2011_bsm_benchmark

2011 BSM MATURITY
BENCHMARK STUDY
Copyright © 2011, BSMReview.com

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BSM Benchmark Survey
BSMReview, a Business Service Management community of business and IT professionals, conducted a survey to
measure the maturity of BSM initiatives industry-wide. The survey provides a 2011 benchmark for the adoption,
perceptions and expectations of Business Service Management. The survey results validate the industry definition
of Business Service Management, quantify its value to the organization and provide a means for organizations to
assess the level of IT and business alignment based on market and business maturity.
Readers will learn:
How other companies are assessing the value of BSM.
How your BSM maturity and initiatives compare to others.
What others are doing to better align Business with IT.
How others are measuring BSM effectiveness.
Survey Sponsors
The survey was conducted in the second quarter of 2011. With 157 completed responses the survey represents
a good cross section of company size, industry and views from both IT and business personnel.

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What people are saying?
“IT agility is dependent upon extreme collaboration and transparency. Tools
and process can't get in the way of getting IT service management work
done. IT staff must be able to resolve known business problems with limited
IT resources. For Service-Now, this BSMReview maturity report highlights the
different kinds of business demands on IT and the resulting need for a
collaborative platform that can bridge the gap between IT and business.”
“As is typical for major transformations such as BSM, progress never
seems fast enough and accurately gauging progress is a continual
challenge. This BSM Maturity benchmark study provides a view of the
current “state of BSM”, giving BSM practitioners perspectives on their
own “state of BSM” and how it compares with other BSM initiatives, as
well as a benchmark to measure their progress.”
Matt French
Marketing Director
Service-Now.com
Audrey Rasmussen
Partner
Ptak/Noel

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What people are saying?
"The survey results captured in this BSMReview report confirms the
importance of IT Service Management adoption as a means of
focusing IT strategy on business outcomes and objectives. Specific
findings reflecting that Business Service Metrics are best improved by
the maturity of IT Management processes and ITIL adoption does
indeed point to an increased generation.”
“Today’s business initiatives cannot relegate IT as an afterthought. At
Cherwell, we believe that technology is needed for every aspect of
business. The results of BSMReview’s 2011 survey confirms this need in
the business context of “RITE” … meaning that IT decisions and
deliverables must be Relevant, Integrated, Timely and Efficient if IT is
to successfully align with their business customers.”
Troy DuMoulin
AVP Strategic Solutions
Pink Elephant
Vance Brown
CEO and Chairman
Cherwell Software

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Survey Demographics
Title
Executive (CEO, CIO, VP)
Director/Manager
IT Operations
IT Consultants
47%
20%
17% 16%
Company Size
1 to 99
99 to 999
1000 - 4999
5000+
23%
16%
43%
18%
0%
5%
10%
15%
20%
25%
Industry Sector
Response

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About the Survey Demographics
The BSMReview survey was able to capture a reasonable breadth and size of survey demographics. From an
industry perspective, there were significant participation from the financial services and technology industry
segments, as well as ―cross industry‖ which tended to be IT consultants providing services to multiple types of
companies. The survey also captured a reasonable response from manufacturing, health care, government and
education enterprises. There was only a moderate response from retail, energy and telecom industries.
However, survey responses demonstrated an unexpected consistency re: IT perceptions by both IT and the
business communities that seemed to be independent of type of industry …thus confirming the horizontal
demands for IT deliverables.
The more interesting survey results surfaced in the role (executive, manager, staff or consultants) or function (IT or
business) demographics and will be highlighted when and where appropriate. If there were noteworthy
differences in responses to specific questions, it surfaced primarily in the role or function played within the
organization. Another interesting result was the difficulty in determining the impact of size upon the responses.
We expected there to be greater harmony between IT and business perspectives within smaller companies and
less within larger enterprises. However, size seemed to have minimal impact upon the variation of opinions
regarding successful alignment between IT and their business customers, as well as in the perception of business
and IT maturity.
BSMReviewInsight

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Table of Contents
Take Note
We identified survey
summary data in the left
sidebar with
―Response”.
Conclusions and
observations with
―BSMReview Insight”.
 Executive Summary
 BSM Maturity Assessment
 IT Investment Decisions
 Business/IT Culture
 Service Level Management
 ITIL Adoption
 Benchmark Conclusions
 Final Recommendations

This is the first benchmark study to assess BSM maturity industry-wide. The
study measures and compares IT and Business maturity, extracts independent
operational views based on department, role and titles and offers insight
into the current and future state of Business Service Management.
Executive Summary

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Survey Highlights
 Both Business and IT personnel agree on the high-level definition of Business Service Management, i.e. IT
investments and capabilities are aligned with Business maturity and strategic goals.
 However perceptions and reality are not what they seem:
 Business personnel see IT as a Tactical, not operating as a strategic part of the business – operating at level 1 or 2 of the
BSM maturity model
 IT personnel see IT as Strategic, providing strategic business value to the business – operating at level 3 or 4 of the BSM
Maturity Model
 The 2011 Benchmark Study shows that businesses are maturing at a higher rate than IT and, as such, IT is
struggling to keep pace with the business
 There remains a significant ―information‖ gap between business and IT regarding how technology could, or
should, be leveraged to support business growth and competitive differentiation
 The good news is that the nearly half of enterprises have achieved pretty good alignment with their
business counterparts and are meeting expectations
 But, too many IT shops are in danger of being marginalized as the lack of investment in IT leads to less
innovation and IT services that are inadequate to satisfy the longer term needs of the business
BSMReviewInsight

