Whitepaper

The 7 Attributes of High-Performing IT Service Organizations

Service Excellence: The IT Maturity Manifesto

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Executive summary

In this whitepaper, we discuss the key areas of focus for transformation. IT organizations that push to transform and make the jump from average to high maturity will achieve a level of performance that regains the trust of the business and achieves the agility required to lead the business into the digital age with confidence.

Just at the time when technology has become most critical to running, growing and transforming businesses, IT departments are collapsing under the weight of their own legacy. The pressures of the digital age are too great for the architectures, mindset, processes, practices and skills of the past.

The gap between what IT can do and what the business needs has widened to a critical degree. This shortfall in capability has compromised IT’s credibility and driven business executives to seek alternatives in the cloud - a now-mature open market for technology and IT services. Business executives are no longer willing to accept technical excuses from IT for missed business opportunities and lost revenue.
The complexity of the legacy IT infrastructure, which has grown in response to years of evolving business needs, is now out of control, with IT departments spending upwards of two thirds of their resources on “keeping the lights on”.
Meanwhile, IT is non-responsive to requests from the business for more automation, digital innovations and new business models. The inability to support new business needs is symptomatic of an IT maturity deficit that is being filled by specialist cloud vendors.

IT maturity has reached an impasse that must be crossed for IT to remain relevant in the digital age. Data from global analyst research suggests that average enterprise IT maturity is static at Level 2 of 5. The frustration is that the “tipping point” at level 3 is in sight, but seemingly just out of reach. The reality is that the transition from Level 2 to Level 3 is a difficult journey requiring a multi-faceted transformation of the IT department. For IT, it is both the best of times and the worst of times; the perfect opportunity and the perfect storm.

“ There is a growing gap between the needs and expectations of the digital business and the capability of its IT department. This gap is being filled by shadow IT teams and by vendors dealing directly with business functions and hence bypassing the CIO.”

Disrupt IT: A new model for IT in the digital age, Ian Cox, Axin Publishing

Introduction

IT maturity is something that business and IT leaders aspire to have but is difficult to define. So what is IT maturity?

The meaning is highly subjective, varying within a single organization, across industries, business models, company sizes and stages of corporate evolution. Startups tend to have a lightweight IT infrastructure and are too fluid to be concerned with concepts like IT maturity. Larger organizations with large IT estates are more acutely aware of the importance and commit to regular benchmarking against their peers.

Today, products and services are continuously being disrupted due to emerging technologies. Eventually, every organization will hit its own “peak IT” when the business demands overpower its IT department’s capacity. At this point, IT transformation is forced to tackle the hardship of the digital age. The symptoms of this sticking point are all too familiar to today’s IT departments:

  • Constant firefighting of the same infrastructure and application issues ties up IT resources
  • The IT project portfolio is heavily stacked towards infrastructure improvements
  • Infrastructure changes trigger service disruption
  • High turnover of service desk and support staff
  • Combative interactions with business people
  • Short-term objectives continually overshadow long term strategies
  • IT projects never complete in time and business opportunities are missed
  • Project output that doesn’t match business needs

Analyst research has shown average IT maturity has remained stagnant around half-way up the 5-step ladder. Real IT maturity starts at Level 3 (beyond the sticking point) and breaking through the barrier to move up the maturity scale is possible. It is these high performing IT organizations that enable businesses to grow and lead in the digital era. They illustrate the power and influence of a strong IT function and why IT maturity really matters.

Being so subjective, any “textbook” definition of IT maturity can only exist in general terms, but one fundamental principle must be upheld – it is the business’s definition that counts. For business executives, IT maturity is the IT function’s ability to support current business operations, growth objectives and transformation programs – within the time, cost and quality constraints set by the business. When further qualifying what IT maturity means to the organization, it is often described as: responsive, engaged, proactive, streamlined, stable, agile, aligned, integrated, accountable, efficient, effective, predictable, and anticipatory.

