2011 BSM MATURITY

BENCHMARK STUDY

Copyright © 2011, BSMReview.com

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BSM Benchmark Survey

BSMReview, a Business Service Management community of business and IT professionals, conducted a survey to

measure the maturity of BSM initiatives industry-wide. The survey provides a 2011 benchmark for the adoption,

perceptions and expectations of Business Service Management. The survey results validate the industry definition

of Business Service Management, quantify its value to the organization and provide a means for organizations to

assess the level of IT and business alignment based on market and business maturity.

Readers will learn:

How other companies are assessing the value of BSM.

How your BSM maturity and initiatives compare to other

What others are doing to better align business with IT.

How others are measuring BSM effectiveness.

Survey Sponsors

The survey was conducted in the second quarter of 2011. With 157 completed responses the survey represents

a good cross section of company size, industry and views from both IT and business personnel.

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What people are saying?

“IT agility is dependent upon extreme collaboration and transparency. Tools

and process can't get in the way of getting IT service management work

done. IT staff must be able to resolve known business problems with limited

IT resources. For ServiceNow, this BSM Review maturity report highlights the

different kinds of business demands on IT and the resulting need for a

collaborative platform that can bridge the gap between IT and business.”

“As is typical for major transformations such as BSM, progress never

seems fast enough and accurately gauging progress is a continual

challenge. This BSM Maturity benchmark study provides a view of the

current “state of BSM”, giving BSM practitioners perspectives on their

own “state of BSM” and how it compares with other BSM initiatives, as

well as a benchmark to measure their progress.”

Matt French

Marketing Director

Service-Now.com

Audrey Rasmussen

Partner

Ptak/Noel

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What people are saying?

"The survey results captured in this BSMReview report confirms the

importance of IT Service Management adoption as a means of

focusing IT strategy on business outcomes and objectives. Specific

findings reflecting that Business Service Metrics are best improved by

the maturity of IT Management processes and ITIL adoption does

indeed point to an increased generation.”

“Today’s business initiatives cannot relegate IT as an afterthought. At

Cherwell, we believe that technology is needed for every aspect of

business. The results of BSMreview’s 2011 survey confirms this need in

the business context of “RITE” … meaning that IT decisions and

deliverables must be Relevant, Integrated, Timely and Efficient if IT is

to successfully align with their business customers.”

Troy DuMoulin

AVP Strategic Solutions

Pink Elephant

Vance Brown

CEO and Chairman

Cherwell Software

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Survey Demographics

Title

Executive (CEO, CIO, VP)

Director/Manager

IT Operations

IT Consultants

47%

20%

17% 16%

Company Size

1 to 99

99 to 999

1000 - 4999

5000+

23%

16%

43%

18%

0%

5%

10%

15%

20%

25%

Industry Sector

Resp

onse

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About the Survey Demographics

The BSMReview survey was able to capture a reasonable breadth and size of survey demographics. From an industry perspective, there were significant participation from the financial services and technology industry segments, as well as ―cross industry‖ which tended to be IT consultants providing services to multiple types of companies. The survey also captured a reasonable response from manufacturing, health care, government and education enterprises. There was only a moderate response from retail, energy and telecom industries. However, survey responses demonstrated an unexpected consistency re: IT perceptions by both IT and the business communities that seemed to be independent of type of industry …thus confirming the horizontal demands for IT deliverables.

The more interesting survey results surfaced in the role (executive, manager, staff or consultants) or function (IT or business) demographics and will be highlighted when and where appropriate. If there were noteworthy differences in responses to specific questions, it surfaced primarily in the role or function played within the organization. Another interesting result was the difficulty in determining the impact of size upon the responses. We expected there to be greater harmony between IT and business perspectives within smaller companies and less within larger enterprises. However, size seemed to have minimal impact upon the variation of opinions regarding successful alignment between IT and their business customers, as well as in the perception of business and IT maturity.

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Table of Contents

Take Note

We identified survey

summary data in the left

sidebar with

―Response”.

Conclusions and

observations with

―BSMReview Insight”.

Executive Summary

BSM Maturity Assessment

IT Investment Decisions

Business/IT Culture

Service Level Management

ITIL Adoption

Benchmark Conclusions

Final Recommendations

This is the first benchmark study to assess BSM maturity industry-wide. The study measures and compares IT and Business maturity, extracts independent operational views based on department, role and titles and offers insight into the current and future state of Business Service Management.

Executive Summary

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Survey Highlights Both Business and IT personnel agree on the high-level definition of Business Service Management, i.e. IT

investments and capabilities are aligned with Business maturity and strategic goals.

