VeriSM™ - Foundation Study Guide E-Book

Helen Morris

• Herausgeber: Van Haren Publishing
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 301

Veröffentlichungsjahr: 2018

Beschreibung

This book is intended as a self-study guide for the VeriSM™ Foundation, VeriSM™ Essentials, and VeriSM™ Plus qualifications. It also supports classroom and online courses for these qualifications. It is based on the requirements of the syllabuses for these three qualifications (Certification requirements for the VeriSM™ Foundation, VeriSM™ Essentials, and VeriSM™ Plus, a publication of the IFDC – International Foundation for Digital Competence). This guide is also useful for all professionals and organizations involved in delivering value to customers through the development, delivery, operation and/or promotion of services. VeriSM™ Foundation, VeriSM™ Essentials and VeriSM™ Plus prove to be useful to both professionals at the very start of their service management career and also to experienced professionals who need access to a simple service management approach. It refers to the information contained in the VeriSM handbook, “VeriSM™ - A service management approach for the digital age” - published by Van Haren Publishing. This guide has been developed for anyone who works with products and services and will be of particular interest to: graduates and undergraduates, managers (who want to understand how to leverage evolving management practices), service owners and service managers (who need to bring their skills up to date and understand how service management has changed), executives and IT professionals (who need to understand the impact of evolving management practices and new technologies on their role).

Leseprobe

VeriSM™ Foundation Study Guide

Other publications by Van Haren Publishing

Van Haren Publishing (VHP) specializes in titles on Best Practices, methods and standards within four domains:

- IT and IT Management

- Architecture (Enterprise and IT)

- Business Management and

- Project Management

Van Haren Publishing is also publishing on behalf of leading organizations and companies: ASLBiSL Foundation, BRMI, CA, Centre Henri Tudor, Gaming Works, IACCM, IAOP, Innovation Value Institute, IPMA-NL, ITSqc, NAF, KNVI, PMI-NL, PON, The Open Group, The SOX Institute.

Topics are (per domain):

IT and IT Management

ABC of ICT

ASL®

CATS CM®

CMMI®

COBIT®

e-CF

ISO/IEC 20000

ISO/IEC 27001/27002

ISPL

IT4IT®

IT-CMF™

IT Service CMM

ITIL®

MOF

MSF

SABSA

SAF

SIAM™

TRIM

VeriSM™

Enterprise Architecture

ArchiMate®

GEA®

Novius Architectuur

Methode

TOGAF®

Business Management

BABOK® Guide

BiSL® and BiSL® Next

BRMBOK™

BTF

EFQM

eSCM

IACCM

ISA-95

ISO 9000/9001

OPBOK

SixSigma

SOX

SqEME®

Project Management

A4-Projectmanagement

DSDM/Atern

ICB / NCB

ISO 21500

MINCE®

M_o_R®

MSP®

P3O®

PMBOK® Guide

PRINCE2®

For the latest information on VHP publications, visit our website: www.vanharen.net.

Colophon

Title:

VeriSM™ Foundation Study Guide

A publication of:

IFDC (International Foundation of Digital Competences)

Content Authors:

Helen Morris and Liz Gallagher

Cover illustration:

Frank van Driel, www.frankvandriel.com

Publisher:

Van Haren Publishing, Zaltbommel, www.vanharen.net

Design and Layout:

Coco Bookmedia, Amersfoort – NL

Production ePUB:

Coco Bookmedia, Amersfoort – NL

NUR code:

981 / 123

ISBN Hard copy:

978 94 018 0270 3

ISBN eBook (pdf):

978 94 018 0269 7

ISBN ePub:

978 94 018 0295 6

Edition:

First edition, first impression, February 2018

Copyright:

© Van Haren Publishing, 2018

All rights reserved. No part of this publication may be reproduced in any form by print, photo print, microfilm or any other means without written permission by the publisher.

Although this publication has been composed with much care, neither author, nor editor, nor publisher can accept any liability for damage caused by possible errors and/or incompleteness in this publication.

Trademark notices:

BiSL® is a registered trademark of ASL BiSL Foundation.

CMMI/SVC is a registered trademark of Software Engineering Institute

COBIT® is a registered trademark of ISACA.

Emotional Intelligence Appraisal® is a registered trademark of TalentSmart

ISO/IEC 20000® and ISO/IEC 27000® are a registered trademark of ISO.

ITIL® is a registered trademark of AXELOS Limited.

IT4IT® is a registered trademark of The Open Group.

