Business Service Management at a restaurant

Let’s discuss something that each one of has some experience with and we will be able to relate to it i.e., business service management at a restaurant. This will enable us to gain greater appreciation of how service management enables greater appreciation of our customers and allows us to focus on the areas that will impact the quality of our products and / or services that are consumed by our customers.

Most of us have experienced having our dining experiences at a variety of restaurants. With obvious exceptions, most commonly, after we go through initial settling-in steps, we are presented with a menu that mostly presents the following:

• Upcoming new or specials such as lunch specials 

• Meals grouped by categories such as Appetizers, Pizza, Specialties, and so on.

• Under each main category, we are presented with individual meal options. Each meal item contains some relevant details such as:

• Name of the item

• Brief description of what to expect

• Pricing information

• Other relevant information on potential exceptions is normally provided by the server.

If I ask you to rank your ‘experience’ at a particular restaurant, what factors will you consider? We all appreciate that there are personal preferences. However, there are certain elements of the experience that are absolutely critical and largely common. These may include:

• The way we are received and welcomed to the restaurant and treated to our tables

• The hospitality of the server and the presentation of the menu

• Clarity of the items described in the menu

• Pricing information

• Timely delivery of the order placed

• Appropriate follow-ups to ensure that we are satisfied

• Overall customer care and the attitudes

• In case, we have any issues with the order, proper management of our complaints

When we settle in, the first thing that we are presented is the menu. Menu shows us what the restaurant produces, lists any specialty items, shows price tags, and serves as the key source for enabling our selection, decision making and order initiation. In most cases, restaurants will not accept orders outside of the menu items. Have you tried ordering Indian curry at a McDonald? In short, menu enables restaurants to achieve the following:

• Ensure that customers clearly understand what items the restaurant offers

• Based on historical data and demand, ensure that appropriate quantity and quality of required ingredients are ordered and acquired

• Ensure that right staff (chef) with right skills and experiences (competencies) are hired to be able to prepare and offer the items listed in the menu

• Ensure that recipes (processes) for the items in the menu are clearly documented and well maintained to ensure quality and consistency.

Therefore, in case of a restaurant, menu helps determine what people are required, what processes need to be defined, what tools are necessary and what partners / suppliers will have the ingredients needed to prepare the items. Think about what kitchen will do if there is no menu. 

Now, let see some situations that will most definitely lead to a negative overall experience. These may include: 

• What is there is no menu? Imagine your experience and the steps that you will need to go through to explain what you need and then for the kitchen to agree on one-on-one basis on how to fulfill all that you need. Keep in mind that there are restaurants where every order may be custom made or prepared by the customers themselves. Even in those restaurants, there will be menu but the menu will list ingredients, probably recipes, and so on instead of prepared meals.

• What if there is no clarity on how to place the order? Do you go to the kitchen yourself? Do you place the order at the bar or at the reception?

• What if there are no servers and you are asked to reach out to the Chef directly? Imagine the impact that it will have on the Kitchen and its productivity?

• What if you are approached by multiple members of the Kitchen team in order to gain further understanding of what you need? Even if, at the end, you do receive exactly what you were expecting, will you be happy and / or satisfied as a customer?

• What if you ordered one item and received a totally different one?

• What if you just keep waiting? Every time you inquire, you are told that it would be ready soon and then again a never ending waiting period.

• What if you are not clear on the price?

Having provoked this business service management at a restaurant thinking, in my upcoming blogs, we will discuss how business service management may look like at a high maturity IT organization. Following that, we will discuss the challenges faced by lesser mature IT organizations and how those can be addressed by implementing business service management.  