However perceptions and reality are not what they seem:

Business personnel see IT as a Tactical, not operating as a strategic part of the business – operating at level 1 or 2 of the BSM maturity model

IT personnel see IT as Strategic, providing strategic business value to the business – operating at level 3 or 4 of the BSM Maturity Model

The 2011 Benchmark Study shows that businesses are maturing at a higher rate than IT and, as such, IT is struggling to keep pace with the business

There remains a significant ―information‖ gap between business and IT regarding how technology could, or should, be leveraged to support business growth and competitive differentiation

The good news is that the nearly half of enterprises have achieved pretty good alignment with their business counterparts and are meeting expectations

But, too many IT shops are in danger of being marginalized as the lack of investment in IT leads to less innovation and IT services that are inadequate to satisfy the longer term needs of the business

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A bit about the BSM Maturity Model

Effective BSM (IT/Business alignment) alignment occurs when IT is operating at a level that meets business imperatives

Maturity of IT Operations should move in a consistent pattern with Business Maturity

An IT ―aligned‖ organization delivers the technology/services required for customer focused business value that ensures competitive differentiation

The BSM Maturity Model can be obtained by clicking here.

Level IT

Maturity

Business

Maturity

Business

Benefits

Business

Metric

5 Pervasive Market

Leadership

Sustained

Competitive

Advantage

Market

Expansion

4 Optimized Competitive

Differentiation

Product &

Service

Leadership

Market

Penetration

3 Aligned Business Value Customer

Acquisition &

Retention

Profit

Maximization

2 Predictive Secure &

Reliable

Operations

Cost Effective

Operations

Revenue

Focuses

1 Essential Business

Fundamentals

Technology

Supporting

Business

Minimize IT

Investment

BSM Maturity Model

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A Yardstick for Measuring BSM Maturity

We derived the current state of Business Service Management by evaluating survey responses along maturity continuum:

Business Maturity - from sustaining market share to obtaining and holding the market leader position

IT Maturity - from providing a low-cost utility infrastructure to delivering innovative technology for strategic advantage

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Busi

ness

Ma

turi

ty

IT Operational Maturity

Aligned

Strategic

Innovative

Aligned

Utility

Cost Efficient

Not Aligned

Strategic IT

Immature Business

Utility Strategic

Lea

der

Sus

tain

Not Aligned

Strategic Business

Immature IT

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BSM Maturity – The Desired State

The optimal or desired state of Business Service Management is when IT operational maturity is aligned with the maturity of the business.

Good BSM alignment happens when Business and IT are investing and operating at, or near, same level of maturity.

Poor BSM alignment occurs when one or the other is operating at a higher or lower level of operational performance, creating costly inefficiencies and/or missed opportunities.

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Busi

ness

Ma

turi

ty

IT Operational Maturity

Aligned

Strategic

Innovative

Aligned

Utility

Cost Efficient

Not Aligned

Strategic IT

Immature Business

Utility Strategic

Lea

der

Sus

tain

Not Aligned

Strategic Business

Immature IT

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2011 Benchmark – The Current State

2011 Benchmark – Current Reality

The degree of BSM alignment is greater than we anticipated, but almost half of shops with immature IT are attempting to serve needs of more mature business leadership.

There were only a few cases where IT was operating ahead of business maturity.

The current reality is that IT is playing catch-up with business maturity, and the fact is that businesses are maturing at faster rate than IT. The challenge for IT is to maximize the pace of change and demonstrate strategic value to the business.

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Busi

ness

Ma

turi

ty

IT Operational Maturity

Aligned

Strategic

Innovative

Aligned

Utility

Cost Efficient

Not Aligned

Strategic IT

Immature Business

Utility Strategic

Lea

der

Sus

tain

Not Aligned

Strategic Business

Immature IT

Current Reality

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IT is at Risk at being Marginalized

As a result of disconnect between current and desired state, IT is at risk of being increasingly marginalized.

Probably the biggest surprise was that a large majority of the businesses were perceived as having significant business maturity, particularly by the non-executive personnel. In spite of budget cutbacks, layoffs, loss of consumer buying power and increasing regulatory unknowns, these respondents feel that their companies are achieving their business goals and moving up the business maturity spectrum.

While IT personnel see themselves continually moving up the ―IT maturity‖ spectrum, business personnel maintain in their responses that IT remains a tactical focus within their company, and are not operating as a strategic part of the business thrust.

The survey highlights the dichotomy of business operating at an aggressive, mature ―business‖ level, while IT struggles at an immature level of response to the technology demands of their business counterparts. The danger in this conflict is that while IT is getting better and better at managing IT, they are in increasing danger of being permanently marginalized on the outskirts of “business” contribution.

Interestingly, it was evident that the lower levels of IT operations are struggling to understand technology’s contribution within the bigger ―business‖ picture, yet were consistently demonstrating a more cynical perception of how technology was not being appropriately leveraged.

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In this section we converge on the definition of BSM and assess both IT and

Business maturity.

BSM Maturity Assessment

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What best describes your definition of

Business Service Management?

The definition of Business Service Management is gaining consensus, but there remains a need to better define BSM to achieve market clarity and expectations.

2/3 or 66.7% defined BSM as a:

Business-oriented approach to IT operations & deliverables

Measurable activity for aligning IT with Business objectives

Rejected, but still existing in the industry:

Running IT as a business (11.6%)

Process approach to ITSM (17.1%)

Managing application performance (3.9%)

BSM Definition Response

BSM is measurable activity for aligning IT with

business objectives 34.9%

BSM is a business-oriented approach to IT

operations and deliverables 31.8%

BSM is a (mature) process oriented approach to IT

service management 17.1%

BSM focuses on "running IT as a business entity" 11.6%

BSM is managing and analyzing application

performance 3.9%

Resp

onse

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Increasing consensus that Business needs to

drive definition of BSM

For almost a decade, the discipline of Business Service Management (BSM) has been largely focused on resolving the lack of strategic alignment between the business community and the IT organization. Vendors, standards bodies, user organizations, and consulting houses have all attempted to capture the promise of BSM — with notable success. Yet the existence of multiple definitions of BSM illustrates the current confusion surrounding this IT discipline.