NPS® is a registered trademark of Net Promoter Network

PMBOK® is a registered trademark of PMI Inc.

PRINCE2® is a registered trademark of AXELOS Limited.

SAFe® is a registered trademark of Scaled Agile Inc.

SIAM™ is a registered trademark of EXIN.

VeriSM™ is a registered trademark of IFDC

Preface

This book is intended as a self-study guide for the VeriSM™ Foundation, VeriSM™ Essentials, and VeriSM™ Plus qualifications. It also supports classroom and online courses for these qualifications. It is based on the exam requirements as defined by EXIN, BCS and APMG.

VeriSM™ Foundation proves to be useful to both professionals at the very start of their service management career and also to experienced professionals who need access to a simple service management approach. It refers to the information contained in the VeriSM handbook, “VeriSM™ - A service management approach for the digital age”, published by Van Haren Publishing.

The Foundation level can be taken in its entirety, but it has also been split up into two parts which are being offered separately as well: VeriSM™ Essentials and VeriSM™ Plus. VeriSM™ Essentials focuses on the basic service management principles, where VeriSM™ Plus focuses on the progressive practices and how these relate to service management. VeriSM™ Plus is more appropriate for existing service management experts who wish to update their knowledge.

Good luck with updating your skills & giving your career a boost!

Winter 2018, the publisher

Contents

1   INTRODUCTION

1.1 Objectives

1.2 Purpose

1.3 VeriSM™

1.4 VeriSM™ certification scheme

1.4.1 Target groups

1.5 VeriSM™ model

1.6 How to use this Study Guide

2   SERVICE MANAGEMENT ORGANIZATIONS

2.1 Introduction

2.2 Organizational context

2.2.1 Types of organization

2.2.2 Consumers

2.2.3 Assets and capabilities

2.2.4 Consumer outcomes

2.2.5 Interactions between business capabilities

2.2.6 Shadow behavior

2.3 Organizational governance

2.3.1 Governance practices and principles

2.3.2 The governance flow

2.3.3 Planning activities

2.4 Digital transformation

2.4.1 The benefits of digital transformation

2.4.2 Digital disruption

2.4.3 The impact of digital transformation

2.4.4 Summary of digital transformation

2.5 Summary Chapter 2

2.6 Quiz questions

2.7 Assignment Chapter 2

3   SERVICE CULTURE

3.1 What is a service culture?

3.2 Elements of a service culture

3.2.1 Adaptability/flexibility

3.2.2 A focus on service quality in addition to product quality

3.2.3 Management of expectations

3.2.4 Consumer focus

3.3 How to create a service culture

3.3.1 Empowerment

3.3.2 Motivation

3.3.3 Behavior

3.3.4 Management responsibility

3.3.5 Contribution

3.3.6 Measuring culture

3.3.7 Reward and recognition

3.4 Summary Chapter 3

3.5 Quiz questions

3.6 Assignment Chapter 3

4   PEOPLE MANAGEMENT AND ORGANIZATIONAL STRUCTURE

4.1 Introduction

4.1.1 Breadth and depth of knowledge

4.2 Generic organizational roles

4.2.1 Leaders

4.2.2 Managers

4.3 Emotional Intelligence (EI)

4.4 Generic competences for service management

4.4.1 Lifelong learning

4.5 Occupation or profession?

4.6 Organizational structures

4.6.1 Team development

4.6.2 Team building

4.6.3 Team motivation

4.6.4 Team characteristics

4.7 Service management challenges

4.7.1 Tribalism and team culture

4.7.2 Virtual teams

4.8 Relationship management

4.8.1 Consumer management

4.8.2 Supplier management

4.8.3 Expectation management

4.8.4 Communication

4.9 Organizational change

4.9.1 The 8-step approach

4.9.2 The volunteer army

4.9.3 Quick wins

4.9.4 Managing stakeholders for successful organizational change

4.9.5 The role of the sponsor

4.9.6 Planning for organizational change

4.10 Summary Chapter 4

4.11 Quiz questions

4.12 Assignment Chapter 4

5   THE VERISM MODEL

5.1 The VeriSM operating model

5.2 Service management and the VeriSM model

5.2.1 Service management benefits

5.2.2 Evolving service management

5.3 Governance

5.4 Service Management Principles

5.5 The Management Mesh

5.5.1 Building the Management Mesh

5.6 The VeriSM model: Define

5.6.1 Consumer need

5.6.2 Required outcome

5.6.3 Solution

5.6.4 Service Blueprint

5.7 The VeriSM model: Produce

5.7.1 Change control

5.7.2 Produce activity: Build

5.7.3 Produce activity: Test

5.7.4 Produce activity: Implement and Validate

5.8 The VeriSM model: Provide

5.8.1 Provide activity: Marketing