Business-IT Integrations, Cultural Transformations & ITILv3

In the last decade or so, we all have witnessed the business enterprise evolutions caused by the emergence of the Internet and IT. Immediately following the .com bubble burst, business enterprises have, justifiably, gone through the state of denial (IT is necessary evil, IT is not important, IT is back-office, and so on) by attempting to outsource as much of IT as possible. When companies like ebay.com, amazon.com, and many others demonstrated how IT and the Internet have enabled these business enterprises to emerge as leaders in their respective verticals, others, that were previously in denial, have started realizing that IT could truly enable these business enterprises to capture new markets, to enter new regions, to offer value-add services / products to their end customers, to be more profitable, to generate greater wealth for their shareholders, and so on. Proctor and Gamble reported savings of over $500MM through an innovative use of IT and implementation of service management, amazon.com, in these slow time, have shown all the potential to be profitable and to be able to pass through these tough times, and so on. There is an increasing degree of dependencies between the core business processes of business enterprises and capabilities provided by the Internet and IT. As a result of these dependencies, most recently, IT organizations have found themselves under increasing pressures, from the businesses / customers they support, to evolve their respective organizations and to ensure tighter business-IT integration.

ITILv3 most definitely provides a unique set of guidelines that creates a view of how mature IT organizations should be able to provide effective business service management. ITILv3 is unique in a sense that it spans across a wide range of IT industry practices, standards and disciplines to bring all into a larger perspective i.e., business-IT integration. ITILv3 will enable IT organizations to plan and implement their transformations / improvements to achieve business service management. We also understand that business enterprises do evolve and business process evolution is always one of the key components of such evolutions. In order for these evolutions to be efficient and successful, business enterprises continue to depend on and look towards IT to support and enable these evolutions. In such situations, IT organizations are expected to be agile and be able to respond to ever changing business environments and competitive drivers. However, the challenge for lower maturity level (organizational maturity level 2 and lower) IT organizations is that they always find themselves reacting to such business demands and they do so in a way that is not efficient and causes a lot of disruptions e.g., service outages, slow response capability, expensive changes, lack of alignment between the needs and the solution, and so on. In addition, since these IT organizations are largely disconnected from their businesses / customers, they are unable to appreciate and proactively plan to build the right IT capabilities to support and enable business evolutions in a timely manner.

Depending upon the role that IT plays in enabling the core business processes, the rate of IT evolution may be critical to the overall business success and profitability. For some business enterprises, implementing service management may be transformational and embarking upon such a journey may sometimes be more about cultural transformations than any other single factor. It may need major shift in how people think about and manage IT. These shifts may include:

• IT is for the business and IT is not for IT
• Targeted technology capabilities investments to maximize business profitability
• Fire-fighting is not rewarded, pro-active fire-prevention is rewarded
• We will thrive not just survive, and so on. 

Cultural transformation, an aggregate of small behavioral transformations over time, is achieved through:

·      Well-aligned business and IT vision & strategies

·      Clear definition of enterprise architecture standards and governance policies

·      Thoughtful management of changes in people’s attitudes and ways of thinking

·      Careful planning, management and incremental implementations of a range of continual service and service management process improvements

·      Business-IT organizational re-alignments.

Business enterprises have been struggling to leverage IT Infrastructure Library (ITIL) guidelines and to achieve such transformations to realize the highly anticipated effectiveness and efficiency and business-IT integration benefits.

It is important to note that such ‘transformation’ – normally a higher degree of change with greater impact – does not happen overnight and requires consistent, steady, incremental, and ongoing improvements. Business service management implementation is no exception. What makes such transformations even riskier is the lack of organizational knowledge about all that is necessary to make these efforts successful. It is absolutely critical to realize that ITILv3 is more than just about the IT infrastructure and IT operations management and that business service management sometime means a major shift in the way IT has been managed and operated and the manner in which it has been delivering its services to the customers. ITILv3 and business service management are about integrating IT with the business and ensuring traceability right from business processes, business services to technical services and all the way down to individual technology (infrastructure, application, software, hardware, databases, middleware and others) components. Implementing business service management will very likely impact each and every aspect of the business enterprise organization. In fact, depending upon organizational baseline maturity level, implementing service management may even be revolutionary and may take longer before the undertaking organizations starts realizing the benefits. To make the matters worse, organizational tolerances to sit tight and wait for these transformational benefits to come through have been declining. In efforts to see the returns sooner, some organizations have considered options to outsource business service management without even completely realizing what it really means to outsource business service management.

