State of IT Transformation – Solving the Operating Model Challenge
Part 4 in our global study of gaps in IT transformation
We are continuing to hear that operating model is the most challenging part of IT transformation. Technology implementation is the easy part. The hard part is changing how you operate to take full advantage of it. In our State of IT Transformation analysis, 95% said they want to have an IT organization that has no silos and works together to deliver business-focused services at the lowest cost. 88% think they need to improve skills in both cloud technology and business-facing service definition.
McKinsey says that if an organization can introduce a new model for demand and service management, it can usually realize 10 to 20% cost savings (“Managing the demand for IT infrastructure” by McKinsey & Company).
Gartner analyst Tom Bittman said that failure to change the operational model was the biggest stumbling block to successful cloud implementation (“Why Are Private Clouds Failing?” by Thomas Bittman, Gartner Blog Network).
Let’s say you’ve just implemented a VCE Vblock System and you’ve automated processes for provisioning test/dev environments. How do you realize the cost savings of implementing cloud automation technologies that McKinsey promises and eliminate the stumbling blocks that Gartner is hearing about?
You begin to transition your IT organization to manage the full service lifecycle for these new services, to focus on the broader end-to-end picture of how IT services will be delivered, rather than on silo’d technology stacks. You create an IT Service Center for infrastructure as a service (IaaS). An IT Service Center is built on the ITIL framework for IT Service Management. It allows IT to manage the full service lifecycle for a defined set of services, from service strategy, to service design, to service transition, to service operation.
The first step is to assess the current operating environment, both processes and organization. The charter, or the focus of the service center, and type of services that will be provided for a single service center is defined. In this example, we are starting with IaaS services – compute services, storage services, and networking services.
A best practice for assessing processes is to start by identifying gaps between your current state and desired state for the key ITIL processes (we have a recommended subset of 15) in the ITIL Process Maturity Framework. Once gaps are identified, process improvements are defined to close those gaps. Automation tools are implemented where needed.
With these new processes, you’ll want to take a look at the current IT organizational structure, roles, and skills. New and/or changed roles and responsibilities will be required. Your IT staff will be managing services now, not just technology components. You’ll have roles like portfolio manager, solutions architect, and service operations manager.
To summarize, the IT Service Center transforms how the IT organization works and thinks. Processes, roles, and skills, as well as organization alignment, are redefined so that IT can work better with the business to determine what they need and deliver the right mix of services. This service provider mindset allows IT to be more strategic towards business outcomes, and to create value for the business. Read how EMC consultants did it for EMC IT.