Identifying IT Service Management Challenges: A Case Study in Two IT Service Provider Companies

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1 rd International Workshop on Database and Expert Sytems Applications Identifying IT Service Management Challenges: A Case Study in Two IT Service Provider Companies Sanna Heikkinen University of Eastern Finland, School of Computing P.O.Box Kuopio, Finland sanna.heikkinen@uef.fi Marko Jäntti University of Eastern Finland, School of Computing P.O.Box Kuopio, Finland marko.jantti@uef.fi Abstract Continual service improvement within IT service management is an important research topic. Nowadays, IT services should be actively developed and improved in order to increase quality and cost effectiveness. Continual Service Improvement enables identification of bottlenecks and weak areas in the services. The research problem of this study is: what types of challenges exist in the IT service management from IT service provider s perspective? The main contribution of this study is to present ITSM challenges in two IT service provider companies in Finland. In order to categorize results, we used the three core perspectives of ITSM people, process, and technology. These three areas provide inputs to the continual service improvement lifecycle phase which controls and manages the identified improvements. Data for this study were mainly collected through interviews with 21 IT service management specialists. Index Terms IT service management; ITIL; Continual Service Improvement; CSI; ISO/IEC I. INTRODUCTION Information Technology Infrastructure Library (ITIL) is a set of good practices for IT service management. It gives a detailed description of IT service management processes with comprehensive checklists, activities, roles, and responsibilities which can be tailored to any IT organization [1]. ITIL is the most widely used IT service management (ITSM) approach that has gained a de facto standard status. ITIL version 3 approaches service management from the service lifecycle viewpoint. The service lifecycle describes the way how service management is structured. The service lifecycle consists of five phases: Service Strategy [2], Service Design [3], Service Transition [4], Service Operation [5], and Continual Service Improvement [6]. The business perspective plays an important role in the Continual Service Improvement (CSI). The need for continual improvement is obvious because there is a strong competition in business today. Effective service management may attract new customers and increase customer satisfaction among existing customers. The CSI has, for example, the following objectives [6]: 1) Review, analyse, and make recommendations on improvement opportunities in each lifecycle phase. 2) Identify and implement individual activities to improve IT service quality and improve the efficiency and effectiveness of enabling ITSM processes. 3) Ensure that applicable quality management methods (for example ISO/IEC 9001 and ISO/IEC 20000) are used to support continual improvement activities. Continual service improvement enables identification of bottlenecks in the services and processes. IT service management can be approached from the viewpoint of three core focus areas: people, process, and technology [7]. These priority areas provide inputs to the CSI lifecycle phase which is responsible for monitoring, controlling, and managing the identified improvements. Implementation of the organizational improvements should always take into account these three elements because ignoring one element might cause critical problems to the process improvement work. For example, ignoring people perspective might cause a situation where employees are not ready to work as process managers due to lack of ITSM competence. The CSI process aims to continually improve the effectiveness and efficiency of IT processes and services. The concept of continual improvement is also visible in the ISO/IEC service management standard. The ISO/IEC standard [8] requires that organizations continually improve their services and document the improvement actions and results. The ISO/IEC defines auditable requirements for the design, transition, operation and continual service improvement of services. In this paper, we present the identified ITSM challenges of the IT provider organizations. These challenges are inputs to the continual service improvement phase. Solving these challenges may lead the service to higher quality and increased customer satisfaction. Previous studies have investigated continuous improvement from the IT service management viewpoint. Donko and Traljic [9] discussed in the article the concept of the Balanced Scorecard applied to Service Operation. The objectives and indicators that are linked to the Service Operation processes and functions are defined and they are mapped to the particular performance key indicators and performance management processes. Lima et al. [10] have studied improving the quality view. They have dealt with how to estimate quality percent of an IT service, in order to provide a continual activity in the service life cycle. Jäntti and Kalliokoski [11] have studied the process perspective. They have used interviews as the research method to identify knowledge management challenges in a Nordic /12 $ IEEE DOI /DEXA

2 IT service provider organization that has operations both in Finland and in Sweden. Jäntti, Lahtela and Kaukola [12] have researched how the measurement of the IT service support processes can be improved. In their study, they describe the implementation process of the measurement system and explain its architecture. The concept of measurement is a key issue in the IT service management and continual service improvement. Kim et al. [13] have studied what relationships exist among Quality Management (QM) practices and which QM practices are directly or indirectly related to innovation. The results show that a set of QM practices through process management has a positive relationship with different types of innovation. Researchers also found that organizational capability to manage processes may play a vital role in identifying routines, establishing a learning base, and supporting innovative activities. This paper belongs to the results of ongoing KISMET (Keys to IT service management and Effective Transition of Services) research project. The Continual Service Improvement in the IT service management was one of the KISMET pilot projects focus areas. The main contribution of this paper is to: Present the challenges in IT service management in two IT service provider companies in Finland Provide recommendations how to solve challenges to increase the efficiency of the provided