Implementing business service management is expensive, risky, and difficult and requires consistent and well-planned approach. Some of the questions that IT managers have asked me over the years mostly pertain to keeping the momentum going in the midst of ever changing organizational and business environments. One of the most common questions is:

How do we implement business service management and demonstrate the value-add before our next management ‘shuffle’?

What do we do when this shuffle happens and we lose all the support?

Answer to these questions is simple. In order to keep the senior management sponsorship alive, the one that survives all frequent management shuffles and in order to ‘excite’ the larger organization to embrace this transformational change, 

We must demonstrate the business value created as early as possible and help the senior management and the larger organization see a small ‘slice’ of our business service management vision at a time.

Under such business / organizational pressures, faster turn-around coupled with effective and efficient management of continual improvement efforts may be the answer.

How can IT organizations go about delivering incremental and iterative value to the business customers through steady and ongoing improvements in an agile fashion? My future blogs will be dedicated to answering this question in great deal of details. 

Measuring Business-IT Integration

So we understand now what is meant by business service management or BSM and some of the critical success factors. Measurements are at the core of enabling IT organizations and IT leadership to assess how well IT organizations are supporting their respective businesses and customers. We will focus on indicators that help IT organizations appreciate the extent to which they understand their customers’ businesses and the level of support that they provide to their customers to achieve their respective business objectives.

Some of the factors that will be critical (aka Critical Success Factors or CSFs) to the overall success of Business Service Management initiative are listed below.  Each Critical Success Factor or CSF in turn comprises of a range of recommended indictors that will help us assess / measure the performance (aka Key Performance Indicators or KPIs) of our Business Service Management. Depending upon your particular situation and circumstances, you may decide on a subset of these metrics.

• Quality and maturity of business and technical services (IT services)
• Business process enablement and support
• Business-IT integration

In this blog, we will discuss the key indicators that will help us measure how well we are able to achieve the quality and maturity of business services that we offer to our customer(s) and technical services that actually implement those business services. 

Quality and maturity of business and technical services (IT services)

This critical success factor or CSF is about the quality and maturity of IT services. Once an organization embarks on the BSM journey, it is vital that we are able to demonstrate an improvement in the quality of services that we deliver to our customers. In addition, we need to continually measure and improve our IT processes that underpin our IT services.

Some of the KPIs that will help us measure this factor are as follows:

• Average response times to changing business goals and needs

• %age of IT resources involved in operations (keeping the lights on) vs. new development

• %age of IT budget spent in developing new IT services / capabilities compared to the total IT budget

• %age of IT budget spent in managing existing IT services

• Ratio of IT budget spent on developing new services to managing existing services

• %age of IT services (business or technical services) provided by supplier (i.e., outsourced)

• %age of IT services that use standard technology components and other standards

• %age of technical documentation and other training manuals that are up-to-date

• %age of incidents for which external suppliers are contacted for further assistance.

• Ratio between the total number of employees within IT organization to the total number of non-IT employees within the business organization.

Business Process Enablement & Support

The level of business value delivered by IT services depends upon the extent to which these services enable and support the business processes. Some of the performance indicators that will help us measure our IT services in terms of business value delivered are as follows:

·   %age of IT projects that deliver the value on investment (or VOI) as assessed and agreed in related business cases.

·   %age of revenue generated through the use of IT services

·   %age of services for which cost of unavailability is well understood and properly communicated.

·   %age of business processes that rely on IT services

·   Number and %age of users that depend on IT services to perform their day-to-day job functions

·   %age of service improvement decisions made on the basis of quantitative as well as qualitative service performance as well as perception related data / information.

·   %age of services for which business / customer perception of service quality is calculated.

·   %age of # of key business decisions that are made based on the information / knowledge processed and provided by IT services. 

