As we start to dive into building a business case for ITIL, it is helpful to understand a bit about the market?s current state. Specifically, why are organizations today even looking at ITIL? Studies show it isn?t just to reduce cost, but?..ROI is certainly a significant part of securing executive support (funding) and can prove critical in overcoming organizational resistance. It is probably important to note at this point (before getting too far into this) that the viewpoint, assumptions and discussion presented in this blog are focused primarily on those organizations living in the commercial world, where corporate profitability and cost containment are critical to organizational success. We will address the government and not-for-profit sectors in a later blog as their business drivers and measurement of success can be, obviously, quite different. With that said, my hope is that there is benefit for all in this blog and that the points we discuss will not only help you in your role, but will initiate some lively discussion that will benefit us all.

Now? back to the blog??

In a recent survey conducted by Evergreen Systems on ITIL Maturity Benchmarks, 54% of respondents reported they had secured budgeted approval of ITIL projects at some level (that sounds good). And, a surprising 77% point to service quality as the top business driver of ITIL efforts (a noble cause indeed). However, 72% reported that the biggest barrier to ITIL adoption is organizational resistance ? resistance bolstered by lack of provable ROI and a believable cost savings model (ahhh.. the rub). So what do these findings mean, and what can you do?

Our interpretation is that while service quality may be perceived as the primary driver behind ITIL initiatives, it alone is not enough to overcome organizational resistance and executive scrutiny. While most of us would like to improve customer service and see it as a specific benefit, the truth is, in today?s competitive market, it is rarely a primary driver of IT initiatives. In fact, many of the IT managers we currently work with feel they are probably over-delivering IT services. Their view is that the pendulum has swung perhaps too far towards customer service the past few years and pulling back a bit may yield significant cost savings with minimal impact on service. Not necessarily good news if you are trying to start an ITIL project based on improving customer service.

Bottom line and the real point here is - while improving service quality may be a top business driver for those of us in IT, it might not be for those who fund IT. Your challenge, should you choose to accept it, is to build a business case that is comprehensive in nature and that includes not only the goal of improving customer service, but also looks at other key areas such as expense savings, risk mitigation, business alignment and improved agility? with a particular focus on reducing costs any way you can. This idea is supported by some additional findings in our survey. Respondents were asked about business drivers within their organization other than improving customer service, and what we found were:

• Of those surveyed, 93% have a mandate to drive down cost (staff) of operations (70-80% of the budget) and increase funding/time for increasing strategic projects (25% of the budget). The majority of these respondents had no strategy or plan to achieve these goals.
• 58% responded that business alignment was a primary driver for ITIL-based projects.
• Improving efficiency was selected by 43% of respondents as another key business driver.
• Compliance needs are being met, but the effort to do so is very costly and primarily reactive.

Build a business case that focuses on several of these areas, and you have a much better chance of getting the support and funding you need to move forward.

Now, some will argue (as we have seen in this very blog) that businesses will eventually implement ITIL or ITIL-like processes because ‘it is the right thing to do’. After all, businesses buy PCs for every employee, give them tools and supplies to work with, spend money on HR, Facilities, etc. all without an ROI. ITIL should be viewed in the same way. Unfortunately, ITIL is not seen (yet) by most organizations as key to day-to-day business operations (like having a PC is). After all, IT organizations are functioning adequately today and are, in fact, performing many of the processes and functions found in the ITIL framework. The key here is how efficiently and effectively are they performing these operations and are there real opportunities for improvement? If you are serious about an ITIL initiative, the hard truth is there is no way around developing a real, believable business case built primarily on driving costs out of IT operations or somehow positively impacting the bottom line.

So, if you agree with me so far (and some of you probably don’t), your next step is to figure out what do you do and how to do it. One good place to start is by looking at one of the basic ITIL process areas: Incident Management. And this, my much appreciated reader, is where we will pick up the next blog entry… so stay tuned and let me know what you think so far - agree with what I have said, disagree, want to add your two cents… let me hear from you.

Joe

Also, check out our new White Paper on “Building the Business Case for ITIL”.

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