Quantifying the benefits of ITIL

The Information Technology Infrastructure Library, more commonly known as ITIL, is currently in its third iteration, offering a common language as well as best practice guidelines for IT service management processes

August 31, 2010

By Allan Dickson, Consultant at Compass Management Consulting

The Information Technology Infrastructure Library, more commonly known as ITIL, is currently in its third iteration, offering a common language as well as best practice guidelines for IT service management processes.

ITIL is designed to help organisations achieve the execution of  strategy and improve performance, and many organisations have made significant investments into such initiatives. However, while following recommended guidelines according to ITIL may produce benefits, the majority of enterprises that have implemented these practices struggle to quantify the benefits in terms of cost savings and improvements in quality.

This is a major challenge in today’s business environment, where accountability and demonstrating the impact of various initiatives is of paramount importance due to factors such as King III and the new Companies Act.

A successfully implemented ITIL initiative can deliver significant improvements in efficiency, which can translate to cost savings, especially in areas such as service support and systems delivery. This makes it possible to improve internal customer service (in other words service to people working within the organisation), which in turn helps to improve external customer satisfaction, as employees are able to better service customers.

For organisations with multiple IT locations, especially those which are expanding internationally, ITIL also provides a common language and vocabulary to help pull IT operations together into a coherent force.

One of the reasons that these benefits are difficult to quantify is the traditional strength of IT in articulating the costs, but not the benefits of projects. Business cases are presented that emphasise cost but are at best ‘woolly’ when it comes to  benefit analysis – and as a result the benefits of an initiative are difficult to measure and often left unknown.

The benefits of an ITIL implementation are not necessarily purely in terms of cost but rather in terms of how the customer has been affected and how service has been improved. IT departments therefore need to focus not only on delivering projects on-time, on-budget and according to specifications, but also need to have effective metrics in place to judge whether the stated business benefits are being delivered.

One of the traditional ways of measuring the benefits of ITIL and IT service improvement is to take a tower-specific approach. However, this is by its nature a technical approach that does not take the users into account, which makes its flaws in the instance of ITIL immediately obvious. Optimising one specific tower may give an improvement from a technical perspective but this is not necessarily a process improvement and may not improve the end ‘product’, which should be the customer experience.

Another method of measuring improvement in services with ITIL is to take a pilot approach -in other words launching a test or ‘pilot’ in a specific area of IT. This can be effective if it is deployed in an appropriate area of the business, since ITIL offers many best practices and not all of these will be relevant and appropriate for all organisations.

The best way to conduct a pilot is to focus on the pain points of the business, specifically something with a tangible internal customer touch point, and launch a pilot on one of these. A good place to start is to look at incident management and how the experience can be improved by applying ITIL in this area. Other areas such as change management and the cause and effect relationships between problems can also be effective.

Narrowing the focus and delivering quick wins such as improving incident management or handling change management is an effective way of proving the success of an ITIL initiative, something which is important for buy in from the entire enterprise.

In order for ITIL implementations to be effective the application of metrics is essential. There are three broad areas that can be measured, namely cost, productivity and quality, and metrics in support of each of these need to be built.

Cost can be measured in terms of the impact to unit costs, for example; whereas in terms of productivity, the increase in the number of incidents handled per day and the impact on overall productivity can be measured.

Service quality too can be measured, for instance measuring how long it takes each agent to resolve an incident, highlighting skills level deficiencies, which if addressed can further improve service delivery.

ITIL is a proven methodology for improving services, customer satisfaction, productivity and ultimately the bottom line. However, in order to obtain and maintain buy in from the enterprise it is vital to measure the benefits of an ITIL implementation. And in order to measure implementations it is necessary to have metrics in place that are developed and put in place from the start.

Not only will this help with buy in, it will also keep the implementation on track and it will be possible to see if the stated benefits are being achieved or not, which can only make the project a greater success and lead to greater returns for the organisation.