The Change Challenge- IT and ITIL
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1 Nouri Associates, Inc. Research Report Author: Patrick Reilly Date: July 2005 The Change Challenge- IT and ITIL A story: A few years ago I was working on a project for a very successful technology company. They had achieved market success according to their people and according to Wall Street through high quality leadership, marketing expertise and being the first to market with a portfolio of high quality products. Times had changed and though still very successful they knew that they needed to change to continue with their success. In their case the required change was to increase market share in the services arena. This meant two key things: they would need to charge customers for services that previously had been offered for free and they would need to learn how to collaborate across the company to provide the levels of service required. Yesterday, I spoke with a colleague from my former project team. He told me that the fourth or fifth consulting team was at work trying to help the very successful company change its way of doing business. Still at it, still not successful and still trying because they know the future success of the enterprise depends upon it. It is hard to change for all of us. My favorite quote is, The only person who really likes change is a baby with a wet diaper. It becomes more difficult to change when you add the complexities of a global enterprise, technology and prior success. These are one of the challenges confronting IT today as customers and users demand the best new technologies, better prices and higher quality service. Gilmore and Pine in The Service Economy take the challenge a step further and posit that what customers are looking for is the experience that comes from appropriately combining a quality product with quality, easy to use service in an atmosphere that engages him/her in a personal way. I recently worked with a number of physicians who were using a recently installed digital imaging system. One doctor loved that he could drink his coffee in the ICU and stand by the computer looking at the x-rays of his patient taken five minutes ago and at the same time talk to his buddy about Saturday s upcoming golf tournament. This is the kind of experience that customers are seeking. Why ITIL? ITIL is one tool that is gaining increasing popularity in the domestic community with an already established baseline of success in Europe. As you know, ITIL is a best practices framework that supports success in an IT services oriented environment. Why is it gaining in popularity? Emerging business conditions in the IT world indicate that customers/users are demanding higher quality and easier to use IT services and that the cost of IT is requiring IT organizations to focus on a process orientation to meet both increasing service and price requirements
2 NAI Research Report The Change Challenge- IT and ITIL Page 2 If IT organizations are to remain competitive they must work on continually optimizing processes as the key vehicle for improving service quality and driving down costs. Gartner research suggests that by 2007 IT organizations that don t adopt process based delivery systems will have their service portfolios outsourced at the rate of 25% per year. This has captured the attention of many CIO s! ITIL provides a consistent, integrated approach with a standard vocabulary that makes it easier for people to accept and work with the inevitable changes coming to their world. Change is never easy and has its particular manifestations within the IT arena. Extensive research conducted on large change initiatives conducted by John Kotter of Harvard indicates a 75% failure rate. Successful, thoughtful change management has been identified as one essential component of facilitating the successful adoption of ITIL best practices that pave the way for designing an organization around process and the delivery of quality service. Change in the IT world Over time we have worked in a variety of organizations and have found that to create positive sustainable change there are a number of key factors that must be instituted if the needed changes are to take place and be sustained over time. Successful, value added change management focuses on creating the right mindset in the organization, on planning how to put a change in place, creating the infrastructure and tools to support the change, learning about organizational assets and strengths and mitigating people s resistance to the change through communication, involvement, and education. Success invariably involves securing the active participation of senior management (sponsorship), quality communication and training, the appropriate involvement of all key stakeholders, having a plan that people can follow and a rationale (business case) that makes sense to all involved. IT specific experience indicates a number of additional lessons learned that must be adhered to if IT personnel are going to make the needed adjustments successfully: Fear of change is a typical response. Imposed change is very difficult for IT people. Manage expectations carefully: new role of IT, new organization structure, potential outsourcing are all issues that need to be thoughtfully addressed. Don t let them fail! They need to succeed. Identify wins and make certain that they are effectively communicated. Having more tasks to accomplish than resources allotted invariably results in IT frustration. Determine how to best manage both capacity and availability during the change process. Some IT change experts say that change management success is best measured by the reduction of unplanned work versus total work done. Putting a metric in place to measure this delta during the ITIL change process can be very helpful in getting people s attention in a positive way.
