Adopting service governance is a major change to the way a company organizes itself.
Traditionally, directors are presented with reports by departments or via the general ledger which makes it difficult to translate this mass of financial information to arrive at a clear, end-to-end picture of the organization. The lack of a clear understanding can lead to poor decisions or the uncontrolled, ungoverned devolvement of decisions to the wrong level, increasing – considerably – risk to the organization.
So, once you have decided to adopt the service governance approach, what do you need to do to make it work?
Hold awareness sessions for stakeholders:
You need to communicate with staff, customers and suppliers. The latter are connected because they form part of your organization’s services. Also, you need to communicate with your stockholders; they need to understand the costs involved, such as putting training in place, as well as the substantial benefits to be gained in short to medium term financial improvement and long-term improved agility, delivery and reputation. Listening to stakeholders is an important part of the communication – important insights can be gained.
Set the overall deployment plan.
Identify the planning team and work with them to:
- Take the business case you’ve made for service governance and reconsider it: does it make sense, are you sure the benefits are worth the investment and are based on valid assumptions and well-understood risks. If so, use it to build the initial deployment plan.
- Using existing ITIL® advice from the Service Strategy book, you can see which services are most important and how to understand of those services. Also consider the best practice guidance in Management of Value (MoV®) to help understand, for each service, exactly what value is, how it’s produced and how it links to company policies.
- For each service, using ITIL advice from service design and service transition, build a service description. Identify which services you will use for implementing a “pilot scheme” rather than attempting a full deployment. This will help the organization to recognize and confirm the risks involved and the benefits realised so they can be contained appropriately.
- Service portfolio – look at ITIL service design book; what are the risks and how should the services be designed? Ask: why are services like this? What are they intended to produce? What value are they actually producing and how? This will reveal that some services are a bundle of other services; others are working together as one but are delivered in a disjointed way. This knowledge can help improve services and understand their cost, the value they deliver and how these can be measured.
The pilot scheme is really there to clarify the vision, make sure everyone understands what it’s about, while managers need to understand the issues and the best practice advice required.
Consider: ABC – attitude, behaviour and culture. Many people interpret change as a threat. Therefore, ITIL has guidance to help show people the reasons for change. For example, discontinuing a service doesn’t necessarily mean losing people, who can rather be re-deployed and more involved in the end-to-end service. This, and investment in skill development, helps people get accustomed to the idea and see how it will benefit them. This requires senior managers who are skilled in service transition and communicating change properly. Workshops can help develop and reinforce management skills at this stage.
ITIL has a tremendous amount of best practice to make change work with minimum of pain for everyone, along with a set of methods to improve take-up and acceptance. Remember, if someone is objecting, some of their objections will be right! Part of the communication is listening to what they say, taking on valid objections and improving what you’re doing.
The post-pilot scheme world of service governance
When the pilot scheme is completed, you will have a small service portfolio.
Within that is the Service Design Package (SDP): technical information about how a service works, throughout its life, for example what vehicles are being used in the organization, their scheduling, etc. The SDP provides all the necessary, up to date and easily accessible information for service transition when, for instance, establishing a new depot.
The board of directors is also able to compare services and see what value they deliver and what they cost. It’s possible to compare relative efficiencies and see what needs improving as part of the improvement programme. From this, the board can make investment decisions while the service owners become the link between the board and the different services. Other ITIL advice applies in terms of good governance, security, measurement, and control, bringing a lot more discipline to the management of services.
Continuing the journey
Adopting service governance means understanding which services are top and bottom performers and which are running the dynamics of a company, so enabling the board to make well-informed investment and other governance decisions.
The board doesn’t need to know the technicalities; board members can understand the value, efficiency and cost of the organization’s services and come to conclusions based on detailed, sound financial principles, without being finance experts themselves. Using the same measurement, value against cost, for everything means obtaining an objective view. Having that measurement based on the values set by the board in the vision, mission, charter and policy, ensures these values are embedded in the operation.
So what can organizations hope to gain from service governance?
- Understanding which services need improvement
- Really understanding where the big holes are in the organization and what could be improved to increase customer retention, market penetration, or any other board requirement enshrined in the vision, mission and charter
- Seeing bottom line delivery taking off
- Failing services can be identified and halted, or replaced, before damaging the organization
- Governance decisions about investment in the service portfolio: the board is aware of the right governance decisions to ensure improvement
- Future opportunities can be responded to quickly by extending existing services, or developing new services in a tightly controlled, well-governed process
- Improvements become the central story for the organization.
In the past, many boards of directors have been unaware that best practice, such as ITIL, is a good way of running the organization. But when used to deploy service governance, the board will be 100% behind the programme which will become a guiding light to help the board and people throughout an organization; providing the senior management and board support required to achieve success.
Has your organization benefited from service governance processes? Tell us what improvements to your overall service management you have noticed as a result in the comments box below.
More AXELOS Blog posts from Peter Brooks
Delivering organizational value through service governance
Issues in corporate governance and service governance as a solution