How to Do More, For More?(Without More)

Availability – Availability refers to the sensitivity of the business process to the lack of service utility for variable periods of time. Some business processes can function for days without important IT services. Other business processes may not function at all without the same service. An example of availability might include the inability to access an Internet application or a major business application.

Calculating Service Value

For each value component (confidentiality, integrity and availability) there are two facets: impact and cost. The value of the IT service is composed of the impact multiplied by the cost of each component and averaged out.

Step 1 is to measure impact in the opinion of the service owner or customer. Using a standard questionnaire, the service owner indicates on a scale of 1 to 10 the relative impact that would occur if confidentiality, integrity or availability becomes compromised. Many times what the IT organization discovers will not align with what the IT organization believes to be important. Also note that each major customer or service owner can have diverging valuations for impact―even for the same services. It is very important to reconcile these issues whenever they appear.

The second step is to understand the costs that would accrue should the impact occur. Again, a standard questionnaire captures the costs on a scale of 1 to 10. Note that costs cover not only cash (income, profit, sales, fines, and penalties) but also legal (privacy, regulatory, legislative, etc.), image (standing, embarrassment, market position, etc.) and safety (personnel, environmental, etc.).

As with impact, service owners and customers may disagree with each other, and with IT regarding costs. It is very important at the conclusion of each stage to present results back to the service owner, customer or users (the interviewees) in order to get their commitment. You will probably discover that the service owner may change their answers when they see each service laid out and labeled in this way. This is because they have never considered the importance of services compared to one another. This is a very important objective for the IT manager and practitioner—it begins to educate the service owner (the funder) of the service as to how IT resources will be allocated.

This new awareness will help business manager make better IT funding and priority decisions, which will result in more appropriate IT resource allocations. (As a side note, this is the very definition of business/IT alignment!)

Using Service Valuations

IT service valuations are very important sources of data for balancing resources, choosing IT projects, improving IT service delivery quality, and refining support. At the conclusion of the exercise you will have a detailed understanding of what is important to each customer and service owner; and they will also have a better understanding of their own needs. You will have a score for each IT service, and you can use this score to rank the most important IT services. These are the services that require your immediate attention since they represent the highest business value and, therefore, risk.

While the composite IT service value is critical, of great interest to the IT service provider are the intermediate results, the scores for confidentiality, integrity and availability. These results show precisely which aspects of the IT service matter most.

Perhaps the integrity component of a service is most important from a business perspective. From an IT perspective perhaps it was believed that confidentiality (security) would have been the most important. Once this potential misunderstanding has been rationalized, it can be used to change IT operations. This data is priceless when it comes to selecting IT projects and justifying them.

A great place to get started is to re-use any existing continuity or disaster recovery valuations you or your team may have already produced. These often follow a very similar logic with regard to valuations and present a ready-made source of data that can dramatically accelerate your IT service valuation efforts.

Managing IT operations based on the value of the services for which you are responsible is the only way to accomplish the goals of aligning with the business, controlling costs, improving quality and balancing resource allocations.

In summary, value your IT services to know which service is more important and why so you can prioritize and balance resource allocations. Use your IT service valuations to jump-start or re-focus your BSM or ITIL initiative; meet the changing demands of your business landscape; provide tangible evidence of alignment; move beyond the image of IT as a cost center; and be seen as an innovator and business enabler―all while keeping the lights on!

Hank leads the Business Service Management practice area for Global Knowledge. Contact him at [email protected].