IT service management: process capability, process performance, and business performance

As technology is at the core of almost every leading industry, organizations are increasingly scrutinizing their Information Technology (IT) group’s performance so that it is more in line with overall business performance and contributes to the business’ bottom line. Many IT departments are not equipped to meet these increasing IT service demands. They continue to operate as passive-reactive service providers, utilizing antiquated methods that do not adequately provide the quality, real-time solutions that organizations need to be competitive. Organizations need efficient Information Technology Service Management (ITSM) processes in order to cut costs, but ironically, in order to implement highly capable processes, there are significant costs involved, both in terms of time and resources. A potential way to achieve better performing and higher capable processes is to employ methods to compare an organization’s processes against best-practice standards to identify gaps and receive guidance to improve the processes. Many of the existing methods require large investments. Holding back progress towards best practice for financial benefit in the IT industry is the reluctance of many IT organizations to embrace the business side (specifically Service Portfolio Management and IT Financial Management) aspects of ITSM. Service Portfolio Management (SPM) is used to manage investments in Service Management across an organization, in terms of financial values. SPM enables managers to assess the quality requirements and associated costs. IT Financial Management aims to provide information on the IT assets and resources used to deliver IT services. Providing a Service Portfolio and practicing IT Financial Management requires a high level of maturity for an organization. It seems reasonable and logical that the organization’s Chief Information Officer should be able to articulate and justify the IT services provided, report the costs (by service) incurred in delivering these services, and can communicate the demand for those services, that is, how they are being consumed and projections on how they will be consumed in the future. However, a major investment in terms of time and resources may be needed to catalogue such information and report on it. The research problem that this paper addresses is the lack of a pragmatic model and method that associates ITSM process maturity (process capability and performance) with financial performance for organizations that lack mature ITSM processes. Previous studies have reported on cost savings, but there is currently no measurement model to associate ITSM maturity with financial profitability; which in turn prompts the research question: How can the association of ITSM process capability and process performance with financial performance of an organization be determined? This research iteratively develops and applies a measurement model that presents a pragmatic and cost-effective method to link ITSM process capability and process performance with business performance by operationalizing Key Performance Indicators (KPIs) to support Critical Success Factors (CSFs) and associating CSFs with business risks to determine business performance. This study employs a scholar-practitioner approach to changing/improving processes using action research and an adaptation of the Keys to IT Service Management Excellence Technique (KISMET) model to guide the process improvement initiative. This technique leads to the second research question: How can the ITSM measurement framework be demonstrated for CSI? The research was based on a single case study of a global financial services firm Company X that had implemented the ITIL® framework to improve the quality of its IT services. The study found that the measurement framework developed can be used as a starting point for self-improvement for businesses, identifying gaps in processes, benchmarking within an organization as well as guiding an organization’s process improvement efforts. The measurement model can be used to conduct What-If analyses to model the impacts of future business decisions on KPIs and CSFs. The measurement model presented in this study can be quickly implemented, adapted and evolved to meet the organization’s needs. The research offers an example from which other organizations can learn to measure their financial return on investment in ITSM improvement

A measurement model to link process operational measures to risks associated with attainment of business critical success factors

There is currently no evidence of a measurement model to associate IT Service Management (ITSM) maturity with financial profitability which prompts the research question: how can a model and method be developed to link ITSM process capability and process performance with financial performance? The purpose of this study was to develop and apply a measurement model and present a pragmatic and cost effective method to link ITSM process capability and financial performance by operationalizing Key Performance Indicators (KPIs) to support Critical Success Factors (CSFs) and associating CSFs with business risks to determine CSF risk levels. This paper presents a conceptual measurement model derived from the literature, a description of the mixed method approach to collect data from the organization, the application of the model to the Incident Management process at Company X and a discussion of lessons for practice, theoretical contributions, limitations and an agenda for further research. The study found that the measurement model and method developed can be used as a starting point for self-improvement for businesses, identifying gaps in processes, benchmarking within an organization as well as guiding an organization’s improvement efforts. The measurement model can be used to conduct What-If analyses to model the impacts of future business decisions on KPIs and CSFs. The measurement model presented in this study can be quickly implemented, adapted and evolved to meet the organization’s needs. This study employs the resource-based view of the organization to exhibit a firm’s IT capability characteristics of, and its relationship to, organizational performance. The research offers an example from which other organizations can learn to measure their financial return on investment in ITSM improvement

Data science and big data analytics in financial services: a case study

The chapter discusses how Financial Services organizations can take advantage of Big Data analysis for disruptive innovation through examination of a case study in the financial services industry. Popular tools for Big Data Analysis are discussed and the challenges of big data are explored as well as how these challenges can be met. The work of Hayes-Roth in Valued Information at the Right Time (VIRT) and how it applies to the case study is examined. Boyd’s model of observe, orient, decide and act (OODA) is explained in relation to disruptive innovation in financial services. Future trends in big data analysis in the financial services domain are explored

The issue of reliability in software mediated process assessments

This paper reports on a reliability analysis of a Software-mediated Process Assessment (SMPA) decision support tool as it was used at three sites. The tool was used at two sites as part of its development process. Following its evaluation, further development included the formulation of assessment questions and knowledge items to complete the requirements for all ISO/IEC 20000 processes. The SMPA was deployed at a third site, a large financial services firm. These three case studies brought up the issue of the reliability of the capability ratings and the value of the reliability measure (coefficient of variation) incorporated in the SMPA. Further data collection when undertaking assessments is required to have better assurance of the results given the variability of subjects. In addition the future of ISO/IEC 15504/ISO/IEC 330xx and ISO/IEC 20000 and how the SMPA will need to change to maintain alignment is raised

Development and evaluation of a software-mediated process assessment method for IT service management

IT service improvements can add immense value to organisations. To improve IT service management (ITSM) processes, a software-mediated process assessment method is proposed with four phases: process identification, process assessment, process capability measurement and process improvement. The international standard for process assessment was applied to measure process capability. This method was trialled at two Australian organisations and positively evaluated in a US foreign exchange trading business. Our empirical evidence challenges the underlying assumption that higher levels of process capability depend on the achievement of lower level process attributes. We conclude that this method can be applied to transparently self-assess processes