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THE GREAT

DIVIDE

What is the Business

Impact?

A White Paper about

IT Service and Business Alignment

By Sue Southern

Independent Business & IT Service Management Consultant

Updated April 2010

THE GREAT DIVIDE IT Service and Business Alignment

© Sue Southern ([email protected]) of 13 Southern Assignments

TABLE OF CONTENTS Introduction...................................................................................................3

How does the Great Divide Manifest Itself? ............................................4

Mutual Perception ................................................................................4

Confidence Disruptions ........................................................................5

Business Strategy ................................................................................6

Good and Bad Customers and Service Providers ................................7

Best Practice Processes ......................................................................8

SLAs and other Metrics ........................................................................8

Causes of the Great Divide.......................................................................10

Desired Results ...........................................................................................11

Conclusions..................................................................................................12



Introduction

A business that is not continually adjusting to what its customers need, will find

trouble just around the corner.

The Great Divide. That perceptible gap between the IT service provider and the

business that is created and maintained by friction and blame. This can be seen not just

in the case of the internal IT Department but also in external contracts for managed services and outsourcing. The presence of the Great

Divide has been acknowledged for many years but it needs positive actions to be taken to

beat it into extinction. This paper, aimed at managers, considers some of the

well known and perhaps lesser known causes of the

problem and whether there are any workarounds or fixes

that can bridge the divide and truly align the IT service

with the needs of the business.

There is broad understanding that businesses and other

types of organisation are dependent upon their IT to be

able to operate – it is seen as an enabler and it touches

our lives every day to some extent. Like business, IT can

be a large and complex beast to control requiring skill,

judgement, tools, processes and experience to make it

work effectively. Experience shows that structure, best

practice disciplines and understanding the component

parts can play a significant and valuable part in driving

improvements. When IT goes wrong or is unavailable it

can be anything from mildly inconvenient to a huge

business disabler, involving for example, considerable

losses in terms of finance or reputation.

The complexity of business can be simplified when

considering the three fundamental needs from which

everything else stems:

1. Making a profit

2. Retaining customers

3. Growing the business

The relationship between IT and the business is

symbiotic. It would seem reasonable to deduce therefore

that IT and business alignment happens naturally and

automatically. But so often it doesn’t work that way.

So how and why does The Great Divide manifest itself?



How does

the Great

Divide

Manifest

Itself?

Evidence of the Great Divide between business and the IT

service provider is typically quick to surface. Pinpointing the

cause is not always immediately obvious as there is often a

history and ‘baggage’ to be waded through, but often the

cause can be found within it. Necessarily, the people who

manage the business are looking for the people who manage

the IT service to contribute to the business success through

support and innovation. The business management must be

able to successfully articulate its mission and strategy to

stand a chance of gaining this commitment from those in IT.

This is such an important area that it has a section of its own

later in this document.

Edison articulated this point when he said “Vision without

execution is an hallucination.”

What follows is an outline of some of the factors that

contribute to creating or maintaining the Great Divide.

Mutual Perception

Examples of how the great divide manifests itself can be seen

in the perception that the business has of IT and vice versa.

Such as:

Business Perception of IT Service We Need

• Aligned with business

• Available when we need it

• Consistently high quality

• Competitive cost

IT Perception of Business Service They Want

• Cost must be reduced

• Quality must be

improved

• Newest, latest, fastest IT

• 24x7 service for 9-5

price

Service We Get • Slow and unresponsive

• Unreliable service and

unbelievable reports

• Expensive without ‘value’

• Lack of business

understanding

• Tireless commitment to

mediocrity

• They create the downtime

Service We Deliver • Service quality is high

with reports to prove it

• Our costs are controlled

• End-users never satisfied

• Invisible business

strategy (and how does

it affect IT anyway?)

• Downtime is a fact of IT

service delivery

These are common examples of the perception of both parties

and show that trust and respect have taken a back seat to

conflict.

Differing views of perception are not the cause of the divide but a

strong indicator of its existence. Perception, when effectively

managed, can give some very clear pointers to what is creating

or maintaining the Great Divide. Lack of trust is a major

concern; unreliability and failing to keep promises are big issues

for which a resolution path can be found.



Confidence Disruptions

Every day IT support and management people go about their

tasks trying to do the right thing but finding constant

pressures and a reactive environment. One of the most

frequently heard complaints from IT service deliverers is that

they have no time for proactive activities – too busy fighting

fires.