The only true measure of IT maturity is what the business says it is. The challenge here is that few business executives can articulate precisely what a mature IT organization would look like to them. They are willing to articulate what a mature IT organization doesn’t look like, usually referring to a number of painful anecdotes where the IT department has failed to deliver for the business. So it is the job of IT to help the business reach a consensus on what good looks like before formulating a road map to achieving this level of proficiency.

VIDEO: Find out why understanding your IT maturity level is key to selecting fit-for-purpose ITSM technology

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Attribute #1: Outward looking perspective

Disconnected IT organizations waste precious resources and fail to lead technology strategy

An obsessive and narrow-minded focus on technology dilutes IT productivity and prevents a focus on what is truly important to the business. Over the years, business technology requirements have become more complex and diverse and IT departments have done their best under sometimes severe budget constraints to service these growing and changing needs.

The result is a cluttered IT ecosystem, built from a patchwork of legacy systems that compete for the attention of IT support people. This “spaghetti” infrastructure lacks architecture, stability, flexibility and robustness. Consequently, the high failure rate keeps IT experts tied up with the infrastructure layer. In essence, IT people are too busy handling the day-to-day maintenance to “zoom out” and see the business context of what they do.

Without an outward looking perspective, IT people simply don’t know if what they are doing right now is relevant to the business. Unaware of the business context, time and money is inevitably wasted on projects and procurements that don’t support a business need (when there are plenty of legitimate business demands competing for attention). For everything that the IT department invests in, there is an opportunity cost. For each project that gets done, there will be many more projects that remain undone.

Without grounding IT activity planning in the real world, assumptions take the place of facts and skew priorities. Outward-looking IT organizations actively identify and challenge these assumptions with observations and data in order to test the collective mindset of IT, and bring both thinking and activity into line with the realities of the business context.
Screen Shot 2019-10-02 at 10.52.53High performing IT organizations know the importance of the business context as a guide for IT activity: they are acutely aware of the “why”. They look outside the walls of the IT department, pro-actively explore business scenarios, track business processes from end to end to achieve a global view, internalize a range of business perspectives, and join the dots between IT activity and business value. Research from Accenture shows that 50% of high performing IT organizations explore business scenarios as part of their IT planning process.

4 ways to achieve an outward perspective:
  • Think from the outside-in: start with the end customer or end user perspective and work inward to create solutions that are relevant.
  • Continually ask “What is the business context here?” and “Who benefits from this?” If the context isn’t clear, or there is no clear benefit to end users or end customers, explore the connection with business stakeholders before investing time and budget.
  • Strip wasteful projects from the IT project portfolio and non-relevant actions from IT people’s work queues.
  • Repeat until the habit of validating planned IT activity against business value becomes culturally engrained.

The result is a reduction in waste – a leaner IT project portfolio and more business-focused work queues for individual IT experts. This in turn provides the slack required to develop deeper knowledge of the business, end-users, end customers, the market and competitors that IT needs. Armed with a greater understanding of the business ecosystem, IT people are empowered to identify, propose and act on opportunities that will improve performance. The outward perspective and knowledge of the business context is critical to IT’s evolution from reactive support organization to pro-active solutions initiator.

“ I&O organizations are stratified systems, where the old coexists with the new, and managing such a disparate environment in a cohesive manner is an enormous challenge.”

J.P Garbani, Forrester

FIND OUT MORE: Voice of the user: Improving ITSM with user feedback

Attribute #2: Aggressive outsourcing strategy

Unravel the legacy headache to eliminate repetitive firefighting

Most IT departments are spread too thinly - across too much complexity - to support business transformation at a pace that works in the digital age. IT is carrying around so much legacy baggage that sustained evolution is not possible.

However, the natural instinct is to increase headcount instead of reducing complexity – to which the business responds “Do more with less. Work smarter.”

High performing IT organizations are lean; they outsource aggressively to rationalize bloated legacy infrastructure, reduce complexity and unravel the legacy headaches. In-house staff focus on the core competencies, while commodity IT services are outsourced. Specialized third party vendors are sourced on their ability to provide scalable and robust solutions to drive accelerated efficiencies.