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A bit about the BSM Maturity Model
 Effective BSM (IT/Business alignment)
alignment occurs when IT is operating
at a level that meets business
imperatives
 Maturity of IT Operations should move
in a consistent pattern with Business
Maturity
 An IT ―aligned‖ organization delivers
the technology/services required for
customer focused business value that
ensures competitive differentiation
 The BSM Maturity Model can be
obtained by clicking here.
Level IT
Maturity
Business
Maturity
Business
Benefits
Business
Metric
5 Pervasive Market
Leadership
Sustained
Competitive
Advantage
Market
Expansion
4 Optimized Competitive
Differentiation
Product &
Service
Leadership
Market
Penetration
3 Aligned Business Value Customer
Acquisition &
Retention
Profit
Maximization
2 Predictive Secure &
Reliable
Operations
Cost Effective
Operations
Revenue
Focuses
1 Essential Business
Fundamentals
Technology
Supporting
Business
Minimize IT
Investment
BSM Maturity Model

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A Yardstick for Measuring BSM Maturity
We derived the current state of
Business Service Management by
evaluating survey responses along
maturity continuum:
 Business Maturity - from
sustaining market share to
obtaining and holding the
market leader position
 IT Maturity - from providing a
low-cost utility infrastructure to
delivering innovative technology
for strategic advantage
BSMReviewInsight
BusinessMaturity
IT Operational Maturity
Aligned
Strategic
Innovative
Aligned
Utility
Cost Efficient
Not Aligned
Strategic IT
Immature Business
Utility Strategic
LeaderSustain
Not Aligned
Strategic Business
Immature IT

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BSM Maturity – The Desired State
The optimal or desired state of Business
Service Management is when IT
operational maturity is aligned with the
maturity of the business.
 Good BSM alignment happens when
Business and IT are investing and
operating at, or near, same level of
maturity.
 Poor BSM alignment occurs when one
or the other is operating at a higher
or lower level of operational
performance, creating costly
inefficiencies and/or missed
opportunities.
BSMReviewInsight
BusinessMaturity
Aligned
Strategic
Innovative
Aligned
Utility
Cost Efficient
Not Aligned
Strategic IT
Immature Business
Utility Strategic
LeaderSustain
Not Aligned
Strategic Business
Immature IT

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2011 Benchmark – The Current State
2011 Benchmark – Current Reality
The degree of BSM alignment is greater
than we anticipated, but almost half of
shops with immature IT are attempting to
serve needs of more mature business
leadership.
There were only a few cases where IT was
operating ahead of business maturity.
The current reality is that IT is playing
catch-up with business maturity, and the fact
is that businesses are maturing at faster
rate than IT. The challenge for IT is to
maximize the pace of change and
demonstrate strategic value to the business.
BSMReviewInsight
BusinessMaturity
Aligned
Strategic
Innovative
Aligned
Utility
Cost Efficient
Not Aligned
Strategic IT
Immature Business
Utility Strategic
LeaderSustain
Not Aligned
Strategic Business
Immature IT
Current Reality

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IT is at Risk at being Marginalized
As a result of disconnect between current and desired state, IT is at risk of being increasingly marginalized.
Probably the biggest surprise was that a large majority of the businesses were perceived as having significant
business maturity, particularly by the non-executive personnel. In spite of budget cutbacks, layoffs, loss of
consumer buying power and increasing regulatory unknowns, these respondents feel that their companies are
achieving their business goals and moving up the business maturity spectrum.
While IT personnel see themselves continually moving up the ―IT maturity‖ spectrum, business personnel maintain
in their responses that IT remains a tactical focus within their company, and are not operating as a strategic part
of the business thrust.
The survey highlights the dichotomy of business operating at an aggressive, mature ―business‖ level, while IT
struggles at an immature level of response to the technology demands of their business counterparts. The
danger in this conflict is that while IT is getting better and better at managing IT, they are in increasing danger
of being permanently marginalized on the outskirts of “business” contribution.
Interestingly, it was evident that the lower levels of IT operations are struggling to understand technology’s
contribution within the bigger ―business‖ picture, yet were consistently demonstrating a more cynical perception
of how technology was not being appropriately leveraged.
BSMReviewInsight

In this section we converge on the definition of BSM and assess both IT and
Business maturity.
BSM Maturity Assessment

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What best describes your definition of
Business Service Management?
The definition of Business Service
Management is gaining consensus, but
there remains a need to better define BSM to
achieve market clarity and expectations.
 2/3 or 66.7% defined BSM as a:
 Business-oriented approach to IT
operations & deliverables
 Measurable activity for aligning IT with
Business objectives
 Rejected, but still existing in the industry:
 Running IT as a business (11.6%)
 Process approach to ITSM (17.1%)
 Managing application performance (3.9%)
BSM Definition Response
BSM is measurable activity for aligning IT with
business objectives
34.9%
BSM is a business-oriented approach to IT
operations and deliverables
31.8%
BSM is a (mature) process oriented approach to IT
service management
17.1%
BSM focuses on "running IT as a business entity" 11.6%
BSM is managing and analyzing application
performance
3.9%
Response