5.8.2 Provide activities: Protect

5.8.3 Provide activities: Measure and Maintain

5.8.4 Provide activities: Improve

5.9 The VeriSM model: Respond

5.9.1 Respond interactions

5.9.2 Respond activities: Record

5.9.3 Respond activities: Manage

5.10 Adapting the VeriSM model

5.10.1 Selecting management practices

5.10.2 Establish the Governance and Service Management Principles

5.10.3 Select and integrate a set of management practices.

5.10.4 Create a responsive (or flexible) operating model

5.10.5 Measuring performance

5.10.6 Measurement perspectives

5.10.7 Reporting

5.11 Summary Chapter 5

5.12 Quiz questions

5.13 Assignment Chapter 5

6   PROGRESSIVE PRACTICES

6.1 Introduction

6.2 Common success factors

6.3 Agile

6.3.1 Sprints

6.3.2 The Agile Manifesto

6.3.3 Four Agile values

6.3.4 Twelve Agile principles

6.3.5 The Agile mindset

6.3.6 When should Agile be used?

6.3.7 When should Agile not be used?

6.3.8 Agile Service Management

6.3.9 Agile variants

6.4 DevOps

6.4.1 DevOps and VeriSM™

6.4.2 DevOps principles and values

6.4.3 The three ways of DevOps

6.4.4 DevOps supporting practices

6.4.5 When could DevOps be used?

6.4.6 When is DevOps not appropriate?

6.4.7 DevOps variants

6.4.8 DevOps and service management

6.5 SIAM

6.5.1 The SIAM ecosystem

6.5.2 Service broker

6.5.3 IT as Service Integrator

6.5.4 Benefits of SIAM

6.5.5 Possible dangers of a SIAM approach

6.5.6 When should SIAM be used?

6.5.7 When should SIAM not be used?

6.5.8 SIAM variants

6.5.9 SIAM and service management

6.6 Lean

6.6.1 Lean considerations

6.6.2 Lean principles

6.6.3 Flow and pull

6.6.4 Waste

6.6.5 Takt time and cycle time

6.6.6 Value stream mapping

6.6.7 When should Lean be used?

6.6.8 When should Lean not be used?

6.6.9 Lean variants

6.6.10 Lean and service management

6.7 Shift Left

6.7.1 Required capabilities for Shift Left

6.7.2 Shift Left and VeriSM™

6.7.3 When should Shift Left be used?

6.7.4 When should Shift Left not be used?

6.7.5 Shift Left and service management

6.8 CX and UX

6.8.1 CX

6.8.2 EX

6.8.3 UX

6.8.4 DX

6.8.5 Net Promoter Score (NPS)

6.8.6 The relationship between CX and UX

6.8.7 When is using CX and UX principles appropriate?

6.8.8 When is using CX and UX principles not appropriate?

6.8.9 CX/UX Variants

6.8.10 CX/UX and service management

6.9 Continuous Delivery

6.9.1 Key concepts

6.9.2 When should Continuous Delivery be used?

6.9.3 When should Continuous Delivery not be used?

6.9.4 Continuous Delivery variants

6.9.5 Continuous Delivery and service management

6.10 Summary Chapter 6

6.11 Quiz questions

6.12 Assignment Chapter 6

7   INNOVATIVE TECHNOLOGIES

7.1 When to use new technologies

7.1.1 Service management considerations for new technologies

7.2 Cloud computing

7.2.1 Cloud computing benefits

7.2.2 Characteristics of cloud computing

7.3 Virtualization

7.3.1 Benefits of virtualization

7.4 Automation

7.4.1 Benefits of automation

7.5 Big Data

7.6 Internet of Things (IoT)

7.6.1 Benefits of IoT

7.7 Mobile computing

7.7.1 Benefits of mobile computing

7.7.2 Bring Your Own Device (BYOD)

7.8 Mobile Device Management (MDM)

7.9 Serverless computing

7.9.1 Benefits of serverless computing

7.10 Artificial Intelligence (AI)

7.10.1 Benefits of AI

7.11 Robotic Process Automation (RPA)

7.11.1 Benefits of using RPA

7.12 Machine Learning

7.13 Containerization

7.14 Summary Chapter 7

7.15 Quiz questions

7.16 Assignment Chapter 7

8   GETTING STARTED WITH VERISM

8.1 Getting Started

8.2 Proactive Approach

8.2.1 Discover

8.2.2 Contain

8.2.3 Improve

8.3 Acceptance of VeriSM

8.4 Summary Chapter 8

APPENDIX A – VERISM FOUNDATION SAMPLE EXAM

A.1 Sample exam

A.2 Answer key

A.3 Evaluation

APPENDIX B – QUIZ QUESTION ANSWERS

APPENDIX C – ASSIGNMENT EXAMPLE ANSWERS

APPENDIX D – AUTO TRADER CASE STUDY

APPENDIX E – SITUATIONAL ANALYSIS OF MANAGEMENT PRACTICES

APPENDIX F – VERISM GLOSSARY

1 Introduction

▪ 1.1 OBJECTIVES

This chapter explains the purpose and use of this publication and introduces a new Service Management approach called VeriSM™.

The content of this chapter does not form part of the examinable material required by the VeriSM™ Foundation qualification syllabus, but sets the context for the study of the VeriSM™ model.

▪ 1.2 PURPOSE

