Understanding the Application
Companies today demand competitive advantage from their IT investments but 45% of companies view their IT as “necessary” -- as in a necessary evil -- and fully 2/3 feel poor quality IT limits the business. Most U.S. companies spend between 2 and 9 percent of their annual revenues on IT-related expenditures -- making IT a huge investment. And companies need more than just cost effectiveness, they are demanding competitive advantage from their IT investments.
Yet while most business executive agree that IT should be a contributor to cost effectiveness, throughout North America, Asia-Pacific and Europe two out of three say that their business is constrained by IT's inability to quickly adapt to the changing needs of the business. Under 1/3 of businesses view IT as a strategic partner with the business. 14% of companies feel their IT "is not considered part of business advancement", 15% say IT "makes no contribution at all", 21% view their IT as an "expensive overhead", 37% feel that "business is constrained by IT." Coupled with the fact that over half of funded IT projects fail -- and of those that do complete the average cost is more than double -- IT leaders now have to work harder to prove that they are adding measurable value to their company.
Getting in the way of improving IT contribution to competitive business advantage is the current global economic downturn. The difficult business climate is forcing companies to cut IT spending dramatically. The projected drop in IT spending will be worse than the decline when the "Internet bubble" burst in 2001. Spending on all fronts is falling -- hardware spending falling nearly 15 percent, IT services spending falling 1.7 percent, spending on telecommunications equipment falling 2.9 percent in 2009, and software spending remaining flat.
At the same time the demand for IT services is increasing due to the merger of three important topics: complexity, commoditization, and globalization.The dramatic increase in the complexity related to falling costs and accelerating pace of change is well known. Less well understood is the how the business has less and less tolerance for poor service quality due to business dependence upon IT. The bad news for IT leaders is that just when they need to jump-start improvement initiatives to meet the changing demands of the business landscape budgets and staffing at all levels are under assault.
Making matters worse, today’s economic climate puts IT organizations under increased scrutiny and IT leaders under incredible pressure to deliver real and measurable results – or else. Turnover of IT executives is increasing at an alarming rate. Almost three quarters of IT leaders say they've been in their jobs for two years or less, less than half who said that two year prior. At the same time, under 10% say they've been in their jobs longer than four years, compared with 29% two years before.
Another trend that does not bode well for IT leaders is that business is uncertain about how they ought manage IT. Many businesses are de-emphasizing of senior IT positions by relegating them under the finance office.
The bottom line is that the perceived value and prestige of IT leadership is diminishing -- and taking many hard-built careers along with it. Facing increasing demand for services, escalating technological complexity, withering scrutiny and declining budgets, how can IT leaders possibly hope meet the changing demands of the business landscape, move beyond the image of IT as a cost center and be seen as an innovator and business enabler?
Our solution answers this questions, and moves beyond theory with explicit directions on exactly how to measure IT service quality. But even more important, show how to use the results of your quality measurements to develop targeted action plans to solve specific quality issues. The IT environment today is an ocean of uncertainty—and not just uncertainty, but also opportunity. Opportunity to provide tangible evidence of alignment and move beyond the image of IT as a cost center, the chance to be seen as an innovator and business enabler. Follow the guidance in this book to measure service quality, analyze the results, and apply practical solutions to allocate limited IT resources to overcome challenges, seize opportunities, and empower business success.
Many IT managers work under strained relations with their businesses. The reason we in IT are failing is simply because we do not:
⁃ understand the expectations consumers have for the services we provide
⁃ accurately capture these expectations and analyze them
⁃ manage our resources in ways to match changing expectations
⁃ deliver services that meet consumers needs and expectations
Many so-called "customer satisfaction surveys" used in an effort to determine IT service quality. These surveys are definitely a start in the right direction in that the survey author understands that he or she needs to take into account the consumer of the service when measuring quality. Unfortunately, many of these customer satisfaction surveys are simply not effective and are soon discarded.
Time is perhaps the most precious commodity we all possess-including the consumers of the services we produce. Asking too many questions or asking questions in the wrong way or just plain asking the wrong questions wastes time.
The really good news is that over the last 25 years the science of marketing has advanced dramatically. There are now statistically valid-that means very well proven-frameworks for measuring quality and ways to generate reliable and repeatable results.