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Increasing consensus that Business needs to
drive definition of BSM
For almost a decade, the discipline of Business Service Management (BSM) has been largely focused on
resolving the lack of strategic alignment between the business community and the IT organization. Vendors,
standards bodies, user organizations, and consulting houses have all attempted to capture the promise of BSM
— with notable success. Yet the existence of multiple definitions of BSM illustrates the current confusion
surrounding this IT discipline.
The statements which focused on the business driving the definition of acceptable IT service management were
the predominant responses within the BSMReview survey:
35% - ―BSM is a measureable activity for aligning IT with business objectives‖ …note the emphasis on metrics
focused on achievement of business goals
32% - ―BSM is a business-oriented approach to IT operations and deliverables‖ …note the focused approach
coming from the business perspective and not IT’s
Other definitions paled by comparison. Confining the BSM discussion to ITSM processes captured less than half
of either of the above responses. Running IT as a business was less than one third of the above responses.
Focusing BSM attention solely on application performance was one tenth of the above answers.
This growing consistency in the expectations of BSM’s contribution to IT and business working more effectively
together is a positive industry direction.
BSMReviewInsight

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What best describes your company’s
business goals?
All groups tend to view their company’s business
goals as very mature - meaning the company has a
unique competitive differentiation and is a market
leader.
Strong agreement that their businesses are
operating at levels 3 & 4 (mature businesses)
 Good agreement that their business are
operating at level 5 (market leader)
Yet 55% of executives also feel that company is
only doing what is necessary to sustain business
 Whereas IT staff and mid-level managers
strongly disagree with this statement
Response Options
(Strongly agree or agree)
Exec
View
IT
View
The company does only what is necessary to sustain
the business
Business Maturity – Level 1
55% 30%
The company focuses on tactical operations that secure
short-term value to stockholders and employees
Business Maturity – Level 2
55% 55%
The company emphasizes strategic initiatives that
maximize long-term profitability and business value
Business Maturity - Level 3
82% 80%
The company focuses on creating product and service
leadership for competitive differentiation
82% 80%
The company is recognized as the market leader and
uses that unique competitive advantage to enter new
markets
73% 67%
Response

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Are Company’s Really this Mature?
The consistency which all groups view the maturity of the business as ―very‖ mature was surprising. Few
respondents felt that the primary business objective was to focus on ensuring the business was secure and reliable
and delivering the short term value (profit) most prized by stockholders and employees. Yet almost 9 out of 10
respondents felt that their company was ―focused on creating product and service leadership for unique
competitive differentiation‖ or ―emphasized strategic initiatives that maximize long-term profitability and
business value through customer emphasis.‖ Even more surprising, 7 out of 10 identified their company as market
leaders with a competitive advantage that could not be replicated and provided unique entrees into new
markets.
Given the state of the economy, the need to retrench, to ensure cost-effectiveness and still preserve revenue
options, this strategic, mature state of the business was a welcomed finding. However, one interesting
contradiction involved nearly 60% of executives and business respondents stating that the company was only
doing what was necessary to sustain the business, which would negate unique competitive differentiation and
market leadership.
Even more interesting was the finding that nearly 70% of IT staff and mid-level managers completely disagreed
with the ―only doing what was necessary‖ statement … implying a more correct understanding that you can’t
have it both ways. A company cannot be constrained to doing only what was necessary to sustain the business,
yet characterize that same business as a market leader with a unique competitive advantage that could not be
replicated by any other business competitor. It was intriguing to find that the IT worker bees ―got‖ that
contradiction and the executives and business respondents did not.
BSMReviewInsight

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What best describes your company’s view
of Technology?
Large majority of employees view technology
as critical to company’s success - yet IT feels
much more can be done with technology to
enhance competitiveness
Every role views contribution of technology in very
positive way
Healthy disagreement that technology is limited to
performing basic business functions
Using technology as a unique competitive
advantage was agreed to by business & consultants
(83% combined)
 but disagreed by IT oriented roles (70%)
Response Options
(Strongly agree and agree)
Business
View
IT View
We use technology to create product and
service leadership in our industry
84% 55%
We leverage technology to focus on
customer acquisition and retention
84% 75%
We use technology to ensure cost
effective operations
91% 80%
Our technology provides us with a
unique, sustained competitive
advantage
83% 30%
We limit the use of technology to basic
business functions
42% 67%
Response

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How does your company recognize the
benefit from technology?
― … is a key component to delivering quality with speed to market‖
―… allows us to provide exceptional patient care‖
―… enables top line revenue growth and margin improvement‖
―… improved finding of Oil & Gas and the development of these assets‖
―… reduced operational costs and customer satisfaction‖
―We are a technology center …technology is our livelihood‖