High performing IT organizations are forward-thinking and not rooted in the past. For them, the size of the datacenter is not the measure of the IT function’s value to the business. Instead, utilizing the technology and services you have rather than simply concentrating on a “bigger is better” mentality, and outsourcing the technology management allows you to better control overheads. Deloitte’s 2015 Global CIO Survey¹ found that 57% of the IT budget is spent on keeping the lights on, with 27% spent on IT enhancement and only 16% dedicated to supporting new business innovations – many of which are at high risk of failure. From the business’ perspective, they are not getting much return from the IT budget and it is easy to see why confidence in IT capability is low.

Stakeholders outside of the IT department don’t care if IT builds, buys or leases technology. They’re interested only in the business outcomes that technology enables: more efficient/effective business processes, innovative products and services, and a customer experience that differentiates from the competition. IT needs to be positioned to source and manage the technology that will underpin these outcomes. And they want IT to help them discover new needs and innovative solutions earlier in order to get ahead of the competition. They want IT to be proactive; leveraging technical knowledge to propose innovative solutions to business problems they haven’t even seen yet. In all but a few cases, ownership of the technology is not an explicit requirement.

Cloud technologies and managed services enable IT to spend less time managing technical aspects and more time focusing on business capabilities, outcomes, performance and differentiation.

Replacing the traditional build-or-buy behavior with a cloud first approach keeps the IT footprint lean and support overheads low. Getting outsourcing right takes time, is founded on a solid process and involves frequent engagement with business stakeholders:
  • If you don’t already have a service catalog, create a list of services and technologies in production to guide a systematic evaluation.
  • Identify and decommission “dead wood” legacy systems (those that relate to now-extinct business requirements).
  • Identify which services and technologies don’t support business differentiation. Which carry a high cost?
  • Agree on a set of criteria with the relevant business stakeholders to enable the objective evaluation of in-house technologies and services against outsourcer alternatives.
  • Collect service cost and performance metrics from the IT side and the business side to fuel a data-driven evaluation process.
  • Assess each technology and service, and compare commodity services and technologies against options in the open market.

Outsourcing is not a quick fix; rather it is a cornerstone of the long-term IT maturity strategy. It is a critical step to rationalizing the IT infrastructure in order to regain control over spiraling complexity and establishing a greater degree of flexibility.

Evaluating the service portfolio and options for outsourcing takes time, involves a due diligence process, and broad engagement with business stakeholders. To keep your IT footprint lean and business-relevant, and prevent a return to the chaos of the legacy “spaghetti”, review your technology and service portfolio on a regular basis – at least annually.

The key questions are:
• Have any services become redundant in the last 12 months?
• Have the criteria for outsourcing eligibility changed?
• Do any of the rationalized technologies in our portfolio now meet the criteria for outsourcing?
• If you were to rebuild your IT function from scratch, what would it look like?
• How much of what you have right now would you actually keep?

“ In high performing IT groups, 55% of all IT investments are designed to deliver strategic business capabilities.”
Accenture2
 

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Attribute #3: Structured for business fusion

Transform teams for greater collaboration and innovation

Isolation is a major barrier to IT maturity. While IT exists apart from business units, it is constantly broadsided by unseen shifts in business strategy and last-minute awareness of new technology requirements. 

IT leaders who are not consistently informed by business leadership can’t anticipate the impacts of upcoming changes. Consequently, the timescales that IT teams have to work within to deliver are too short to be practical and failure to capitalize on business opportunities is frequently a foregone conclusion.

Shockingly, 75% of CIOs felt that infrastructure roll-outs were the most successful type of project.3

The IT department needs to progress beyond alignment or integration and aim for structural fusion with the business it serves. IT needs to operate at the frontiers of the business.

A siloed structure isolates IT people from the business context and creates confusion around strategies and priorities. In order to serve and support the business, IT people need to be out in the business; not just engaging with other functions via meetings, but by being truly embedded in the other functions, working with them for extended periods creating solutions from the business user perspective. The break-out popularity of shadow IT, often perceived as a threat, has, in fact, shown the way: business units want closer proximity to - and greater control over - the technologies they use and the technical resources they need to support them.