The statements which focused on the business driving the definition of acceptable IT service management were the predominant responses within the BSMReview survey:

35% - ―BSM is a measureable activity for aligning IT with business objectives‖ …note the emphasis on metrics focused on achievement of business goals

32% - ―BSM is a business-oriented approach to IT operations and deliverables‖ …note the focused approach coming from the business perspective and not IT’s

Other definitions paled by comparison. Confining the BSM discussion to ITSM processes captured less than half of either of the above responses. Running IT as a business was less than one third of the above responses. Focusing BSM attention solely on application performance was one tenth of the above answers.

This growing consistency in the expectations of BSM’s contribution to IT and business working more effectively together is a positive industry direction.

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What best describes your company’s

business goals?

All groups tend to view their company’s business

goals as very mature - meaning the company has a

unique competitive differentiation and is a market

leader.

Strong agreement that their businesses are

operating at levels 3 & 4 (mature businesses)

Good agreement that their business are

operating at level 5 (market leader)

Yet 55% of executives also feel that company is

only doing what is necessary to sustain business

Whereas IT staff and mid-level managers

strongly disagree with this statement

Response Options

(Strongly agree or agree)

Exec

View

IT

View

The company does only what is necessary to sustain

the business

Business Maturity – Level 1

55% 30%

The company focuses on tactical operations that secure

short-term value to stockholders and employees

Business Maturity – Level 2

55% 55%

The company emphasizes strategic initiatives that

maximize long-term profitability and business value

Business Maturity - Level 3

82% 80%

The company focuses on creating product and service

leadership for competitive differentiation

Business Maturity - Level 4

82% 80%

The company is recognized as the market leader and

uses that unique competitive advantage to enter new

markets

Business Maturity - Level 5

73% 67%

Resp

onse

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Are Company’s Really this Mature?

The consistency which all groups view the maturity of the business as ―very‖ mature was surprising. Few respondents felt that the primary business objective was to focus on ensuring the business was secure and reliable and delivering the short term value (profit) most prized by stockholders and employees. Yet almost 9 out of 10 respondents felt that their company was ―focused on creating product and service leadership for unique competitive differentiation‖ or ―emphasized strategic initiatives that maximize long-term profitability and business value through customer emphasis.‖ Even more surprising, 7 out of 10 identified their company as market leaders with a competitive advantage that could not be replicated and provided unique entrees into new markets.

Given the state of the economy, the need to retrench, to ensure cost-effectiveness and still preserve revenue options, this strategic, mature state of the business was a welcomed finding. However, one interesting contradiction involved nearly 60% of executives and business respondents stating that the company was only doing what was necessary to sustain the business, which would negate unique competitive differentiation and market leadership.

Even more interesting was the finding that nearly 70% of IT staff and mid-level managers completely disagreed with the ―only doing what was necessary‖ statement … implying a more correct understanding that you can’t have it both ways. A company cannot be constrained to doing only what was necessary to sustain the business, yet characterize that same business as a market leader with a unique competitive advantage that could not be replicated by any other business competitor. It was intriguing to find that the IT worker bees ―got‖ that contradiction and the executives and business respondents did not.

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What best describes your company’s view

of Technology?

Large majority of employees view technology

as critical to company’s success - yet IT feels

much more can be done with technology to

enhance competitiveness

Every role views contribution of technology in

very positive way

Healthy disagreement that technology is limited

to performing basic business functions

Using technology as a unique competitive

advantage was agreed to by business &

consultants (83% combined)

but disagreed by IT oriented roles (70%)

Response Options

(Strongly agree and agree)

Business

View IT View

We use technology to create product and

service leadership in our industry 84% 55%

We leverage technology to focus on

customer acquisition and retention 84% 75%

We use technology to ensure cost

effective operations 91% 80%

Our technology provides us with a

unique, sustained competitive

advantage 83% 30%

We limit the use of technology to basic

business functions 42% 67%

Resp

onse

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How does your company recognize the

benefit from technology?

― … is a key component to delivering quality with speed to market‖

―… allows us to provide exceptional patient care‖

―… enables top line revenue growth and margin improvement‖

―… improved finding of Oil & Gas and the development of these assets‖

―… reduced operational costs and customer satisfaction‖

―We are a technology center …technology is our livelihood‖

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Conflicting Views of Technology Contribution

There was a strong, healthy majority of respondents that deemed technology as critical to the company’s success.

However, there were significant differences between the business and IT people regarding the best or correct

view of technology’s contribution. For example, 83% of business respondents agreed that technology provided

the company ―with a unique, sustained competitive advantage‖ while only 30% of the IT respondents felt that

way. A second example involved 84% of business agreeing that technology was used by their company ―to

create product and service leadership in our industry‖ while only a slight majority (55%) of IT felt that way.