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Conflicting Views of Technology Contribution
There was a strong, healthy majority of respondents that deemed technology as critical to the company’s success.
However, there were significant differences between the business and IT people regarding the best or correct
view of technology’s contribution. For example, 83% of business respondents agreed that technology provided
the company ―with a unique, sustained competitive advantage‖ while only 30% of the IT respondents felt that
way. A second example involved 84% of business agreeing that technology was used by their company ―to
create product and service leadership in our industry‖ while only a slight majority (55%) of IT felt that way.
Why would there be such a difference in their viewpoints?
Yet, the percentages were swapped for the statement that the company ―limits the use of technology to basic
business functions‖ with only 42% of business agreeing while a much larger percentage (67%) of IT expressed
stronger agreement. Again, why this discrepancy between the two camps?
Apparently business personnel grasps the impact technology has upon competitive advantage and
product/service leadership where that perspective is only available to a smaller subset of the IT organization.
However, the reverse disparity between business and IT regarding ―limiting technology to only basic functions‖
implies that IT has a better grasp on the opportunity that technology brings to the corporate objectives and
nearly two-thirds of IT are responding that technology’s contribution to business value is mismanaged or
misunderstood.
BSMReviewInsight

In this section we discuss how IT investment decisions are made and assess, to
what extent, those decisions are aligned with the business.
IT Investment Decisions

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What BEST describes how IT technology investment
decisions are assessed and made within your organization?
There tends to be a strong feeling IT investments
are a collaborative effort, especially with top
management in the company.
 Majority of Business, IT and Consultants
(Executives and Managers) felt that IT
investment decisions were jointly sponsored by
IT and Line-of-Business executives and that
CIO and CEO were working in tandem
 However, IT Staff felt IT was making IT
decisions based primarily on cost justification
or sponsored solely by IT.
Sponsored
solely by IT
Limited to
cost
justification
with our CFO
Jointly
sponsored
by IT and
LOB
executive
CEO and
CIO are
working in
tandem
CIO is
trusted to
make
independent
decisions
7.9%
14.0%
38.6%
24.6%
13.2%
Response

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IT investment decisions, differing perspectives
Probably one of the most telling symptoms of IT/Business alignment involves how IT investment decisions are
made and by whom. Identifying annual budgets for IT operations, approving IT projects, and maintaining
adequate IT staff required to ―do‖ the job … all whisper the true agreement or disagreement between IT and
their business customers. If IT projects are continually turned down and IT is expected to work miracles in
keeping legacy systems performing while constantly investing in new, mission-critical applications without
adequate funding, then there is no adequate IT/business alignment.
In this case, there was generous agreement between all functions (business, IT, system consultants) that IT and
Business were jointly making IT investment decisions and that the CIO and CEO were working toward common
goals. The disparity surfaced in the roles that individuals played within the enterprise -- 82% of mid-level
managers and 63% of executives (…healthy majorities) supported this perception of harmony in IT investment
decisions. Yet only a minority (45%) of IT was able to support such claims with the same minority (45%) feeling
that IT investment decisions were based primarily on cost justification. Again, the obvious conclusion is that IT
staff is not getting the business insight or cooperative perspective that is shared at the management level and IT
staff therefore cannot be expected to share in the apparent optimism of the management group. We conclude
that this is a management communication issue that can easily be addressed.
BSMReviewInsight

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What are the top obstacles that your company faces in
terms of aligning business and IT investments?
Both IT and business see poor alignment due
to the general lack of understanding of the
―value of alignment‖.
The lack of understanding is rooted in
Ineffective Communication (47%)
The lack of understanding is no doubt
affecting the level of commitment through
Budget/Resources applied to alignment
(51%)
Ineffective communication of
business strategy to IT management
team
Lack of IT understanding of the
value of business alignment
Lack of business understanding of
the value of IT alignment
Lack of budget and resources
applied to creating alignment
between business and IT
47.4%
43.0%
53.5%
50.9%
Response

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BSM Immaturity Surfaces as an Obstacle
Certain obstacles that are frequently identified as causing a disconnect between IT and business were only
selected by a small minority of the respondents. These include:
IT making budget/investment decisions in a vacuum (17%)
Business units making their own technology decisions (26%)
Business receiving weak support from IT executives/staff (17%)
However, the survey responses clearly identified the ―lack of understanding‖ of the value of IT alignment by the
business or the value of business alignment by IT. Almost half of all respondents identified ineffective
communication of the business strategy to the IT management team as a primary cause of this lack of
understanding.
Just over half of all respondents also identified the ―lack of budget and resources‖ being applied to improving
alignment between business and IT.
Unfortunately implying that corporate decision makers were not recognizing the need to plan and invest in
improving business/IT alignment.
BSMReviewInsight

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Considering how your company makes IT financial investment
decisions, please indicate your level of agreement with the
following statements.
IT investment decision criteria is highly
consistent with views expressed on company
goals – that business goals and IT investments
are focused on Maturity Levels 3 and 4
Significant disagreement (63%) that decisions are
focused on cost containment – particularly by mid-
level/staff and IT (68-78%)
Significant agreement that decisions are based on
revenue contribution (68%), profit margins &
customer relationships (67%) – particularly by
business & consultants (88-96%)
Solely based
on cost
containment
Determined by
revenue
contribution
and cost
containment
Focused on
maximizing
profits and
strengthening
customer
relationship
Prioritized to
optimize
market
penetration
Create unique
technology
infrastructure
for unfair
competitive
advantage
5% 6% 12% 7% 5%
25%
62% 55%
42%
18%
50%
21% 23%
36%
47%
13%
5% 5% 7%
15%
Strongly agree Agree Disagree Strongly disagree
Response