3 NAI Research Report The Change Challenge- IT and ITIL Page 3 IT has very high standards for quality information. It is their job to provide quality information to others. They expect you to provide it to them. Provide them with quality information or they will invent it and most often it will not be accurate. A clear plan with deliverables is essential Recommendations for Change in the IT ITIL World For success to enter the IT ITIL world there are a number of change factors that must be initiated thoughtfully, successfully and comprehensively. Leadership or sponsorship is key. The leaders must truly speak and act from a show me the money and show me the commitment perspective. From the beginning, they must invest the time to learn what they are committing to and its consequences and impacts. They must allocate the funds and resources that a make a transformation of the business possible and they must be willing and able to answer the tough questions that invariably come their way and they must communicate again and again the messages essential to enroll a critical mass of stakeholders. They must be the change they are advocating. In addition to demonstrating the requisite leadership, the leaders must deliver two other essential tasks that support the appropriate involvement of others. The first is the development of the business case for change. People will need to know about market changes, emerging customer needs and the data that justify the significant changes leadership is requesting of them. Getting impacted IT managers to understand the scope of what the ITIL processes encompass and fitting them into the current direction of the organization are critical to success. The other activity required of leadership is to develop the case for meaning required for appropriate engagement of stakeholders. What does this mean? Significant change, especially one that literally changes IT s world from vertical to horizontal, necessitates the opportunity for people to explore what is important to them, what they value and what is meaningful to them. Leadership s role is to position the impetus for improving the ways things have been done traditionally and then to create the opportunities for discussion. While this does not have to be a formal structured activity, giving people the opportunity to air their feelings, ask questions and recognize what is important are all opportunities that leadership needs to create. This sets up the opening for successfully getting a critical mass of people on board with a change that requires significant adjustments to behaviors, ways of thinking, ways of organizing and ways of relating. The bottom line is that following this advice generally results in meeting the end goal, successful adoption of process oriented IT business supported by ITIL, more quickly and more easily. Role clarity is the next requirement for success in the emerging ITIL world. In the current world, technical ability is king. ITIL success assumes technical competence for managers and then demands abilities in four key area: financial and business
4 NAI Research Report The Change Challenge- IT and ITIL Page 4 management, demand management, resource management and process management. Many current managers are not skilled in these areas, some will never become skilled and some will simply not be interested. The organizational challenges are formidable. Do we invest heavily in developing these managers or do we find others or do we outsource? None of these questions in a complex IT environment are to be taken lightly. Additionally, there evolves the challenges of crafting and communicating the emerging expectations to the workforce. This is what I, your manager, wanted in the past. The game has changed. This is what you need to do now. As experienced business people we are all familiar with the magnitude of the task of changing from function to process and successfully managing the expectations of others. These changes require re-thinking how we see the world. Current brain research indicates that this task can be accomplished but typically takes 6+ months. Planning is the third key component of the change challenge. A comprehensive map is needed to lead us into the new territory. Most of the people in our organization are accustomed to thinking and doing IT in a functional way. Current planning and organizing are centered in the various technologies and operating systems in our world: PC group, network group, UNIX, desktop support. Quality planning requires quality thinking. Planning to create a map to follow is difficult. Developing a good map when you don t have experience thinking through issues in your new world is even harder. When you move to a process world and your audience is not accustomed to the significant collaboration required for success in the process organized world you truly need experienced and seasoned hands to help guide you through the process. Communication is the final core change component required for ITIL success. An effective communications strategy requires listening carefully to the needs and concerns of the various stakeholders and then providing them with frequent, repeated communications delivered through a variety of methods such as meetings, newsletters, on the web, lunches, etc. (For this paper we are assuming training to be part of communications.) These actions, once defined, will keep all in the organization informed and involved, open consistent communication channels with internal and external business partners, maintain a live connection with external and internal customers, mount a successful educational campaign of interactions with senior managers, stakeholders, customers, suppliers and others.
5 NAI Research Report The Change Challenge- IT and ITIL Page 5 Conclusion The changes required to successfully launch an ITIL campaign are daunting. The path forward is not simple or easy. What other choice do we have if we wish to be competitive and meet the service and process requirements of the emerging IT universe? The challenges may be daunting but by modeling past success and developing an approach that successfully integrates the value of ITIL with learnings from prior process re-engineering efforts the potential payback from ITIL is great. Acknowledging the specific requirements of an IT universe and using the best tools and models that change management has available only enhance our possibilities for success. Are you ready for the challenge? Our experience suggests that all successful, value added ITIL change programs need to include the following components: 1) Involved sponsorship 2) The business case and the case for meaning that provide the logic, opportunity for expression and positioning that support people buying into imposed changes 3) Recognition of prior success to build on 4) Acknowledgement of specific characteristics of IT organizations and your organization (culture) 5) Role clarity 6) Education and training 7) A map- A clear plan with deliverables If you discover there are other additional, core components to an ITIL change program please let us know what they are and how you implemented them.
