IT Service Value: When IT doesn't "get it" neither does your business

I have several very good friends stateside whom, I would say, hold the stereo typical viewpoint of what IT is and what it does for the business. In my past life, I worked in the IT sector as a software educator in what I called “The Second Silicone Valley” of Orange County California. (Or, “The O.C. to those that have cable television). My wife and I both lived through the dot com bubble days and experienced the opulence of the era by way of a holiday party thrown by the IT company my wife worked for.

In Vegas.

At the Bellagio Hotel! (That’s the one with the dancing fountains)

AT NO COST TO US!

The organization in question flew their employees AND spouses to Vegas, put them up in the Bellagio hotel and had a raging (not to mention expensive) year end shindig.
Ahh….the good old days. But, I digress.

During that time IT organizations were pretty much given blank checks to make “the next big thing”. If you had .com in your name, it was assumed you would make a killing regardless of how ridiculous your idea was. (See this article for proof: http://www.cnet.com/4520-11136_1-6278387-1.html)
One BIG lesson out of the dot com disaster was more of a reminder than it was a lesson:

It doesn’t matter what clever name you have, how funny your marketing is, how much capital you’ve raised or how smart your people are. In the end if you don’t provide a quality service that provides value to your customers you are dead in the water. It doesn’t matter if your “service” is providing IT, delivering pizza’s or renting movies. Your customers want value for their money.

IT services are no different than any other service. Before we get into this, let’s set a baseline definition of what a “service” is using the ITIL (Information
Technology Infrastructure Library) definition:

“A service is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks”

In ITIL a “customer” is the one who pays for the service. The end-user or user is the one that uses it. Customers can be end users (e.g. the HR director authorizes payment for the new HR system out of the HR budget and he/she also uses the HR system to run reports.) Now that we have established that, let’s talk about what they mean by “delivering value to customers”

In ITIL service value is broken down into two distinct aspects. Both of these must be present in order to create value. They are Utility and Warranty.
Utility is what the customer gets and Warranty is how it is delivered. Another way of saying it is:

Utility = Fit for purpose (what it does)

Warranty = Fit for use (how it is delivered)

Both utility and warranty must be present in order for a service to provided value.

The “facilitating outcomes” part speaks to the Utility aspect of value. The “outcome” being what the customer gets or what it does.

Now, let’s pick that aforementioned statement apart and apply it to our non-IT day-to-day lives.

“….facilitating outcomes customers want to achieve”

Have you ever gone to the movies? Have you ever rented a movie from the local rental place up the street? Have you ever ordered a movie from your cable provider from the comfort of your couch?

Guess what? You’ve had your outcome facilitated by a service provider!

In each of the examples given the “facilitated outcome” is the same:

You want to watch a movie.

Hence the movie theater, movie rental store and your cable television provider all “facilitate the outcome customers (you) want to achieve”.

Next let’s take a look at the rest of the statement:

“…without ownership of specific costs and risks”

This speaks to the Warranty aspect of service value or how the service is delivered. In order for you to watch that movie in the comfort of your home, or in the theatre, there are specific costs and risks that have to be taken into account in order to provide or deliver that service.

Do you care about how many staff need to be on hand at any given time? What hours the rental store or theater needs to be open? How many and what type of movies you need to stock? Big budget action films, drama, foreign? How much snacks and soda need to be on hand? The type of computer system needed to accept your cable TV order and allow you access to the movie using only your remote? Do you care about how movies get delivered to the theater, rental store or cable company?

No. You just want to pay X amount of dollars and watch a flick.

By the way, before you pick up your movie from the rental store you might pull into that a pizza place next door that facilitates the outcome of “I need something to eat”.

HR, Sales, Marketing, Procurement, Admin are all “customers” of the “services” that IT provides.

Each one of these business units have specific outcomes they need to achieve in accordance with the overall vision, mission and strategy of the business as a whole. All of these business units are (theoretically) working together to help the business achieve its objectives in the marketplace. The business sees value in IT only when IT can help the business achieve its business outcomes.

By facilitating these outcomes effectively (doing what we said we would), and efficiently (using minimal effort and time to do it), IT becomes a strategic asset for the business and the business achieves greater flexibility, better cost effectiveness, superior efficiency and greater market presence.

So, whether you are a 2 person company or a multi-million dollar agency, if you or your IT department don’t “get” services and service value, neither will your customers. If your customers don’t get it….you don’t get business. If you don’t get business….well…..

I think you get it.