This book is intended as a self-study guide for the VeriSM™ Foundation, VeriSM™ Essentials, and VeriSM™ Plus qualifications. It also supports classroom and online courses for these qualifications. It is based on the requirements of the syllabuses for these three qualifications (Certification requirements for the VeriSM™ Foundation, VeriSM™ Essentials, and VeriSM™ Plus, a publication of the IFDC International Foundation for Digital Competence).

This guide is also useful for all professionals and organizations involved in delivering value to customers through the development, delivery, operation and/or promotion of services.

VeriSM™ Foundation, VeriSM™ Essentials and VeriSM™ Plus prove to be useful to both professionals at the very start of their service management career and also to experienced professionals who wish to certify for an up-to-date service management approach. It refers to the information contained in “VeriSM™ - A service management approach for the digital age” - published by Van Haren Publishing.

▪ 1.3 VERISM™

The VeriSM approach has been developed in partnership with the global service management community to respond to the changing demands on service management and the impact of digital transformation.

VeriSM is:

■Value-driven: focuses on providing value;

■Evolving: an up-to-date approach which will continually evolve;

■Responsive: facilitates a tailored approach depending on the business situation;

■Integrated: helps you fit all the different practices together;

■Service;

■Management.

Today, many organizations and governments offer their services in a rapidly changing environment. This has created demand for highly-educated professionals with the right knowledge and skills in service management. To meet those changing demands, the International Foundation for Digital Competences (IFDC) has launched VeriSM™, a new service management approach. It’s important to remember that VeriSM™ doesn’t replace any effective ways of working that you might already have in place. Instead, it shows you how to fit these into an overall organizational context and flexibly adopt different management practices to meet different service management situations.

▪ 1.4 VERISM™ CERTIFICATION SCHEME

The VeriSM™ Foundation, VeriSM™ Essentials and VeriSM™ Plus certifications are part of the VeriSM™ qualification program. They build the fundamental skills and knowledge enabling individuals to participate in a service organization and to deliver value to the consumer.

The Foundation level can be offered in its entirety, but it has also been split up into two parts which are being offered separately as well: the VeriSM™ Essentials and the VeriSM™ Plus. The VeriSM™ Essentials focuses on the basic service management principles, where VeriSM™ Plus focuses on the progressive practices and how these relate to service management. VeriSM™ Plus is more appropriate for existing service management experts who wish to update their knowledge.

This certification scheme includes the following topics:

■ The Service Organization

■ Service Culture

■ People and organizational structure

■ The VeriSM™ model

■ Progressive practices

■ Innovative technologies

■ Getting started

The table below shows the topics and relative weight given to each topic for the three certifications.

Certification requirement

Exam specification

Weight Foundation

Weight Essentials

Weight Plus

1. The Service Organization

1.1 Organizational context

2,5%

5%

1.2 Organizational governance

2,5%

5%

1.3 Digital transformation

5%

5%

5%

2. Service culture

2.1 Service culture

5%

10%

3. People and organizational structure

3.1 Organization structure

10%

10%

15%

3.2 Service Management challenges

10%

15%

4. The VeriSM™ model

4.1 The VeriSM™ model

25%

50%

15%

4.2 Adapting the VeriSM™ model

7,5%

15%

5. Progressive practices

5.1 Progressive practices

20%

30%

6. Innovative technologies

6.1 Impact of technology

10%

15%

7. Getting started

7.1 Getting started

2,5%

5%

Total

100%

100%

100%

As a reminder in each chapter you will see these images to denote which section applies to which course:

1.4.1 Target groups

All professionals and organizations involved in delivering value to customers through the development, delivery, operation and/or promotion of services. VeriSM™ Foundation, VeriSM™ Essentials and VeriSM™ Plus prove to be useful to both professionals at the very start of their service management career and also to experienced professionals who need access to a simple service management approach.