IT services The goal of this study was to identify challenges that IT providers encounter in their IT service management and in that way prevent other IT providers doing the same mistakes again. The results of this study can be used by persons who are responsible for any IT service lifecycle stages, persons who are working in service management, such as process owners, service managers, project managers, consultants and CIO managers. The results can be used to support ITIL-based and ISO/IEC based continual service improvement work. The rest of the paper is organized as follows. In Section 2, we describe the research problem and methods in this study. In Section 3, we present the ITSM challenges that were found by the interviews. In Section 4, is the analysis of the challenges. The discussion and conclusion are given in Section 5. II. RESEARCH QUESTIONS AND METHODOLOGY The research problem of this study is: what types of challenges exist in the IT service management from IT service provider s perspective? In this case study, we used a qualitative research approach to identify challenges in two case organizations. The research problem was divided into following three research questions: RQ 1: How do the processes support the continual service improvement actions? RQ 2: What kind of role the employees have in improvement actions? RQ 3: How technical tools and practices can support the improvement? According to Yin [14] a case study is a research strategy which focuses on understanding the dynamics present with single settings. The case study focuses on studying and understanding of a particular object of study, activity in connection with their environment [14]. During the case study researcher is an outsider, who observes and analyses the environment, making notes by combining different data collection methods. In this case study, we focused on exploring the CSI activities in IT service provider companies. As a theoretical framework of the study we used IT service management Information Technology Infrasfructure Library (ITIL) [1] and ISO/IEC standard [8][15]. Interviews were used as a main data collection method. The interview method is very flexible and suitable for a wide variety of research purposes. Figure 1 describes the research settings of this case study including research problem, research methods and research data. Fig. 1. The research settings of the study A. Case Organizations and Data Collection Methods Our first case organization Alfa is a Nordic IT service provider organization that has operations both in Finland and in Sweden. Alfa provides companies and organizations with easy-to-use IT services. Alfa has around 700 employees and its turnover was approximately EUR 140 million in Alfa provides various types of services to its customers: application services, desk top services, servers and capacity services, network services etc. Alfa have a strong focus on ITIL, ISO/IEC and ITSM tool improvement. Second organization Beta develops and implements stateof-the-art solutions for the financial sector in Finland. It also ensures the performance and quality of such solutions. This services company is in charge of the development, production, and maintenance of the Group s products and services. It provides Group companies with business development and ICT services, and services for business process management. For example, the company ensures that online and Contact Centre services perform well. It also takes care of the smooth operation of banking and investment services, and the production of various materials. Multiple data sources were used in collecting data regarding the case organizations service management. The case study carried out from March 2010 to July The following data collection methods and data sources were used: 56

3 Documents: Administrative documents, progress reports, meeting memos, and other internal records Archival Records: Articles Participative observation: This included the meetings with CSI manager, process owners, quality manager, unit manager and quality expert. The researchers organized an ITSM training session for Beta s user support staff ( ) Physical Artifacts: Access to the case organizations intranet, reporting tool, process tool and customer support database Half-structured theme interviews: Interviews with 21 IT service management specialists (based on form with 36 questions [16]). B. Data Analysis Method The cross-case pattern method was used in data analysis. The cross-case pattern method focuses on searching similarities and difference between cases [17]. The content analysis was used within cross-case analysis in this study. Content analysis is useful especially for analysing qualitative data. In the content analysis, the data was arranged in compact and clear form without losing the information contained in. The research data was analysed by using the theory-driven content analysis. The theoretical framework in this case consisted of the ITIL framework and ISO/IEC standard. Challenges were analysed from three different perspectives: people, process, and technology perspective. After that, the case comparison was carried out to identify the common ITSM challenges between two case organizations. Triangulation allows researchers to be more confident of their results. Denzin [18] extended the idea of triangulation beyond its conventional association with research methods and designs. In this study, we used three forms of triangulation: 1) data triangulation, which entails gathering data through several sampling strategies, so that slices of data at different times and social situations, as well as on a variety of people, are gathered, 2) investigator triangulation, which refers to the use of more than one researcher in the field to gather and interpret data, 3) methodological triangulation, which refers to the use of more than one method for gathering data. III. IDENTIFIED IT SERVICE MANAGEMENT CHALLENGES IN TWO IT SERVICE PROVIDER COMPANIES This study had two major goals. The first goal was to present the IT service management challenges in two IT service provider companies. The second goal was to provide recommendations how these challenges could be solved and thus increase the efficiency of the IT provided services. In the following section, we present the results on interviews. A. Defining the Interview Questions The interviews were conducted as half-structured theme interviews in which the researcher had an opportunity to present more specific questions if necessary or if the interviewees needed further clarification. In this study interviews in company Alfa were carried out as part of an ISO/IEC internal pre-audition in with 17 people (4 Managers, 5 Change Managers, 8 employees) participated in the interviews. Interview questions were based on the ISO/IEC standard s PDCA (Plan-Do-Check-Act)-cycle related requirements. Interviews in Beta were carried out in with 4 people (process owner, quality management manager, unit manager and quality expert). The interviewees were selected by using elite sampling and the same questions were used both for Alfa and Beta. B. Identified Challenges The researchers identified ten common challenges regarding IT service management. These ten challenges can be used as inputs to the continual service improvement. 