Post on 22-Jul-2020
THE GREAT
DIVIDE
What is the Business
Impact?
A White Paper about
IT Service and Business Alignment
By Sue Southern
Independent Business & IT Service Management Consultant
Updated April 2010
THE GREAT DIVIDE IT Service and Business Alignment
© Sue Southern (suesouthern13@hotmail.com) Page 2 of 13 Southern Assignments
TABLE OF CONTENTS Introduction...................................................................................................3
How does the Great Divide Manifest Itself? ............................................4
Mutual Perception ................................................................................4
Confidence Disruptions ........................................................................5
Business Strategy ................................................................................6
Good and Bad Customers and Service Providers ................................7
Best Practice Processes ......................................................................8
SLAs and other Metrics ........................................................................8
Causes of the Great Divide.......................................................................10
Desired Results ...........................................................................................11
Conclusions..................................................................................................12
THE GREAT DIVIDE IT Service and Business Alignment
© Sue Southern (suesouthern13@hotmail.com) Page 3 of 13 Southern Assignments
Introduction
A business that is not continually adjusting to what its customers need, will find
trouble just around the corner.
The Great Divide. That perceptible gap between the IT service provider and the
business that is created and maintained by friction and blame. This can be seen not just
in the case of the internal IT Department but also in external contracts for managed services and outsourcing. The presence of the Great
Divide has been acknowledged for many years but it needs positive actions to be taken to
beat it into extinction. This paper, aimed at managers, considers some of the
well known and perhaps lesser known causes of the
problem and whether there are any workarounds or fixes
that can bridge the divide and truly align the IT service
with the needs of the business.
There is broad understanding that businesses and other
types of organisation are dependent upon their IT to be
able to operate – it is seen as an enabler and it touches
our lives every day to some extent. Like business, IT can
be a large and complex beast to control requiring skill,
judgement, tools, processes and experience to make it
work effectively. Experience shows that structure, best
practice disciplines and understanding the component
parts can play a significant and valuable part in driving
improvements. When IT goes wrong or is unavailable it
can be anything from mildly inconvenient to a huge
business disabler, involving for example, considerable
losses in terms of finance or reputation.
The complexity of business can be simplified when
considering the three fundamental needs from which
everything else stems:
1. Making a profit
2. Retaining customers
3. Growing the business
The relationship between IT and the business is
symbiotic. It would seem reasonable to deduce therefore
that IT and business alignment happens naturally and
automatically. But so often it doesn’t work that way.
So how and why does The Great Divide manifest itself?
THE GREAT DIVIDE IT Service and Business Alignment
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How does
the Great
Divide
Manifest
Itself?
Evidence of the Great Divide between business and the IT
service provider is typically quick to surface. Pinpointing the
cause is not always immediately obvious as there is often a
history and ‘baggage’ to be waded through, but often the
cause can be found within it. Necessarily, the people who
manage the business are looking for the people who manage
the IT service to contribute to the business success through
support and innovation. The business management must be
able to successfully articulate its mission and strategy to
stand a chance of gaining this commitment from those in IT.
This is such an important area that it has a section of its own
later in this document.
Edison articulated this point when he said “Vision without
execution is an hallucination.”
What follows is an outline of some of the factors that
contribute to creating or maintaining the Great Divide.
Mutual Perception
Examples of how the great divide manifests itself can be seen
in the perception that the business has of IT and vice versa.
Such as:
Business Perception of IT Service We Need
• Aligned with business
• Available when we need it
• Consistently high quality
• Competitive cost
IT Perception of Business Service They Want
• Cost must be reduced
• Quality must be
improved
• Newest, latest, fastest IT
• 24x7 service for 9-5
price
Service We Get • Slow and unresponsive
• Unreliable service and
unbelievable reports
• Expensive without ‘value’
• Lack of business
understanding
• Tireless commitment to
mediocrity
• They create the downtime
Service We Deliver • Service quality is high
with reports to prove it
• Our costs are controlled
• End-users never satisfied
• Invisible business
strategy (and how does
it affect IT anyway?)
• Downtime is a fact of IT
service delivery
These are common examples of the perception of both parties
and show that trust and respect have taken a back seat to
conflict.
Differing views of perception are not the cause of the divide but a
strong indicator of its existence. Perception, when effectively
managed, can give some very clear pointers to what is creating
or maintaining the Great Divide. Lack of trust is a major
concern; unreliability and failing to keep promises are big issues
for which a resolution path can be found.
THE GREAT DIVIDE IT Service and Business Alignment
© Sue Southern (suesouthern13@hotmail.com) Page 5 of 13 Southern Assignments
Confidence Disruptions
Every day IT support and management people go about their
tasks trying to do the right thing but finding constant
pressures and a reactive environment. One of the most
frequently heard complaints from IT service deliverers is that
they have no time for proactive activities – too busy fighting
fires.