IT departments need to reach out into business units, connect with pockets of shadow IT and co-locate specialist IT people within the business units they serve in order to provide advice, consulting, support and governance in a way that really works. Co-location of IT people and business people greatly reduces the transaction cost of collaboration, while the close proximity naturally breeds tight alignment between what IT people do and what the business needs.

CIOs need to embrace this decentralized model for IT, devolve control over technology decisions to a local level and trade absolute control of technology for a looser form of stewardship, governance and curation. An important principle of the agile methodology, co-location puts people with complementary skill sets together to form highly effective autonomous units that can quickly execute the right thing in the right way. Over time, IT professionals embedded in the business context become highly-focused business technology specialists, and business people become more aware of the technical issues to be considered. In the digital age, business units that are supported from within by these specialized technical resources have a major advantage over separated teams.

At the same time, the central IT component needs to maintain a helicopter view of what’s happening out in the business, to ensure local activity meshes with the global objectives, data standards and governance rules of the organization. This high level view affords central IT visibility of many of the inefficiencies and security risks that can’t be seen by IT professionals working at the coal face.

In large organizations, a big bang business strategy for implementing business-IT fusion will be too cumbersome to work, and a more phased approach is necessary. The marketing department – an area where technology has become critical to supporting digital communications, customer engagement and analytics – is an ideal point for piloting this new structure.

FIND OUT MORE: Making IT collaboration work

“ Change agents must step outside of their departments and collaborate with other functional and executive leaders to foster real change.”
Brian Solis, Altimeter4

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Attribute #4: Value people over technology

A happy workforce is the key to the productivity and stability

Imagine if half of your IT staff were replaced overnight. What would this do to your current capabilities? The truth is that this is already happening, only on a smaller scale. The impact may not be so immediate and obvious but a high turnover of staff still has a significant impact.

IT is traditionally technology focused, but technology can be replaced more easily than people. Swapping out a server blade, hard drive or network cable is simple compared to replacing a veteran technician or IT manager. Business continuity relies on a stable workforce. Likewise in the IT department, a high staff turnover rate can be extremely damaging to IT capabilities.

This ongoing “brain drain” compromises the IT department’s body of knowledge and drives up recruitment and training costs – funds that ought to be directed towards new technology projects to support new business capabilities. Knowledge Bases (KBs) and Configuration Management Systems (CMSs) are no substitute for the rich knowledge in people’s heads. Although a sound knowledge management strategy and good IT operations management tools are critical to supporting a high IT maturity level, they cannot provide optimal value in an environment where the average staff lifespan is short.

High staff turnover kills process adherence, which undermines the stability of processes and the capabilities they support. New staff don’t arrive with knowledge of your organizations processes, culture and governance rules. By default, they import foreign work habits and attitudes that may conflict with the established processes and culture. Without a stable workforce and culture, productivity is compromised and creating a stable platform to achieve the consistency on which the higher levels of IT maturity rely is difficult.

A third symptom of high staff turnover is the weakening of relationships. Relationships between IT people and business people are personal, so replacement staff must re-forge the relationships which are a key part of the fabric of a mature IT organization. Unsurprisingly, Deloitte’s 2015 Global CIO Survey¹ found that strong relationships correlate with a high frequency of interaction; they are fragile in nature and require constant maintenance. In the Agile Manifesto, the importance of people and relationships is articulated as “Individuals and interactions over processes and tools”.

Increasing IT maturity involves taking technical people out of their comfort zones. They must challenge assumptions, absorb new work practices and form wider networks of relationships. Doing so makes many technical people anxious. Recent research by Axios Systems which spanned North America, UK and Europe, indicates that morale of IT staff can decline as IT maturity increases. The transformation required to achieve high IT maturity reshapes their world significantly, which means that people management is an essential component of the IT maturity roadmap. Staff require training, support, coaching and mentoring to help them overcome anxiety and grow on the path to higher IT maturity. The IT leadership must work with HR to plan out aspects of recruitment, engagement, retention, training and coaching.

