How do your business peers view IT? 

a) a black box of spending
b) a large bureaucracy which my function tries to work with
c) a collection of applications and projects
d) the help desk, and the relationship manager I work with
e) a set of business services supporting my department or function

Now, which of these is the most beneficial perspective — the one that leads to your firm getting the most bang for your technology spending?

The correct answer is e) a set of business services supporting my department or function. 

Why? – because the others eliminate any useful dialogue between you (the IT organization) and business execs (your customers).  By viewing IT as a set of business services, such as a ‘product engineering service’ or a ‘field sales support service’, IT spending is mapped to functions which business cares about. When the IT organization is aligned around these services, redundant applications, overlapping projects, and organizational silos are more easily exposed, and the business-IT discussion is re-focused on service levels, costs and capabilities. 

What makes this work is a catalog of business services — each service a key business activity plus all associated applications along with the infrastructure and IT services required to run them. The services in the catalog can  range from an “end-user productivity business service” to a “customer support business service” — all with complete costs, defined capabilities, and investment roadmaps. And the CIO should assign service managers to each business service, charged with ensuring that IT’s role in enabling the business services meet the expectations of business users. 

This all sounds fine, but CIOs know it’s complicated to build this catalog, and most IT shops focus too much on IT and not enough on the business.  They make a start by adopting ITIL, but while their support processes are becoming stabilized, the business services catalog is not being built or the services are IT-centric services like ‘mainframe processing’, ‘mailbox’ or ‘help desk’.   

The reason why these efforts struggle is that the business services catalog shouldn’t start with the team implementing ITIL.  ITIL efforts are usually tied to Infrastructure & Operations, and so are more focused on operational processes than on business services.  Instead, CIOs should re-charter their business service catalog development efforts:

1. Start top-down, from the firm’s business model, value chain or major business processes to define a model of capabilities your business runs on. Read this report if you want to see what the result should look like. 
2. Use this model as the basis for mapping the functionality which IT supports to the capabilities the business cares about — that the business organizations use for their own planning and measurement of success.  These become the framework for your business services. Where services, such as the ‘end user productivity’ service are used by more than one area, identify these as shared business services.
3. Map existing costs – both MOOSE (on-going costs) and new investments to these services.  The cost mapping doesn’t have to be exact, but it should be reasonable and relate to ‘what factors – business or IT - drive these costs’. 
4. Wrap the current services into your business services catalog, with projects enhancing these services (which could be both infrastructure and business functionality) into your services portfolio. This report will help. 
5. Re-assess your organization in light of this business services portfolio:  do you have organizational silos or redundant functions that should be collapsed?  Should your governance structures be updated? Read this report if you want more info. 
6. Make this catalog the basis of your communications program.  Educate your peers as to how this is an easier way for them to understand IT, and for you to manage the service levels, costs and capabilities provided to business. 

Have you defined or begun to define your business services catalog?  What advice or cautions can you share?