This web cast has been recorded; to see the recorded version <click here> An approximate transcript follows -- feel free to comment!
For a related rant, see my recent column on the ITSM Portal: Defining Moments in ITSM
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BPM's Black Eye
If you look at the history of BPM --- outlined very nicely in Terry Schurter's book "The Insider's Guide to BPM" --- you'll find that many companies had a tough time with BPM adoption. Sounds pretty similar to some ITIL/ITSM adoption programs I know.
Many organizations equated BPM with re-engineering and downsizing. This was not the intent of BPM, and sometimes this focus on cutting costs resulted in such a focus on process details that the customer was lost.
In fact, sometimes a lot of effort was spent trying to improve processes that really did not contribute to external customer outcomes or, they were streamlined against the wrong outcome.
This made BPM a bad word for many organizations.
Business Service Management
Business Service Management is mentioned in several of the ITIL publications; Service Design calls it a "strategy and an approach to enable IT components to be linked to the goals of the business" ….
Service Strategy says it "differs from previous strategic methods by offering a top down approach to IT business alignment" and that the view of the IT infrastructure "shifts from a topology map to a dependency model"
So Business Service Management is really at the heart of IT Service Management … in fact you could call it the end game for ITSM.
The more the business abstracts complexity to deliver value to customers, the more IT must decompose that complexity in order to implement and deliver on business requirements.
IT's View of Dependency Data
When IT talks about dependencies you start hearing about the CMDB and configuration management, since that's where ITIL says these dependencies are captured.
But even when IT begins building service catalogs, it often is driven by a desire to automate request fulfillment of technically oriented services.
These are resource-facing services, and right in IT's comfort zone …. bottom-up implementation mindsets.
Business' View of Dependency Data
Business Service Catalogs are --- or certainly should be --- customer facing. Ideally they will support the business processes of the organization.
V3 Glossary (BSM) - "An approach to the management of IT Services that considers the Business Processes supported and the Business value provided." ...
and as the ITIL guidance quoted earlier says, the business tends to take a Top Down design oriented approach to dependency data.
Outside-In Techniques for Business Service Management
The rest of this presentation provided a very brief snapshot of some techniques used in the International Process and Performance Institute's Education Program.
These techniques are being popularized as Outside-In thinking, and I believe present an ideal opportunity to create a business lane for your ITIL road map. Because of time constraints we couldn't cover everything; I'm just touched on some key points and techniques.
IPAPI's CPP, CPD, an d CPM classes are 2-3 days in length and cover the material in detail. I think they're a good addition to an ITSM adoption program, and -- at least as far as Outside-In thinking goes --- several folks who've been practicing in the ITSM space for some time now seem to agree with me.
Process Activities & Diagnostics
The concept of value added work is not new; basically we try and identify any work being done that does not directly contribute to goods and services, work that is required (by law for example) and work that's needed to support those who directly contribute to goods and services.
Of course we take a bit more time discussing this in class, but you get the point. The Process Diagnostics are relatively simple concepts (which is why I like them). We'll take a quick look at these process diagnostics in a minute, but before we do let's understand a very basic Outside-In concept...
Successful Customer Outcomes (SCO)
Successful Customer Outcomes --- or 'SCO' --- are absolutely fundamental to Outside-In thinking. Every process exists for a reason, and this reason -- it's intended outcome -- should serve the customer of the process. Successful Customer Outcomes meet the needs as defined by the customer of the process.
We use mind-mapping techniques to establish SCO statements that clearly define outcomes in customer terms, from their vantage point OUTSIDE the business.
Moments of Truth
A Moment of Truth is any place the customer touches the process, or the process touches the customer. Every interaction with the customer is a Moment of Truth. It can also be a moment of misery when things go wrong. The concepts of MOT, SCO and value added work are very important to successful Outside-In thinking.
Break Points & Business Rules
Another couple of process diagnostics we talk about are Break Points -- those points in the process between output and input that do not involve the customer --- and Business Rules -- a requirement that dictate the actions of those executing the process.
Process Actors
The last diagnostic are the Process Actors --- the people and systems that actually execute the activities in the process. This includes the application systems that support and automate the activities within the process.
Using Process Diagnostics
We can use these process diagnostics to Optimize, Align and/or Innovate processes.
By eliminating MOTs, Break Points, and Business Rules we can simplify the process. This simplification can make it less prone to error and improve efficiency.
By using SCO statements, we can identify Key Performance Indicators that are directly tied to customer outcomes. This improves alignment.
And finally, we can categorize improvement opportunities and evaluate them based on how they impact customers, often providing us with an opportunity to radically re-think the way we fulfill customer expectations.
Bridging Business Silos
The same way the business doesn't care about IT silos, the businesses external customers do not care about the business silos. They see one process end-to-end; or, at least that's what they want to see. Customers do not want to get tangled up in your business processes; they just want results.
The business has very similar issues when it comes to silos that IT has.