Why would there be such a difference in their viewpoints?

Yet, the percentages were swapped for the statement that the company ―limits the use of technology to basic

business functions‖ with only 42% of business agreeing while a much larger percentage (67%) of IT expressed

stronger agreement. Again, why this discrepancy between the two camps?

Apparently business personnel grasps the impact technology has upon competitive advantage and

product/service leadership where that perspective is only available to a smaller subset of the IT organization.

However, the reverse disparity between business and IT regarding ―limiting technology to only basic functions‖

implies that IT has a better grasp on the opportunity that technology brings to the corporate objectives and

nearly two-thirds of IT are responding that technology’s contribution to business value is mismanaged or

misunderstood.

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In this section we discuss how IT investment decisions are made and assess, to

what extent, those decisions are aligned with the business.

IT Investment Decisions

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What BEST describes how IT technology investment

decisions are assessed and made within your organization?

There tends to be a strong feeling IT investments

are a collaborative effort, especially with top

management in the company.

Majority of Business, IT and Consultants

(Executives and Managers) felt that IT

investment decisions were jointly sponsored by

IT and Line-of-Business executives and that

CIO and CEO were working in tandem

However, IT Staff felt IT was making IT

decisions based primarily on cost justification

or sponsored solely by IT.

Sponsored solely by IT

Limited to cost

justification with our CFO

Jointly sponsored by IT and

LOB executive

CEO and CIO are

working in tandem

CIO is trusted to

make independent

decisions

7.9%

14.0%

38.6%

24.6%

13.2%

Resp

onse

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IT investment decisions, differing perspectives

Probably one of the most telling symptoms of IT/Business alignment involves how IT investment decisions are

made and by whom. Identifying annual budgets for IT operations, approving IT projects, and maintaining

adequate IT staff required to ―do‖ the job … all whisper the true agreement or disagreement between IT and

their business customers. If IT projects are continually turned down and IT is expected to work miracles in

keeping legacy systems performing while constantly investing in new, mission-critical applications without

adequate funding, then there is no adequate IT/business alignment.

In this case, there was generous agreement between all functions (business, IT, system consultants) that IT and

Business were jointly making IT investment decisions and that the CIO and CEO were working toward common

goals. The disparity surfaced in the roles that individuals played within the enterprise -- 82% of mid-level

managers and 63% of executives (…healthy majorities) supported this perception of harmony in IT investment

decisions. Yet only a minority (45%) of IT was able to support such claims with the same minority (45%) feeling

that IT investment decisions were based primarily on cost justification. Again, the obvious conclusion is that IT

staff is not getting the business insight or cooperative perspective that is shared at the management level and IT

staff therefore cannot be expected to share in the apparent optimism of the management group. We conclude

that this is a management communication issue that can easily be addressed.

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What are the top obstacles that your company faces in

terms of aligning business and IT investments?

Both IT and business see poor alignment due

to the general lack of understanding of the

―value of alignment‖.

The lack of understanding is rooted in

Ineffective Communication (47%)

The lack of understanding is no doubt

affecting the level of commitment

through Budget/Resources applied to

alignment (51%) Ineffective communication of

business strategy to IT management team

Lack of IT understanding of the value of business alignment

Lack of business understanding of the value of IT alignment

Lack of budget and resources applied to creating alignment

between business and IT

47.4%

43.0%

53.5%

50.9% Resp

onse

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BSM Immaturity Surfaces as an Obstacle

Certain obstacles that are frequently identified as causing a disconnect between IT and business were only

selected by a small minority of the respondents. These include:

IT making budget/investment decisions in a vacuum (17%)

Business units making their own technology decisions (26%)

Business receiving weak support from IT executives/staff (17%)

However, the survey responses clearly identified the ―lack of understanding‖ of the value of IT alignment by the

business or the value of business alignment by IT. Almost half of all respondents identified ineffective

communication of the business strategy to the IT management team as a primary cause of this lack of

understanding.

Just over half of all respondents also identified the ―lack of budget and resources‖ being applied to improving

alignment between business and IT.

Unfortunately implying that corporate decision makers were not recognizing the need to plan and invest in

improving business/IT alignment.

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Considering how your company makes IT financial investment

decisions, please indicate your level of agreement with the

following statements.