1) Interdepartmental barriers prevent the effective functioning of work. (People) 2) Lack of the feedback to the employees. (People) 3) Lack of the feedback channel to the employees. (People) 4) There is need for more standardized processes. (Process) 5) Process implementation and related responsibilities has not been completed. (Process) 6) Follow-up monitoring should be more visible in ITSM, for example, after the change management process and projects. (Process) 7) There is a need to identify the organization s critical success factors and key performance indicators. (Process) 8) There is a need to establish documented procedures for handling the service improvement initiatives. (Process) 9) The challenges in integrating systems and the poor interoperability of systems. (Technology) 10) ITSM reporting needs to be more efficient. (Technology) The first challenge addressed interdepartmental barriers that seemed to prevent the effective work. The interviewees reported of poor communications and different ways of work which led to confusion and lack of information. The second challenge was related to lack of the feedback from the employees viewpoint. The employees reported that the customer feedback should be sent to them. Thus, based on the feedback they and other experts would know how to correct any deficiencies in their work. The third challenge was related to how employees could give the feedback to management. The improvement ideas from employees should be seen as an important way to improve the service. There is need to increase the use of the feedback channel and to make the service improvement initiatives more effective. The sources of improvement ideas may include feedback from customers and personnel and survey results, third-party feedback, measurement results and project closure reviews. Regarding the fourth challenge, IT service provider comppanies need more standardized processes to support the daily work. Processes need harmonization because there were a lot of customer-specific practices. 57

4 Related to the fifth challenge, the processes were still unclear to part of the employees and they have not been identified the process based approach in their daily work. The staff didn t know who were the responsible persons of the process and from who they could ask more details and process descriptions. The common problem was also that some support requests were not recorded anywhere causing a risk of damaging the service. The sixth challenge was that the follow up work must be more intensive after the change management process and projects for example, in process improvement initiatives there must be a team or a person that will check whether employees follow the new practices instead of old ones. Without any follow up, the staff may likely return to the old working practices. Regarding the seventh challenge, the lack of organizations had not defined the key process metrics. There is need to identify the organizations critical success factors (CSF) and key performance indicators (KPI). Continual service improvement requires that the metrics are frequently monitored, reports are produced and the identified improvements are implemented. Regarding the eighth challenge, there is need to improve the handling of the service improvement initiatives. Employees have difficulties to identify sources of improvement ideas and define a systematic process for handling them. The organization would need clearer methods to support the process and service improvement because at the moment a lot of time goes to reactive work, fire fighting and there is often no time for proactive activities. The ninth challenge addresses the systems integration problems that cause challenges to reporting capabilities. Interviewees reported that the organization would need efficient and modern technological tools to support the operation. Processes and tools should ensure that relevant information is always available for people who need it. According to the tenth challenge, automated reporting should be increased because there is a high amount of manual reporting. Lack of the metrics affected also the reporting. We observed that the companies would have needed defined process metrics for IT service operation processes and more effective reporting practices. Employees proposed that reports should be produced more for internal use because that way they know which things shoud be done better. The case study provided valuable information on the IT service management challenges to ITSM research field. Information of the challenges is valuable because it enables other IT service providers to avoid these challenges and gain success in ITSM implementation projects. IV. ANALYSIS The research problem of this study is: what types of challenges exist in the IT service management from IT service provider s perspective? Our study focused on exploring IT service management challenges in two IT service provider companies. In this section, these challenges are analysed and recommendations, how to solve the challenges, produced. According to the interviews there is need to improve the communication between different departments to ensure effective service production. Recommendation I: Process descriptions will create transparency to services and document service management interfaces. Improvement work is mainly performed by individual business units. This might cause challenges in developing a big picture of service improvement. The ISO/IEC standard defines interfaces between service management processes and their integration within the SMS. Service provider companies need to implement the interfaces between ITSM processes and projects and need to check that each process includes the description of inputs and outputs and relationships to other processes. According to the challenges 2 and 3 in a future employees need to take more responsibility for their own work, which will require a coherent approach and a more open management culture. Managers should lead the action to decided direction. All employees should have a desire to service the customer well in order to achieve the demanding service