What does “digital” mean to service management? – A trilogy (part 1)

As we embark upon the start of a new decade, we thought it might be a good time to consider what the next few years has in store for those of us involved in service management.

In this three-part blog, Simon Dorst and Michelle Major-Goldsmith will consider all things digital and discuss the questions about the impacts of digital on traditional service management approaches.

Let’s start with a quote….

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change!”

It may or may not have been a Darwin quote, but it certainly provides food for thought for those of us experiencing significant and potentially disruptive change within the environments we live and work.

This era of the digital age is also known as the fourth industrial revolution

A quick history lesson to set the scene: The first industrial revolution took place in the 18th and 19th centuries in Europe and North America.  It was a period when mostly agrarian, rural societies became industrial and urban.

The second industrial revolution took place just before World War I.  It was a period of growth for pre-existing industries and expansion of new ones, such as steel, oil and electricity, which used electric power to create mass production.

The third industrial revolution refers to the advancement of technology from analogue electronic and mechanical devices to the digital technology available today.  The era started during the 1980s and is ongoing.

But the fourth industrial revolution builds on this digital revolution, representing new ways in which technology becomes embedded within societies and even the human body (smaller, more powerful, more ubiquitous).  The fourth industrial revolution is marked by technology breakthroughs in many fields, including robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, the Internet of Things (IoT), 3D printing, autonomous vehicles etc.

Of course, whilst most of what we hear and see focuses on the positive impact of digital, there is another conversation to be had about the contradictory nature of technological advances and the impacts associated with it, such as climate change or technological unemployment.

Whatever school of thought you hold to, one thing is certain: digitisation is having impacts on our personal and working lives and these are these cannot be ignored.

Digital is transforming businesses

The fourth industrial revolution is driving disruption across every sector.  According to the World Economic Forum, by 2022 over 60% of global GDP will be digitised.  And an estimated 70% of new value created in the economy over the next decade will be based on digitally enabled platforms .

It is believed that half of the Fortune 500 Companies will be replaced in the next decade.  And where heavyweight organisations used to spend 33 years on that list, this is forecast to drop to 14 years on average.  The challenge for organisations is to tackle inertia and ‘move with the times’.

We only have to look at the organisations that have become ‘high street’ names in recent times.  The irony is that these are not actually on the high street, they are not bricks and mortar business but truly ‘digital’:

 

Uber, the world’s largest taxi company, has no taxi’s

 

Facebook, the world’s most popular media owner, creates no content

 

Alibaba the world’s most valuable retailer, has no inventory

 

Airbnb the world’s largest accommodation provider, owns no property

These are organisations that don’t hold to the traditional way organisations in their respective markets are operating, but instead disrupt the market with a new, digital service delivery model utilising innovative new technology.

However, the technology is not the distinguishing point of difference between these successful digital disruptors and those organisation that lost their relevance (like, Kodak, Blockbuster or Nokia).  The technology is generally available to everyone, in fact it is more available as cloud-based solutions allow the capability to be within reach for small start-up organisation.

What is the differentiating factor between successfully adopting digital or languishing in oblivion, is the ability of the organisation to change their delivery model.

What about your organisation?

Let’s be fair, most of us, and the businesses we work in, are not embarking upon a digital revolution or disruption; we’re not working for start-ups that are looking to ‘overturn the applecart’.

Many of us are working in established organisations where we use the digital age and modern technologies to optimise our existing business, often by performing the same things, the same way; but just bigger, better, cheaper, faster and/or stronger.  Research tells us that this ‘digital optimisation’ is not enough…not in the long run. To truly enter the digital age, you need to transform the business of the business: doing the same thing differently!

The only constant in all of this is change, although even that isn’t constant, but with a continuous acceleration, agility and flexibility demanded.  The application of new, modern technology to change the way the business operates is at the heart of digital transformation.  However, the transformation is not only the application of the new technologies, but also the participation of other areas of the business in the design and delivery of enterprise services.  This not something the IT department can do on its own and part of the challenge here is that digital transformation, true transformation, requires a different approach.  We can’t just keep doing what we’ve been doing in the past and expect this to work differently or better this time.

