Defining Business Services - Key to ITSM Value
Who’s on first, What’s on Second – Defining Business Services
I’m frequently asked:
“Hoop, how can I get our management to see the need for ITSM and building out our service catalog?”  My usual answer is “tell me 3 of your services?” and here is where the issue will present itself…  they have no idea what a Business Service looks like.

What does a Business Service look like?

The reason why most ITSM professionals can not properly define and structure business services is because they usually can’t answer this one simple question: What is IT?
If you were to poll the global industry of IT professionals, I assure you that the answers you would receive would likely be both wrong & extremely varied.   I promise I will get to Business Services but first we need to do some self reflection.

IT has an identity crises.

First, IT needed to become more “customer” oriented, but no one told them who the “customer” was.  Then IT needed to partner with the business, but no one defined how this partnership was going to work.  Next IT needed to align with the business, but since we had distanced ourselves from business owners with language like “customer” & “service provider” we were treated exactly as we had positioned ourselves… A disconnected and distantly managed option for IT services, but slower & more expensive.
What is HR?  Human Resources is the operation that drives value through the performance of human capital.
What is Finance? Finance is the operation that drives value through the performance of financial assets and mitigation of financial risks.
What is Sales? Sales is the operation that drives value through the performance of customer acquisition & retention.
What is Marketing? Marketing is the operation that drives value through market research, messaging, and promotion of organizational capabilities.
Now when I asked, What is IT? You may have thought; infrastructure, pc’s, apps, databases, networks, etch… You may have even thought Information Technology is the operation that drives value through the performance of technology.
But is it?
What is an ATS? Applicant Tracking Systems are the technology platforms that HR teams use to find and acquire human talent.  The Information & Technology within an ATS are critical for HR manage capacity to achieve performance goals.  80-90% of the ATS’s utilized are cloud based and were purchased by HR officers directly, with little to no help from IT.
What is a GL? A General Ledger is the system used by finance to account for budgets, cost centers, spending, and other assets and liabilities.  Most GL’s are going to the cloud, are outsourced to managed service providers, or are managed by a group of professionals who report into Finance.
What is A CRM? A Customer Relationship Management system is the technology platform, for sales teams to manage the sales process from prospecting to contract closure and customer satisfaction.  By 2018 over 62% of companies CRM will be in the cloud according to Forbes, and many of the purchases will be done by Sales officers with little help from IT.
What is a CMS? A Content Management Systems are the technology platform used to manage the creation, distribution, and usage analytics of marketing artifacts.  Some statistics estimate that by 2017 over 90% of the CMS’s will be in the cloud.  CMS platforms are also frequently purchased by the Marketing Officer, with little to no involvement from IT.
IT has an identity crisis issue, it also has a relevance issue.  I went  self-reflection to reinforce a very important point:   WHY you define business services in your ITSM platform is as important as HOW you define them.
I’m hoping at this point you have read my previous blogs and recognize the difference between IT services and Business Services, if not please go back to Bringing a Knife to a Gun fight.

WHY do we need to define business services?

What’s is IT?
IT is the enabler of value for all business operations that leverage digital assets to drive performance.
This is why I say IT is no longer a department, but it’s an organizational competency which at scale gives the business competitive market advantage.  To be an enabler, a true partner, integrated into the performance of business outcomes, IT needs to abandon its identity as a technology custodian & service provider.   IT needs to drive business understanding of these competitive market advantages and educate line of business owners of the risks and benefits associated with digital initiatives and transformations.
Can you hear me now” became a household expression through the advertising of Verizon Wireless (US mobile carrier).  What it really is saying is that, “yeah we had a performance or availability issue, but we have improved it and now the service is good“.   This improvement in IT was measured and reported in terms of direct consumer impact and then repositioned as a competitive market advantage.  Simply compare Verizon’s rates against AT&T, Sprint or other mobile carriers, and you see they demand a higher premium for their technical advantage.
That is WHY we need to define business services into the governance framework.  Governance is about decision making, monitoring & reporting one performance of our technical humans & assets is critical to balancing supply, demand, risk & benefit.
So HOW does IT define the business services.  Hopefully by now you know the answer, but I’ll making super clear… THEY DON’T.   That’s right, IT doesn’t define business services, they don’t need to.
Defining Business Services:
More than likely your company has not only defined the business services, but they have also prioritized and ranked them.  For the fun of it, go to your companies website and put in /services at the end of it.  I.e. Http://IBM.com/services or find the link to products and services.
This detailed list of business offerings did not randomly come about.  Numerous meetings and discussions were held to define this list, determine the addressable market and craft strategies and budgets to take on these business offerings.   This is where you start, so for example, say you were in an issuance company, your services might look like this:
  • Life Insurance
  • Property & Casualty Insurance
  • Automotive Insurance
  • Corporate Coverage

Ask your controller or marketing officers, or if you are public review your earnings reports, what the economic value of these services are?

