2017 is approaching quickly and it is time to dive into the familiar but yet opaque area of IT as a Service (ITaaS). In this third blog post covering top IT trends for the next year, we will sort out what it is, what it is not, and how it can be of tremendous value to your organization.
What is a service?
In daily life, we consume as private persons a great number of services, each one designed to meet a specific need that we have. Services, unlike products, are consumed instantly. The hairdresser, the public transportation system and the pizza delivery are only a few examples of services that make our lives easier. Common for all of them is that their capabilities each meet one well-defined need, that they are complete solution offerings and that the price we pay more or less reflects the cost of the resources required to provide these services. The benefit for us consumers is that we do not need to invest in the skills to cut our own hair. We can travel by bus without having to buy the bus itself first. We do not even need a pizza oven at home – we simply make a call and pay for the single pizza we consume.
In the same way, IT can be offered as services designed to meet the needs of the business users without requiring them to bother about software configurations, server capacity or acquiring advanced IT skills. The differences between seeing IT as a service rather than as a product or tool is that an IT service is a complete solution package – it meets a well-defined need, is ready to use on demand, requires to initial investment and is just as easy to cease using without any extra costs incurred.
IT as a Business
Even though IT as a Service can use underlying technology models like cloud computing, it is not about a technology choice but more of a transformation into running IT like a business. The real costs of IT become visible when each service must carry its own cost. By charging users – most commonly through monthly subscription fees – comparing competing services becomes much easier and inefficient ones can be identified and eventually retired. What is not possible to efficiently produce internally may be bought from external vendors. The increased cost transparency, coupled with service level definitions based on user needs, enables IT to reduce waste by minimizing excessive capacity as well as standardize around one or a few cost-efficient variations for each service offering. There is often no need to fear having several services with similar offerings, as long as scalability and standardization advantages are not endangered. Competition can trigger optimization and encourages innovativeness in finding the most efficient solution for a business need.
Even if transforming IT to using a service management model can bring an impressive range of benefits, it is a major change for any company. The top three challenges we see in ITaaS implementation programs are:
- Fear of change – employee concerns about cutbacks or outsourcing must be addressed.
- Cultural resistance – true adaption of change must be achieved on all levels in the IT organization.
- The transparency fallacy – to the business, sudden cost transparency and shifts of cost center responsibilities may give the impression that IT is managing the services inefficiently. As so often, communication is key.
In addition, we also strongly encourage our clients to establish price models that are predictable, fair and that encourage service usage but at the same time give incentives to use the service in cost-efficient ways. One should also not underestimate the importance of support from the executive level. A sponsor with a strong engagement in the transformation and good communication skills can be the difference between success and failure.
From our experiences with digital transformation projects we have also established that, quite often, business units are reluctant to use only the standard solutions offered in service catalogues. This challenge can only be overcome with a close alignment between business and IT.
Are you ready to transform your IT and benefit from the many advantages of managing IT as a Service? Don’t hesitate to contact us – we would be happy to support you in your journey!