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and things with them. A good horse-and-cart combination was one route to the desired outcome, but a technology-enabled alternative was another.
Getting a plan wrong is expensive, and getting it right begins with a service strategy: a provider’s plan for the services it will offer to customers and for delivering, marketing, and selling those services. One part of the Netflix service strategy, for example, is providing streaming video service to its customers.
Creating a Service Management Plan
In contrast to a service strategy, a service management plan defines how the provider will manage the services in the service strategy and road map. This plan is more complicated than it may sound. In the real world, companies typically work in silos (isolated implementations of services). IT operations in one division may have a separate service management implementation for a group of servers. Although silos and organization charts are convenient for internal order and control, they don’t serve customers — and very often generate internal friction in the company that prevents customers from getting their desired outcomes.
Business management staffers use the data available to them to think great thoughts about the business and to formulate products and service strategies. They operate business units to provide — profitably and efficiently — products and services that will keep customer and stakeholder expectations satisfied. They plan for the future because they know that they’ll need to innovate with new products and services. They also understand that they need to provide better management of the products and services they already offer. Their plans include how to get more value from all their capabilities and existing resources.
On another floor somewhere, IT management has its hands full operating the physical and virtual world of servers, applications, security, and the like. The typical IT organization sees itself as a systems support operation. (The same problem may occur in other aspects of enterprise operations.) But is this approach good enough? You probably anticipate at this point that the answer is no. Correct.
In the brave new world that has emerged, it isn’t wise for business and the various flavors of enterprise and IT operations to operate as separate silos. They need to align better. Better alignment of all operations with the
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business always has a twofold meaning: Operations can help drive the cost out of business products and services, and it can help differentiate the business from its competitors. Technology-enabled services, for example, can reduce cost, improve quality, and help achieve specific business objectives. Technology improves a production line’s efficiency and reduces costs at the same time that it helps the research-and-development department innovate. In fact, business and operations need to expand the scope of alignment to levels we’ve never seen before. Just look at the Netflix example. Is its business about enabling people to watch movies, or is it about service management? Is service management the supporting actor, or does it play a lead role? A business needs to provide new, innovative IT-enabled services, and at the same time, it needs to manage the cost and quality of those services so that the price and reliability provide a desirable outcome.
In many businesses nowadays, service management needs to have a leading role. Where would Netflix be as a company if it didn’t monitor, measure, and optimize the way it offered its service to customers? Where would it be if it couldn’t support its innovations? Probably out of business.
Defining a Service Management Plan
In the general sense, all service management plans should point in the same direction. The goal is for all facets of operations that play a contributing role in business services — IT, facilities, plant operations, network operations, and beyond — to align with the business more effectively.
You may think, “I’ve heard that cliché a million and one times. IT has been trying to align itself more effectively with the business since Adam got his first computer.” So we’d probably better explain.
Figure 6-1 illustrates exactly what we mean. You start with managing the physical systems — be they systems of enterprise assets, smart assets, or IT assets. Then you focus on managing how all these systems relate to one another. Finally, you manage how these interconnected resources actually perform the series of processes required to satisfy the business goals.
In most organizations, the focus is on the management of systems — systems that individually don’t serve customers. The services that customers value typically are complex configurations of capabilities and resources that span business and operational lines, all of which must work together to provide a desirable outcome before the customer sees sufficient value.
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Business performance management
Service management
Figure 6-1:
A service
manageSystem ment plan. management
To fully align with the business, all flavors of operations must evolve to the point where all their respective activities focus on business performance management. The final goal is managing business performance effectively. Companies take different approaches to managing performance, depending on industry dynamics and potential innovation. To reach that goal, operations as a whole first has to evolve to the point where its activities can be accurately described as service management — where operations no longer focuses only on managing systems, but also focuses on managing the services that contribute to business performance.
That concept sounds simple — a two-step program from here to there. If that program were all that was involved, we could finish the book here. But service management is a little more complicated, as we describe in the rest of the chapter.
Understanding Service Management
and Governance
The scope of service management is broad and deep. Therefore, you need to have oversight of all the management processes and services, including how
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they work and what they actually do. You have to implement governance in the context of service management.
No matter how you organize a business, you end up with groups of people who have to collaborate and tools that have to integrate to serve the customer. Because these groups need to work together to serve customers, you need some mechanism beyond the internal controls within each group to provide the overall direction and control to ensure that the services meet customer and stakeholder requirements. You need to establish clear decision rights and accountability chains (who is allowed to make what decisions under what circumstances) for each management process and each service. Good service management requires clarity and transparency in the decision rights and accountability chains for directing, controlling, and executing each management process and service. Without this clarity and transparency, human behavior and decision-making within the service provider don’t lead to outcomes that customers and stakeholders desire. The greatest risk that every service provider faces is human behavior and decisions that are out of alignment with stakeholder requirements.
We could continue to discuss the matter in this vein, but we can be a little simpler and refer to the models that we’ve already described. Service management is the set of management processes required to manage services.
To explain what we mean, first we’ll remind you what a service is and how it relates to service management.
Suppose that an organization creates a service that calculates the tax rate for an order. We’ll call it the tax rate service. Service management is really the business manager, the controller, and the auditor combined. A piece of software ensures that the service calculates the order total according to company and government rules and then executes in an efficient manner. Although it would be nice to think that the company could use this automated program without any oversight or intervention, that scenario isn’t
possible. Service management, therefore, must involve people, standardized processes, and tools to manage the service across traditional operational boundaries to support a comprehensive business service and all its moving parts. Indeed, in discussing the Information Technology Infrastructure Library (ITIL) in Chapter 5, we outline a set of standardized IT-centric management processes that support one major operational constituent with a vested interest in business-aligned service management. On the road to success, however, all constituents — not just IT — must have a vested interest in the success of the business, and must govern and measure across operations to ensure the integrated management of business services.
Service management, like any other management discipline, requires measurement. The old axioms “What gets measured gets done,” “Inspect what