objectives. Recommendation II: Organizations should emphasize the importance of communication between the employer and the employee. A dialogic work culture provides the basis for a functioning work community where employees are able to identify and communicate improvements. Employees may have the change resistance againts new ways of working. The management s task is to motivate all employees to the change. Challenges 4 and 5 indicate that there are several practice for managing the service objectives and plans because the service management plan does not exist. The ISO/IEC standard requires that the service provider shall implement and operate the SMS for the design, transition, delivery and improvement of services according to the service management plan. Recommendation III: Establish a review procedure and appoint a person that monitors limit values of process metrics. According to ISO/IEC standard the service provider shall create, implement, and maintain a service management plan. Additionally, IT providers need to define responsibilities for each ISO/IEC process, and service within the scope of ITSM. Regarding the challenge 6, the employees have change resistance against new practices and may consider those more difficult than the old ones. Recommendation IV: Organize the post-implementation review (PIR) after changes, improvements, and projects. PIR is a review that takes place after a change or a project has been implemented. It determines whether the change or project was successful and identifies opportunities for improvement. There is need to identify the organization critical success factors (CSF) and key performance indicators (KPI) (challenge 7). Recommendation V: According to the ISO/IEC 20000, the service provider shall use suitable methods for monitoring and measuring the SMS and service. IT providers need to check that core metrics, CSF and KPI are defined for each service management process. There is a need for proactive measures that ensure that improvement efforts can start on time. There is also pressure to provide the customers with results on end- 58

5 to-end service performance. According to CSI, the people, processes, and technology require continual improvement in the form of measurement, reporting, and identification of the improvement initiatives. According to ISO/IEC standard, the service provider shall create, implement and maintain a service management plan. Additionally there shall be a policy on continual improvement of the SMS and the services. Recommendation VI: Create a documented procedure including the authorities and responsibilities for identifying, documenting, evaluating, approving, prioritizing, managing, measuring, and reporting of improvements. The challenges 9 and 10 were related to the lack of the systems interoperable and efficient reporting. We observed that part of the reporting is hand-made of large number of data which is ineffective and expensive way. Organizations need to improve the service reporting process, especiallyof gathering, processing and analysing the data. Recommendation VII: Create a reporting process to describe what kind of reports are produced and what kind of reporting is needed. According to ISO/IEC the purpose of Service Reporting process is to produce agreed, timely, reliable, accurate reports for informed decision making and effective communication. The successful implementation of service reporting process provides the following benefits: 1) agreed reports are delivered in time and 2) the findings in the service reports are communicated to relevant parties. V. DISCUSSION AND CONCLUSION The main contribution of this study was to present ITSM challenges in two IT service provider companies in Finland. In order to categorize results, we used the three core perspectives of ITSM people, process, and technology. There are three important reasons why our research results are valuable: First, a continual service improvement is an actual improvement target for IT service providers companies. Second, there are only few academic studies that deal with the continual service improvement. We managed to conduct 21 interviews that revealed several interesting challenges. Third, our results may help other IT providers to avoid these challenges and learn from these mistakes. This study included the following limitations. First, the study was performed with two case organizations. Multiple organizations would have provided a richer view on the CSI challenges. Second, the case study does not allow us to generalize results to other organizations. Third, we could have interviewed more persons in Beta. Several organizations in change programs fail in their aim of achieving the desired results because they overlook the importance of the staff. People generally do not like changes, and they do not want to change. Therefore, the benefits of changes need to be explained to the staff in a such way that change gets their support and they are ready to give up the old ways of working. Process descriptions help to understand the impacts throughout the organization and bring transparency between units. Without this understanding it is difficult to design a viable strategy and in general lead the organization effectively toward the goals. IT providers need technology in order to achieve the desired results. Without a good and high quality tools for high level performance can not be delivered. The organizations need easy to use and efficient technologies to support their business goals. Further research could focus on exploring CSI activities from the perspective of innovation management. It would also be interesting to carry out interviews in other companies and compare those results to the results of this study. Additionally, more research is needed to examine how change management manages the identified improvements. ACKNOWLEDGMENT This paper is based on research in Keys to IT service management and Effective Transition of Services (KISMET) project funded by the National Technology Agency TEKES (no /10), European Regional Development Fund (ERDF), and industrial partners. REFERENCES [1] OGC, Introduction to ITIL. The Stationery Office, London, [2] C. Office(1), ITIL Strategy. The Stationery Office (TSO), United Kingdom, [3] C. Office(2), ITIL Service Design. The Stationery Office (TSO), United Kingdom, [4] C. Office(3), ITIL Service Transition. The Stationery Office (TSO), United Kingdom, [5] C. Office(4), ITIL Service Operation. The Stationery Office (TSO), United Kingdom, [6] C. Office(5), ITIL Continual Service Improvement. The Stationery Office (TSO), United Kingdom, [7] itsmf International, IT Service Management-An Introduction. 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