The certifications are essential for anyone who works with products and services and will be of particular interest to:

■ Graduates and undergraduates – who will be joining organizations and who need to understand the principles of service management.

■ Everyone within a service organization, in particular:

○ Managers – who want to understand how to leverage evolving management practices;

○ Service owners and service managers – who need to bring their skills up to date and understand how service management has changed;

○ Executives – who are accountable for effective service delivery;

○ IT professionals - who need to understand the impact of evolving management practices and new technologies on their role.

▪ 1.5 VERISM™ MODEL

VeriSM™ describes a service management approach from the organizational level, looking at the end to end view rather than focusing on a single department. Based around the VeriSM™ model, it shows organizations how they can adopt a range of management practices in a flexible way to deliver the right product or service at the right time to their consumers. VeriSM™ allows a tailored approach depending upon the type of business you are in, the size of your organization, your business priorities, your organizational culture, and even the nature of the individual project or service you are working on. Rather than focusing on one prescriptive way of working, it helps organizations to respond to their consumers and deliver value with integrated service management practices. VeriSM™ shows you how to fit your current, effective ways of working into an overall organizational context and flexibly adopt different management practices to meet different service management situations.

▪ 1.6 HOW TO USE THIS STUDY GUIDE

Each chapter refers to an element in the exam specification, and provides information based on the book “VeriSM™ - A service management approach for the digital age” - published by Van Haren Publishing, sufficient to prepare the reader for examination in the subjects covered.

Each chapter has a set of quiz questions at the end, designed to measure the learning achieved during the chapter. Where appropriate, each chapter also has an assignment, to encourage further exploration of the subject areas, to enhance understanding. Answers are available in the appendices of this publication.

Each chapter shows whether it is applicable to the VeriSM™ Foundation, VeriSM™ Essentials and VeriSM™ Plus certification.

2 Service management organizations

▪ 2.1 INTRODUCTION

This chapter looks at the organizational context of service provision and introduces some key terms and definitions. It examines organizational governance, which sets the vision and policies for the organization. Finally, we will look at the challenges that are faced by organizations as a result of digital transformation.

▪ 2.2 ORGANIZATIONAL CONTEXT

We start by defining the term ‘organization’; this term is used frequently, but describes a variety of structures. Organizations may be commercial, such as companies, or they may be local or central government bodies; they may even be voluntary organizations.

We are going to begin with a definition:

An organization is “an official group of people, for example a political party, a business, a charity, or a club”.

2.2.1 Types of organization

Let’s consider some of the different types of organization covered by this definition:

■ Some commercial organizations are privately owned, these are often referred to as private sector organizations.

■ Organizations such as local councils or government departments are known as public sector organizations

■ Many organizations are focused on non-commercial activities, with a campaigning or philanthropic purpose. These are charity organizations or voluntary sector organizations. Examples include organizations to alleviate poverty, to help or raise awareness of disadvantaged people, locally, nationally or internationally, or aim to support wildlife or environmental causes.

■ Non-profit organizations may undertake commercial activities, but any profit is used to support its goals, rather than having owners or shareholders. Examples of this include many charity and voluntary organizations who raise money through commercial activities such as running shops selling donated goods, or selling goods such as clothing displaying their logo or campaign message.

■ The term ‘third sector’ is sometimes used as means of referring to non-governmental and non-profit organizations collectively.

VeriSM™ expands upon the definition of an organization; it states that every organization is a service provider to a greater or lesser extent. This means that it offers products or services to consumers. This includes both organizations which sell products, and require services to support the sales effort, and those organizations that are classed as public sector, who provide services such as garbage collection.

2.2.2 Consumers

We used the term ‘consumer’ in the previous paragraph. Other commonly used terms include ‘client’, ‘customer’ or ‘user.’

A consumer is “a person who buys things or uses services”.