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IT Investment Decisions - Quotes
Best Case
―IT investments are determined by added value, effectiveness
and efficiency of the business‖
Typical Case
―Investments build a global infrastructure and product set that
should improve efficiency and drive business‖
Worst Case
―IT investments are always reactionary‖
Response

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Business Goals Impact IT Investment Decisions
The survey identified a strong cause/effect relationship between the ―business‖ goals of the company and the
resulting IT investment decisions. Those companies that had strong identification earlier in the survey questions
for business goals of long-term profitability and business value as defined by customers (Level 3 Business
Maturity) or product/service leadership and competitive differentiation (Level 4 Business Maturity) ...expressed
significant agreement that IT investment decisions were based on revenue, profits and customer relationships (77-
83%), particularly by business and consultants (88-96%). To a lesser extent, there was also healthy
disagreement (63%) that IT decisions were focused on cost containment (Level 1 and 2 Business Maturity). This
disagreement was particularly expressed by those most affected by the IT investment decisions …namely mid-
level IT management and IT staff.
Fortunately, the consistency between the cause (business goals) and the effect (IT investment decisions) provided
good validation of the earlier assessment of what was driving the business agenda of companies surveyed
…meaning that individuals within IT are gaining a better understanding of the impact of IT on the business, even
if the company’s behavior frequently did not follow through with that increased understanding.
BSMReviewInsight

In this section we explore how business and IT work toward an alignment
and uncover some interesting perceptions of IT based on role and title.
Business/IT Culture

33
How is business operations involved with IT?
Functions (Business and IT Operations) are fairly
consistent regarding business involvement with IT.
Differences surface in roles -- with Executives feeling
Business more involved and IT staff feeling Business is
much less involved.
Significant agreement (all roles & all functions) that
―business holds IT accountable for continuous business
improvement though technology‖
 Exec (41%), Mid-level (39%), Staff (53%)
 Business (48%), IT Ops (43%)
Yet, significant difference between IT and Business
exists regarding that "business accepts IT operational
requirements and finance approves minimal
budget."
Business expects
IT to operate
like a utility and
has no other
interest in IT
Business accepts
IT operational
requirements
and finance
approves
minimal budget
Business requires
regular IT
updates
regarding IT
investment
targets and
operation results
Business insists
upon
measurable
results within 6-
12 months of IT
investment
decision
Business holds IT
accountable for
continuous
business
improvement
through
technology
30%
22%
30% 30%
48%
34%
37% 38%
22%
43%Biz View IT View
Response

34
How is business operations involved with IT?
“Business expects IT to add value, but IT seems to be interested in
protecting turf. IT accepts little responsibility for anything.”
“Depends on Business Unit, some just want a utility and others want
active participation.”
―Business evaluates impact of IT as a service differentiator.‖
Response

35
Better IT Communication = Better Alignment
There was healthy agreement that ―business holds IT accountable for continuous improvement through
technology.‖ Disagreement with that statement is almost like disagreeing with motherhood and apple pie.
However, the more interesting part of the survey results identified the disparity between IT executives and IT
staff on the statement ―business expects IT to operate like a utility and has no other interest in IT‖.
The executives, who have the better connections with their business counterparts, disagree with this statement
88% of the time, whereas IT staff, who have the least common connections with the business, disagree only 44%
of the time.
The resultant conclusion is that while the business feels their issues and requirements are being heard by IT
executives, this communication is not being passed down to the worker-bees … thereby not empowering them to
alter behavior as they interact and serve their customer base.
The issue here is not the business’s communication to IT, but IT executive’s communication to IT staff.
BSMReviewInsight

36
How do business and IT interact or
cooperate in your company?
While IT feels responsive, there is definite lack of trust
& cooperation between IT and Business regarding
meeting the needs of the business.
The majority of IT roles (52%) view IT as responsive to
reasonable business requests, but are not expecting miracles,
while just 30% of Business responses see IT as responsive.
Generally the scores reflect the lack of trust and cooperation
between IT and Business
 Roughly only 25% feel that IT can be trusted to do
the right thing in leveraging technology for business
benefits, and feel that Business does not trust IT and
has minimum confidence in IT meeting Business needs
 Business less supportive of all descriptions of Bus/IT
interaction …ranging from 19-30%
Response
Business does not trust IT and has minimum
confidence in IT meeting business needs
Business feels IT is responsive to reasonable
IT requests, not expecting IT miracles
IT is recognized for contributing to reduction
in production costs of existing products &
services
IT has a history of success in automating
business process improvements
Business effectively leverages IT for core
operating processes (supply chain, CRM,
product innovation...)
IT is trusted to do the "right" thing in
leveraging technology for business benefits
19%
30%
33%
26%
30%
26%
30%
52%
34%
25%
33%
25%
Biz View IT View

37
“IT has a history of not delivering on time or on budget & when on-time,
functionality doesn’t work”
“The business submits work requests, IT determines required and available
resources, and business prioritizes projects”
“We are a large organization, so trust is higher in some areas than others.
Executive level is NOT yet supportive of a single approach or point of view”
“Business is beginning to participate in governance activities to prioritize IT
projects”
How do business and IT collaborate?
Response