IT investment decision criteria is highly

consistent with views expressed on company

goals – that business goals and IT investments

are focused on Maturity Levels 3 and 4

Significant disagreement (63%) that decisions

are focused on cost containment – particularly by

mid-level/staff and IT (68-78%)

Significant agreement that decisions are based

on revenue contribution (68%), profit margins &

customer relationships (67%) – particularly by

business & consultants (88-96%) Solely based

on cost containment

Determined by revenue

contribution and cost

containment

Focused on maximizing profits and

strengthening customer

relationship

Prioritized to optimize market

penetration

Create unique technology

infrastructure for unfair

competitive advantage

5% 6% 12% 7% 5%

25%

62% 55%

42%

18%

50%

21% 23%

36%

47%

13% 5% 5% 7%

15%

Strongly agree Agree Disagree Strongly disagree

Resp

onse

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IT Investment Decisions - Quotes

Best Case

―IT investments are determined by added value, effectiveness and efficiency of the business‖

Typical Case

―Investments build a global infrastructure and product set that should improve efficiency and drive business‖

Worst Case

―IT investments are always reactionary‖

Resp

onse

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Business Goals Impact IT Investment Decisions

The survey identified a strong cause/effect relationship between the ―business‖ goals of the company and the

resulting IT investment decisions. Those companies that had strong identification earlier in the survey questions

for business goals of long-term profitability and business value as defined by customers (Level 3 Business

Maturity) or product/service leadership and competitive differentiation (Level 4 Business Maturity) ...expressed

significant agreement that IT investment decisions were based on revenue, profits and customer relationships (77-

83%), particularly by business and consultants (88-96%). To a lesser extent, there was also healthy

disagreement (63%) that IT decisions were focused on cost containment (Level 1 and 2 Business Maturity). This

disagreement was particularly expressed by those most affected by the IT investment decisions …namely mid-

level IT management and IT staff.

Fortunately, the consistency between the cause (business goals) and the effect (IT investment decisions) provided

good validation of the earlier assessment of what was driving the business agenda of companies surveyed

…meaning that individuals within IT are gaining a better understanding of the impact of IT on the business, even

if the company’s behavior frequently did not follow through with that increased understanding.

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In this section we explore how business and IT work toward an alignment

and uncover some interesting perceptions of IT based on role and title.

Business/IT Culture

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How is business operations involved with IT?

Functions (Business and IT Operations) are fairly consistent regarding business involvement with IT. Differences surface in roles -- with Executives feeling Business more involved and IT staff feeling Business is much less involved.

Significant agreement (all roles & all functions) that ―business holds IT accountable for continuous business improvement though technology‖

Exec (41%), Mid-level (39%), Staff (53%)

Business (48%), IT Ops (43%)

Yet, significant difference between IT and Business exists regarding that "business accepts IT operational requirements and finance approves minimal budget."

Business expects IT to operate

like a utility and has no other interest in IT

Business accepts IT operational requirements and finance approves

minimal budget

Business requires regular IT updates

regarding IT investment

targets and operation results

Business insists upon

measurable results within 6-12 months of IT

investment decision

Business holds IT accountable for

continuous business

improvement through

technology

30%

22%

30% 30%

48%

34% 37% 38%

22%

43% Biz View IT View

Resp

onse

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How is business operations involved with IT?

“Business expects IT to add value, but IT seems to be interested in

protecting turf. IT accepts little responsibility for anything.”

“Depends on Business Unit, some just want a utility and others want

active participation.”

―Business evaluates impact of IT as a service differentiator.‖

Resp

onse

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Better IT Communication = Better Alignment

There was healthy agreement that ―business holds IT accountable for continuous improvement through

technology.‖ Disagreement with that statement is almost like disagreeing with motherhood and apple pie.

However, the more interesting part of the survey results identified the disparity between IT executives and IT

staff on the statement ―business expects IT to operate like a utility and has no other interest in IT‖.

The executives, who have the better connections with their business counterparts, disagree with this statement

88% of the time, whereas IT staff, who have the least common connections with the business, disagree only 44%

of the time.

The resultant conclusion is that while the business feels their issues and requirements are being heard by IT

executives, this communication is not being passed down to the worker-bees … thereby not empowering them to

alter behavior as they interact and serve their customer base.

The issue here is not the business’s communication to IT, but IT executive’s communication to IT staff.

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How do business and IT interact or

cooperate in your company?

While IT feels responsive, there is definite lack of trust

& cooperation between IT and Business regarding

meeting the needs of the business.

The majority of IT roles (52%) view IT as responsive to reasonable business requests, but are not expecting miracles, while just 30% of Business responses see IT as responsive.

Generally the scores reflect the lack of trust and cooperation between IT and Business

Roughly only 25% feel that IT can be trusted to do the right thing in leveraging technology for business benefits, and feel that Business does not trust IT and has minimum confidence in IT meeting Business needs

Business less supportive of all descriptions of Bus/IT interaction …ranging from 19-30%

Resp

onse

Business does not trust IT and has minimum confidence in IT meeting business needs

Business feels IT is responsive to reasonable IT requests, not expecting IT miracles

IT is recognized for contributing to reduction in production costs of existing products &

services

IT has a history of success in automating business process improvements

Business effectively leverages IT for core operating processes (supply chain, CRM,

product innovation...)

IT is trusted to do the "right" thing in leveraging technology for business benefits

19%

30%

33%

26%

30%

26%

30%

52%

34%

25%

33%

25%

Biz View IT View

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“IT has a history of not delivering on time or on budget & when on-time,

functionality doesn’t work”

“The business submits work requests, IT determines required and available

resources, and business prioritizes projects”

“We are a large organization, so trust is higher in some areas than others.

Executive level is NOT yet supportive of a single approach or point of view”

“Business is beginning to participate in governance activities to prioritize IT

projects”

How do business and IT collaborate?

