My post yesterday claimed that ITIL is necessary, but not sufficient for reaching Level 3 Business-IT Maturity. As anticipated, this has led to a fair amount of traffic, some showing up as commentary on the blog, others showing up as email messages from various vendors of Service Management and ITIL support services. I therefore want to expand upon and defend my position on this.
In so doing, let me be clear – intelligently implemented (i.e, without becoming an end in itself, and as part of a well-orchestrated IT transformation plan) ITIL is very useful – especially in its v3 incarnation. As with CMMI, I’m a supporter, although I have seen both CMMI and ITIL “madness” reminiscent of the Malcolm Baldrige award and Deming Prize madness of the mid-90’s when companies drove themselves into or near bankruptcy in pursuit of a prize, while taking their metaphorical eyes of the business ball.
A while ago I posted on Business-IT Maturity and the Portfolio Lens. In addressing the ITIL issue I want to revisit one of the core concepts from that post. First, drawing from Professor Peter Weill’s excellent work on IT Portfolio Management, I repeat below his portfolio model showing 4 classifications of IT investment types.
In this model, we can think of Infrastructure as the underlying enabler, just as roads and railways enable us to travel, work, play, and so on. The things we do on that infrastructure include the day-to-day necessities of processing repeated transactions – taking orders, paying vendors, managing customers and so on. Just as with the roads and railways, we can do the daily mundane activities of getting our groceries, and getting to and from work. We can also leverage that infrastructure for higher value endeavors such as managing information, supporting collaboration, enabling decision support, etc. I guess the road analogy equivalent might be getting the kids to and from school, participating in social activities, be they worship or a visit to the gym.
The highest potential value in Weill’s model he calls ‘strategic’ – the things we do to drive business growth. These are generally risky – they have a risk of failure, but when they win, they win big, and might actually become essential to business operations. At the risk of pushing my road analogy too far, this might equate to launching a new courier service, or perhaps renting out mannequins so single people can take advantage of High Occupancy Vehicle lanes. Yield management as first introduced by American Airlines Sabre unit gave them such a competitive advantage that now all airlines, and in fact, hotels and other businesses with similar characteristics use yield management – it’s almost become part of their infrastructure – and is certainly an integral piece of how a reservation transaction is processed.
Anyway, with some ‘poetic license’ I think there is a mapping between Weill’s IT Portfolio classifications and Business-IT Maturity, as illustrated below.
Level 1 Business-IT Maturity is all about getting the IT infrastructure “right.” Level 2 is about getting the firms transaction processing systems and core business processes “right.” And Level 3 brings to the table business analytics, collaboration, innovation and leveraging IT to drive growth. Bear in mind, this is a simplification of reality – some Level 3 activities do take place at Level 1 – but it’s a slim minority – not where the IT organization is primarily focused. Also bear in mind, this is a maturity model – the Level 1 and Level 2 needs never go away. But they become relatively ‘mastered’ and allow management attention and focus to shift to higher value activities.
Back to my hypothesis about ITIL, CMMI and other process (or service) management disciplines – they are very helpful in climbing through Level 1 and Level 2 Business-IT Maturity – but they won’t get you to Level 3! I’ve explored elsewhere in this blog, and will continue to do so, what my research and client experience is teaching me about what will take IT organizations to the lofty heights Level 3 maturity. There’s a trap in believing that approaches such ITIL or CMMI are going to be the “silver bullets” for driving up IT maturity and value – unfortunately, they aren’t!