38
Evidence of Collaboration is Minimal
Responses to this question seem to confirm the unfortunate trend that while IT is getting better and better at what
they do …and are recognized for their responsiveness, the value of their business contribution is becoming
increasingly marginalized. This set of questions focused on how business and IT were actually collaborating. Yet
some of the lowest scores on the survey were in response to some descriptions of how business & IT collaborates.
There was minimal agreement that ―business trusts IT and has confidence in IT meeting business needs‖. Yet in a
similar question with the statement reversed, there was only minimal agreement that ―IT is trusted to do the right
thing in leveraging technology for business benefits‖.
The only plausible explanation for the contradiction is that business really doesn’t trust IT to meet business needs,
but they do trust IT to leverage the use of technology, which a much more restrictive contribution from an IT point
of view.
Other examples of IT not being effective in their collaborative behavior include:
―Business feels IT is responsive to reasonable requests‖ achieved fair agreement with most roles, but business
respondents did not support this premise with 70% disagreeing.
Minimal agreement with the following statements:
 ―IT has a history of success in automating business process improvements‖
 ―IT is recognized for contributing to reduction in production costs‖
 ―Business effectively leverages IT for core operating processes‖
BSMReviewInsight

39
What is your opinion of IT operations?
One of the most interesting responses in the survey
with significant contradictions (safe vs. strategic)
and disagreements (real-time visibility & early
adopter):
 Strong agreement (all roles, all functions):
 IT operations uses only proven, safe technologies and
is not an early adopter of leading edge technology
 IT operations is core to strategic business execution
 Differences surface:
 Business (96%) agree that IT provides real-time
visibility into business impact of technology issues,
while IT is less convinced (46% of IT responses)
 Business perceives IT is an early adaptor of leading
edge technologies (86%) while IT disagrees (only
36% agree)
Response
Has little to no technical strategy
(services are managed to be "good
enough")
Uses only proven, safe technologies
that have been validated and
tested elsewhere
Provides real-time visibility into
business impact of technology issues
Is an early adopter of leading edge
technologies
Is core to strategic business
execution
48%
66%
48%
36%
70%
50%
75%
96%
86%
74%
Strongly Agree/Agree
IT View Biz View

40
Technology Understanding is a GAP
This set of questions provoked some of the most interesting responses in the survey. For example, there was
strong agreement that ―IT operations uses only proven, safe technologies‖ and is not an early adopter of
leading edge technology. However, there was also strong agreement that ―IT operations is core to strategic
business execution.‖ It seems an anomaly that IT uses only safe technologies and can still be ―strategic‖
(…implying long-term vision) to business execution.
The disagreement between IT and business respondents regarding how IT ―provides real time visibility into
business impact of technology issues‖ serves to highlight how the various roles in the company affects their point
of view. In this case, executives agree with this premise most of the time whereas mid-level IT management and IT
staff don’t see it that way. Apparently IT is delivering real time visibility to business impact …but only the
executives seem to see it, as it is somewhat invisible to the mid-level and staff positions.
There was some disagreement regarding IT being ―an early adopter of leading edge technologies.‖ The
business perspective has strong agreement with this statement while IT staff largely disagrees. Implication being
that IT staff have a better grasp of what is considered leading edge technologies and executives operate under
older, different definitions of what constitutes ―leading edge.‖
BSMReviewInsight

In this section we explore the impact of service performance and outages on
business operations.
Service Level Management

42
What is the level of impact of
performance and service outages?
IT and Business View
IT and Business have different, sometimes
opposing views on how IT service outages
and performance impact business operations
Both agree on lost revenues and employee
productivity, but
 Business places higher impact on poor
customer retention and decreased business
agility (business issues)
 IT Operations places higher impact on
visibility by external customers (perception
issues)
Business Impact IT View Business
View
Lost Revenues High High
Poor Customer Retention Medium
High
High
Increased Time-to-Market Medium Medium
Decreased Business Agility Medium High
Employee Productivity High High
Increased Cost to Business
Operations
Medium Medium
Visibility to External Customers High Medium
Response

43
What is the level of impact of performance
and service outages?
Business Impact Executive
s
Mid-Level IT Staff
Lost Revenues Medium High Medium
Poor Customer Retention Low Medium
High
Medium
Increased Time-to-Market Low Medium Medium
Decreased Business Agility Low Medium Medium
Employee Productivity High High High
Increased Cost to Business
Operations
Medium Medium
High
Medium
Visibility to External Customers Medium Medium
High
Medium
Role/Title View
Opposing views surface on how IT service
outages and performance impact business
operations based on role and title.
All roles (Exec, Mid-level, Staff) agree that
IT issues have highest impact on employee
productivity, but
 Mid-level roles tend to have greater
awareness of IT issues on lost revenues,
customer retention, increased cost and
external visibility
Response