If possible try to identify sub-services and segmentation.  These will usually equate line of business owners within your organization, get that role name.
  • Life Insurance $120M – President of Life Insurance
    • Accidental Death $80M – SVP Products: ADLI
      • Americas $50M – VP of Americas Products: ADLI
      • EMEA $20M – VP of EMEA Products: ADLI
      • APAC $10M – VP of APAC Products: ADLI
    • Long Term Disability $40M – SVP Products: LTD
      • Americas $20M – VP of Americas Products: LTD
      • EMEA $2M – VP of EMEA Products: LTD
      • APAC $8M – VP of APAC Products: LTD
  • Property & Casualty Insurance
    • (Etc…)
This gives you the ownership model you need to reference priority and value.  If you are leveraging a CMDB in your ITSM tool, you would want each of these to be CI’s and the roles to be CI’s.  Revenues would be attributes.  We’ll explain why in a bit.
Next we need to build our service & system models.  Using our insurance company as an example. Let’s build that out.  Here will depend on how our organization was structured and has grown. Most organizations will grow through a leveraged capability model, where they can offer services to different markets throw shared disciplines.   These disciplines are manifested in the forms of Vital Business Functions (VBF’s).  So in our insurance example they may be;
  • Quoting
  • Binding
  • Policy
  • Claims
These core disciplines are used to support the business services, underpinning these VBF’s are business process and systems, we can now build out the definitions for these as well.
  • Quoting
    • Rating
      • Actuarial Systems
      • Rating System
    • Quoting System
      • Secure Email System
  • Binding
    • Underwriting
      • Actuarial Systems
      • Background/ Fraud systems
  • Policy
    • Benefits
      • Benefits Management System
  • Claims
    • Benefits Validation
      • Benefits Management System
      • Accounts Receivables
    • Payments
      • Accounts Payable
    • Fraud Detection
      • Background/Fraud Systems
We now have a great view into how the business operation is enabled through key IT assets.  Again if using a CMDB, all of these will become CI’s with some having multiple relationships.
For example, each business service likely has its own benefits management system, but each of those benefits management system will point back to the vital business function of Benefits.
At this point we have setup knowledge artifacts that can massively change they way IT enables business value for the digital assets.  Let’s look at a simple and complex scenario to see how this works in action:
1) The VP of Asia Pacific (APAC) for Accidental Death reports revenue decline through Independent agents, reporting that quotes are not delivered in realtime leading to agents going to competitors.
A review of our model would move us to focus on the quoting process. If all 3 regions share the same systems, and the other 2 regions are not reporting a problem, the likely conclusion is that APAC has changed its business rules causing a performance, degradation.   (By the way, is was a real world example for me.)
2) Now let’s look at something more complex.  A new regulatory mandate based on the US EU Safe Harbor act requires shared systems to be split where they contain employee data.  Having the correlation to the geographies as CI’s and by reviewing VBF’s, the impacted CI’s can quickly be isolated.  The only real system with employee data would Benefits Management System.  However, it affects multiple business functions.   So evaluating the risk against benefit, if Long Term Disability had a shared Benefits Database, and it was going to cost $5M to split the system, IT’s guidance might be get out of that business in Europe, as it is only yielding $2M in revenue.
The conversations had when business services are the true “end customer consuming services”, and mapped effectively, drastically changes the value IT provides as an enabler and business partner.
As you collect and build more services, more VBF’s, more owners, your need for managing categories, or types drastically reduces.  Ultimately you can scrap CTI’s and just leverage intelligent real-time CI’s.  Using correlation to show only relevant artifacts to analysts in context to their action, location and role.
In my next Blog, I’m going to discuss the value of Business Service Management, and the types of metrics the organization really wants from IT, and hint: It Ain’t Up-Time.
Written by

Digital Transformentalist Twitter: @VigilantGuy http://twitter.com/vigilantguy Linkedin: http://www.linkedin.com/in/matthewbhooper Web: http://www.vigilantguy.com Matt Hooper is an industry advocate for Service Management strategies and best practices around Enterprise Service Management. For over 20 years Matt has instituted methodologies for business intelligence and optimization. Leveraging technology to drive business outcomes, he has built an industry reputation for his highly effective approach to creating value through Service Management. Matt is active on Social Media known as VigilantGuy, and co-hosts the weekly podcast: Hacking Business Technology. HackBizTech.com

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Matthew Hooper

Digital Transformentalist