World Class IT Service Delivery

Peter Wheatcroft

• Publisher: British Computer Society
• Year: 2007
• Print ISBN: 9781902505824
• eBook ISBN: 9781780170343
• Edition: 1
• Topic: Business
• Subtopic: Infrastructure
• Index: Business

"World Class IT Service Delivery" is a distillation of best practices in IT service delivery. It demonstrates the factors that enable organisations to achieve world class standards and the competitive advantage that this brings. The book not only covers what is required to reach these standards and how to achieve certification, but also explains what the results should look like and how your organisation may be missing out. It offers a shortcut to selling services more profitably whilst achieving results more quickly. This book is for IT managers, executives and consultants who need to raise their service standards or are contemplating offshoring their IT. It supports the ISEB service management certificate and is of core interest to those taking IT service management courses.

1 Defining world class

The terms ‘world class’ and ‘best practice’ are often used interchangeably to describe the attainment level of a particular IT organization or service offering. However, they do not mean the same thing at all and it is important that the differences between these two terms are understood. This chapter defines ‘world class’ and ‘best practice’ as well as the relationship between them and then goes on to show how they can both be used to govern IT service delivery. A number of concepts and models are introduced, starting with some well-known examples from outside IT and concluding with an accession model developed by the author specifically for IT services departments.

WORLD CLASS VERSUS BEST PRACTICE

Imagine that you are a keen golfer. You have the opportunity to visit a variety of golf courses each month and so are developing a respectable handicap. Each course that you visit has defined the number of strokes that it will take a good golfer to get round in and this is universally known as par – as in the expression ‘par for the course’. Terminology can get complicated here, since there can also be a standard scratch score defined for each course, but for the sake of simplicity this explanation will focus on par as meaning the expected standard of golfing achievement. Par for the course is the golfing equivalent of best practice and the measure of how much individual players differ from best practice is known as a handicap – so someone with a handicap of 16 would be expected to get round a par 80 course in 96 strokes in order to justify that handicap. The smaller the handicap, the better the player has to do in relation to the course par until the standard of achievement is such that he can get round exactly on par – having become a scratch golfer with a handicap of 0.

In the analogy above, a scratch player is achieving best practice as a golfer and you can see how this example can be interpreted in relation to IT service delivery. The gap between your current level of performance and the best-practice standards defined for service delivery is a handicap because it describes a shortfall in service quality and, just like in golf, this shortfall can be quantified by means of benchmarking, as explained in Chapters 3 and 8.

But the standards of service required for your organization may not be satisfied by best practice alone. Someone had to set par for the golf course you play on each month and this person can probably get round the course in even less than the defined number of strokes – and do so consistently. This expert has a positive handicap, which is used to rank their performance in competitions, where professional golfers usually play for high stakes. Getting round a course in less than the established par rating is the province of world-class golfers, and these are the people who define professionalism.

So world class sets the standards that govern best-practice developments. World class is the province of a defined elite that not only set the standards for others to follow but are consistently in competition with each other to produce ever higher levels of achievement, for which the winners get rewarded but the followers do not. This is the differentiator between IT service excellence and IT service good practice – just like the distinction between a professional and a leisure golfer. This is world-class IT in action.

INDUSTRY DEFINITIONS OF WORLD CLASS

World-class achievements are not just confined to golf, and neither are they an esoteric concept. The issues and characteristics of organizations that strive to achieve outstanding service performance can be analysed and measured, and a number of important models that do this are outlined in this chapter. But before looking at the models, it is useful to look at how world class has been defined more generally. For instance, the Government Accountability Office in the USA defines world-class organizations as being ‘recognized as the best for at least one critical business process and are held as models for other organizations’. In contrast, The Bridgefield Group, which specializes in quality management and performance measurement systems, defines world class as being ‘a general term for a high level of competitive performance as defined by benchmarking and use of best practices’. And not least of all, Wikipedia – an online collaborative encyclopaedia – defines world class as ‘ranking amongst the foremost in the world; of an international standard of excellence; of the highest order’.

All these definitions support world-class performance as being based on best practices, benchmarking and excellent delivery. It will be seen from this chapter and also throughout this book that all of these factors are critical in order to determine a comparative and objective level of service quality.

The researcher’s view

There are a number of robust industry models that define more closely what is meant by world class. The first of these examples described here relates to the characteristics of organizations measured by means of a research study carried out by three prestigious business schools of 310 service organizations operating in the UK and the USA and placing these in a classification system based on a service index (Voss et al. 1997). This service index rates the actual performance of the companies surveyed and also the degree to which best practices have been put in place, and is illustrated in Figure 1.1.

The service achievements of the 310 companies involved can be seen as a progression from bottom left to top right, displaying a strong correlation between the degree to which documented practices are used and actual delivery performance. Although this correlation is not universal, it is indicative of the first primary feature of a world-class organization – that when best practices are used consistently, they will lead to a high quality of service. The other two primary features of a world-class IT service organization, namely people and technology management, will be explained later in this chapter and also expanded in the rest of the book. The segmentation in Figure 1.1 shows how the companies were ranked in terms of their characteristics and Table 1.1 compares the UK and USA results.