Resp

onse

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Evidence of Collaboration is Minimal

Responses to this question seem to confirm the unfortunate trend that while IT is getting better and better at what they do …and are recognized for their responsiveness, the value of their business contribution is becoming increasingly marginalized. This set of questions focused on how business and IT were actually collaborating. Yet some of the lowest scores on the survey were in response to some descriptions of how business & IT collaborates.

There was minimal agreement that ―business trusts IT and has confidence in IT meeting business needs‖. Yet in a similar question with the statement reversed, there was only minimal agreement that ―IT is trusted to do the right thing in leveraging technology for business benefits‖.

The only plausible explanation for the contradiction is that business really doesn’t trust IT to meet business needs, but they do trust IT to leverage the use of technology, which a much more restrictive contribution from an IT point of view.

Other examples of IT not being effective in their collaborative behavior include: ―Business feels IT is responsive to reasonable requests‖ achieved fair agreement with most roles, but business

respondents did not support this premise with 70% disagreeing. Minimal agreement with the following statements:

―IT has a history of success in automating business process improvements‖ ―IT is recognized for contributing to reduction in production costs‖ ―Business effectively leverages IT for core operating processes‖

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What is your opinion of IT operations?

One of the most interesting responses in the survey with significant contradictions (safe vs. strategic) and disagreements (real-time visibility & early adopter):

Strong agreement (all roles, all functions):

IT operations uses only proven, safe technologies and is not an early adopter of leading edge technology

IT operations is core to strategic business execution

Differences surface:

Business (96%) agree that IT provides real-time visibility into business impact of technology issues, while IT is less convinced (46% of IT responses)

Business perceives IT is an early adaptor of leading edge technologies (86%) while IT disagrees (only 36% agree)

Resp

onse

Has little to no technical strategy (services are managed to be "good

enough")

Uses only proven, safe technologies that have been validated and

tested elsewhere

Provides real-time visibility into business impact of technology issues

Is an early adopter of leading edge technologies

Is core to strategic business execution

48%

66%

48%

36%

70%

50%

75%

96%

86%

74%

Strongly Agree/Agree

IT View Biz View

40

Technology Understanding is a GAP

This set of questions provoked some of the most interesting responses in the survey. For example, there was

strong agreement that ―IT operations uses only proven, safe technologies‖ and is not an early adopter of

leading edge technology. However, there was also strong agreement that ―IT operations is core to strategic

business execution.‖ It seems an anomaly that IT uses only safe technologies and can still be ―strategic‖

(…implying long-term vision) to business execution.

The disagreement between IT and business respondents regarding how IT ―provides real time visibility into

business impact of technology issues‖ serves to highlight how the various roles in the company affects their point

of view. In this case, executives agree with this premise most of the time whereas mid-level IT management and IT

staff don’t see it that way. Apparently IT is delivering real time visibility to business impact …but only the

executives seem to see it, as it is somewhat invisible to the mid-level and staff positions.

There was some disagreement regarding IT being ―an early adopter of leading edge technologies.‖ The

business perspective has strong agreement with this statement while IT staff largely disagrees. Implication being

that IT staff have a better grasp of what is considered leading edge technologies and executives operate under

older, different definitions of what constitutes ―leading edge.‖

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In this section we explore the impact of service performance and outages on

business operations.

Service Level Management

42

What is the level of impact of performance and service outages?

IT and Business View

IT and Business have different, sometimes opposing views on how IT service outages and performance impact business operations

Both agree on lost revenues and employee productivity, but

Business places higher impact on poor customer retention and decreased business agility (business issues)

IT Operations places higher impact on visibility by external customers (perception issues)

Business Impact IT View Business

View

Lost Revenues High High

Poor Customer Retention Medium

High

High

Increased Time-to-Market Medium Medium

Decreased Business Agility Medium High

Employee Productivity High High

Increased Cost to Business

Operations

Medium Medium

Visibility to External Customers High Medium

Resp

onse

43

What is the level of impact of performance and service outages?

Business Impact Executive

s

Mid-Level IT Staff

Lost Revenues Medium High Medium

Poor Customer Retention Low Medium

High

Medium

Increased Time-to-Market Low Medium Medium

Decreased Business Agility Low Medium Medium

Employee Productivity High High High

Increased Cost to Business

Operations

Medium Medium

High

Medium

Visibility to External Customers Medium Medium

High

Medium

Role/Title View

Opposing views surface on how IT service

outages and performance impact business

operations based on role and title.

All roles (Exec, Mid-level, Staff) agree that

IT issues have highest impact on employee

productivity, but

Mid-level roles tend to have greater

awareness of IT issues on lost revenues,

customer retention, increased cost and

external visibility

Resp

onse

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Limited Alignment of ―Business Impact‖

Both IT and business strongly agree that there is a high impact of IT performance and service outages on lost

revenues and employee productivity. Agreement is a nice thing. However, business places a higher impact of IT

performance and service outages on poor customer retention and decreased business agility. IT places a higher

impact on visibility to external customers. The implication might be that IT understands there is a negative impact

to external customers not being able to interface to the company …but business carries that loss of external

visibility to the business issues of retaining existing customers and in maintaining business agility …issues that IT

might have difficulty comprehending.