6 NAI Research Report The Change Challenge- IT and ITIL Page 6 Update September 2005 Recently, someone reminded me, again, of some of the formative change work of John Kotter that has supported the thinking and action of those of us in the change field. Kotter s initial work can be summarized via the following eight key learnings: 1. Establishing a sense of urgency Examining market and competitive realities and define the business case Identifying and discussing crises, potential crises, or major opportunities 2. Forming a powerful guiding coalition Assembling a group with enough power to lead the change effort Encouraging the group to work together as a team 3. Creating a vision Creating a vision to help direct the change effort Developing strategies for achieving that vision 4. Communicating vision Using every vehicle possible to communicate the new vision and strategies Teaching new behaviors by the example of the guiding coalition 5. Empowering others to act on the vision Getting rid of obstacles to change Changing systems or structures that seriously undermine the vision Encouraging risk taking and nontraditional ideas, activities, and actions 6. Planning for and creating short-term wins Planning for visible performance improvements Creating those improvements Recognizing and rewarding employees involved in the improvements 7. Consolidating improvements and producing still more change Using increased credibility to change systems, structures, and policies that don't fit the vision Hiring, promoting, and developing employees who can implement the vision Reinvigorating the process with new projects, themes, and change agents 8. Institutionalizing new approaches Articulating the connections between the new behaviors and corporate success Developing the means to ensure leadership development and succession What I asked myself after re-reading Kotter s eight key change principles are two questions,
7 NAI Research Report The Change Challenge- IT and ITIL Page 7 What would I change from his list of eight key factors? and What has changed in the environment that would cause those leading change to think and act differently? I would delete nothing from the list that Kotter developed about 15 years ago. I have found repeatedly that all eight of these factors are essential to ensure the success of IT change projects. Some of the eight factors, though, I have found to be more important than the others and we want to highlight them for those seeking successful ITIL endeavors. The two factors from the list of eight that repeatedly need more attention to ensure success are: #2- form a powerful guiding coalition and #5- empowering others to act on the vision. In practice, no real changes occur successfully unless the leadership team or guiding coalition actively supports the change effort (Kotter factor #2- form a powerful guiding coalition) in a sustainable way. This was stated in our original article but what does it mean? It means that those with recognizable formal authority actively support the change effort from beginning to end. People still listen to those in charge. The necessary support comes in a variety of forms: actively communicating their support and reasoning for the change effort, procuring the right people resources to get the job done well and providing the dollars necessary to achieve the objectives. At other times the support required is that of influence: Stating the case for change to other key decision makers so that they actively support the effort or at minimum do nothing to get in the way. The other key factor is that of sustainability: Continuing to influence and support the ITIL effort until successful completion of the project. Sustained influence over time is not necessarily something that every leader or change sponsor perceives as requisite for success. Our experience is that it is a critical success factor. The second factor of the eight that I have essential to the success of every change project is number #5- empowering others to act on the vision. Most of the initial change management work and literature focused on resistance to change and finding ways to minimize the resistance or to get the impacted stakeholders to let go of their resistance. Over time, I have found that approach to be burdensome and not all that successful. It is simple: people resist changing because they do not want to change. I found that designing change efforts based on the ideas of Dick Axelrod (Terms of Engagement) and Diana Whitney (The Power of Appreciative Inquiry) to be more fruitful
8 NAI Research Report The Change Challenge- IT and ITIL Page 8 and impactful. My direct experience is that it is more productive to examine and articulate the case for meaning or why the change matters than to attempt to confront or overcome the resistance to change. Rather than fighting with or against what people don t want I have found it more resultsful to present the case for change and to give people the chance to understand and accept it. Invariably, a critical mass will support the change if you have a well thought out case for change that includes the logical business case and the opportunity for people to express their sentiments. Once they understand and accept the case for change is the new way to go you can use past successes, attributes and strengths of the people and the organization to design more successful and easily implementable change solutions. The other key addition to Kotter s seminal work that I find necessary to add comes from the nature of the development of ITIL itself. ITIL was born because of the increased need for increased rigor, clarity of process and cost effectiveness in IT. In the recent past, both Wal-Mart and Dell have captured great efficiencies and cost savings by initiating major process improvements to their IT functions. These changes have been predicated on three core principles: 1) run a centralized information system. 2) have common systems and common platforms 3) be merchants first and technologists second What does their success imply for those leading other successful IT change efforts? In my experience it strongly suggests that successful change efforts integrate in their planning and implementation the impacts and influences on people (merchants first), process (centralized information system) and technology (common systems and platforms) and that they each receive the appropriate level of attention to ensure success. An exclusive focus on technology, as has happened in many places in the past, or improvements that don t focus sufficiently on process improvement, are not likely to capture the range of benefits and impacts that those designing the change hope to achieve. ITIL is based on the premise that IT processes must be improved. It is our experience that the right blend of focus on change in technology, process improvement and engagement of the people who will need to change creates the special sauce that cultivates successful ITIL change efforts. Kotter in my opinion laid the groundwork for successful change efforts. Many change agents and leaders put his principles into practice and found them to be pretty effective. What we have learned overtime, especially in the realm of IT and ITIL efforts, is that there are three core refinements that can and should be applied to informed ITIL efforts: Increase focus on sustained support or sponsorship. Without the decision maker(s) providing all the resources and influence required throughout you are diminishing your chances for success. Refocus the change paradigm from resistance to change to one of achieving a positive vision based on engagement through a thoughtfully articulated business
9 NAI Research Report The Change Challenge- IT and ITIL Page 9 case and case for meaning. In short, people support best what they design or when they are given the opportunity to contribute to the design Design a change approach that appropriately considers an integrated approach that always considers people, process and technology and how they fit best together given the specifics of your context, conditions and culture. While most of this September addition is simply a refinement to the original article, we think it is an important refinement that can make a significant difference for you. Just adding a little salt to your steak is also just a refinement but sometimes that little bit of salt makes a big difference to the final product. Nouri Associates, Inc. One Embarcadero Center Suite 500 San Francisco, CA (888) Voice (415) Fax
10 NAI Research Report The Change Challenge- IT and ITIL Page 10
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