An organization needs clarity and transparency to show leaders and boards of directors how well it’s operating, but without everybody having to become accountants!
With no disrespect to the accountancy profession, viewing an organization solely from a financial point of view can skew understanding of the value it provides – or doesn’t provide – to its stakeholders.
As mentioned in my itSMF blog post on the topic last year, I believe some directors relinquish their responsibility to understand exactly what is happening in their organizations and defer to the finance director if the finances have gone awry. This isn’t good enough, especially when matters end up in court.
Enter the concept of service governance and the role of ITIL in applying management of value on a service by service level, which becomes the service portfolio.
The service portfolio is a way for the board to observe the organization’s operations and comprehend the services delivering value at a fair cost, or vice versa. It is the “map of the journey” that the board can use to “govern the route” and enable operations to follow.
Understanding each service within an organization and its intrinsic value means leaders can improve and optimize that value. They can define the value brought to the organization, such as market share for a business, the number of students taught for an educational institution or patient referrals to a hospital. Equally, if an organization can identify services that aren’t linked to corporate values they can dispense with them, because they shouldn’t be there.
Service governance is not IT, but depends on ITIL and other best practice guidance; that is, ITIL from the perspective of the board.
Service governance in action
Service governance clarifies organizations in terms of their services.
In retail, for example, companies make it their business to understand the cost and value of the supply chain as a service.
Understanding the value of each service component – and how it contributes to value and costs – enables boards to invest more in services doing well, improve services that need to be better or get rid of poor services. But, it is undeniably difficult for directors to have a clear picture of how well an organization is operating without a structure in place to do so.
Having a service portfolio provides the necessary structure to allow directors to govern more effectively. This is where ITIL enters the picture: it enables service governance and knits together everything across an organization.
A common, and understandable, misconception about ITIL is that it’s only about the IT service desk. Wrong! ITIL is a tool to achieve service governance excellence. For example, CERN – the particle physics laboratory – adopted ITIL to support successful operations beyond the IT function.
Yes – this is a major shift in the perception and understanding of ITIL and its capability; but it’s something that non-IT directors and anyone involved in corporate governance should take note of.
ITIL for the board – really?
Try talking to a board of directors about the “what” and “why” of ITIL and they might claim to have been “mugged” by the IT “mafia”; funding ITIL – they might say – is like paying protection money to avoid technology problems.
But what they need to recognize is that ITIL enables service governance and gives boards a non-technical tool to understand how the company’s doing. Making operations more transparent and controllable means the directors can then pose the right questions about cost, value and risk.
And the board needn’t understand the granular details but observe the value of services being delivered and whether they’re working or not.
Next steps on the road to service governance
- Make sure operations understand this is going to be the future and start the path to ITIL’s measurement of value which allows greater understanding of various parts of the organization.
- Go to the CEO, FD, CIO and IT Director with a business case to justify service governance and investment in training and development to implement service management in the organization.
- Get people trained in ITIL, though this ITIL project doesn’t start with the service desk: it’s about devising a service strategy the board will buy into.
- Ensure your people are trained to work with the organization’s services, not just by the book. This requires tailored courses to ensure the knowledge and information is relevant.
If you’re seeking proof of the service governance concept, look no further than Apple: it understands that its value is not in selling computers but in delivering highly desirable, and iconic fashion products – Apple’s core values – behind which it aligns all its services.
As I’ve said before (but will say again for good measure), service governance allows services to become the compass, the navigation, the controls and the measurement of success for the organization.