IT as a service: taking care of business

To play a truly strategic role, the modern IT organization must run itself as a separate operation. Here’s how four enterprises are reinventing the relationship between business and IT

More and more organizations are transforming their IT departments into self-sustaining business units, treating internal users as if they were external customers. And for good reason, says Dennis Drogseth, vice president of Enterprise Management Associates, an IT management consultancy.

“IT is a business within the business,” he says. “If it’s not run that way, it won’t be effective or efficient.”

But delivering IT as a service is not a trivial transformation — nor, ultimately, one with a foreseeable end. It can involve elements of project portfolio management, re-engineering of workflow, and process improvement spanning several years.

Many large IT organizations have discovered that the route to a customer-centric service organization runs along the ITIL (Information Technology Infrastructure Library) framework. By adopting best practices for managing service requests, changes, and IT assets, organizations can harness their help desks, avoid downtime from unauthorized changes, and deliver better service to their internal customers, notes David Ratcliffe, CEO of ITIL training organization Pink Elephant.

But ITIL is only a means, not an end. “The biggest misconception is that all you need to do is become ITIL certified,” Drogseth warns. “That’s a sure recipe for failure. You have to figure out what it is you’re trying to enable. The end has to transcend ITIL.”

With all big initiatives, the biggest hurdle is getting the support of your prospective customers. “The No. 1 pitfall is always people,” says Jean-Pierre Garbani, a vice president at Forrester Research. “If people feel threatened by what you’re doing, they’re going to resist it. You’ve got to educate them, show them the benefits, remove the threat.”

A customer-centric IT department increases productivity, drives up project success rates, and creates a higher profile for technology within an organization. If efforts in this direction are poorly implemented, organizations risk further alienating techies from the rest of the organization — turning them into order takers for the enterprise, rather than business advisers. Done well, however, corporate strategy and investment track records stand to improve significantly.

Here are four organizations getting IT as a service right.

Meeting the customer-focus challenge:
Purdue’s renewed end-user orientation earns high marks

Two years ago, a techie at Purdue University came up with a great idea. Why not turn professors’ lectures into podcasts that Boilermaker undergrads could download and listen to as often as they wanted? With that flash of inspiration, the BoilerCast service was born.

There was just one problem: Hardly anyone in IT management knew the program existed. Purdue’s CIO, in fact, found out about BoilerCast when the guy who started it — a supervisor in one of Purdue’s video departments — was interviewed on a local news station.

“It’s a time in our lives we don’t really like to think about,” admits Brett Coryell, executive director for Information Technology at Purdue (ITaP). “Our CIO came back to us with a lot of questions we couldn’t answer — like how we were going to support the service as it scaled, or protect professors’ rights to their own content.”

Shortly afterward, ITaP began rolling out a customer-focused approach for delivering IT services to Purdue’s 62,000 students and staff, following a project-governance model and portfolio-management approach. Now BoilerCast is one of 130 services ITaP offers in its online service catalog, which also includes items such as payroll services, phones, and networking. If, say, the student services department needs a new access-control system for the gymnasium, Coryell says, it can purchase application-hosting services from ITaP. The fee would also include a certain amount of rack space, power, networking, and call support.

Roughly 25 percent of ITaP’s $58 million budget comes from charge-backs to internal customers; the rest is covered by the university. The group is required to break even over a rolling three-year span; if it collects too much money, it has to lower next year’s rates; too little, and it has to renegotiate with customers.

“That puts great pressure on us to keep service levels high and customers satisfied,” Coryell says. “We’re not allowed to run a deficit, so if customers leave us, we’ve got to charge everyone else more.”

The customer-centric focus flows in the opposite direction as well. When ITaP must decide which of the 30 to 60 projects in its portfolio deserve the most resources, it brings in a governance committee composed of 20 department heads. Each member ranks projects based on factors such as benefit, cost, duration, and risk; projects that receive the highest overall ranking are then paired head to head until the group reaches a consensus about which ones to pursue first.

ITaP’s shift in focus began three and a half years ago when it embraced formal project management. Nearly half of ITaP’s 450 full-time employees have gone through ITIL training, while nine employees have completed their Project Manager Professional certifications, an 18-month process.

The training has paid off handsomely. Last year ITaP rolled out a course-management system across Purdue’s four campuses; its ITIL-based service desk was able to cut second-level support calls by 50 percent. The group has just finished rolling out BMC’s Remedy Service Desk for unified ticketing and incident handling. Coryell says these changes will allow ITaP to implement a $73 million ERP project without adding more full-time personnel or degrading service levels.

“Being more customer focused challenges our staff to not only be technically savvy, but also in touch with the business community,” he says. “By asking probing and open-ended questions, we can make sure we’re building them the right systems and better aligning ourselves with their business.”

Flying high on ITIL:
Oakland County finds a lifeline in ITIL and CA Clarity

It’s not every day you’re asked to save three astronauts in a crippled spacecraft thousands of miles above the Earth. But that was the job facing Phil Bertolini and his Mission Control team as they grappled with explosions, rising carbon-dioxide levels, and dozens of other tough problems coming at them from every direction.

Of course, this was not NASA’s Mission Control, and they weren’t rescuing the real Apollo 13. It was a one-day ITIL training exercise conducted last March at CA’s Long Island, New York, headquarters. Bertolini, CIO for Oakland County in Michigan, was there with members of his management team to learn firsthand just how bad things can get when your service-management process is lost in space.

The exercise was an appropriate one. In the mid-’90s, Oakland County’s IT office was juggling more than 900 projects, with no way to track status, completion date, or whether the project was still needed. Oakland’s help desk, relied on by more than 4,300 county employees and 61 cities and townships, was a rolling disaster.

