The Impending Irrelevance of Service Management - Enterprise Technology and the New Quest for Value
Large-scale investment in traditional service management is now unwise. This is because technology service management, is no longer a standalone constraint to creating business value. Executives should instead focus on building a flow framework as part of an operating model that connects business product development to technology portfolio management, Agile programs, DevOps, and cloud-based consumption. This change will also result in moving the organizational focus from running development projects to managing a lifecycle of business products. Selective investment in critical capabilities that stimulate the flow of work is still required but not in the same order of magnitude.
2018 signals the demise of the technology service management industry. Thirty years after Service Management, (ITIL and itSMF) was launched on the world stage in London, the decline is upon us. A proud keynote speaker at the original launch, I never imagined just how big ITIL and Service Management would become. Billions of dollars have since been spent on improving and perfecting our ability to deliver services to customers. Training, tooling, certification, frameworks, books and entire departments thrived on service management. There are many great success stories to celebrate, and many of the technology Icons of our time emerged from the service management movement. People like Gene Kim, Jayne Groll, Robert Stroud, and Silvia Prickel and companies like ServiceNow, BMC, Cherwell, and Splunk, So why is this era now coming to an end?
The service management world is struggling to retain relevance as the enterprise transitions its approach to technology. We are moving away from centralized IT departments controlling large budgets, running large programs with a hierarchical pyramid of executives, who have ruled like Mandarins. In the new world, survival means creating value in a world of digital ecosystems. This change sparks a new battle for relevance. When we created ITIL, the inability to define and deliver services was a key political and business constraint. ITIL demand was originally driven by a UK government desire to introduce market testing for public services, and then to outsource; this was amplified by the private sector’s sourcing strategies, as part of a ‘back to core business’ movement. As ITIL spread to the USA, it removed a key constraint of a lack of efficiency across sprawling IT organizations. It isn’t strange that the technology service management industry mirrors the lifecycle of the outsourcing and offshoring industries. Just as these industries are now in decline, so too is Service Management. In other words, as time has moved on, technology service management no longer solves a mainstream constraint to business success.
Instead of reviving its relevance, the service management industry has chosen to repeat and enhance its former journeys. While there might well be an incremental benefit to this approach, business outcomes will not substantially improve. From a business outcome perspective, the return on these well-intended initiatives is minimal.
New frameworks like VerISM and ITIL4 are not going to provide relief. Further investment along the automation of process from tooling has reached the point of diminishing marginal returns. Replacing one type of tooling with another, is a potential waste of time and effort.
This doesn’t mean that every aspect encompassed by service management is now irrelevant, but it is a question of pearl diving those competencies in new ways. In Pete Townsend's classic 70’s rock opera, Tommy, the main character asks nothing more than, “see me, feel me, touch me, heal me.” In the same way, business leaders are in desperate need of a more collaborative, outcome driven and empathetic experience from technology. Instead, the response from IT has been analogous to the disturbing scene where Keith Moon's troubled Uncle Ernie, decides to “fiddle about, fiddle about. “
In other words, we are investing with renewed vigour in areas with low return. In 2018, even better service management is irrelevant to business success. The technology service management world missed the great pivot, when, in 2013, Gene Kim, Kevin Behr, and George Spafford released The Phoenix Project. By combining established management theory with their understanding of IT service management, they pinpointed a need to move the needle. The crested wave of DevOps and Continuous Delivery broke. Now that wave needs to be integrated to the business change portfolio at one end and the service delivery at the other. We need to develop a new operating model. A model that concentrates on business value.
So what happens now?
The obvious answer is to shift investment to resolve those constraints that impede business outcomes. Move from sub-optimized, incremental improvement (fiddling about) in the value creation chain to see me, hear me, touch me, heal me, across the board.
Dr. Mik Kersten, a prominent leader in the DevOps community, suggests a new approach, in his book, From Project to Product. He describes how DevOps also needs to focus less on tools, and ‘fiddling about" and more on the flow of value creation from business portfolios to business outcomes.
His extensive statistical research of 308 enterprise IT toolchains and detailed case studies at organizations including Nokia and BMW has resulted in a manifesto for change; it is a a signpost for the upcoming transition. His book shifts the discussion from the flow of work to the flow of business outcomes.
Flow is the new mantra for all contributors to the technology value chain.
This shift provides an exciting opportunity for new approaches to creating business value with a new operating model that connects the thinking of the Portfolio, Agile, DevOps, and Service Management worlds. Fundamentally ensuring that the value envisioned in the business portfolio remains visible and managed across the entire lifecycle. Value is determined by the outcomes derived through business products, rather than the successful execution of IT projects or IT services.
Quo Vadis Service Management?
While the industry we know today will dissapate, portions of service management will remain attractive and vital. I believe that two areas, in particular, will become a focus of attention because they remove constraints to success.
The first is the reawakening of service design as a vital discipline. Service design will be an essential enabler in any flow framework. It frustrates me that the service design elements of ITIL never received the same consideration that service delivery aspects like service desk, configuration, and problem management have. Because in the future service design will be seen as part of a business product, rather than a hurdle to deployment, I expect that the DevOps community in their move from project to product will subsume service design disciplines, such as the design for availability, serviceability, security, and compliance.
The second exciting area is Experience Level Agreements (XLAs). These underpin the concept of flow. For XLAs to work, the assumption that IT can and must control all variables through a transactional relationship based on SLAs, and KPIs needs to be abandoned for a more vulnerable approach. An approach based on empathy, how the customer/business experiences the product. Think Net Promotor Score on steroids and in real-time. Industry innovators like Marco Gianotten at Giarte and Pedro Bados of Nexthink have pioneered XLAs in major enterprises like ING, and the results are more than encouraging, with both the conversation and the relationship between business and technology partners improving. So as the era of service management draws to a close, Project to Product and XLAs are Exhibit A of a new way of, “seeing, hearing, feeling, and healing" the business. Finally, an end to “fiddling about,” and the start of a new operating model with renewed relevance for the business of technology?