44
Limited Alignment of ―Business Impact‖
Both IT and business strongly agree that there is a high impact of IT performance and service outages on lost
revenues and employee productivity. Agreement is a nice thing. However, business places a higher impact of IT
performance and service outages on poor customer retention and decreased business agility. IT places a higher
impact on visibility to external customers. The implication might be that IT understands there is a negative impact
to external customers not being able to interface to the company …but business carries that loss of external
visibility to the business issues of retaining existing customers and in maintaining business agility …issues that IT
might have difficulty comprehending.
In moving to differences as expressed by role within the company (…executive vs. mid-level vs. staff), a even
greater disparity surfaces. For example, there is widespread agreement among all roles that there is a high
impact to employee productivity from IT performance and service outages …that being the only high impact
assessed by IT staff (?). Conversely, executives rated the business impact of lost revenue, poor customer
retention, increased time-to-market and decreased business agility lower than mid-level or staff personnel.
Given the dominance of those metrics within existing IT organizations, the implication might be that executives
understand the need for more business-oriented ―alignment‖ metrics sooner and more clearly than mid-level and
staff personnel.
BSMReviewInsight

45
How have IT service metrics changed in
the past 12 months?
 High consistency between IT and
Business regarding how service metrics
have changed, with two exceptions:
 IT feels time between service slowdowns
has marginally improved (65%)
compared to optimistic view of Business
(90%) – implying slowdowns are not
visible to Business community
 Business responds optimistically (65%)
regarding IT/Business alignment while
IT responds on average that services
have not improved, mostly stayed the
same
95%
84%
90% 90%
70%
80%
65%
77%
60%
70% 65%
70% 73%
66%
Service
availability
Time between
service
outages
Service
performance
and/or
response times
Time between
service
slowdowns
and/or
brownouts
Number of
issues or
incidents
reported
Business staff
satisfaction
with services
managed by IT
operations
Understanding
of IT/Business
alignment
requirements
Improved or Stayed the Same
Business View IT View
Response

46
Business/Executives View Metrics Improving
There is both good and bad news in these responses on metrics. On one hand, IT has been able to maintain
good service and support during one of the worst economic downturns in history … or IT is doing more with less.
On the other hand, IT has not made significant improvements from the BSM perspective of IT moving to higher
levels of business maturity -- where typical IT performance metrics have yet to be replanted with business
oriented IT metrics.
Business perceives a healthy improvement for Service Availability and Service Performance metric, and IT
confirmed Service Availability as reasonably improved.
Executives viewed Service Availability, Service Performance and Business Staff Satisfaction as experiencing
healthy improvement in the last 12 months. However, IT Staff was not nearly as positive. Interestingly, IT staff
felt metrics declined only 7-8% of the time …the lowest of any group.
Those responsible for tracking the metrics have a more restrictive view of how these metrics might have changed
for the better. The result of the business and executive assessment indicates a more positive perception exists …
or they don’t care about the metrics identified.
BSMReviewInsight

47
What actions should be taken to improve
IT performance metrics?
Belief by all roles & functions that process
improvement is the best way to improve service
metrics which supports continued industry focus
on ITIL best practices.
 Investments in new solutions or technology, or
upgrades of existing technology is
supported by only 29-31% of respondents
 The vast majority, 66%, of respondents
believe that IT operational metrics can be
improved by improving service management
processes.
 We believe that this indicates better
awareness and expectations of ITIL and
higher adoption rates of ITIL processes
 That is a huge change from 10 years ago,
when the focus was largely on tools.
Outsource
service
management
Invest in
service
management
solutions
Improve
service
management
processes
Invest in new
technology Upgrade
existing
technology
Don't know
16.3%
38.4%
66.3%
29.1% 31.4%
12.8%
Response

48
“Find better ways to leverage existing technology”
“The things that declined are good things”
“Need to hold staff accountable”
“Meetings and more meetings … but nobody with the guts to truly
change.”
“We’re implementing an improved ITSM toolkit and plan to soon
have metrics available.”
Improving IT performance metrics - Quotes
Response

49
Focus on ―Process‖ to Improve Service
The important finding is that all roles and all functions believe strongly that implementation of service
management process is the best way to improve IT performance metrics (66%). This is a huge and significant
change from 10 years ago when a tool or technology was expected to resolve all service management issues. It
is a good change. The highest score on process (72%) came from mid-level managers. This is an important
endorsement of ITIL best practices …but possibly not ITIL implementation projects as evidenced by the lowest
process scores coming from business (56%) and IT staff (58%). The business is seeing the length of ITIL project
implementation impeding responsiveness to their business needs, and the staff is seeing the diversion of resources
from high priority tasks.
The minimal willingness to outsource (16% of respondents) to improve metrics identifies a critical, yet-to-be-
resolved impact on cloud service providers. This implies an unwillingness or inability to hand off portions of IT
service management to an outsourcer … not from the perspective of reduced cost and faster provisioning
offered by Infrastructure-as-a-Service providers, but from the perspective of managing cloud services to satisfy
business objectives.
BSMReviewInsight

In this section we explore how ITIL v2 and v3 process adoption is
progressing.
ITIL Adoption

51
What ITIL v2 process capabilities are you
using today and planning to use?
 No big surprise here!
 IT has largely implemented, the
core ITIL processes:
 Incident management
 Problem Management
 Service Request Management
 Change management
Incident
Management
Change
Management
Problem
Management
Service Request
Management
79%
66%
60%
54%
Implemented
Response