For perhaps the first time in the history of IT management we have our disposal the tools and techniques to truly understand the quality of the IT services we provide. We can measure them, and perhaps more importantly we can analyze them to understand specifically which characteristics of a service is meeting were not meeting consumer expectations and requirements.
Practitioners and managers often ask similar questions regarding the measurement of IT services. Many practitioners assume that by examining the warranty surrounding the IT components that create a service that they can measure IT service quality. They cannot. Measuring warranty of individual components is at best predictive, and has been proven to be woefully inadequate in many instances.
Many common questions arise with regard to measuring services: What is customer delight? How do we exceed customer expectation? How do we under promise and over deliver?
These are not the right questions to ask. To measure service quality is to measure the expectation of the service user, and then position the IT organization within that expectation. It is not feasible to attempt to delight all customers, or exceed customer expectations. In fact, attempting to do these things more often than not result in spectacular failures.
IT Service Quality
Quality is a subjective concept, and this makes measuring quality not always straightforward or easy due. The perception of quality depends on the context and the person making the assessment. Consider a simple software application: the application developer, the marketing person, the support agent and the user with all have very different perceptions of quality for the same product. However, each of these perceptions is vitally important.
Some aspects of quality such as functionality are objectively defined. For example, an email client actually must send and receive emails. Measuring the quality of such an objective aspect of quality is relatively easy. For example we can simply attempt to send and receive e-mails.
Other aspects of quality are much more difficult to measure since they involve the perception of the assessor and the context within which the assessor is assessing. Whether these aspects of quality are perceived responsiveness, assurance, and empathy of support organization, or even the fit and finish of the physical goods and marketing materials associated with service, they are all subjective. The assessment of quality will vary from person to person. Measuring the quality of the subjective aspects requires an entirely different approach than measuring object of aspects of services. For these types of quality measures you must involve the consumer of the service in the actual measuring process so that they can express their opinions of quality, and you can then use these opinions to understand the job you are doing.
Quality is a very interesting word that means different things to different people. For example, if I am a technician working on an IT system then quality is simply me doing my job correctly. If I am a service provider than quality takes on very different aspect. From the point of view of a service provider quality is the culmination of all of the little jobs accomplished by all of the systems, staff, and tools at my disposal.
From the perspective of the consumer of the service however, quality is very simple--quality is the ability to accomplish his or her job, using IT services as a means to and end. Consumers of IT services rely upon the services to achieve business outcomes. Some of these outcomes have to do with success in the marketplace, for example selling more products. Other outcomes have to do with goals and objectives internal to the enterprise. For example, a human resource management system and the ability to consent and entice employees to remain with the company. In either case consumers of IT services view them very differently than providers.
This fundamental difference in perspective is often responsible for what is termed the "business IT disconnect". The business IT disconnect refers to the gap in understanding between the producers and consumers of IT services. Fundamentally producers and consumers share a common interest in the form of the service itself. However, their interests diverge rapidly and substantially from this point.
Producers care most about the creation and delivery of the IT service. An IT service encapsulates all of the systems required to instantiate it--all of the people, hardware, the software, the networking elements, the process is the documentation. To service producer IT service is the outcome of all the hard work service requires. Providing a service is the act of delivering a performance, and that performance is constrained by the resources and capabilities required to deliver the service.
Resources are all those factors and organization possesses and has available a used to deliver the service. Resources are those tangible organizational assets and include infrastructure, people, money and anything else that might help to deliver the service. The performance of a resource is constrained by the resources capability.
Capabilities are the intangible elements are factors within an organization which enable resources to achieve desired results. Capability is the ability of an organization, person, process, application IT service or any other resource to carry out an activity. Common examples of capabilities include training, knowledge, support, attitude, etc.
IT services are dependent upon their resources, but for success they require an appropriate level of capability. Therefore capabilities operated a higher level than resources in that the resource is constrained by its capabilities. The bottom line is that it is capability that controls the quality of the performance of the IT service. Resources without capabilities are useless. So it makes sense that the IT view of quality means doing all the little jobs required in the right way. However, it is all too easy to focus on those aspects of the IT system that are easy or well-known.