In addition, they report that Service Review meetings require
a hard hat to survive the onslaught from the customer!
Service providers can disrupt their customers’ confidence
through hundreds of small actions over the course of any
week or month, small events that cause irritation, often about
inconsistent (or consistently bad) service.
“A typical dissatisfied
customer will tell 8 – 10 people about their
problem”
Approximately 95% of dissatisfied customers
don’t complain, they simply walk away.
Confidence disruptions give cause for complaints. Complaints
give substance to the Great Divide. Research has found that
it can take approximately 12 positive service encounters to
make up for one negative incident.
Conversely, a well-managed complaint can leave the
customer with a better impression of the organisation than
before. Examples of this, both good and bad can be found in
many areas, not just IT service delivery. Every customer,
however, has a patience and tolerance threshold and even
well-managed complaints will not increase customer
satisfaction if they happen too frequently.
A service provider can benefit from engaging with their
customers to encourage complaints where service is poor. If
something has gone wrong and a customer gives them the
opportunity to correct it then they have the chance to retain
their customer. Worryingly, research has found that between
94-96% of dissatisfied customers don’t complain, they simply
walk away. An action that certainly widens the Great Divide.
THE GREAT DIVIDE IT Service and Business Alignment
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Business Strategy
Strategy is everyone’s business
“We don’t need computers to build
houses, we need bricks.”
“What is the mission and strategy of your business?”
Ask this question of any room-full of business and/or IT
managers across a variety of organisations and the responses
are varied and include laughter and cynical remarks but rarely
the ability to articulate what the mission or strategy include.
CEOs and other business directors are usually intelligent, hard
working people who have the vision to see where they are
taking the business. One of the key differentiators between
the CEOs of the most successful organisations and brands in
the world and the rest is their ability to cascade their vision,
mission and strategy through the business and clearly express
what this means to everyone and how everyone contributes to
its achievement. They not only motivate their people to
translate the strategy into action but they also provide the
means to make it work effectively. The use of tools, such as
balanced scorecards, is widely acknowledged to be a best
practice method to achieve this.
Achieving the strategy should be the business of every
employee, but it takes above average leadership to make it
happen. Top management teams maintain this strong focus
on the strategy month after month, year after year.
Top organisations also differentiate themselves by having a
clear understanding of what their customers need and how
they can provide it better than their competitors, through
trusted relationships.
Without this top-level leadership and direction, the business
units, departments and employees will busy themselves on
the wrong things. This can lead to operating silo-style and to
personal agendas being worked which may be contrary to that
of the Executive Management Team. This is certainly a
contributing factor to creating and maintaining the Great
Divide.
There is evidence that some people don’t see the connection
with IT and business. An employee of a well-known company
in the house building business commented “we don’t need
computers to build houses, we need bricks.” This is an
interesting remark as it is more common to find the
accusation from the business that those in IT do not
understand the business, whereas this example is the other
way around. How long could that organisation continue to
build houses without their computers? Businesses that don’t
rely on IT are few and far between.
THE GREAT DIVIDE IT Service and Business Alignment
© Sue Southern (suesouthern13@hotmail.com) Page 7 of 13 Southern Assignments
Good and Bad Customers and
Service Providers
“If you can’t change the
people, change the people.”
This can be a sensitive area and for this reason it is often only
discussed behind closed doors. There are ‘good’ suppliers and
customers whose characteristics include forward thinking,
being open minded and customer focussed with positive
attitudes. These customers and suppliers work together for
the common good of the business, often creating what is
referred to as a win-win trusted relationship. It is refreshing
to find these relationships in an industry that’s known for poor
supplier management.
Then there are ‘bad’ suppliers and customers who have the
opposite characteristics. Bad customers and suppliers seek to
create or widen the Great Divide to perhaps meet a hidden
agenda. These relationships will be in the category of ‘hard
and difficult’ and will typically be represented by a lack of trust
in a few key people.
There are also combinations of the two; such as good supplier
and bad customer or good customer and bad supplier. A win-
win relationship is unlikely to be the outcome.
In addition, there is the business-to-business relationship
chain, giving more than one level of customer and the
opportunity for good and bad players to be found at any level.
The Great Divide could also be found at any level but this
paper concentrates on the customers and users of the IT
Service plus the customers of the business. An understanding
of the requirements of both is highly desirable if not essential
but not always present and Figure 1 below, illustrates the
positioning of the key players.
The Business
Customers of the IT Service
The IT Service Provider (maybe internal or external to The Business)
Service managed from IT infrastructure
External SuppliersProducts/services required to meet the Business needs
External CustomersRecipients of the products/services
The Great Divide?