FIND OUT MORE: Social IT Knowledge Management: surface and capture knowledge through collaboration

“ 85% of high performers identify skills in new technologies as one of the top skills to have for future success.”
Accenture2

“ 59% of organizations face a technology skills shortage.”
Harvey Nash3

Attribute #5: Evolve core competencies

Update the IT process portfolio to support new digital age capabilities

Mid-maturity IT departments, frequently positioned as “support organizations” within the business are intimately familiar with the ITIL® support processes that control the management of incidents, problems, changes, configurations and SLAs.

In general, most IT organizations formally manage support processes as part of their process portfolio – and have been doing so with some level of success and stability for years. But to achieve a higher level of IT maturity, IT departments must manage a broader array of processes that support more rapid innovation capabilities.

This includes agile development and vendor management processes that enable IT departments to source and develop new solutions much faster – within timescales that are more appropriate for the pace of the digital age.

Mature IT organizations continually assess their core process competencies in order to spot gaps and make timely improvements.

IT departments are typically driven by the need for everything to be perfect. Consequently, the relatively simple template processes described by ITIL are frequently over-engineered to fit all possible circumstances, driving complexity to a level where the processes become painfully slow, fragile and difficult to automate. It is better to streamline processes (and the supporting technology) to handle mainstream demand quickly – and put exception mechanisms in place to handle unique instances that require custom responses.

Likewise, when the business needs something new from the IT department, complex and rigid processes often stand in the way of progress. The traditional waterfall development model insists on a comprehensive and finalized set of requirements before moving on to the design phase.

The waterfall development model, although still a necessity for some of the largest and most complex IT projects, does not work well with the speed of change in the digital world. An agile approach helps achieve the pace required to get new services to the business and innovations to the market within the right timescale.

The IT department must help the business define the shape of a viable solution and then iterate to refine the solution over time. The intention is to deliver early value, not late perfection. This agile process is cyclical, not linear, and relies on new cloud and virtualization paradigms to accelerate the rapid production of prototype solutions which can be tested by the business.

The “build everything” mentality is neither viable nor necessary.

However, there is one particularly painful symptom that stems from the disconnection between the business and IT: business strategy planning happens behind closed doors and the IT leadership are informed too late in the process to provide technical advice or execute within the desired business timescale. High-performing organizations integrate business strategy and IT development process to ensure engagement between business and IT leaders at the earliest opportunity.

“ 46% of high performers expect to adopt agile methods across their organization.”
Accenture2

Attribute #6: Empower end-users

Make information and services readily available at the right place and the right time

As more and more Millennials enter the workforce (and Baby Boomers retire) the average end-user profile is becoming more tech-savvy. This growing technical capability and willingness to self-support means it is no longer necessary for IT to treat the end-user community as a homogenous mass of technophobes, all of whom need personal assistance from the service desk to resolve technical issues.

The application of a self-service support strategy is critical to reaching a high level of IT maturity. While burdened by high daily volumes of minor technical issues, the service desk will remain in firefighting mode and the transformation projects that are essential to establishing advanced IT capabilities will remain on the shelf.

To make self-service work, IT needs to move from a support gatekeeper to a support facilitator model. As it stands, the service desk is the central control point for technical issues. A self-support strategy facilitates widespread sharing of technical knowledge and decentralizes support from the service desk, exposing the right level of technical information to the right end-user groups – and empowering them to resolve issues quickly without adding an unnecessary burden to the service desk.

The facilitation of peer-to-peer support amongst end-user groups can further reduce the volume of issues referred to the service desk. Some end-users are more capable and confident than others, so they become natural go-to people for those who are less confident with technology.

The challenge is to scale up peer support from a local level to a global level, enabling end-users to collaborate across regions and time zones to leverage previously isolated pockets of knowledge – while IT maintains visibility, facilitates capture and applies curation of knowledge artifacts. However, HDI research states that only 15% of IT organizations enable collaboration between end-users5.

High performing IT organizations know their end-user community. They survey the community to rank end-users by technical capability and confidence so that they can expose the right level of technical information to the appropriate groups.

They use data from the service desk to focus their self-service strategy – tackling the simple issues that are draining the most time from end-users and the service desk first. Where support knowledge cannot be directly exposed to the end-user (because there is an element of risk), they capture knowledge at the second and third-line support levels and make it available to the service desk to reduce transaction overhead, shorten call times and increase first contact resolution rates.

