Colin rudd-business-integration-and-value
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This document discusses business integration and value. It defines service as facilitating outcomes customers want without ownership of costs and risks. Value exists when used by consumers and varies over time. There are different types of customers - internal who share objectives and external with different objectives. Value is realized when outcomes are enabled for customers, not where money is spent internally. IT must link services to where value is realized for customers, not just where value is added, to demonstrate value to the business.
Colin rudd-business-integration-and-value
- 1. Business integration and value APMG International Showcase (28th June 2012) Colin Rudd FSM, FBCS, CITP, CEng, FIITT Service Management consultant, mentor and coach Chairman itSMF UK ITIL Author IT Enterprise Management Service Ltd. colin.rudd@itsmf.co.uk © Crown Copyright 2011 - reproduced under license from the Cabinet Office © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 2. Agenda • What is value? • Customers and delivering value • Are all customers the same? • Is all value the same? • How should value be measured? • The value network • Enhancing value © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 3. Definition of service 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 © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 4. Service value • Dynamic, real-time demand and value • Multiple delivery channels (internal / external), deliver different value • Output less valuable than outcome • Value only exists when used by the consumer • Value is carried in the relationship • Service value varies over time © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 5. ITIL – Service assets Capabilities Resources Management Financial Capital Organisation Infrastructure Process Applications Knowledge Information People People (Experience, skills, (Numbers of employees) and relationships) © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 6. Service value Increased value and ROV Capabilities Management Organisation Processes Increase Knowledge performance Coordinate, Asset Performance of control and Service People types customer assets deploy Reduce Information risk Applications Infrastructure Financial capital Resources © Crown Copyright 2011 - reproduced under license from the Cabinet Office - reproduced under license from the Cabinet Office © Crown Copyright 2011
- 7. ITIL® – The service lifecycle Requirements The Business / Customers Service Change Strategy Resource and proposals Policies constraints Business Strategies value (Including: the Service Portfolio and Service Catalogue Service SDPs Design Service Knowledge Management System (SKMS) Standards Architectures Solution designs Service Implementation Transition SKMS of plans Tested New/changed solutions services Service Operational /live Operation Achievements services Against targets Continual Service CSI register, improvement Improvement actions & plans © Crown Copyright 2011 - reproduced under license from the Cabinet Office - reproduced under license from the Cabinet Office © Crown Copyright 2011
- 8. Customers • Different types of customer: • Internal: • Same business objectives • IT is involved in their decision-making • We work together to achieve common outcomes • External: • Different business objectives • IT is involved in understanding their requirements • We enable their outcomes so that we keep their business © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 9. Value Money spent Value realized Value added © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 10. What does this mean for IT? • If IT wants to demonstrate value it has to link its services to where value is realized, not where value is added • If IT can not do this it will always be viewed as ‘money spent’ not ‘value added’ © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 11. Customers and services External External External External External Customer Customer Customer Customer Customer Value realized Business Unit Business Unit Value added Money spent IT Unit IT Unit IT Unit IT Unit © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 12. What is value for you? • Financial: increased revenue or profit (or possibly reduced operating costs) • Risk: reduced vulnerability • Compliance: increased legal and regulatory conformance • Customer: increased quality and satisfaction • Shareholders: increased share value or improved image © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 13. A simple value network Customers Services IT service provider Services Partners and suppliers © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 14. Internal customers External customers Customers Customers Services IT service provider Services Partners and suppliers © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 15. Internal customers External customers Customers Customers Services Services Services IT service provider Services Partners and suppliers © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 16. The value network Customers Services IT service provider Services Partners and suppliers © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 17. Customers Services IT service provider Services Partners Suppliers Partners Partners Suppliers Suppliers Partners Partners Suppliers Suppliers Partners Suppliers Suppliers Partners Partners Suppliers Internal External suppliers and partners suppliers and partners © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 18. Customers Services IT service provider Front office Back office Services Partners Suppliers Partners Partners Suppliers Suppliers Partners Partners Suppliers Suppliers Partners Suppliers Suppliers Partners Partners Suppliers Internal External suppliers and partners suppliers and partners © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 19. Customers Services IT service provider Front office Back office Services Services Services Partners Suppliers Partners Partners Suppliers Suppliers Partners Partners Suppliers Suppliers Partners Suppliers Suppliers Partners Partners Suppliers Internal External suppliers and partners suppliers and partners © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 20. Internal customers External customers Customers Customers Services Services Services IT service provider Front office Service Catalogue Back office Services Services Services Partners Suppliers Partners Partners Suppliers Suppliers Partners Partners Suppliers Suppliers Partners Suppliers Suppliers Partners Partners Suppliers Internal External suppliers and partners suppliers and partners © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 21. IT Governance Business Corporate Business governance pressures of IT needs Evaluate Direct Monitor Invest in Enhance policies conformance Performance Plans value value Business Project Service demand delivery delivery Note: diagram based on ISO/IEC 38500 © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 22. Internal customers External customers Customers Customers Services Services Services IT service provider Front office Relationships Back office Services Services Services Partners Suppliers Partners Partners Suppliers Suppliers Partners Partners Suppliers Suppliers Partners Suppliers Suppliers Partners Partners Suppliers Internal External suppliers and partners suppliers and partners © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 23. Relationships The five questions: • Readiness: Are we prepared for relationships? • Connection: Are we willing to focus on other? • Trust: Can we build mutual trust? • Investment: Are we willing to invest in others? • Synergy: Can we create a win-win relationship? Good relationships are the foundation for achievement Ref: Winning with people, John C Maxwell © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 24. The approach • Agree the required business outcomes • Agree the definition of value with the business • Agree the measurement of value • Deliver and measure delivered value • Improve and increase value, as part of the overall service strategy © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 25. New ‘cloud based’ value networks Customers Customers Services Services Customers Services Customers Customers Service Provider Suppliers Services Services Services Management Hub Mgmt. services Mgmt. services Management. services Services Suppliers Suppliers Suppliers © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 26. Summary • Need to understand value from the customer and business perspective • Focus on value, outcome and quality, both measurement and improvement • Good relationships are essential in delivering service value, both customer and supplier • Integrate and automate to provide consistent and accurate information • And remember .......... © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 27. “Quality (value) in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.’” Peter Drucker "People don’t buy products (services); they buy the expectation of benefits“ Theodore Levitt, Harvard Business School © Crown Copyright 2011 - reproduced under license from the Cabinet Office
- 28. Business integration and value APMG International Showcase (28th June 2012) Colin Rudd FSM, FBCS, CITP, CEng, FIITT Any questions ? Service Management consultant, mentor and coach Chairman itSMF UK ITIL Author IT Enterprise Management Service Ltd. colin.rudd@itsmf.co.uk © Crown Copyright 2011 - reproduced under license from the Cabinet Office © Crown Copyright 2011 - reproduced under license from the Cabinet Office