As this definition makes clear, consumers may not pay for the service they receive directly, in a commercial transaction through a store or website; the payment may be indirect, such as when a citizen pays taxes, and then receives services provided by the government body which are free at the point of use.

Some organizations also differentiate between people by what they want from the service provider, and that they pay for these services if required; these people are termed ‘customers’. Those who receive the services but have little or no influence over what is provided are termed ‘users’. Another term often used is ‘client’; this refers to customers or users.

It is important to remember that it is not the act of payment that ensures influence over the service or outcome. Tax payers pay for the services they receive through their taxes, but have no direct influence over the delivery of the service (indirectly they have some influence over aspects such as the level of taxation levied, through voting for one party or another but the experience is unlikely to change, whatever the level of taxation).

VeriSM™ uses the term ‘consumer’ to cover clients, customers and users.

2.2.3 Assets and capabilities

All organizations, of whatever type, need to have assets and capabilities which it can utilize to meet its consumers’ needs.

An asset is defined as “anything that is useful or valuable within a product or service”.

Assets may be physical, such as hardware, or may include software or applications.

Capability is defined as “the ability or the qualities that are necessary to do something”.

Capability areas could include:

■ Human resources;

■ Finance;

■ Marketing;

■ Sales;

■ Customer service;

■ Information technology.

These capabilities may not be teams or departments. For example, an organization should possess a customer service capability, but this may be:

■ A department called customer service;

■ Spread across many or all departments;

■ Outsourced to a specialist supplier.

Service provider organizations should understand the capabilities they need to support their consumers’ requirements. If the capabilities they require are not present in the organization already, or are ineffective, the organization should develop or acquire the capabilities they need. Organizations which are failing to meet their customers’ needs may restructure in an attempt to improve; if the capabilities they need are not present in the organization, such restructures will be ineffective.

There has been a huge growth in the provision of digital services in recent years. Even organizations which have provided services and products for many years will now have a website through which consumers may order their products. It is important to understand that the provision of the digital service is not restricted to the IT capability; all the organizational capabilities are involved. Selling the organization’s products on a website will require input from several organizational capabilities such as customer service, sales, logistics and IT capabilities.

2.2.4 Consumer outcomes

Service providers need to understand the outcome their consumers require, and focus all their organizational capabilities to achieving this. Consumers buy goods and services for a reason, and organizations need to understand this reason to ensure that they deliver the correct outcome. For example, a supermarket chain that allows consumers to order groceries for delivery at their home realizes that consumers want this service, because they are busy and do not have the time to go grocery shopping. A well-designed service will store previous shopping lists to be re-used and remember the brands that the consumer prefers. These features will speed up the shopping experience, and offering a wide range of delivery slots will be convenient for the consumer, who will not have to arrange to be at home at an awkward time.

An outcome is defined as “the end result of a consumer interacting with a product or service”.

For the consumer to be happy with the outcome, all aspects of their experience interacting with the organization must be positive. The service or product must satisfy their requirement to be able to order online, but the ordering experience should also have been easy, the delivery on time, and the billing accurate.

Understanding the outcomes the consumers are seeking, requires the service provider organization to recognize when these needs change, and altering their services to fit the new requirement. The organization also needs to understand its position in its own environment and context. This means considering:

■Consumers: where are the consumers? What is the target demographic group?

■Competition: who competes with the organization? What advantages does the organization have over any competitors (and vice versa)?

■Structure: is the organization local, regional, national or global? Each structure provides scope and perspective for the organization.

■Consumer culture: accepted behaviors and local customs affect how a business operates.

■Laws and regulations: how do laws and regulations affect the organization? Are the organization’s products and services under scrutiny from government regulators? Is the organization required to comply with any industry standards?

■Challenges: what challenges is the organization currently facing? For example, eroding sales, loss of market share, aging product lines or production facilities. Is customer demand exceeding capacity? These aspects have an influence on an organization.

The diagram in Figure 2.1 The Organization is a Service Provider shows an organization, highlighting a number of capabilities, including IT, Human Resources and Sales. As discussed, these capabilities may be one multi-skilled team, groups of people, departments or even individuals. This diagram shows that however an organization decides to structure itself, the capabilities are focused on delivery an outcome to a consumer.

Figure 2.1 The organization is a service provider

2.2.5 Interactions between business capabilities

VeriSM™ defines the whole organization as a service provider, delivering products and services to consumers. Some services are only used internally, and will never be provided to the organization’s consumers. One such example would be an IT customer relationship management system developed for sole use by the HR department.

