Part 2 - Intro to BSM Fundamentals

As the next stop in our tour of Business Service Management, let’s talk a little about the fundamentals. To make this as accessible as possible, we’re going to strip away the technologies and processes and start with a high level statement of what Business Service Management strives to achieve. According to Wikipedia :

The goal of BSM is easy to state and understand: To manage IT investments in alignment with business priorities in order to create competitive advantage.

Notice something different about this statement, compared to traditional IT management practices? To begin with, there are no technology buzzwords, nor any acronyms describing some new technology that’s going to replace everything you’re currently running. In fact, this doesn’t even look like it was written by a technologist. Instead, this represents what line of business leaders want to achieve with technology in a way that enables organizations to communicate and measure IT just like every other department of the business.

In order to accomplish this, the following must happen:

1.     Identify business objectives.
While this may seem to just follow common sense, the number of IT leaders who are fully aware of the objectives of the business they support is small. Critical to achieving this is good communication between Line of Business and IT leaders. Let’s take an example. Company XYZ Inc is a wireless phone company with store fronts in 15 states. Over the course of the next two quarters, one of the primary objectives of the business is to streamline the sales process to reduce the time to complete a transaction by at least 20 minutes.

2.       Align IT with business objectives and processes
The concept that a single server delivers a complete user experience is past. Instead, multiple servers, applications, point solutions and networked assets all come together to deliver the services users consume. With this in mind, our objective here is to logically group each networked asset (e.g. servers, applications, network equipment, etc.) into the services delivered to the client. In our example, we’re going to create an Account Processing service that includes the backend database servers, application-tier servers, core network equipment and any other networked asset that contributes to the account processing application used by the sales consultants at each storefront.

3.      Meaningfully measure IT in relation to these objectives
While still useful, SLA’s, incident response times and other traditional metrics used to measure the effectiveness of IT can be meaningless to non-technical people. In order to prove the value of IT, BSM requires a new set of metrics that prove the business impact of IT in a way that’s meaningful to line of business leaders. Monetary metrics tend to communicate the best. In our example, we’re going to calculate average revenue generated per hour by our Account Processing service to develop a dollar figure for down time. However, we don’t just want to focus on mitigating the negative, so we’re also going to calculate the average time to complete a transaction and average revenue per transaction. These will be used to measure the positive impact to the business if we can significantly reduce transaction times, more transactions during business hours and therefore increased revenue resulting from managed change within IT.

4.       Manage the business impact, not the technology
Using the new grouping and metrics developed in the previous steps, BSM enables organizations to prioritize response and monitor their assets from the perspective of what impacts the business the most. While the underlying technology is important from an operator’s perspective, being able to see the big picture in regards to how the technology is impacting the user and the bottom line of the business enable improved prioritization of work and improved visibility into how each of these disparate assets affect each other.

5.   Adapt to change in the business and technology
Armed with meaningful metrics that prove IT’s value to the business, communication between line of business and IT leaders should become significantly better, but cannot end with that first meeting. As the business changes direction, IT must have the ability to change with it and shift its focus accordingly. Additionally, as new technology purchases are considered, the decision is made in light of where IT wants to be in order to support these larger business objectives and when alignment is identified between a new technology and business plans, gaining buy in from the organization as a whole becomes simpler as well.

This gives you a high-level overview of what is required to achieve effective Business Service Management. Over the coming weeks, we’ll dive deeper into each of these key elements and include some guidance into how to fit these into your unique business and IT environment. One key to keep in mind is that unlike traditional IT management practices, BSM is not a one-size-fits-all model, but must be tailored for each organization to achieve full effectiveness.