So very VeriSM™…digital transformation in action!

May 28, 2018

SIAM lead architect and ITSM Zone mentor Michelle Major-Goldsmith is a VeriSM author. In this blog, Michelle shares her thoughts on one of the VeriSM case studies. You can read the full case study in the VeriSM publication, available as part of our VeriSM Foundation recommended package. If you study VeriSM online with ITSM Zone, you can work with Michelle as your course mentor as part of our Training+ virtual mentor scheme.

Real world VeriSM

During my recent planning sessions for presentations and workshops for the forthcoming itSMF Australia conference, I have become invested in looking in more depth at the VeriSM publication. There are lots of great anecdotes and real-world examples in there, but one that struck a chord for me was a case study about the transformation approach of UK based organization Auto Trader®. Their story is not an uncommon one, but what I found interesting was their timely response to what they recognized was a changing business environment. In other less timely circumstances, I am sure the story could have been a very different one.

Before I share the story, some of the key messages and how they relate to service management in a digital age… let’s go back a step and have a quick run through of what VeriSM is and what its main concepts mean.

During the latter part of 2017, there was a great deal of media frenzy around the launch of what was heralded as ‘Service Management for the Digital Age!’ - for example this VeriSM webinar from the British Computer Society.

The International Foundation for Digital Competencies (IFDC), who commissioned VeriSM, stated that service management as we know it had to change. They said that due to sweeping change in the IT/IS industry, a shift towards digital transformation and the evolution of new management practices there is need to ensure that within any organization, IT and business operations realize that they cannot afford to be separate. Organizations of every size and background require a flexible service management method to support their advancement and long-term success.

VeriSM logoVeriSM is intended to offer that new approach through:

  • Value-driven
  • Evolving
  • Responsive
  • Integrated
  • Service
  • Management

VeriSM describes how an organization can define its Service Management Principles, and then use a combination of management practices to deliver value. Rather than focusing on one prescriptive way of working, it aims to helps organizations respond to their consumers and deliver value with an integrated service management approach. This is how the Auto Trader story started: the need to move to a flexible operating model.

So back to the story…

“Auto Trader is a UK-based organisation. Started in 1977, it published a magazine of vehicles for sale. From a peak circulation of 368,000 copies per week in 2000, print sales dropped steadily until June 2013, when the organisation stopped printing magazines altogether.”

This is an important contextual piece as it explains how Auto Trader realised that a change in the way they undertook service provisioning was necessary considering the impact of digital services on their modus operandi. Not dissimilar to other organisations that went before them, some that didn’t respond and are now in demise or have ceased trading altogether. You will know the examples no doubt, consider Blockbuster, Kodak, Toys R Us… …

Auto Trader knew their operating model and strategy needed to evolve to take advantage of digital services and to create new commercial offerings. Today it is the number one online marketplace for car buyers in the UK. In addition to its individual customers, Auto Trader also provides a range of new, additional and digital services to car dealers, helping them with everything from pricing to stock acquisition.

Auto Trader had a lofty ambition: to become a world leading digital organisation. Their journey talks about an approach involving slow, steady change, developing autonomy, evolving culture and developing what they refer to as the ‘Auto Trader way’. The case study is there within the VeriSM publication for you to read and I encourage you to do so as it demonstrates the extent and reach of the transformation, and teaches vital lessons about how important it is to consider a holistic view of change and understand services, consumers, competition, technology advances and the impacts this has on keeping a company flourishing.

Let’s look in a little more detail at how the VeriSM concepts are brought to life in this example. VeriSM is built on three core pillars: Organisational Governance, Service Management Principles and a Management Mesh.

Organisational Governance

Governance is defined in VeriSM as a “system of directing and controlling”.

VeriSM talks about the need, when managing products and services, to define the parameters in which operating activities occur within an organization. Those parameters will differ from one organization to the next of course and are dictated by the environment, requirements and culture. These parameters are the governing framework, practices and activities and all decisions should be based on them. Governing principles cascade through all organizational capabilities (these are the people, the teams and the resources that sit within the organisation’s departments). Each capability defines how they operate within those principles through their own management practices and activities. Governance activities are influenced by stakeholder and organizational needs, and legal or regulatory requirements. They are owned at the highest level of the organisation (e.g. Executive Board, C-level or senior management).

In the Auto Trader example, there is no doubt that the introduction of a CEO with a digital background supported the development of the defined governance framework in which the future state of the organization was planned. Of course, governance is not ‘one size fits all’. It needs to be balanced at a suitable level for an organization and so the establishment of policies and process need to be pitched at the right level. By way of example, Auto Trader focused on ‘light’ processes, using the minimum control required. Rather than proactively anticipating problems that need to be fixed with process controls, their approach is to wait and see if a problem emerges. This would not necessarily work for every organization.

Another key element of governance is the establishment of culture and key principles that define an organizations’ preferred approach as mandated by the governors or leaders. The culture and principles story in Auto Trader tells of staff co-location and providing visibility of work through Kanban boards, monitors and posters. It also explained how enhanced autonomy and clearly defined roles were developed, created within the boundaries of the organizational governance principles. They no doubt helped to build trust between t
eams and increase collaboration and communication.

Service Management Principles

Within the VeriSM model, the principles of governance and management are executed via Service Management Principles and the deployment of the Management Mesh (I will come back to this). Service management incorporates the strategic requirements and expresses them as Service Management Principles which shape the Management Mesh and the activities of the VeriSM model. Of course, within many organizations, service management is ‘IT’s responsibility’, but in the VeriSM model, service management principles are defined at the organizational level. These principles act as the guardrails for product and service teams, allowing them to work with progressive management practices if they choose to.