In recent years, the IT department has been encouraged to consider itself a service provider to the rest of the organization. In this example, it would have regarded the HR department as its customer. Although this approach has been adopted with the best of intentions, to improve the level of service provided by IT, it often created a divide between departments within the same organization. It also diverts focus away from the value delivered to the organization’s end consumers.

VeriSM™ recommends service providers see their capabilities as part of an overall organization, not as internal providers and consumers. All capabilities should work together as partners:

“A culture of communication and cooperation must exist to successfully support product or service provisioning, and for service management to be successful.”

There are hundreds of interactions, hand-offs, conversations and approvals taking place between staff, teams and departments every day. The diagram of Figure 2.2 shows one possible relationship between business capabilities, in this case HR and Sales.

2.2.6 Shadow behavior

Shadow behavior is common in many organizations.

Shadow behavior is defined as “systems, processes, solutions and decisions implemented and used inside organizations without explicit organizational approval or service delivery consideration”.

Figure 2.2 Interactions between business capabilities

This situation arises when departments source IT facilities from suppliers without consulting or possibly even informing the IT department. For example, the Sales department buys a customer Relationship Management system from an external supplier. Often IT is not aware of such systems or services acquired by other parts of the organization, but will eventually be expected to provide support for them. Without knowing what systems are in use across the organization will make impact assessments of proposed changes to be incomplete, and may even lead to changes causing these systems to fail. The business is unlikely to have made arrangements to ensure service continuity in the event of a major disruption to services, and the support staff will have no knowledge or training to enable them to support these systems.

To prevent shadow behavior, the barriers between the organization’s capabilities, encouraged by the customer and service provider mindset, need to be broken down. The organization should encourage a holistic approach to communication, collaboration and a shared mindset of quality service provisioning.

▪ 2.2 ORGANIZATIONAL GOVERNANCE

All organizations need rules and guidelines to govern how the business capabilities work together, and the parameters for their interactions. Each organizations rules, guidelines and parameters will be unique, based on the particular requirements of the organization in question. The environment in which the organization operates, its requirements and its organizational culture will all have an impact on the approach adopted.

These parameters are the governing principles. All decisions should be based on these principles, which should cascade throughout the organizational capabilities. Each capability will use its own management practices and activities, but operate within the governing principles.

Every organization has a system of governance and management. Governance provides the vision, and provides the basis for the policies which set the organization’s direction. It is the job of management to make the decisions that implement the policies, following the direction the organization has set.

2.3.1 Governance practices and principles

The diagram shows the high-level activities involved in governance. These include:

■Evaluate – Look at the current and future situation based on approved plans and proposals, respectively.

■Direct – Create and deploy strategies and policies that ensure objectives are met.

■Monitor – Ensure policies are followed (conformance) and performance against the strategies is at an acceptable level.

Governance activities will vary between organizations. Each organization has its own stakeholders, whose needs must be considered, and each is subject to its own legal or regulatory requirements. The activities must be owned at the highest level of the organization, to ensure that all capabilities treat them seriously.

Figure 2.3 Governance: Evaluate, Direct and Monitor

Typical governance practices and principles include:

■ Create and maintain the governance framework: define the structures, principles and practices based on the organization’s goals and objectives (mission/vision).

■ Define responsibilities: ensure they are understood, accepted and empowered.

■ Ensure the value proposition: link the outcomes of the products and services to the achievement of organizational objectives.

■ Optimize risks: define organizational risk tolerance and ensure it is understood, communicated and managed.

■ Optimize capabilities: ensure there are sufficient resources (people, process, technology) to support the achievement of organizational objectives.

■ Ensure conformance: check that all mandatory laws and regulations are met through organizational practices and defined policies are clear, deployed and compulsory.

■ Create stakeholder transparency: ensure the outcome of all performance and conformance activities (reporting) are effectively communicated and have stakeholder approval.

2.3.2 The governance flow

Governance needs to flow through an organization. The diagram of Figure 2.4 shows the basic governance structure of an organization; the strategic requirements from the owners cascade to a governing body and then to organizational capabilities:

■ Owners and stakeholders are accountable for the success or failure of an organization. They set the mission and vision, the expectations of performance, but delegate the authority to a governing body within the organization.

■ The governing body should involve representatives from all organizational capabilities, including senior staff. They should provide direction and approval of the activities supporting achievement of the needs and requirements of the owners and stakeholders

■ After authorization, the actions required will be assigned to the appropriate groups or teams, made up of the various organizational capabilities. (Remember these include all areas of the organization, such as HR, Finance, Sales, not just IT. The teams carry out the activities to create the required functionality, and report on the results.