In addition, they report that Service Review meetings require

a hard hat to survive the onslaught from the customer!

Service providers can disrupt their customers’ confidence

through hundreds of small actions over the course of any

week or month, small events that cause irritation, often about

inconsistent (or consistently bad) service.

“A typical dissatisfied

customer will tell 8 – 10 people about their

problem”

Approximately 95% of dissatisfied customers

don’t complain, they simply walk away.

Confidence disruptions give cause for complaints. Complaints

give substance to the Great Divide. Research has found that

it can take approximately 12 positive service encounters to

make up for one negative incident.

Conversely, a well-managed complaint can leave the

customer with a better impression of the organisation than

before. Examples of this, both good and bad can be found in

many areas, not just IT service delivery. Every customer,

however, has a patience and tolerance threshold and even

well-managed complaints will not increase customer

satisfaction if they happen too frequently.

A service provider can benefit from engaging with their

customers to encourage complaints where service is poor. If

something has gone wrong and a customer gives them the

opportunity to correct it then they have the chance to retain

their customer. Worryingly, research has found that between

94-96% of dissatisfied customers don’t complain, they simply

walk away. An action that certainly widens the Great Divide.



Business Strategy

Strategy is everyone’s business

“We don’t need computers to build

houses, we need bricks.”

“What is the mission and strategy of your business?”

Ask this question of any room-full of business and/or IT

managers across a variety of organisations and the responses

are varied and include laughter and cynical remarks but rarely

the ability to articulate what the mission or strategy include.

CEOs and other business directors are usually intelligent, hard

working people who have the vision to see where they are

taking the business. One of the key differentiators between

the CEOs of the most successful organisations and brands in

the world and the rest is their ability to cascade their vision,

mission and strategy through the business and clearly express

what this means to everyone and how everyone contributes to

its achievement. They not only motivate their people to

translate the strategy into action but they also provide the

means to make it work effectively. The use of tools, such as

balanced scorecards, is widely acknowledged to be a best

practice method to achieve this.

Achieving the strategy should be the business of every

employee, but it takes above average leadership to make it

happen. Top management teams maintain this strong focus

on the strategy month after month, year after year.

Top organisations also differentiate themselves by having a

clear understanding of what their customers need and how

they can provide it better than their competitors, through

trusted relationships.

Without this top-level leadership and direction, the business

units, departments and employees will busy themselves on

the wrong things. This can lead to operating silo-style and to

personal agendas being worked which may be contrary to that

of the Executive Management Team. This is certainly a

contributing factor to creating and maintaining the Great

Divide.

There is evidence that some people don’t see the connection

with IT and business. An employee of a well-known company

in the house building business commented “we don’t need

computers to build houses, we need bricks.” This is an

interesting remark as it is more common to find the

accusation from the business that those in IT do not

understand the business, whereas this example is the other

way around. How long could that organisation continue to

build houses without their computers? Businesses that don’t

rely on IT are few and far between.



Good and Bad Customers and

Service Providers

“If you can’t change the

people, change the people.”

This can be a sensitive area and for this reason it is often only

discussed behind closed doors. There are ‘good’ suppliers and

customers whose characteristics include forward thinking,

being open minded and customer focussed with positive

attitudes. These customers and suppliers work together for

the common good of the business, often creating what is

referred to as a win-win trusted relationship. It is refreshing

to find these relationships in an industry that’s known for poor

supplier management.

Then there are ‘bad’ suppliers and customers who have the

opposite characteristics. Bad customers and suppliers seek to

create or widen the Great Divide to perhaps meet a hidden

agenda. These relationships will be in the category of ‘hard

and difficult’ and will typically be represented by a lack of trust

in a few key people.

There are also combinations of the two; such as good supplier

and bad customer or good customer and bad supplier. A win-

win relationship is unlikely to be the outcome.

In addition, there is the business-to-business relationship

chain, giving more than one level of customer and the

opportunity for good and bad players to be found at any level.

The Great Divide could also be found at any level but this

paper concentrates on the customers and users of the IT

Service plus the customers of the business. An understanding

of the requirements of both is highly desirable if not essential

but not always present and Figure 1 below, illustrates the

positioning of the key players.

The Business

Customers of the IT Service

The IT Service Provider (maybe internal or external to The Business)

Service managed from IT infrastructure

External SuppliersProducts/services required to meet the Business needs

External CustomersRecipients of the products/services

The Great Divide?