Each organization develops its own Service Management Principles based on its governing principles, creating a tailored approach to service management. These principles define how the organization wants to perform and gives an indication of what it values; they state outcomes. Typical areas that these principles and their associated policies might cover include change, continuity, performance, quality, risk, regulatory requirements, security, sourcing and commercial considerations.

Within Auto Trader there was evidence of a cultural shift from more traditional approaches to developing services through the adoption of Agile and continuous delivery and deployment. The key point here is that for this to be successful, Service Management Principles need to be applied so that teams within the organization are fully aware of them. It defines the boundaries in which they need to work. These principles must be communicated across all product and service teams so that the guard rails are established and conformed to across the organisation.

Management Mesh

The Management Mesh is made up of some of the elements an organization could consider as part of its own service capability.

The elements of the mesh are grouped into four categories. The first three are:

• Resources; the elements an organization draws up on to create produces and services. Think about finances, assets, people, time, knowledge
• Emerging technologies; new technologies (for example AI, big data) that should be considered for relevance and fit
• Environment; organizations need to consider their environment as part of their Management Mesh. Think about considerations such as competitors, regulatory or legislative requirements or cultural considerations.

Understanding each element of the mesh offers benefits to the service provider and in turn, benefits to the consumer of its services. Most organizations have a good understanding of their resources and their environment. Emerging technologies can be challenging due to the pace of change.

Then there is the last Mesh category: management practices. For the purposes of this article this is my focus as it provides a method to manage and use the multitude of frameworks, standards, methodologies, management principles and philosophies that are present in today’s service management world. VeriSM encourages organizations to exploit a range of management practices; each has its own benefits, depending on the situation or requirement. Having a single focus on any one management practice may not provide the breadth or depth of control desired. Each decision within the mesh will be made based on the requirements – be sure it’s an educated decision and not one based simply on the technology or management practice that is in fashion!

Once governance requirements and Service Management Principles are defined, the Management Mesh can evolve. The Management Mesh concept provides a flexibility that is unique to VeriSM. The mesh includes the resources, environment, management practices and emerging technologies available to a service provider organization as it develops and provides products and services. The mesh allows teams to work on products and services flexibly, using their resources, developing staff capabilities enhancing cross team relationships and building autonomous product teams.

In Auto Trader, the more traditional service delivery approaches were surrendered in favour of Agile Project Management, the use of Lean approaches to process and a focus on continuous delivery. The key point here, and I am sure it isn’t lost on Auto Trader, is that this mixture isn’t static. As their business needs develop, so will their approach to delivery and other best enabling practices, or technologies or resources might need to be considered. For example, a move to working with more providers might indicate Service Integration and Management (SIAM) might be useful, bringing in an integrator to provide a single point of control. A future environmental requirement for more focused service governance and security controls (for instance GDPR) might indicate that COBIT could provide the requisite support.

Within the mesh there are also service stabilizers which look to define process, tools and metrics. In the Auto Trader story there is much talk of the establishment of effective monitoring to make sure the operational performance of its products could be understood by the whole organisation, including evolved technical decisions through automation and embracing emerging technologies. There is clear evidence here of enhancements to not just people capabilities, but organizational behavioural change.

VeriSM is an organizational change

This is an important point and any move to adopting a new way of working shouldn’t be embarked upon lightly. The Auto Trader story talks about changes to staff, evolution of culture and recognizing the importance of building cross-functional and co-located teams. Auto Trader structures its product teams into ‘squads’ and ‘tribes’, based on the Spotify model but adapted to fit the organization. Squads are commercially and technically responsible for the products they work on and operate with high autonomy and low interference. Tribes are larger groups of squads with some areas in common. Auto Trader has also worked to minimize dependencies between teams, which supports autonomous working and reduces the need for project managers and business analyst roles. The lines between operational roles and development roles have been blurred. I especially like this quote “everyone is a developer”. Operations has a defined purpose: to lead, rather than to support.

When the structural changes were first being implemented, release analysts acted as go-betweens for the development and operations teams. Over time, the need for these go-betweens reduced. Service management at Auto Trader is now largely embedded in the organisation’s product squads, rather than in a centralized service management team. This speaks to the VeriSM approach as we are all service providers and service management should be enterprise wide!

It’s so very VeriSM…

Throughout the Auto Trader story there is evidence of a focus on organizational change management, which created positive cultural changes, improved relationships, ownership and enhanced communication. This was facilitated through making sure they had the right staff who understood the big picture.

These are all key VeriSM concepts. The VeriSM way is encapsulated in their journey and it’s a glowing endorsement of what enterprise wide service management can do to enable the long-term success of an organisation. For Auto Trader, the journey from being a print organisation to a digital organisation was a huge change, but
they also recognised that big problems need to be divided into small sections to be manageable. They recognised that slow, steady change leads to the right solution.

Auto Trader is clearly building their operating model for the long term. They have developed the ‘Auto Trader Way’ to guide the development of new products, processes, strategies and services. The way is based on testing assumptions and hypotheses to validate an idea, assessing it from the perspective of customers, marketing and operations, product and technology, and business. It is, in effect, built on established organisational governance, Service Management Principles and an evolving Management Mesh. It’s just so very VeriSM!

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