Source: International service study reproduced by kind permission of the London Business School

FIGURE 1.1 Charting services against performance and practice indices

TABLE 1.1 Classifying services against performance and practice indices

Category	United States	United Kingdom	Definitions – out of 100%
Laggards	11.1%	11.4%	Practice ≤ 60 Performance ≤ 60
Performance leads practice	17.1%	13.0%	Practice ≤ 60 Performance ≥ 60
Practice leads performance	2.0%	3.0%	Practice ≥ 60 Performance ≤ 60
Contenders	56.6%	67.2%	Practice > 60 but ≤ 80 Performance > 60 but ≤ 80
World class	13.2%	5.3%	Practice > 80 Performance > 80
Total	100%	100%

• Laggards needs little explanation. They are those companies that neither deliver effective services nor display awareness of the importance of best practices in helping deliver world-class results. And yet the view of these companies is striking in that they display high motivation – 56 per cent of low-performing UK companies and 24 per cent of USA companies regarded themselves as being either completely or mostly competitive. This could be interpreted as a lack of understanding about the correlation between practice and performance, or even a degree of complacency about their ability to survive in a process-driven world. As details of the organizations in this survey were not published for commercial reasons, it is not possible to track how many of these companies are still in business.
• Performance leads practice is an interesting classification and one that contains a similar number of companies as the previous category. This is typified by a high-performance culture as measured by company output, but without the necessary supporting processes to provide stability or consistency. This is typical of an entrepreneurial enterprise or one that is relatively new and funding its way towards growth at the expense of process. As a stepping stone in service maturity, then, it could be regarded as a useful way of proving the business model and company viability before investing heavily in developing processes and management strategies. Companies falling into this classification will have a major weakness in that there is likely to be a high reliance on a few individuals, which, if they were to leave, could result in the company being without the necessary corporate knowledge – a collective memory – of how things are done.
• Practice leads performance is an area that has the least number of companies reported within it. This is a good thing because any company that has invested heavily in process management, enterprise resource planning (ERP) tools, reporting systems and management dashboards but does not show commensurate benefit from these is clearly in trouble. Again, it is not possible to track how many of these companies are still trading.
• Contenders is where the bulk of companies are placed and where it could be expected that the household names we rely on every day would have been ranked. This category supports the hypothesis that good performance derives from good processes, and it is interesting that there are more companies in this category in the UK than in the USA.
• World class is, of course, the category in which we are most interested. What this section shows is that organizations that continue their investment in effective processes continue to gain a benefit in terms of service performance. These are the companies with big reputations and will also be those that invest in their delivery, keeping their existing customers, winning new ones and probably scooping awards along the way. This is the category to which IT service delivery organizations should aspire and is one that is by no means impossible to achieve. The service practices that lead to this level of performance can be grouped into five different result areas – service process, leadership, people, performance management and results. As will be seen elsewhere in this book, this grouping is a common way of thinking about the actions that are needed to deliver effective results, and they apply as equally to IT service delivery as any other type of output.

The industry view

One of the leading organizations in the UK that recognizes high standards of service achievement is the Management Today/Unisys Service Excellence Awards Programme. This was established in 1995 with two primary aims:

• to recognize those organizations that excel at serving customers;
• to provide feedback and share good practices enabling entrants to improve their performance.

Although this awards programme is not aimed specifically at IT organizations, a number of IT service providers have entered and done well in the various categories – for example, Rackspace Managed Hosting was the overall winner in 2005 and Happy Computers won the top award in 2003, with both companies also scoring highly in at least one of the five component categories. This level of achievement, when service delivery is being compared across industry sectors by a consortium of judges drawn – among others from Management Today, Cranfield School of Management and Unisys, a leading IT services company, represents outstanding performance and shows clearly that IT service must share the characteristics of all good service, regardless of sector. Not unlike the joint London Business School/USA Universities study referred to earlier in this section, the Service Excellence Awards Programme also assesses service performance in five categories, as shown Table 1.2.

TABLE 1.2 Five areas of activity examined for the Service Excellence Awards

Category	Description
Customer intelligence	This addresses how an organization builds an understanding of the needs and expectations of its customers and their perception of performance
Operational effectiveness	This examines the effectiveness of service delivery and how easy the organization is to do business with
Engaging people	This examines how well an organization inspires the hearts and minds of i...

Table of contents

• Coverpage
• Halftitlepage
• Frontmatter
• Title
• Copyrightpage
• Contents
• Figures and Tables
• About the Author
• Acknowledgements
• Abbreviations
• Useful Websites
• Introduction
• 1 Defining world class
• 2 Service delivery
• 3 Developing the services value proposition
• 4 Quality management
• 5 Developing the business proposition
• 6 Redefining the role of the user
• 7 Governing service delivery
• 8 The end result
• References
• Index
• Backcover