In moving to differences as expressed by role within the company (…executive vs. mid-level vs. staff), a even

greater disparity surfaces. For example, there is widespread agreement among all roles that there is a high

impact to employee productivity from IT performance and service outages …that being the only high impact

assessed by IT staff (?). Conversely, executives rated the business impact of lost revenue, poor customer

retention, increased time-to-market and decreased business agility lower than mid-level or staff personnel.

Given the dominance of those metrics within existing IT organizations, the implication might be that executives

understand the need for more business-oriented ―alignment‖ metrics sooner and more clearly than mid-level and

staff personnel.

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How have IT service metrics changed in

the past 12 months?

High consistency between IT and

Business regarding how service metrics

have changed, with two exceptions:

IT feels time between service slowdowns

has marginally improved (65%)

compared to optimistic view of Business

(90%) – implying slowdowns are not

visible to Business community

Business responds optimistically (65%)

regarding IT/Business alignment while

IT responds on average that services

have not improved, mostly stayed the

same

95%

84% 90% 90%

70%

80%

65%

77%

60% 70% 65%

70% 73% 66%

Service availability

Time between service outages

Service performance

and/or response times

Time between service

slowdowns and/or

brownouts

Number of issues or incidents reported

Business staff satisfaction with services

managed by IT operations

Understanding of IT/Business

alignment requirements

Improved or Stayed the Same

Business View IT View Resp

onse

46

Business/Executives View Metrics Improving

There is both good and bad news in these responses on metrics. On one hand, IT has been able to maintain

good service and support during one of the worst economic downturns in history … or IT is doing more with less.

On the other hand, IT has not made significant improvements from the BSM perspective of IT moving to higher

levels of business maturity -- where typical IT performance metrics have yet to be replanted with business

oriented IT metrics.

Business perceives a healthy improvement for Service Availability and Service Performance metric, and IT

confirmed Service Availability as reasonably improved.

Executives viewed Service Availability, Service Performance and Business Staff Satisfaction as experiencing

healthy improvement in the last 12 months. However, IT Staff was not nearly as positive. Interestingly, IT staff

felt metrics declined only 7-8% of the time …the lowest of any group.

Those responsible for tracking the metrics have a more restrictive view of how these metrics might have changed

for the better. The result of the business and executive assessment indicates a more positive perception exists …

or they don’t care about the metrics identified.

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What actions should be taken to improve

IT performance metrics?

Belief by all roles & functions that process improvement is the best way to improve service metrics which supports continued industry focus on ITIL best practices.

Investments in new solutions or technology, or upgrades of existing technology is supported by only 29-31% of respondents

The vast majority, 66%, of respondents believe that IT operational metrics can be improved by improving service management processes.

We believe that this indicates better awareness and expectations of ITIL and higher adoption rates of ITIL processes

That is a huge change from 10 years ago, when the focus was largely on tools.

Outsource service

management

Invest in service

management solutions

Improve service

management processes

Invest in new technology Upgrade

existing technology

Don't know

16.3%

38.4%

66.3%

29.1% 31.4%

12.8%

Resp

onse

48

“Find better ways to leverage existing technology”

“The things that declined are good things”

“Need to hold staff accountable”

“Meetings and more meetings … but nobody with the guts to truly

change.”

“We’re implementing an improved ITSM toolkit and plan to soon

have metrics available.”

Improving IT performance metrics - Quotes

Resp

onse

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Focus on ―Process‖ to Improve Service

The important finding is that all roles and all functions believe strongly that implementation of service

management process is the best way to improve IT performance metrics (66%). This is a huge and significant

change from 10 years ago when a tool or technology was expected to resolve all service management issues. It

is a good change. The highest score on process (72%) came from mid-level managers. This is an important

endorsement of ITIL best practices …but possibly not ITIL implementation projects as evidenced by the lowest

process scores coming from business (56%) and IT staff (58%). The business is seeing the length of ITIL project

implementation impeding responsiveness to their business needs, and the staff is seeing the diversion of resources

from high priority tasks.

The minimal willingness to outsource (16% of respondents) to improve metrics identifies a critical, yet-to-be-

resolved impact on cloud service providers. This implies an unwillingness or inability to hand off portions of IT

service management to an outsourcer … not from the perspective of reduced cost and faster provisioning

offered by Infrastructure-as-a-Service providers, but from the perspective of managing cloud services to satisfy

business objectives.

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In this section we explore how ITIL v2 and v3 process adoption is

progressing.

ITIL Adoption

51

What ITIL v2 process capabilities are you

using today and planning to use?

No big surprise here!

IT has largely implemented, the

core ITIL processes:

Incident management

Problem Management

Service Request Management

Change management

Incident Management

Change Management

Problem Management

Service Request Management

79%

66%

60% 54%

Implemented

Resp

onse

52

What ITIL v2 process capabilities are you

using today and planning to use?

To a lesser extent, respondents either

implemented or plan to implement

Service Level Management

Configuration Management

Release Management

Planned for the future include:

Capacity Management

IT Service Continuity Management

Availability Management

30%

13%

27%

21%

40% 43%

41%

35%

28% 25%

ITIL V2 Planned

Resp

onse

53

What ITIL v3 process capabilities are you

using today and planning to use?

