If you are a fan of the movie Office Space (and who isn’t?), then the “Cover Sheet on the TPS Report” reference is almost legend. This sub-plot to the story portrays a funny but all-too-real example of the dysfunctions of bureaucracy: the displacement of goals (Merton, 1940). A rule or process originally implemented to provide instrumental value is now done merely to provide terminal value.
Without knowing the entire back story, let’s assume the cover sheet originally had instrumental value. It could have been for identification or routing purposes; or perhaps for some other practical reason. The movie shows the overwhelming need to use the cover sheet, but the players really don’t know why. In fact, the viewer gets the impression the cover sheet is an end in itself that has no practical value. Indeed, by now the cover sheet has ceased to have the instrumental value intended. The measure of success is the mere presence of the cover sheet, not whether the cover sheet fulfilled its original purpose.
So, let’s look at a real world example. A present-day organization has implemented a training program. The instrumental value is to bring awareness to security: securing information systems and preventing unauthorized access. In an environment growing in cyber-attacks, this is critical to business continuity. At first, the metrics collected on this effort focused on the number of employees trained. This is a relative measure of the instrumental value since we will assume the more employees trained means more awareness and thus more security. This is arguable. Over time, the organization has stressed completing training “early,” that is before the required annual deadline. The organization has lost the instrumental value and has focused on the terminal value: a competition and rewards system has been put in place to foster early training. Click through the PowerPoints and check the box…. and success.
I’m not sure whether the senior leadership who is stressing this effort actually knows, or can know, the actual effectiveness of the training. Success is measured in only in the completion of training….and early. Have incidents decreased? Are employees more aware? What of those numbers? Here, the displacement of goals has led to the dysfunction of bureaucracy. The employees are aware of the training, but they may not be aware of security.
Thus, “Displacement of Goals” means turning things from what were once intended to provide instrumental value into things that merely provide terminal value. Our Information Technology (IT) Service Management Culture (or “Service Culture”) has done the same thing. We sometimes struggle to justify the business value of IT and in many cases rely on metrics related to the terminal value of our IT Enterprise rather than devote critical thought to the instrumental value we provide to the business. Too often we measure success in classic terms: time between failures, time to recovery, reducing the time to process changes, or mitigating the incidents related to change. These may be instrumental for IT, but they are terminal for the Business. In the Digital Age, we must be more concerned with IT Business alignment: being a line of business in support of organizational strategy and goals.
Notwithstanding the possible inconsistencies among business units which can be a challenge, IT should focus on the delivery of services and how those services contribute to business goals rather than measuring availability of components such as servers, networks and applications. As the use of frameworks such as the Information Technology Infrastructure Library (ITIL) have matured and grown there is now evidence that supports its benefits and value to the business. Additionally, the benefits of implementing best practices include consistent and repeatable processes for business continuity and risk management; controlling IT costs; improving internal user satisfaction; and ensuring regulatory compliance. We are now in the “post-industrial society” known as the Digital Age where the knowledge worker is becoming more important than the service worker. In the knowledge based economy, the ability to exploit and automate intangible assets, such as knowledge and business processes, has become far more decisive than simply managing static physical assets. So IT Service Management practitioners can and need to make a clear case for the business value beyond mere cost savings, improved “processes,” and component availability. The information is there. The message needs to be delivered.
So, what does that business value look like? Clearly, IT’s role as an equal partner in determining the most appropriate business strategy has increased, but business value falls generally into two categories: development and delivery of the proper IT Services to support the organizational business strategy; and more efficient and effective running of those services. Let’s look at two examples of each starting with the most tangible: efficient and effective services.
For tangible value, the following assumptions are made for an organization:
• All employees cost $50 an hour
• Your organization comprises 500 Users
• The total number of Incidents is 5,000 per year
• The average time to fix an Incident is ten minutes
• A working year has 200 days
Following the implementation of good Configuration Management, a Service Desk might have much greater insight into the relationship between users, configuration items and incidents. This organization could reduce the number of incidents, the time to repair, and even the support staff assigned to the care of the IT enterprise.
The less tangible value is showing the development and delivery of the right services at the right time to support the organizational strategy. This comes through a more business-value focus in the Digital Age. Where we might have previously focused on processes, we must now focus on business value. This shift attempts to improve the linkage between the business needs of the organization and the IT operational processes that enable them. Hence, a more strategic approach rather than a tactical approach is needed. For example, the Service Portfolio Management ITIL process is responsible for the investment IT makes in its Services across the Services’ entire lifecycle. It forces IT to answer questions like:
• Who is the customer?
• What is the market space?
• What are the opportunities that IT can support the business to exploit?
The business value here is to focus IT to think as a business partner and service provider rather than just an IT technology shop. The Digital Age Service Culture provides business value by providing the paradigm through which IT uses technology and processes as a means rather than an end. We should focus on the instrumental value of services rather than the terminal value. In this way we avoid goal displacement. IT can support and compliment (and sometimes drive) business strategy by designing and deploying the right services. The business value is being a business partner rather than merely a technology provider.
In the Digital Age the Service Culture needs to make this message clear and ensure the business understands this value and the Service Culture understands their role in providing that value.
Sources:
Doherty, P. (2009). Service Portfolio Management: Optimizing the Business Value of IT. White Paper Service Portfolio Management. Computer Associates.
Harris, M. D. & Herron, D. E. & Iwanicki, S. (2008). The business value of it: managing risks, optimizing performance and measuring results. [Books24x7 version]
Merton, R. K. (1940). Bureaucratic Structure and Personality. Social Forces, 18(4), 560-568.
Šimková, E. and Basl, F. (2006). Business value of IT. Systems Integration.
The benefits of ITIL, (2008). Pink Elephant
What is IT-business alignment? (2012). Pink Elephant
About the Author:
Chief Scientist & Institute Fellow
Dr. Frank Granito is Chief Scientist and Lead Fellow at the Institute for Digital Transformation. He has over 40 years of experience in the Information Technology field and has successfully implemented IT Service Management transformation solutions for Government and Commercial clients. Dr. Granito holds a Doctor of Management from the University of Maryland University College with a thesis on Organizational Culture.
As Lead Fellow, Frank selects current transformational topics and leads the monthly discussions with all of the Institute Fellows, parts of which are available on our YouTube Show “Digital Transformation Unplugged“. In his role as Chief Scientist, Dr. Granito created the analytical model that is the basis of the Digital Enterprise Readiness Framework. He designs, creates and produces the analysis of our Rapid Research. He is also the principal author the book Digital Transformation Demystified.
In his spare time, Frank is also a Professional Chef and you can follow his culinary exploits on Instagram @pasticciogranito.
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