Where end-users need something new from the IT department, a service catalog facilitates efficient interaction throughout the process. Exposing a digital service portal takes the original request and subsequent status enquiry calls out of the service desk’s queue to further free up IT resources for improvement and development projects.

Mutual benefit and quality of the end-user experience are critical to getting self-service right.

A successful self-service portal reduces the transaction cost of resolving issues and requesting services for end-users; it must be more efficient than contacting the service desk for end-users to change behavior and adopt the digital channel.

FIND OUT MORE: Why you should care about the IT customer experience

“ 71% of high performers’ total employee interactions are self-service and seamless across channels (vs 36% in other organizations). High performers expect to drive self-service even further - with up to 84% of interactions going down the self-service route.”
Accenture2

Attribute #7: Communicate a persuasive vision for IT

Start with why

Transformation of the IT department cannot and should not happen in isolation.

The CIO and the senior IT management team need to communicate the vision behind the transformation of IT - and how it will benefit the organization. Given the current state of faith in the IT department, the lack of credibility is a significant barrier to IT transformation and the IT leadership must work hard to convince business stakeholders that investing in a “fresh start” will deliver benefits.

Building credibility requires an opportunity to do so. Business executives need to give IT the chance to articulate the vision that is driving the transformation, and afford them the necessary slack to enable forward motion.

They must understand that achieving a high level of IT maturity won’t happen overnight, and long-term maturity may come at the expense of short-term performance: things may actually get worse before they get better.

For most organizations, the journey will span a 24-36 month timescale, so realistic expectations must be set and commitment sought.

Clarity is the key.

The CIO and senior IT management team must plan out a crystal clear IT maturity roadmap, setting out the major steps and the benefits that will be delivered along the way.

The CIO must then engage with the full range of business stakeholders to articulate the impact and benefits in their respective areas of the business.

“ Digital transformation is more than just digital; it’s about remodeling business to be agile, innovative, and customer-centric at the core.”
Altimeter4

Conclusions

IT has to change – and has to be seen to be changing. Achieving high IT maturity requires a clean slate - a fresh vision, a new approach and a new mentality - devoid of ego, jargon and claims over the ownership and control of technology.

Getting from where you are now to a state of high IT maturity is a unique journey for every organization; there is not a one-size-fits-all plan.

However, the principles set out in this whitepaper form a framework on which you can hang a tailored IT maturity roadmap.

IT leaders must make efforts to progress each key attribute to grow maturity in a sustainable manner while balancing this progress with the immediate priorities of the business.

It is a transition from a set of legacy capabilities to a more progressive, agile set of capabilities that are closely aligned with the needs of the business.

Reaching the upper echelons of the maturity spectrum requires a transformation. Incremental improvement of the same operating model, governance and culture simply isn’t enough.

IT has to change – and has to be seen to be changing.

Achieving high IT maturity requires a clean slate - a fresh vision, a new approach and a new mentality - devoid of ego, jargon and claims over the ownership and control of technology.

FIND OUT MORE: Learn how digital transformation translates into IT service delivery

“ 61% of high performing IT organizations have a growing budget (versus 29% of others)”
Harvey Nash3

References:

  1. 2015 Global CIO Survey, Deloitte, http://www2.deloitte.com/content/dam/Deloitte/at/Documents/technology-media-telecommunications/cio-survey2015.pdf
  2. High Performers in IT: Defined by Digital, Accenture, 2016, https://www.accenture.com/t00010101T000000__w__/de-de/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Technology_4/Accenture-HPIT-Research-Report-Defined-by-Digital.ashx
  3. CIO Survey, Harvey Nash, 2015, http://www.harveynash.com/group/mediacentre/Harvey_Nash_CIO_Survey_2015.pdf
  4. 6 Stages of Digital Transformation, Brian Solis, Altimeter, https://www.altimetergroup.com/pdf/reports/Six-Stages-of-Digital-Transformation-Altimeter.pdf
  5. HDI, August 2015