Description
Strategic Fit Of IT Service Management
IBM Academy of Technology
Academy TechNotes ATN Volume 2, Number 9, 2011
Strategic fit of IT Service Management Pietro Della Peruta
iven the crucial role that IT (Information Technol-
ogy) plays in businesses today, IT departments
have a significant responsibility to ensure that its
value is optimized. IT optimization can be obtained
through the adoption of the IT Service Management
proposition by IT operations.
However, IT Service Management concepts and tools are
complex changes to introduce to an organization. To
achieve the right fit of such concepts and tools it is impor-
tant that the introduction is congruent with the com-
pany’s operating mode. The Company Operating Mode
concept was introduced in the seminal work of Nolan
and McFarlan on the “IT Strategic Impact Grid” (Harvard
Business Review, October 2005, Information Technology
and the Board of Direc-
tors). According to the IT
Strategic Impact Grid,
companies operate in
four possible modes:
support, turnaround, fac-
tory, and strategic. These
modes determine the
current value IT has for
the business (i.e. strategic
dependency) and the
future value IT has for the
business (i.e. strategic
impact). To optimize the
value of IT, for each
Company Operating Mode,
a well-defined level of IT
service management (IT
service management mode) needs to be implemented
by the IT operation. The IT service management mode is
characterized by the focus of IT operation (i.e. system
focus or business focus) and by the scope of IT operations
(i.e. management focus or governance focus). When a
company’s currently adopted IT management mode
does not match the operating mode the company is in,
the IT department must modify the way IT services are
managed in order to optimize the value of IT.
Support Mode is characterized by IT having low strategic
impact on the business which has a low strategic de-
pendency on IT. Companies in support mode are least
dependent on IT. In this mode systems operate mostly in
maintenance mode. Service interruption might not pro-
duce serious consequences. For a company in support
mode, systems and applications are monitored and some
best practices exist for recovery from performance and
availability problems. IT operations are focused on sys-
tems and applications resources, and the scope of op-
erations is management.
Factory mode is characterized by the business having
high strategic dependence on IT which has low strategic
impact. Companies in factory mode are more depend-
ent on information technology. If systems fail for a minute
or more, there is an immediate loss of business. Increased
response time has serious consequences for both internal
and external users. IT management in the factory mode is
characterized by a high level of effectiveness via tailored
control of business service quality. KPIs (key performance
indicators) are defined at business level more than at IT
level. IT operations have a business focus but still a man-
agement scope. In factory mode, the focus of IT opera-
tions is more on managing the business services than on
the systems or the applications as single entities.
Turnaround mode is charac-
terized by the business hav-
ing a low strategic depend-
ence on IT which has high
strategic impact. Firms in
turnaround mode expect a
new system to change their
business. New systems prom-
ise major process optimiza-
tion and service transforma-
tion as well as cost reduc-
tion. IT operations are char-
acterized by a great atten-
tion to efficiency, and they
are mostly process driven.
The IT operations focus is on
the systems with attention to
IT governance processes (i.e.
y). This means IT governance and business
rvice focus.
ITIL).
Strategic mode is characterized by IT having high strate-
gic dependence and high strategic impact on the busi-
ness. Firms in this mode require dependable systems and
must exploit emerging technologies to hold their com-
petitive position. IT operations are seeking effectiveness
and efficiency. IT operations focus is on managing busi-
ness service from a business point of view (effectiveness)
as well as using a process driven approach to manage
the IT (efficienc
se
G
Low
High
High
Low
Support Factory
Strategic Turnaround
Strategic Dependence:
Current value of IT on
business
System Focus Business Focus
Strategic Impact:
Future value of IT on
business
Management
Focus
Governance Focus
Scope of IT
operations
Focus of IT
operations
IT Governance
on systems and
applications
Applications
and system
management
Business
service
management
IT
Governance
on business
services
Legenda
IT Management Mode
Company Operating Mode
About the Author: Pietro della Peruta is an Executive ITArchi-
tect, IBM Software Group, a member of the IBM Academy
Technology, and has 20 years of experience
of
in systems
availability and performance management.
For more information please visit
the Academy web site.
