 We are thought partners and advisers to business and technology leaders around the world. We help our clients make informed choices, build capability and deliver sustained business change. Specifically we:  Build innovation and organisational capability.  Help leaders succeed with the most complex transformation programmes.  Help transform IT organisations to meet the challenges ahead. This is an Insight Presentation by Formicio

For further information contact... © 2011 Copyright Formicio Limited 17 David Trafford +44 (0)