Business-IT Integration

How do you measure the extent to which you IT is integrated with the businesses and / or customers that you support. Following are the key performance indicators or KPIs that will enable us to understand how well IT is integrated with the business. These include:

·   %age of IT projects (per year) that are business-driven, are initiated by IT, and are a result of alignment of business and IT strategies. These projects are considered innovative and will result in enabling core business processes and / or addressing core business needs / pain points. These projects must be conceived within IT.

·   %age of IT projects (per year) that are business-driven and are initiated by the business. These projects must be conceived with business.

·   %age of investments made in IT development compared to the total investments across the business enterprise (applies to internal IT service provider)

·   %age of IT budget of the total revenues of the business enterprise

There are other KPIs that are related to specific ITILv3 processes e.g., Change Management has its own KPIs, Service Asset and Configuration Management has its own KPIs and so on. Relevant ITILv3 literature should be used to understand, identify and select specific metrics to measure the maturity of these processes. 

Factors impacting Service Management implementation

This is first of two blogs that we will have on the factors that impact business service management implementation. As discussed in my previous blogs, business service management implementation is more about cultural transformation than anything else. It is a major shift in the way IT organizations plan, produce, deliver and manage their products and / or services.

Some of the critical success factors that impact business service management implementation include:

• Senior business and IT management commitment: Cultural change is not easy and requires strong leadership. Therefore, senior management commitment is the most critical factor in achieving successful implementation of business service management.

• Return on Investment: Business service management implementation requires significant investments and successful business leaders don’t make investments in which they don’t see reasonable / justifiable returns. Big-bang is not going to work. IT improvements that don’t actually impact the value that businesses / customers receive are not at all wise investments.

• Communication, communication and communication: Marketing and communication are the most critical components of trying to implement business service management. IT has traditionally been weak in sharing the success stories. Businesses and / or customers only get communications when something breaks down. Communicating good as well as bad to the customer is critical. Most of the time, we are focusing on only bad and leave the good out. As IT organizations embark on making improvements to products and / or services that they produce, communication planning and execution is critical. Service Level Management process provides means and ways in which service target achievements should be shared. In addition, business relationship or account management functions can prove very useful in communicating with the businesses and customers, identifying / defining services, and negotiating service level agreements. Scorecards, dashboards, heat-maps, and other displays must be made available to customers all the time. This is critical to maintaining IT credibility.

• Business drivers and needs that actually require IT organization to improve the way it delivers its services to the businesses. This will require IT organizations to make major investments in improving the quality of services that they provide. 

• Objective self-assessment: Realistic IT self-assessment to establish current state service management and process maturity is critical. This will enable the leadership and service management project teams to make better estimates on the levels of investments required prior to pursuing business service management project.

• Personnel performance management: Key performance indicators and metrics should be very thoughtfully established. Such performance metrics should be introduced that encourage IT personnel to be responsible for the delivery of end-to-end services. Such metrics will encourage cross-organizational teams to collaborate and work towards common objectives. 

• Not everything is important: Not every IT component is critical. Use business impact as a guide to identify the critical components and guide the prioritization. Focus on those 20% of the components that make 80% of the revenues. Focus on those that result in the improvement of end-to-end service quality. Select the right metrics that tell you what you want to know about the service quality. Those IT organization that start a big, all-encompassing business service management initiative with the goal of defining IT service dependency relationships for all lines of business and millions of IT components, and the intention of achieving 100% monitoring coverage of all IT components in the IT infrastructure often rarely make it to the end i.e., successful achievement of business service management. This is primarily because such a large effort results in a highly complex project that takes years to implement and generally leads to disillusionment and failure. The more-successful deployments break up the project into smaller business-focused and NOT IT focused components. Focus in successful efforts is continually maintained on defining and monitoring only a few critical IT services and underpinning IT components, then expanding after achieving critical successes. These initial successes are used to keep the momentum going. If your company has a disaster recovery plan, it may be a good source of important information as you prioritize which services are more critical and the respective underpinning IT components. This will also enable effective improvement in component monitoring capabilities. Redundant monitoring is removed and gaps in monitoring are identified and appropriate remediation plans can be created.