©Copyright IBM Corporation 2011
doc_203201528.pdf
Strategic Fit Of IT Service Management
IBM Academy of Technology
Academy TechNotes ATN Volume 2, Number 9, 2011
Strategic fit of IT Service Management Pietro Della Peruta
iven the crucial role that IT (Information Technol-
ogy) plays in businesses today, IT departments
have a significant responsibility to ensure that its
value is optimized. IT optimization can be obtained
through the adoption of the IT Service Management
proposition by IT operations.
However, IT Service Management concepts and tools are
complex changes to introduce to an organization. To
achieve the right fit of such concepts and tools it is impor-
tant that the introduction is congruent with the com-
pany’s operating mode. The Company Operating Mode
concept was introduced in the seminal work of Nolan
and McFarlan on the “IT Strategic Impact Grid” (Harvard
Business Review, October 2005, Information Technology
and the Board of Direc-
tors). According to the IT
Strategic Impact Grid,
companies operate in
four possible modes:
support, turnaround, fac-
tory, and strategic. These
modes determine the
current value IT has for
the business (i.e. strategic
dependency) and the
future value IT has for the
business (i.e. strategic
impact). To optimize the
value of IT, for each
Company Operating Mode,
a well-defined level of IT
service management (IT
service management mode) needs to be implemented
by the IT operation. The IT service management mode is
characterized by the focus of IT operation (i.e. system
focus or business focus) and by the scope of IT operations
(i.e. management focus or governance focus). When a
company’s currently adopted IT management mode
does not match the operating mode the company is in,
the IT department must modify the way IT services are
managed in order to optimize the value of IT.
Support Mode is characterized by IT having low strategic
impact on the business which has a low strategic de-
pendency on IT. Companies in support mode are least
dependent on IT. In this mode systems operate mostly in
maintenance mode. Service interruption might not pro-
duce serious consequences. For a company in support
mode, systems and applications are monitored and some
best practices exist for recovery from performance and
availability problems. IT operations are focused on sys-
tems and applications resources, and the scope of op-
erations is management.
Factory mode is characterized by the business having
high strategic dependence on IT which has low strategic
impact. Companies in factory mode are more depend-
ent on information technology. If systems fail for a minute
or more, there is an immediate loss of business. Increased
response time has serious consequences for both internal
and external users. IT management in the factory mode is
characterized by a high level of effectiveness via tailored
control of business service quality. KPIs (key performance
indicators) are defined at business level more than at IT
level. IT operations have a business focus but still a man-
agement scope. In factory mode, the focus of IT opera-
tions is more on managing the business services than on
the systems or the applications as single entities.
Turnaround mode is charac-
terized by the business hav-
ing a low strategic depend-
ence on IT which has high
strategic impact. Firms in
turnaround mode expect a
new system to change their
business. New systems prom-
ise major process optimiza-
tion and service transforma-
tion as well as cost reduc-
tion. IT operations are char-
acterized by a great atten-
tion to efficiency, and they
are mostly process driven.
The IT operations focus is on
the systems with attention to
IT governance processes (i.e.
y). This means IT governance and business
rvice focus.
ITIL).
Strategic mode is characterized by IT having high strate-
gic dependence and high strategic impact on the busi-
ness. Firms in this mode require dependable systems and
must exploit emerging technologies to hold their com-
petitive position. IT operations are seeking effectiveness
and efficiency. IT operations focus is on managing busi-
ness service from a business point of view (effectiveness)
as well as using a process driven approach to manage
the IT (efficienc
se
G
Low
High
High
Low
Support Factory
Strategic Turnaround
Strategic Dependence:
Current value of IT on
business
System Focus Business Focus
Strategic Impact:
Future value of IT on
business
Management
Focus
Governance Focus
Scope of IT
operations
Focus of IT
operations
IT Governance
on systems and
applications
Applications
and system
management
Business
service
management
IT
Governance
on business
services
Legenda
IT Management Mode
Company Operating Mode
About the Author: Pietro della Peruta is an Executive ITArchi-
tect, IBM Software Group, a member of the IBM Academy
Technology, and has 20 years of experience
of
in systems
availability and performance management.
For more information please visit
the Academy web site.
©Copyright IBM Corporation 2011
doc_203201528.pdf