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Author  David Crouch – consultant, Beyond20 and co-author, ITIL 4 Digital and IT Strategy

September 17, 2021 |

 3 min read

  • Blog
  • Collaboration
  • Service management
  • ITIL

Talking about the service management office (SMO) in 2021 raises two key questions: is it still relevant today and has it ever been useful?

The concept of having some sort of structure like an SMO seems to be under attack at the moment, which is a knee-jerk reaction that I think should be questioned.

What contribution does the SMO make?

The SMO is an organization formed to improve the quality, effectiveness and efficiency of services managed by a service provider. It accomplishes this by adapting best practices, learned experiences and resources to its service management ecosystem.

I’ve been involved in helping companies implement SMOs that have delivered a range of benefits. For example, entry-level SMOs can act as a centre of excellence that helps businesses create awareness and change mindsets about the benefits of service management and a service-oriented approach, while improving “bread and butter practices” in ITIL®. This creates an intentionality for service management.

Other SMO examples I’ve seen have had even more staying power: based on a solid business case with both tangible return on investment and return on value also.

That includes milestones such as getting people trained and certified in ITIL, developing roles and establishing service level management and relationship management practices with key performance indicators.

It’s true that improving service management via an SMO might increase costs in the short term. But that could be delivering value elsewhere in the organization.

Digital transformation and the SMO

When some people think of digital transformation – i.e. using technology in fundamentally new ways or creating operational efficiencies – they might imagine a formal structure getting in the way of doing things quickly.

However, another element of successful digital transformation is the relationship management between an organization and its customers and between internal service providers and various parts of an enterprise.

Where a project management office (PMO) is often described as a source of control, an SMO is more about strong relationship building and digital transformation needs this. A lack of internal relationship building and service management can hurt organizations, even if their technology is successful externally.

So, in practice, how does the SMO support digital transformation?

  • Building strong relationships between service providers and the wider organization.
  • Continual improvement: the paragons of digital transformation are built on this.
  • Sustainability: Creating an environment of innovation with solid practices to respond to competition and market changes. This means more structured, principled innovation based on experimenting around a particular problem to solve rather than removing all “guardrails”.

ITIL 4 the SMO

The relationship management practice in ITIL 4 – which cultivates links between the organization and its stakeholders – is crucial to solidify the interaction between IT and the core business. Without these relationships, IT risks getting outsourced during digital transformation.

Employing the practices in ITIL 4 enables both a structure and intentionality to support digital transformation – something that rarely happens organically.

The SMO can set the service management practices and deploy the ITIL 4 guiding principles for an organization: bringing them to life, filling gaps where company policies don’t exist and empowering employees lower down in the organization to make good decisions.

The key steps to develop an effective SMO

To gain the benefits from an SMO, an organization needs clarity on its vision and goals, both within IT and in the non-IT service providers across the enterprise.

Then, you need to decide the type of SMO you want to have: a centre of excellence or something that needs broader practices and relationship building to develop enterprise service management.

And you must establish who will champion and fund this initiative. Executives will be looking for quick returns alongside other, more long-term milestones. So, you must be clear about what you will get done in your first 100 days.