* Calculating the value of IT services and investments
The foundational question about all services is value. In other words, “What is the most effective way for the service to be delivered to those requiring it?” Effectiveness isn’t simply a question of expediency or low initial cost, but of the overall business requirements and the best way to address those in context with the rest of the business. Because this analysis is so difficult, it is often shortcut by simple short-term thinking.
While the concept of “value” is receiving a bit of a renaissance, it is often not developed rigorously. Typical discussions of value lack analysis of costs, savings, and opportunity delivered by a specific solution. Interestingly, analysis of value often introduces unexpected sources for value when viewed from the different constituents. For example, when recently speaking with a network manager about Statscout’s network monitoring system, she mentioned the unexpected value of being able to monitor every port on every device on her company’s network. This value may not be obvious until it is actually available.
Similarly, the value of various services provided to an organization – from compute power to databases and application servers, to Internet services and complete business applications – is not necessarily obvious without significant engineering and analysis. But, it is this value that provides a measure of the effectiveness of the service delivery.
During IT’s steady years of growth, few questioned its the value to businesses. However, with the vast array of technology available – which is continuing to grow every day – it is obvious that value analysis is vital not only to the initial investment decision but also to help consider future benefits. In other words, “Did it do what we thought it would do?”
Of course, to understand these details, the organization must understand the specific needs and costs for the business and how each component within the delivery of each service impacts those needs and costs. It is this detailed analysis that provides the basis for value-based decisions that best affect bottom-line benefits. And it is this analysis and the resulting accountability that will help IT executives develop closer relationships with the lines of business.
The relationship between the lines of business and IT management is the focus of service level management. SLM systems aggregate information using traditional network and systems management and present it visually in a way that leads most directly to information and action. These systems also provide mechanisms for guarding and improving service levels. Using baseline technologies, users can quickly understand their current levels of service, the system components that contribute to those levels, and where investment should be made to improve service levels. As a result, SLM systems become the bridge from business objectives to technology investment and management.
Together with the emergence of standardized systems management and delivery processes as represented by the Information Technology Infrastructure Library (a set of best practices standards for IT service management), SLM provides the rigor and measurement necessary to develop continuous improvement for business-based IT.
For more information on SLM and this approach to IT, visit https://www.slm-info.org/ and related sites. Discussion groups, white papers, and other resources provide an opportunity to develop deeper understanding of how SLM can be an aid in developing effective services.