Figure 1: Levels of Customers and their relationship to IT Service
The Business
Customers of the IT Service
The IT Service Provider (maybe internal or external to The Business)
Service managed from IT infrastructure
External SuppliersProducts/services required to meet the Business needs
External CustomersRecipients of the products/services
The Great Divide?
Figure 1: Levels of Customers and their relationship to IT Service
THE GREAT DIVIDE IT Service and Business Alignment
© Sue Southern (suesouthern13@hotmail.com) Page 8 of 13 Southern Assignments
Best Practice Processes
Processes should be consistently repeatable,
understood, scalable and continually
improving to achieve operational excellence.
There is a wide range of best practice standards, plus open
standards for good practice, that have been determined in the
UK and/or internationally. In the IT and business
management arena, these include:
1. ITIL® IT Service Management certification for individuals
2. ISO/IEC 20000 ITSM certification for organisations
3. ISO 9000/1 Quality Management certification
4. COBIT™ (Control Objectives for Information and related
Technology) an open standard for good IT security and
control practices
5. Six Sigma for process improvement
6. Sarbanes-Oxley (SOX) for the business control
environment processes to meet financial legislation
7. Balanced scorecards for at least three management areas
of business, IT operations and customer perception.
The seven standards listed above could all be present in one
organisation and in fact in many areas they support each
other. There is a danger that the scope of processes can be
misinterpreted by IT and other internal or external
organisations. The distinction between business process and
IT process needs to be well defined and communicated -
confusion can quickly result when used out of context.
Confusion of this nature can be a contributory factor in the
Great Divide.
ITIL® (IT Infrastructure Library) has existed as a best practice
standard since the late 1980s but is currently experiencing
huge international adoption and traction. It can play a key
role in most of the other six standards listed above. ITIL®
has three highly valid objectives:
1. Align IT services with current and future needs of the
business and its customers
2. Improve the quality of delivered IT Services
3. Reduce the cost of provision in the long term.
These objectives are given considerable emphasis throughout
the ITIL® books; they are robust and grounded in common
sense. The overriding message is to ensure that core IT
processes are operationally excellent - singular and
consistently repeatable, well understood, measured, scalable
and constantly improving. They also provide a significant
contribution to closing the Great Divide, when deployed
effectively.
Alarmingly, the perception found among some people in the
business is that their IT service provider causes much of the
downtime that they suffer. Arguably, they have a valid point.
With the absence of effective Problem, Change and Release
management processes, for example, then this is a likely
outcome with the consequent effect on the Great Divide.
THE GREAT DIVIDE IT Service and Business Alignment
© Sue Southern (suesouthern13@hotmail.com) Page 9 of 13 Southern Assignments
SLAs and other Metrics
Customer relationships are not built on
statistical measures.
Establishing Service Level Agreements and other metrics can
present considerable challenges in reaching an agreement
that is acceptable to both parties. This is a time when the
service demands of the business can seem impossible to meet
for the price they are willing to pay. The negotiation process
is often carried out by commercial, procurement and/or
financial people and they transfer the ownership to the IT
Service Management team for delivery. This can result in
misunderstandings or incorrect interpretations that give rise
to difficulties in the relationship.
Once set, achieving SLAs demonstrates nothing more than
basic competency to do the job. IT Service Management staff
can feel disheartened when they find little or no recognition
occurs from business customers by achieving SLAs, despite
the considerable efforts that went into that success. This
disappointment grows when failing to achieve SLAs results in
penalties being applied. Developing business relationships
and closing the Great Divide, will not occur from statistics.
There can be a long record of consistent performance to SLA
and yet the contract can still be lost to a rival.
Service performance metrics are produced month after month
but often no tangible added value can be seen by customers.
Emphasis is often on statistics and exception reports with
little or no reference to how the IT service has aligned itself
with the needs of the business. The service provider typically
expends a significant amount of effort to produce reports only
to find that the recipient gives them little or no attention.
Customers may not believe what is presented in the reports
which is further evidence of lack of trust and conflict.
With the passage of time it is not uncommon to find that the
service provider’s delivery team members are unable to
express what the full complement of services comprises and
the same can be true for customers. This problem often goes
unattended because to admit that it is a problem would result
in a loss of credibility. Confusion is a likely outcome.
Conflict, confusion, mistrust and misunderstandings are all
elements that will add to the Great Divide.
THE GREAT DIVIDE IT Service and Business Alignment
© Sue Southern (suesouthern13@hotmail.com) Page 10 of 13 Southern Assignments
Causes of
the Great
Divide
In summary, the Great Divide can be caused or maintained
through several areas:
1. Lack of coherent business strategy or the strategy not
being communicated and understood by everyone in the
business.
2. People busy on the wrong things (and they are being
paid to do the wrong things!)
3. Organisation is run in silos leading to inconsistency and
even customer and employee confusion.
4. Lack of trust and positive engagement between the
people who manage the business and those who
manage the IT services.