Consumers care most about the ability to make use of the IT service to mitigate some risk, enables some outcome, or accomplish some goal. IT service consumers choose to obtain services from providers because it is more beneficial to do so than not to do so. Services facilitate outcomes these consumers want to achieve without the ownership of specific costs and risks. Services deliver these benefits by controlling or removing one or more constraints, thereby allowing consumers to obtain value otherwise only attainable at additional cost and risks, if at all. From the point of view of the consumer the IT service represents risks--the reason to use a service is because it is riskier than not to do so. At the same time, the IT service itself is a risk--if the service fails to deliver value as promised the consumer stands to lose.
From this very quick examination of how differently consumers and producers of IT services think about those same services they should be more easy to understand the causes of the business-IT disconnect.
The gap between consumers and providers is not irreversible however, and the key to closing the gap is for the IT producer to understand that in reality their objective for an IT service is truly the same as the objective held by the consumer. By focusing on business outcomes the IT provider is able to not only understand consumer requirements, but also to begin to consider new ways to meet changing business requirements.
IT services management strains to enable consumer outcomes by marshaling the performances of IT systems (e.g., electronic processing and data manipulation apparatus and all the human operators and managers of such apparatus. Its IT systems are composed of human and technical resources (including the requisite capabilities) and comprise the organizational functional groupings of people, products, process, and partners delivering and supporting IT services. IT services rely upon several to hundreds of IT systems, many of which are shared between one or more a tea services. An IT service is the instantiation of the performances of all its IT systems, which systems subsume management staff, hardware and software, processes, and partners themselves providing goods and services.
Measuring the quality of an IT service first requires a change in mindset on the part of the service provider. Measuring the quality of an IT service also requires the active engagement and involvement of the consumers of the service. It is critical that the consumer of an IT service assumes some amount of responsibility for their consumption of the service. Many business people at first may not understand the criticality of the role they play. However, without consumers indicating what they need to accomplish their objectives and providing feedback to the service provider about whether the service is enabling the attainment of those objectives, one cannot measure IT service quality.
The IT Commoditization Opportunity
Today's IT systems and the services they comprise are becoming commodities. As commodities, the hardware and software artifacts composing IT systems get faster, cheaper, and better at predictable pace.
With the increased availability of telecommunications transmission systems such as the Internet and cellular and cable communications, the quantity of individuals relying upon IT services rises annually. With this increase in usage comes increased dependency, which places significant burdens upon both the consumers and producers of IT services.IT services and IT service providers have a direct and growing impact on IT consumers who rely upon IT services. As technology standardizes and becomes ubiquitous, it is the human element of IT that becomes a critical path to customer and user satisfaction.
The complexity, ubiquity and market the tendency of modern IT services conspired to create a murky situation in which a language hardware, software, network and human resource does what, for whom, when, and why is nearly impossible. While it may seem obvious to "focus on the consumer" and IT even discovering whom the consumer is can be difficult at times. Still, most IT managers do not make random decisions regarding the allocation of their resources. The responsible manager believes he or she has the best interests of the consumer and user in mind, and the manager usually believes that what he or she is doing is the right course of action. All too often however in reality, these decisions by managers are made in a knowledge vacuum. The manager believes he or she knows what is best and understands fully the requirements placed upon him or her, when in reality, the complexity of the IT systems masks the true requirements of the IT service, resulting in dissatisfaction with IT service providers and frustration from IT managers and providers.
IT services are intangible, still, most managers of service businesses continue to think and operate using product-oriented terms and IT managers are only now truly beginning to understand that as IT becomes a commodity the way it needs to be managed as change dramatically. In such a turbulent situation, IT managers need a framework to help them identify where they are most likely to get the best performance from their limited resources. Measuring IT service quality from the point of view of the consumer is exactly what is required for today's IT service providers to remain relevant and successful.
Companies today demand competitive advantage from their IT investments, but many view their IT as “necessary” -- as in a necessary evil -- and most feel poor IT quality limits the business. As a result most IT managers are frustrated and struggle with strained relationships with their business. The purpose of this book is to equip IT managers with the concepts, principles, skills and tools they need to meet the changing demands of their business landscape, move beyond the image of IT as a cost center and be seen as an innovator and business enabler. Our solution shows exactly how to measure quality, analyze results, communicate findings, justify improvements, develop actions, and apply practical solutions overcome challenges, seize opportunities, and empower business success.