Interest (…and understanding) is maturing with ITIL V3.

There seems to be a higher correlation between V3 and

improved Business/IT alignment catering to more mature

BSM levels 3-4.

High ―planned‖ anticipation for a few V3 categories:

Knowledge Management

Service Catalog

Service Asset & Configuration Management

Service Portfolio Management

Operation Processes were also high in ―planned‖ expectations:

Request Fulfillment Event Management

Assess Management

Healthy interest in plans for three other Processes:

Service Management and Reporting

Continual Service Improvement

IT Financial Management

35% 36% 41% 44% 49% 54%

Top ITIL 3 Planned

Resp

onse

54

ITIL v3 process capabilities using today

and planning to use?

62% 58% 57%

54% 52% 52%

48%

Not Planned or Don't Know Our initial surprise to this question is the

number of respondents that indicated that

they either had no plan to implement or

didn’t know.

We see ITIL V3 is more relevant to

organizations at BSM maturity levels 3 or

higher, and most of our survey respondents

are at level 2.

Resp

onse

55

ITIL v2 and Adoption of ITIL v3 There are no surprises in responses from V2 of ITIL. The top four categories of ITIL implementations include

Incident Management, Problem Management, Service Request Management and Change Management,

confirming the maturity of IT is currently focused on secure and reliable operations for a Level 2 business

maturity achievement.

The V2 ITIL ―planned to implement‖ story is a good indication of where short-term investments are anticipated.

Configuration Management (CMDB), Service Level Management (SLA’s) and Release Management top the chart

of next set of ITIL implementations ...all topping 40% of planned investments.

Although the existing implementations of ITIL V3 processes sometimes reaches one-third of respondents, the

―planned‖ implementations tell the story of what is being considered for short term investments. The top four

include Knowledge Management – Transition (32% now & moving to 73%); Service Catalog - Design (20% now

& moving to 72%); Service Asset & Configuration – Transition (21% now & moving to 70%); and Service Portfolio

Management – Strategy (15% now & moving to 59%).

IT Management using these V3 processes are attempting to move the IT organization from Level 2 Predictive to

Level 3 Aligned and Level 4 Optimized business maturity levels in order to better satisfy the business demands

of technology.

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In this section we wrap up on the 2011 BSM Benchmark with some overall

conclusions and industry recommendations.

Conclusions and Recommendations

57

Conclusions

Business is maturing (moving beyond consistently ―reliable‖ to ―customer driven‖ and ―competitively

differentiated‖) at a faster rate than their IT counterparts are maturing in their ability to meet business

expectations.

IT needs to better understand the business context in which their company is immersed and business should

better understand how technology can be leveraged for competitive advantage. The disparity between

business and IT views of business maturity and business drivers is too significant to ignore.

Business has a more optimistic, but dated view of technology’s contribution. IT needs to create additional

focus on ―marketing‖ IT to their business customers. If IT doesn’t articulate their unique differentiation and

core value proposition, then business will continue to have inappropriate expectations of IT and will move

toward competitive alternatives like outsourcing.

We found that respondents who had experienced some type of cross fertilization (business or IT liaison

roles) demonstrated greater awareness of the communication issues and better understanding of the value

of aligning IT investments with business objectives.

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Recommendations (part 1)

To begin to

realize the

potential of

BSM, we

recommend

you consider

taking the

following

actions:

Create a BSM Alignment Executive role who is measured on improving

BSM Maturity (strategic and operational alignment)

Consider integrating Business and IT liaison roles

Benchmark both company and IT maturity to assess the current state of

alignment and determine next steps

Utilize BSM Maturity Model as a assessment template

Conduct a State-of-the-Business workshop for IT

Ensure IT executives/mangers have a solid understanding of the company’s

business strategy, goals and competitive challenges

Strive to put the business in terms that IT can consume and execute on

Select 1 or 2 specific IT initiatives that will results in near-term business value

59

Recommendations (part 2)

To begin to

realize the

potential of

BSM, we

recommend

you consider

taking the

following

actions:

Conduct an annual ―Technology for Business Summit‖ that enlightens line-

of-business executives with what is possible from a technology/service

point-of-view

Provide vision and insight into technology trends that can improve competitive

differentiation and customer retention

Cloud computing, mobile computing, social media, etc.

Bring the consumer/customer experience into play

Develop an IT Marketing Strategy and Plan that builds a positive,

trusted IT brand identity with the business

Be clear about who you serve, what value you uniquely offer and how you will

improve customer satisfaction, retention and loyalty

Utilize proven marketing strategies/tactics and measure results

60

Credits

Rick Berzle

GoToMarket Publishing

rberzle@bsmreview.com

858-271-4351

Bill Keyworth

Editor-in-Chief, BSMReview

bkeyworth@bsmreview.com

949-600-6255

Authors/Editors Sponsors

Copyright © 2011, BSMReview.com

2011 BSM MATURITY

BENCHMARK STUDY

Copyright © 2011, BSMReview.com