5. Poor management of customer complaints.
6. ‘Bad’ customers and/or service providers who amplify
mistrust.
7. Customers and service providers are confused about
the product/service offerings.
8. Ineffective, inefficient and inconsistent processes,
particularly those evident to customers.
9. Performance reports are panic driven and/or are
measuring inappropriate service level targets and
demonstrate no value added.
10. Lack of best practice that causes re-work and creates no time for proactive activities; this increases
operational costs and hinders innovation.
The Great Divide is a negative force that undermines and
inhibits the potential of any business or organisation.
THE GREAT DIVIDE IT Service and Business Alignment
© Sue Southern (suesouthern13@hotmail.com) Page 11 of 13 Southern Assignments
Desired
Results
A desirable outcome is to neutralise the forces of the Great
Divide. As with any good process improvement model, it is
necessary to understand where the aiming point is located.
A ‘destination statement’ for each area will facilitate greater
understanding.
Based on the list of causes shown on the previous page,
corrections can be achieved through setting destination
statements that show the aiming point, for example:
1. The Corporate mission and strategy have clear focus,
interpretation, management and communication.
2. Workforce is busy on the right things that cause the
strategy to be achieved.
3. Organisation is managed for performance against
business objectives.
4. The business and IT service provider are aligned
through the use of best practice standards with
frequent and effective communication.
5. Customers benefit from perception management and
complaints are seen as a chance to improve.
6. Key stakeholders (including customers, IT service
providers and suppliers) understand the business
objectives and how to achieve them.
7. A Service Catalogue presents current product/service
offerings and is communicated to customers and
service provider staff.
8. Best practices implemented for effective process
control.
9. IT Service Performance reports are aligned with the
business needs of the users and reflect the needs of
the customers of the business.
10. Best practice processes are a basic competency and
include proactive service delivery and management.
Having understood what is to be achieved the next stage is
to plan and implement the route to get there and by when;
a level of detail that is outside the scope of this white
paper.
The desired results for the business, in their most simple
terms are to make a profit, to retain customers and grow
the business; these key objectives are unlikely to be
achieved without IT. Therefore the alignment of IT and
those who manage it with the business is essential.
THE GREAT DIVIDE IT Service and Business Alignment
© Sue Southern (suesouthern13@hotmail.com) Page 12 of 13 Southern Assignments
Conclusions
Wal-Mart view technology as an enabler, it permits
scale and responsiveness to customer needs.
Where the Great Divide exists it has a negative business
impact. It is an inhibitor to the general well-being of the
business.
That is not to say however, that it exists in all
organisations. Some have mastered the resolution to
this problem and created a culture and environment that
allows the business objectives to be achieved using IT as
an enabler with demonstrated added value. A point
illustrated by some of the most successful organisations
and brands in the world.
Technology has been central to business success for
many years; this trend increases continually. For those
businesses where the Great Divide is present, then CEOs
would do well to accelerate their business transformation
plans to maximise and publicise the value of IT to the
business. In support of this aim, increased leverage can
be gained through processes such as ITIL® and COBIT.
Proven best practice demonstrates tried and tested skills
leading to what customers want; a relationship trusted
for consistency and reliability. This leads to customer
retention and strong referrals.
The organisation’s strategy and mission must be clear to
every employee so that they know how their contribution
makes a difference. Trust must exist between employer
and employee and between customers and service
providers. Performance objectives should be actively
managed through the use of dynamic tools such as
Balanced Scorecards. Out-performing rivals leads to
business growth and profit.
IT service providers must recognise the importance of
their role in the business and engage accordingly. There
is no room for private agendas or over-inflated egos;
team work and strong communication are essential to
deliver business value.
THE GREAT DIVIDE IT Service and Business Alignment
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About the author
Sue Southern is an independent Business and IT Service
Management consultant and trainer specialising in
implementing Balanced Scorecards for managing business
performance, service delivery and customer perception.
She is first qualified in ITIL® to Manager’s Certificate level
in 1996 and actively uses this knowledge to deliver
improved customer service, management capability and
operational excellence. To maintain her ITIL® knowledge,
Sue also delivers courses from Foundation level upwards.
She has earned a reputation for professionalism over 25
years by meeting objectives and delivering high standards.
Sue has written this paper on the basis of her direct
experience and industry research and hopes you have
found it to be interesting and relevant to your work.
Should you wish to contact her, please email to
Suesouthern13@hotmail.com.
Trademark acknowledgements
COBIT A trademark of the IT Governance Institute and is now in its third
edition.
ITIL® A registered trademark of the UK Office of Government Commerce and
is in its second edition, published by TSO (The Stationery Office).
Balanced
Scorecard
A creation of Drs Kaplan & Norton, published by Harvard University
Press. Scorecard development has reached the third generation.