This includes our approach to service management, which can no longer be an ‘IT thing’, focussing on the efficient and effective delivery of technology. Digital transformation drives a change in focus.  If focus doesn’t include all parts of the business, we will be increasingly out-of-touch with the real-world needs of the organisations and consumers we support.

Business and IT ‘alignment’ won’t help you!

The IT department has an important role to play in a digital organisation, as much of what businesses do is underpinned by technology.  But this technology is no longer limited to the IT department: for 2020, forecasters were predicting 34 billion connected devices (a threefold increase compared to 2015), including 24 billion IoT (Internet of Things) devices and 10 billion traditional computing devices.  These devices support anything from personal entertainment and home automation to different business functionalities.  It highlights the changing world we live in, as well as the integration of technology into every part of our personal life and business organisation.

Gartner has been telling us for many years that more than half of the IT-spend is spent outside of IT, i.e. directly by the other areas of the business.  The IT department in many organisations has been disengaged, perhaps due to it falling out of favour, perceived as too slow and creating barriers to change.

For the IT department to be a valuable enterprise capability once more, we must stop talking about IT alignment with the business, but instead about IT integration.  Alignment is the convergence of two lines to run in parallel but still separate from each other.  The ‘digital age’ requires us to see IT as part of the business and no longer as merely a provider.

IT must contribute to the ‘overall’, end to end consumer services, together with other parts of the business. This also means that the concept of service management needs to be expanded to include the whole business, as part of everyone’s role and not just the IT staff.

What does that mean for service management best practice…?

It is an interesting question, and one that is not easily answered.

Anyone who has been to a corporate briefing, attended any IT or service management conference or read any of the social media on the subject cannot ignore the fact that digital transformation (whether it is truly transformation or not) is on top of the CIO’s agenda.  However, the increasing level of complexity, that accompanies the fast-paced, cloud-based world of digital, requires going back to basics.  That means implementing a solid, modernised service management strategy, to make sure that digital transformation and optimisation coincides with agility, resilience, speed, operational excellence and of course, customer satisfaction.

In the next few blogs we want to look specifically at digital in the context of service management practices, and the collection of capabilities, methods and frameworks an organisation can use to plan, build, deliver and improve its services.  Many of the methods and practices we know and love were created in a different age, and whilst there have been some tweaks it has become clear that a new breed of service management is needed.  We will look at some of the recent updated or published best practices and frameworks (like ITIL® 4, SIAM™, VeriSM™, DevOps, LEAN, Agile and enterprise service management) to see what it is they offer to help arm service management practitioners with tools for this digital age.

There also needs to be a realisation that there is no ‘one ring to rule them all’, no silver bullets and thus there needs to be a way to easily merge, connect or at least interact between different practices.

Let’s see if we can respond to the digital change\challenge in order to survive!

Michelle Major-Goldsmith
Simon Dorst

About the authors

With a combined experience of over 50 years in service management, Michelle Major-Goldsmith and Simon Dorst are well known in the industry. They are Lead Architects for the Scopism Service Integration and Management Professional Body of Knowledge (BoK) and founder members of the SIAM Foundation BoK architect team, as well as Subject Matter Experts for both EXIN and BCS in developing the accreditation around this. The team was awarded Thought Leaders of the Year at the Professional Service Management Awards by the itSMF UK (in 2017). Both have been an active committee member of various service management groups and forums for many years, including the itSMF in WA. They shared the award of ITSM Thought Leader of the Year in 2018 and were both the Service Management Champion of the Year (Michelle in 2017, Simon in 2018) from itSMF Australia. Michelle was also awarded HDIs Top 25 Thought Leaders in Technical Support and Service Management for 2020.

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