Note that there is a feedback loop built into this model, to ensure accountability across the groups. The capabilities report back to the governing body, which, in turn, is accountable to the stakeholders.

2.3.3 Planning activities

The governing principles trigger the planning activities within the service provider organization, and within the individual capabilities. These activities are usually carried out annually, to guide the activities for the forthcoming year. In some situation, the requirements may be more fluid, as the organization responds to changes, necessitating more frequent planning activities.

The plans should cover the short-term, mid-term and long-term activities required for the organizational goals and objectives to be met.

Figure 2.4 The governance flow

All three levels of management planning should be included:

■ Strategic planning covers the direction of organization;

■ Tactical planning covers the ‘where and how’, typically for nine to eighteen months;

■ Operational planning covers the ‘what’, requiring individual and specific results.

▪ 2.4 DIGITAL TRANSFORMATION

The final topic of this chapter is digital transformation.

Digital transformation refers to the changes associated with the application of digital technologies across all areas of an organization, from sales to marketing, products, services and new business models

As technology moves away from data centers and into the wider organization, it is having a transformative impact on business models, the ways of interacting with consumers and the technology solutions in use. New ways of developing and managing technology are required, as services are delivered from anywhere to anywhere, and the dependence on technology becomes ever greater. These developments are termed ‘digital transformation’.

Digital transformation is “the rethinking, the reimagining of a business in more digital terms. . . It’s fundamentally looking at delivery channels, operations, marketing and sales and customer care - all business models and rethinking how that might be packaged as new digital products and services, all delivered using digital first as the way business gets done.”

Dion Hinchcliffe, expert in information technology, business strategy, and next-generation enterprises

2.4.1 The benefits of digital transformation

Digital transformation means that technology is used by all capabilities within the organization to deliver products and services. Taking advantage of technology means goods and services can be delivered more quickly, at a lower cost, and to new markets. Organizations can also be more flexible, responding faster to changing consumer needs. The move to this digital transformation results from:

■ Internal drivers where the desire to improve consumer loyalty and reduce costs can be realized by exploiting new technologies;

■ External drivers as the organization needs to operate in a market where competitors are using technical advances to revolutionize the delivery of products and services to consumers.

2.4.2 Digital disruption

The benefits that result from digital transformation are sometimes referred to as digital disruptions. This is not the same as ‘digital optimization’ which occurs when organizations use innovative technologies and methods to augment existing services. Digital disruption occurs when existing industries or ways of doing business are challenged by technology companies, newcomers or existing organizations who have developed skills in technology and are now using these skills to offer new services, or existing services in a different way.

One such example is the impact of social media on print journalism. Only those newspapers and magazines who moved to using the internet will have any chance of survival. This has meant that these organizations have had to change their relationship with their readers, with membership schemes, paywalls and other methods of retaining and monetizing their loyalty. Digital disruptors produce solutions, business models and approaches that cause a significant shift in customer behavior and market context, requiring existing players to change their strategies in reaction. Digital disruption occurs when:

■ Technology is used to radically change the operating performance of an organization.

■ Technology is used to radically extend the reach of the organization to new customers and markets.

■ Technology is used to radically seize customers or win new customers from competitors.

■ Competitors begin copying, emulating and maybe improving on the use of technologies and approaches that were undertaken by the challenger organization.

Examples of digital disruption include:

■ Enabling items bought in store, to be bought on-line instead. This has changed the way people shop, and had a very negative impact on retail organizations, many of whom have gone out of business.

■ Use of social media to raise the power of the consumer, and enable feedback to the organization directly. This has been used recently to persuade companies to stop advertising with newspapers, which are seen to be anti-refugee; the use of social media has persuaded the company to remove its adverts for fear of damaging its brand image.

■ Artificial Intelligence combined with Big Data, enabling searches on information that can change working practices.

2.4.3 The impact of digital transformation

Digital transformation is called transformation because it impacts all aspects of the organization. Every activity process, capability and model is affected. It is more than using technical advances to improve a product or service. It revolutionizes the way an organization does business. The interaction with the customer, working practices, delivery mechanisms and the product or service itself take advantage of the new capabilities that technology offers. Technological evolutions ranging from the cloud, Big Data, analytics, Artificial Intelligence, Machine Learning, mobile/mobility, the Internet of Things and more recent emerging technological realities are all driving change.