Figure 1: Levels of Customers and their relationship to IT Service

The Business

Customers of the IT Service

The IT Service Provider (maybe internal or external to The Business)

Service managed from IT infrastructure

External SuppliersProducts/services required to meet the Business needs

External CustomersRecipients of the products/services

The Great Divide?

Figure 1: Levels of Customers and their relationship to IT Service



Best Practice Processes

Processes should be consistently repeatable,

understood, scalable and continually

improving to achieve operational excellence.

There is a wide range of best practice standards, plus open

standards for good practice, that have been determined in the

UK and/or internationally. In the IT and business

management arena, these include:

1. ITIL® IT Service Management certification for individuals

2. ISO/IEC 20000 ITSM certification for organisations

3. ISO 9000/1 Quality Management certification

4. COBIT™ (Control Objectives for Information and related

Technology) an open standard for good IT security and

control practices

5. Six Sigma for process improvement

6. Sarbanes-Oxley (SOX) for the business control

environment processes to meet financial legislation

7. Balanced scorecards for at least three management areas

of business, IT operations and customer perception.

The seven standards listed above could all be present in one

organisation and in fact in many areas they support each

other. There is a danger that the scope of processes can be

misinterpreted by IT and other internal or external

organisations. The distinction between business process and

IT process needs to be well defined and communicated -

confusion can quickly result when used out of context.

Confusion of this nature can be a contributory factor in the

Great Divide.

ITIL® (IT Infrastructure Library) has existed as a best practice

standard since the late 1980s but is currently experiencing

huge international adoption and traction. It can play a key

role in most of the other six standards listed above. ITIL®

has three highly valid objectives:

1. Align IT services with current and future needs of the

business and its customers

2. Improve the quality of delivered IT Services

3. Reduce the cost of provision in the long term.

These objectives are given considerable emphasis throughout

the ITIL® books; they are robust and grounded in common

sense. The overriding message is to ensure that core IT

processes are operationally excellent - singular and

consistently repeatable, well understood, measured, scalable

and constantly improving. They also provide a significant

contribution to closing the Great Divide, when deployed

effectively.

Alarmingly, the perception found among some people in the

business is that their IT service provider causes much of the

downtime that they suffer. Arguably, they have a valid point.

With the absence of effective Problem, Change and Release

management processes, for example, then this is a likely

outcome with the consequent effect on the Great Divide.



SLAs and other Metrics

Customer relationships are not built on

statistical measures.

Establishing Service Level Agreements and other metrics can

present considerable challenges in reaching an agreement

that is acceptable to both parties. This is a time when the

service demands of the business can seem impossible to meet

for the price they are willing to pay. The negotiation process

is often carried out by commercial, procurement and/or

financial people and they transfer the ownership to the IT

Service Management team for delivery. This can result in

misunderstandings or incorrect interpretations that give rise

to difficulties in the relationship.

Once set, achieving SLAs demonstrates nothing more than

basic competency to do the job. IT Service Management staff

can feel disheartened when they find little or no recognition

occurs from business customers by achieving SLAs, despite

the considerable efforts that went into that success. This

disappointment grows when failing to achieve SLAs results in

penalties being applied. Developing business relationships

and closing the Great Divide, will not occur from statistics.

There can be a long record of consistent performance to SLA

and yet the contract can still be lost to a rival.

Service performance metrics are produced month after month

but often no tangible added value can be seen by customers.

Emphasis is often on statistics and exception reports with

little or no reference to how the IT service has aligned itself

with the needs of the business. The service provider typically

expends a significant amount of effort to produce reports only

to find that the recipient gives them little or no attention.

Customers may not believe what is presented in the reports

which is further evidence of lack of trust and conflict.

With the passage of time it is not uncommon to find that the

service provider’s delivery team members are unable to

express what the full complement of services comprises and

the same can be true for customers. This problem often goes

unattended because to admit that it is a problem would result

in a loss of credibility. Confusion is a likely outcome.

Conflict, confusion, mistrust and misunderstandings are all

elements that will add to the Great Divide.



Causes of

the Great

Divide

In summary, the Great Divide can be caused or maintained

through several areas:

1. Lack of coherent business strategy or the strategy not

being communicated and understood by everyone in the

business.

2. People busy on the wrong things (and they are being

paid to do the wrong things!)

3. Organisation is run in silos leading to inconsistency and

even customer and employee confusion.