“The Apollo 13 exercise mirrored our own problems with our help desk,” Bertolini says. “We had five support numbers for people to call, nothing ever got logged, and employees were bypassing the help desk and escalating problems to people they knew in the IT department.”

Oakland’s road to recovery began in the late ’90s, when the county set up a PMO (project management office) and implemented PM (Portfolio Management) software that’s now known as CA Clarity PPM (Project Portfolio Management). All 900-odd projects were suspended while county officials resubmitted their proposals to the PMO. Most, Bertolini says, went into the circular file. Cross-departmental leadership groups began meeting every three months to debate projects’ merits and establish priorities. The department instituted a series of two-year plans so that everyone would know exactly what was on IT’s plate for the next 24 months and adopted an enterprisewide approach to development. This allowed the county to shave millions off potential development costs and to take on more-ambitious projects despite flat budget growth.

More recently, the county brought the same governance principles to its help desk using CA’s Service Desk solution, routing all incidents through a single point of contact and minimizing escalation.

It was a hard sell at first, Bertolini says, requiring an internal marketing campaign as well as strong support from top executives.

“Our service desk people had been holding customers’ hands for many years. We had to make them understand that the new system would make them more efficient and able to deliver services in a more robust way to our customers.

“The customer here is everything for us,” he adds. “Everything we do is for someone else in county or city government. We know we have to satisfy their needs and expectations.”

When technology is the business:
Thomson Financial watches its productivity grow

At Thomson Financial, which provides everything from data tickers to trading terminals for investment banks, technology doesn’t just drive the business — it is the business.

So it’s only natural that when the division of the $6.6 billion Thomson Corp. sought to improve its internal workflow, it found the answer in an application lifecycle management tool used by a handful of coders in its IT department.

Three years ago, Thomson brought Serena Software’s TeamTrack out of the back office and into the front office, gradually rolling it out to manage different processes across the organization. Today more than one-third of Thomson’s 8,700 employees use it for provisioning, sales proposals, help desk incidents, and dozens of other internal processes that require a clearly defined workflow.

“We realized that what TeamTrack was good at — offering visibility into the development process, tracking who made changes to the code and when, and managing hand-offs between different teams — could be applied throughout the organization,” says executive vice president Warren Breakstone. “We’ve taken TeamTrack far beyond what it was envisioned to do.”

Before TeamTrack, it would take a Thomson salesperson four or five days to work up a proposal for a client, says Breakstone. Now it takes four or five minutes. Breakstone says sales pros simply fill out a Mad-Libs-style form with information about the client’s needs and requirements, and the system spits out a six- to 10-page proposal customized to each client.

The beauty of the software is that applying it to new business processes is a matter of changing configurations, not code, says John Hastings Kimball, Thomson’s vice president of workflow solutions. That means new apps can be rolled out in days instead of months, giving an instant productivity boost.

When the company recently integrated TeamTrack with, integration was done by business analysts in partnership with IT, Breakstone says. But the business side isn’t encroaching on IT’s territory as much as the techies are reaching out toward business.

“The old model of throwing requirements over the transom to IT is gone,” says Breakstone. “Instead of talking in technology nomenclature, the conversation is more about business requirements and end-user needs. More than anything this change has empowered IT, bringing it closer to the business and to end-users.”

Getting a grip on managing change:
Mary Kay puts on a new face on internal processes

With five regional U.S. offices, 34 international locations, 1.6 million independent consultants, and three discrete internal IT organizations, Mary Kay had a lot of different ways to get things done. And that, says technology leader Steve Moore, was a challenge.

“Three or four years ago, we were disparate in the way we handled data operations,” Moore says. “We spoke different languages and used different systems to do the same things.” That in turn led to duplicated efforts and inefficiency.

That’s when the $2.2 billion skin-care manufacturer began to adopt a BSM (business service management) practice using BMC’s Remedy suite and ITIL to standardize its internal processes. It began by implementing BMC Remedy Service Desk to create a standard ticketing system for handling and monitoring events and service requests. In the past, Moore says, many requests were made on an ad hoc basis, via e-mail or face-to-face meetings.

“A lot of deals were done in the hallway,” he says. “We didn’t have a centralized service-request system, and when your requests are done via conversation or e-mail, it’s hard to report and even harder to measure. Now when people walk down the hallway and say, ‘You need to change something in Exchange,’ we tell them they need to put a ticket in. For the first time, we were able to measure the work our IT people did in supporting the organization.”

About a year after implementing the service desk, Mary Kay added BMC’s asset- and change-management products, built around BMC’s Atrium CMDB (Configuration Management Database). The CMDB integrates with automated discovery tools and databases throughout the organization, acting as a central clearinghouse for information on all of Mary Kay’s IT assets.

Because the firm leases all of its equipment on two-year lifecycles, getting an accurate view of its assets has been a challenge, Moore says. Though the company’s CMDB is still a work in progress, Moore says the system has given the company the ability to see a lot of what IT manages in a single place.

Adopting centralized systems also allowed Mary Kay’s Dallas headquarters to become an IT service organization for its five regional offices and some international offices, many of which lack internal IT personnel.

Moore says the biggest hurdles have been overcoming users’ resistance to change, educating them about ITIL best practices, and convincing IT personnel that they’re more than mere order takers for the rest of the organization. The company had to sell them on the benefits of standardization — such as the ability to prioritize service requests and free up IT from day-to-day operations for work that’s both more interesting and more vital to the company’s bottom line.

“In the past, IT was viewed as the guys in the basement that you have to deal with,” he says. “Now we’re reaching out and providing better solutions to the business. We used to think like we’re a mom-and-pop shop; now we’re thinking like a global shop. IT had to turn the corner on that mentality, and through consolidation, education, and standardization, we did.”

Copyright © 2007 IDG Communications, Inc.