52
 To a lesser extent, respondents either
implemented or plan to implement
 Service Level Management
 Configuration Management
 Release Management
 Planned for the future include:
 Capacity Management
 IT Service Continuity Management
 Availability Management
30%
13%
27%
21%
40% 43%
41%
35%
28%
25%
ITIL V2 Planned
Response

53
Interest (…and understanding) is maturing with ITIL V3.
There seems to be a higher correlation between V3 and
improved Business/IT alignment catering to more mature
BSM levels 3-4.
High ―planned‖ anticipation for a few V3 categories:
 Knowledge Management
 Service Catalog
 Service Asset & Configuration Management
 Service Portfolio Management
Operation Processes were also high in ―planned‖ expectations:
 Request Fulfillment
 Event Management
 Assess Management
Healthy interest in plans for three other Processes:
 Service Management and Reporting
 Continual Service Improvement
 IT Financial Management
35% 36% 41% 44% 49% 54%
Top ITIL 3 Planned
Response

54
ITIL v3 process capabilities using today
and planning to use?
62%
58% 57%
54%
52% 52%
48%
Not Planned or Don't Know Our initial surprise to this question is the
number of respondents that indicated that
they either had no plan to implement or
didn’t know.
We see ITIL V3 is more relevant to
organizations at BSM maturity levels 3 or
higher, and most of our survey respondents
are at level 2.
Response

55
ITIL v2 and Adoption of ITIL v3
There are no surprises in responses from V2 of ITIL. The top four categories of ITIL implementations include
Incident Management, Problem Management, Service Request Management and Change Management,
confirming the maturity of IT is currently focused on secure and reliable operations for a Level 2 business
maturity achievement.
The V2 ITIL ―planned to implement‖ story is a good indication of where short-term investments are anticipated.
Configuration Management (CMDB), Service Level Management (SLA’s) and Release Management top the chart
of next set of ITIL implementations ...all topping 40% of planned investments.
Although the existing implementations of ITIL V3 processes sometimes reaches one-third of respondents, the
―planned‖ implementations tell the story of what is being considered for short term investments. The top four
include Knowledge Management – Transition (32% now & moving to 73%); Service Catalog - Design (20% now
& moving to 72%); Service Asset & Configuration – Transition (21% now & moving to 70%); and Service Portfolio
Management – Strategy (15% now & moving to 59%).
IT Management using these V3 processes are attempting to move the IT organization from Level 2 Predictive to
Level 3 Aligned and Level 4 Optimized business maturity levels in order to better satisfy the business demands
of technology.
BSMReviewInsight

In this section we wrap up on the 2011 BSM Benchmark with some overall
conclusions and industry recommendations.
Conclusions and Recommendations

57
Conclusions
 Business is maturing (moving beyond consistently ―reliable‖ to ―customer driven‖ and ―competitively
differentiated‖) at a faster rate than their IT counterparts are maturing in their ability to meet business
expectations.
 IT needs to better understand the business context in which their company is immersed and business should
better understand how technology can be leveraged for competitive advantage. The disparity between
business and IT views of business maturity and business drivers is too significant to ignore.
 Business has a more optimistic, but dated view of technology’s contribution. IT needs to create additional
focus on ―marketing‖ IT to their business customers. If IT doesn’t articulate their unique differentiation and
core value proposition, then business will continue to have inappropriate expectations of IT and will move
toward competitive alternatives like outsourcing.
 We found that respondents who had experienced some type of cross fertilization (business or IT liaison
roles) demonstrated greater awareness of the communication issues and better understanding of the value
of aligning IT investments with business objectives.
BSMReviewInsight

58
Recommendations (part 1)
To begin to
realize the
potential of
BSM, we
recommend
you consider
taking the
following
actions:
 Create a BSM Alignment Executive role who is measured on improving
BSM Maturity (strategic and operational alignment)
 Consider integrating Business and IT liaison roles
 Benchmark both company and IT maturity to assess the current state of
alignment and determine next steps
 Utilize BSM Maturity Model as a assessment template
 Conduct a State-of-the-Business workshop for IT
 Ensure IT executives/mangers have a solid understanding of the company’s
business strategy, goals and competitive challenges
 Strive to put the business in terms that IT can consume and execute on
 Select 1 or 2 specific IT initiatives that will results in near-term business value

59
Recommendations (part 2)
To begin to
realize the
potential of
BSM, we
recommend
you consider
taking the
following
actions:
 Conduct an annual ―Technology for Business Summit‖ that enlightens line-
of-business executives with what is possible from a technology/service
point-of-view
 Provide vision and insight into technology trends that can improve competitive
differentiation and customer retention
 Cloud computing, mobile computing, social media, etc.
 Bring the consumer/customer experience into play
 Develop an IT Marketing Strategy and Plan that builds a positive,
trusted IT brand identity with the business
 Be clear about who you serve, what value you uniquely offer and how you will
improve customer satisfaction, retention and loyalty
 Utilize proven marketing strategies/tactics and measure results

60
Credits
 Rick Berzle
 GoToMarket Publishing
 rberzle@bsmreview.com
 858-271-4351
 Bill Keyworth
 Editor-in-Chief, BSMReview
 bkeyworth@bsmreview.com
 949-600-6255
Authors/Editors Sponsors
Copyright © 2011, BSMReview.com

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