4. Lack of trust and positive engagement between the

people who manage the business and those who

manage the IT services.

5. Poor management of customer complaints.

6. ‘Bad’ customers and/or service providers who amplify

mistrust.

7. Customers and service providers are confused about

the product/service offerings.

8. Ineffective, inefficient and inconsistent processes,

particularly those evident to customers.

9. Performance reports are panic driven and/or are

measuring inappropriate service level targets and

demonstrate no value added.

10. Lack of best practice that causes re-work and creates no time for proactive activities; this increases

operational costs and hinders innovation.

The Great Divide is a negative force that undermines and

inhibits the potential of any business or organisation.



Desired

Results

A desirable outcome is to neutralise the forces of the Great

Divide. As with any good process improvement model, it is

necessary to understand where the aiming point is located.

A ‘destination statement’ for each area will facilitate greater

understanding.

Based on the list of causes shown on the previous page,

corrections can be achieved through setting destination

statements that show the aiming point, for example:

1. The Corporate mission and strategy have clear focus,

interpretation, management and communication.

2. Workforce is busy on the right things that cause the

strategy to be achieved.

3. Organisation is managed for performance against

business objectives.

4. The business and IT service provider are aligned

through the use of best practice standards with

frequent and effective communication.

5. Customers benefit from perception management and

complaints are seen as a chance to improve.

6. Key stakeholders (including customers, IT service

providers and suppliers) understand the business

objectives and how to achieve them.

7. A Service Catalogue presents current product/service

offerings and is communicated to customers and

service provider staff.

8. Best practices implemented for effective process

control.

9. IT Service Performance reports are aligned with the

business needs of the users and reflect the needs of

the customers of the business.

10. Best practice processes are a basic competency and

include proactive service delivery and management.

Having understood what is to be achieved the next stage is

to plan and implement the route to get there and by when;

a level of detail that is outside the scope of this white

paper.

The desired results for the business, in their most simple

terms are to make a profit, to retain customers and grow

the business; these key objectives are unlikely to be

achieved without IT. Therefore the alignment of IT and

those who manage it with the business is essential.



Conclusions

Wal-Mart view technology as an enabler, it permits

scale and responsiveness to customer needs.

Where the Great Divide exists it has a negative business

impact. It is an inhibitor to the general well-being of the

business.

That is not to say however, that it exists in all

organisations. Some have mastered the resolution to

this problem and created a culture and environment that

allows the business objectives to be achieved using IT as

an enabler with demonstrated added value. A point

illustrated by some of the most successful organisations

and brands in the world.

Technology has been central to business success for

many years; this trend increases continually. For those

businesses where the Great Divide is present, then CEOs

would do well to accelerate their business transformation

plans to maximise and publicise the value of IT to the

business. In support of this aim, increased leverage can

be gained through processes such as ITIL® and COBIT.

Proven best practice demonstrates tried and tested skills

leading to what customers want; a relationship trusted

for consistency and reliability. This leads to customer

retention and strong referrals.

The organisation’s strategy and mission must be clear to

every employee so that they know how their contribution

makes a difference. Trust must exist between employer

and employee and between customers and service

providers. Performance objectives should be actively

managed through the use of dynamic tools such as

Balanced Scorecards. Out-performing rivals leads to

business growth and profit.

IT service providers must recognise the importance of

their role in the business and engage accordingly. There

is no room for private agendas or over-inflated egos;

team work and strong communication are essential to

deliver business value.



About the author

Sue Southern is an independent Business and IT Service

Management consultant and trainer specialising in

implementing Balanced Scorecards for managing business

performance, service delivery and customer perception.

She is first qualified in ITIL® to Manager’s Certificate level

in 1996 and actively uses this knowledge to deliver

improved customer service, management capability and

operational excellence. To maintain her ITIL® knowledge,

Sue also delivers courses from Foundation level upwards.

She has earned a reputation for professionalism over 25

years by meeting objectives and delivering high standards.

Sue has written this paper on the basis of her direct

experience and industry research and hopes you have

found it to be interesting and relevant to your work.

Should you wish to contact her, please email to

[email protected].

Trademark acknowledgements

COBIT A trademark of the IT Governance Institute and is now in its third

edition.

ITIL® A registered trademark of the UK Office of Government Commerce and

is in its second edition, published by TSO (The Stationery Office).

Balanced

Scorecard

A creation of Drs Kaplan & Norton, published by Harvard University

Press. Scorecard development has reached the third generation.

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