Outside-In Business Process Dependencies
We can take these simple concepts and use them to establish business process dependencies based on how processes serve (or do not serve) external customers.
Level 1 processes would encapsulate the entire customer experience end-to-end, from their point of view. Every step in a Level 1 process is a Moment of Truth.
Level 2 processes are one step removed; they may have one or more Moments of Truth, but they never capture the entire customer experience.
Level 3 processes are two degrees removed; they connect to Level 2 processes but do not have any Moments of Truth.
And finally we have Level 4 processes, which have no direct connection to Level 1,2 or 3 processes.
These dependencies are viewed Top Down, or from the customer into the business. Also known as Outside-In.
Optimize
What's interesting to me is that even without optimizing the process, the before analysis provides us with a simple view of how process activities are linked to process actors, including the application systems supporting the process. So even before we start optimizing the process, we have a simple approach for beginning to understand how IT underpins Level 1, 2, 3 and 4 business processes. This can be very helpful in establishing a true definition of end-to-end for complex, cross-functional business processes.
Alignment with SCO
Taking the time to really understand Successful Customer Outcomes is an important part of Outside-In thinking. The use of mind maps to brainstorm exactly what the customer wants and how they may view the process can be very helpful in establishing SCO statements that are aligned with customers.
This technique can also be useful in establishing Key Performance Indicators that are closely aligned with SCO, and helps link KPIs across functional areas of the organization by making sure they are tied to SCOs.
Process Innovation
Process innovation can be realized when we look at Moments of Truth and challenge them; what would happen if we eliminated this MOT? Due to time constraints I won't go into every aspect of innovation, but the six steps you see here are detailed in the CPP class and describe how you can use this approach to map innovation to your organizational strategy.
These kinds of techniques are very constant with ITIL's Service Portfolio Management, and might be helpful in improving a dialog about managing a portfolio of services for maximum gain and minimal risk.
BSM and BPM
So, using simple excel templates the business can perform process optimization and alignment. As a by product of doing so, they identify Process Actors, which include the application systems that directly support the activities in the process. This provides a critical link between IT and the business, as well as beginning to identify flows of information critical to the process ---- key transactions for example --- that can be very effectively used in service design, risk analysis and dependency management.
Putting IT/Bus Together
Dependency management is a very important part of Business Service Management; that's why we still hear so much about CMDB and the CMS. IT tends to take a Bottoms Up view of dependency data, since they have to actually implement an infrastructure to support business requirements. The business tends to take a top-down view, hopefully from the perspective of the external customers of the orgaization.
The truth is you'll need both of these views to achieve success.
It certainly seems to me that we have more bottoms-up stuff going on than top-down, and in fact in many ITIL or ITSM adoption programs the business is really not very involved at all. The improvement initiative is viewed as an "IT project". I think outside-in thinking and some of the IPAPI techniques can help improve this situation.
Value to ITSM and BSM
A focus on external customers can be a unifying thread for the business and IT.
At some point the top-down dependencies will need to be linked with bottom-up dependencies, and using external customers can help tie dependency data together in a way that everyone can relate and agree with. I think it might also help with managing the service portfolio, as trade-off decisions about supply and demand need to be weighed.
The concept of Outside-In thinking, and these simple techniques in business process management can really help keep things focused on where they belong:
the external customers of the business.
ITSM On-Ramp Services
The ITSM On-Ramp™ approach attempts to promote and support the use of Outside-In thinking.
In fact, when we try to instrument end-to-end business services this kind of analysis can be invaluable. Without it, we struggle to understand what end-to-end really means, and what transactions are most critical to measure. It can even help foster a dialog about who needs to capture what dependency data, so there's no missing pieces when we try and define end-to-end business service dependencies.
Getting the Business involved in your ITSM adoption can really make a difference, regardless of your approach to adopting IT serviced management.
Of course I believe that applying service monitoring intelligence to your ITIL program can produce other benefits as well.
CMDB dependencies become more clear, and services begin to get defined in a way that more precisely matches customer needs. The process of instrumenting a business service for end-to-end monitoring forces a dialog between the major stakeholders in the service, and I believe delivers value to both IT and the business much faster than building CMDBs and Catalogs.
Don't get me wrong, these ITIL constructs are needed, but how we get there and what value we deliver along the way matters a great deal.
Put the business to work by capturing critical top down dependency information from the Outside-In, get your ITIL Road Map a business lane, and leverage service monitoring intelligence to help you accelerate your road to business service management.
This last element is key.
Virtualization and cloud computing are helping to drive shifts in management tools, but don't leave monitoring decisions to technical domains if you really want the kind of cultural changes that ITSM and BSM promise.
Failure to change the way services are monitored will delay cultural change, inhibit value on investments in ITSM and BSM, and only increase IT staff frustration as legacy tools fall short of what's really needed as you begin to truly understand "end-to-end" services. There's a reason organizations struggle with IT Operations Alignment, and I believe that both Outside-In thinking and service monitoring intelligence can help.