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How to tap the power of an operating model in your enterprise

Phyllis Drucker Senior Consultant, Linium

Many enterprises struggle to bring operating silos together into a cohesive unit that can power the business forward. It doesn't matter whether the operating silos are different service providers in the enterprise—IT, HR, legal, accounting, or office and services—or silos solely within IT.

In each case the missing ingredient is usually an operating model that defines the way that a diverse set of individuals, all with their own management practices, can work together—the rules of the road for the team, so to speak. By building a common operating model you can create the framework that's missing from the team.

An operating model is nothing more than a structure built on practices that all members of an organizational team follow; it's that simple. The complexity comes from devising one that supports a diverse set of providers.

Here's how you build that common model—and avoid the complexity.

Enterprise service management challenges

People often refer to enterprise service management (ESM) as "taking the IT out of IT service management," but that's not necessarily what it means. That terminology represents a very IT-centric view, and other groups within a company could balk at IT's idea they don’t already have valuable management practices.

ESM really is an approach that's used by all providers in an organization, driving a consistent user experience throughout the enterprise.

This includes use of one service management platform, or at least a single service portal, supporting the same set of spoken languages in a global organization, similar or aligned service levels, aligned customer-facing processes, and so forth.

There are several challenges that come along with this:

  • Aligning on a single vision for customer service and support across all providers

  • Aligning on a set of customer-facing practices across all providers

  • Creating a mechanism that helps avoid conflicting tool requirements, or that helps the organization manage them while ensuring a consistent user experience

Thus, to be effective at ESM, operational silos that form around teams with a common purpose, such as IT and HR, need to be combined into a single operating model through which every provider can succeed.

Creating an operating model

Building an operating model takes a common vision, good communication, and the ability to share management practices across providers within an organization, selecting those that work for all.

Some of these will be IT practices, others will be from HR, and yet others may be more business-centric, such as accounting and budgeting practices. The idea is to see what the team needs to be successful, then borrow a bit of everything to create an operating model.

There are several steps you can take to get started:

  • Identify stakeholders from each provider group.

  • Establish the vision for ESM in the organization.

  • Formally charter the group as the "service management office" and select a chairperson from within the group. In organizations without a shared services structure or a service management office as a department, it may be valuable to rotate this role between providers every couple of years.

Your first steps

This group will then work together to create the operating model. One of the first activities the group will need to do is to create the framework of how it will operate, surveying each participant provider to see if it is already using an established framework particular to its industry or business in general.

IT alone has numerous frameworks, some of which—like lean and Six Sigma—may be already used outside of IT. While surveying each provider, it is worth listing out the practices they use within these frameworks, to look for similarities among how the groups operate.

The key here is understanding that most service management or business improvement methodologies and frameworks have similarities and include customer-facing service management practices. So providers may have quite a bit of overlap in how they are operating. Notice the shift away from IT imposing its processes on others.

The next activity would be to go through all of the customer-facing activities of the providers and how they are performed, finding the similarities and documenting the gaps. You can also perform value stream mapping, an exercise that diagrams each activity that provides value to the organization on a step-by-step basis, for instance each step a team takes to record a customer's request for service.

The initial maps may be the step-by-step details of how the activity occurs. Later on you can use these maps to streamline the resulting process that all providers will use.

These two steps form the basis for creating a single operating model for all your providers. The magic comes from doing the work as a team and driving consensus on the practices everyone will use.

How ITIL 4 and VeriSM Can Help

Both ITIL 4 and the VeriSM Foundation can help an organization create and improve an enterprise-level operating model. ITIL4's guiding principles provide great guidance:

  • Focus on value

  • Start where you are

  • Progress iteratively with feedback

  • Collaborate and promote visibility

  • Think and work holistically

  • Keep it simple and practical

  • Optimize and automate

These principles provide a base for how the team can operate as it builds and refines an operating model. There’s nothing IT-centric about them.

For its part, VeriSM offers a solid mechanism it calls the "management mesh" as a way of creating operating models. This mesh combines the organization's environment, resources, and management practices with emerging technologies available to it. It helps people engaged in an initiative to set up their own framework from which they will operate together, establishing processes, communications, and other operational standards to which they'll all adhere.

VeriSM also provides an instructional look at frameworks and how to use them to create the operating model. It's an excellent primer for organizations that are not experienced at doing so.

Marshal your stakeholders

To ensure a positive outcome in your ESM journey, you'll need to gather the stakeholders from all of your provider organizations and then leverage the tools available in ITIL4, along with other frameworks and knowledge that the teams have, to build an operating model for your future state organization.

These concepts form the basis for my upcoming Service Management World talk on November 12, "The Power of Operating Models Across the Enterprise," when I will dive more deeply into the topic and even perhaps get the audience involved in creating a sample operating model. The key takeaway, in addition to learning how to create an enterprise operating model, will be walking out of the room with the understanding that you don't have to choose one framework to dominate all the others; it's more effective to understand how to use all of them to create value for an organization.

Service Management World 2019 runs November 9-13, 2019, in Orlando, Florida.

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