The ROI of IT Service Management
by George Spalding, on 07-Sep-2017 17:24:00
This week, we have a guest blog post from George Spalding, Executive VP at Pink Elephant.
It’s been a year or so since my last webinar with Axios Systems. In that time, as an IT Manager, you’ve probably been working very hard in the background on implementing “stealth” ITSM. No budget. You are focused on trying to pull off an IT miracle using existing resources to create a new “Center of Excellence”. Kudos to you. Trust me, you are not alone in the universe.
You’ve now reached the point where you’ve made significant improvements in your specific area and you realize that you can’t really go any further without involving other areas of IT, and the business, on this quest for improvement. That will take buy-in. That will take commitment. That will take resources. Time, money, people and possibly new or updated automation capabilities. After all, ITSM without automation and integration will fail. So…it’s time to bite the bullet…to create a project and go for it. Timelines. Budget. Deliverables. Accountability. The whole nine yards. Project charter in hand, you move up the approval ladder. Most everyone at the executive level thinks that any improvement in IT is a good idea. Since the only time they hear about IT tends to be when things aren’t working. The CFO then asks the inevitable questions. “What is the ROI?” “How long before this project pays for itself?” Most IT Managers (and most ITSM consultants) start talking about improvements in reliability, stability and availability. They talk less about fewer incidents, faster resolution, higher availability – and more about consistency and predictability, fewer outages. Nothing wrong with all that…and really (as Stephen Colbert would say) it has the element of “truthiness”. But it’s soft and hard to prove…and that darn CFO just doesn’t get it. He wants to see the hard numbers. Over the last decade our response at Pink has always been “Tell me the cost of an outage and I’ll tell you what the ROI is.” But most organizations didn’t have an accurate number for the cost of their outages. If they were lucky they could tell you the length, breadth and impact of the outages that did occur. This is no longer acceptable. In the last few years, we’ve changed from Disaster/Recovery to Business Continuity to Continuous Computing. What was considered as acceptable service availability five years ago just won’t cut it today. Where a lack of service quality is hurting the business, there’s always ROI to be found in improving service quality. But there is another side to the ITSM ROI coin. It can also get IT to a point where it has the resource and the capability to innovate for the business. Delivering new services and automation that ultimately transform business processes. More substantial value and savings for business units. Then there are the less tangible benefits – how happy are your business users with the quality of IT support? Better support means happier business users. It’s difficult to translate into $$$s, but it can be measured, and it does have an impact. It can make getting the budget you need a lot easier when the business is happy. Recently, I came across a blog article that answered some of the questions that people frequently ask about the ROI of better support. Not in the touchy-feely, soft numbers way we are used to, but hard numbers supported by significant research from key players in the IT industry:
- Downtime costs $5600/min (Source: Ponemon)
- Average downtime per year: 87 hours (Source: Gartner)
- Average Mean Time To Repair (MTTR) – the average time taken to get a device or service back online - is 200 minutes per outage (Source: ITPI)
These are just a few of the highlights. I urge you to go to the original post and use the information to support and even enhance your ITSM initiatives.
Thanks for reading!
George Spalding, EVP, Pink Elephant