How to run your IT like a business using Service Levels

There is growing interest in running IT like a business. Internal IT departments are competing against alternative services (a.k.a. Shadow IT) and are under pressure from growing expectations due to what the industry calls consumerization of IT. IT leaders across organizations are stepping up their act to go from an internal operations to fill the shoes of an IT department that is increasingly becoming part of the overall business.

In this new world, an internal IT department is being forced to cast away its traditional mode of operation, and compete and position itself in this new IT marketplace.

The new role of IT

Positioned between the Business and the Service Providers, IT has the opportunity to carve out a new role for itself – based on an orchestration of internal and external IT services. In doing so, it should be careful not to turn into “just an administrative interface”.  It should rather leverage its position.

Using Service Levels to run IT like a business

Using Service Levels to run IT like a business

IT should now focus on:

Creating Value: The new IT thinks differently – it does not necessarily think “profit” but it thinks business. It seeks to understand the intricacies of the business, and then analyses how IT forms a part of the business delivery chain. In doing so, IT shows the business how its service offerings are relevant. IT tracks technology trends and translates these trends into a concrete service offering that makes sense for business. In doing so, it takes make vs. buy decisions. It chooses to procure commodity services, or even partner with innovative providers for co-creation. The role it always retains is “driving the business relevance of IT”.

Integrating Services: IT goes from operating traditional technology silos to a service integration and orchestration. It converts rigid capital costs into flexible operating costs.. It decides how the regulatory compliance laws and guidelines of the business are translated into its IT hosting strategy (internal and external). In doing so, it translates its understanding of how IT intermeshes with business into a modularization of its service landscape. It fills the nooks and cracks in between the services it procures (esp. external providers) to offer a smooth integration.

Optimizing Operations: IT differentiates between core tasks where it is crucial that IT plays a leading role and commodity tasks and services that can be procured. It shifts its attention from solving incidents and tickets to enterprise strategy. It focuses on measuring the impact of its service integration instead of performing the individual commodity services.

IT should go now step beyond just doing the above – the charm lies in being able to demonstrate it quantitatively. This is where Service Levels come in.

Can Service Levels help in positioning?

The art of designing service levels lies in the context of the interface that you are managing – whether this is an interface towards your service providers, or towards your end client.

Start the Value Conversation towards your End Client / Business through a Service Level discussion by following these three steps:

1. First help your client understand the service you offer in terms of Service Levels.
2. Then, together design Service Level Objectives that aid their decision-making,
3. And finally, aid them in fixing service level targets that they can afford.

More about these three steps in “Three Steps to Demonstrate the Value of your IT service“.

Design your service orchestration layer and manage your service provider interfaces by asking very different questions. Irrespective of whether you are measuring service levels with your provider, or setting operating level agreements with adjacent departments, the questions that you should ask are:
a) Can you use these measures to control and manage your delivery landscape?
b) Can the levels that you have set for yourself be attained?
c) Are you able to measure these service levels properly?

More about these three questions in “Are you using the right measures to control your operation?“.

After a detailed appraisal of your operations and strategy using the above, concrete Service Levels will help you as an internal IT department to compete and differentiate yourself in this new IT market place.

Are you facing pressure to demonstrate the value of your IT services internally? Are you facing the constant threat of “Shadow IT”? Have you ever thought of using Service Levels to position yourself?

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