IT service management (ITSM) is an umbrella term for many IT efforts. And now more than ever, any expertise you have in providing services means you can become a valuable asset to any company.
IT has always been about giving users the right tools to help them to work better and faster. Today, this means you need to provide your customers with solutions that are flexible, cost effective and scalable.
The managed services model is the smart way to handle ITSM
Now that selling desktops, laptops and servers generates almost no profit, you need to find a better way to handle your business. Also, operating a break-fix business is becoming increasingly unreliable due to the exploding number of SMBs that pop-up everywhere.
This has resulted in more and more people are looking into a model called managed services. It takes the standard ITSM with billable hours, and turns it into a monthly subscription.
However, switching to managed services might not be the best path for everyone to follow. The Information Technology Infrastructure Library (ITIL) gives guidelines on how to build a solid ITSM practice. It’s a collection of 5 books that gives you an extensive look at how you can create a robust IT business model. Most of the practices detailed below are based on that approach.
Here are some interesting insights from the ITIL, plus other tips we think you’ll find helpful concerning ITSM.
7 IT service management best practices
1) Build a clear strategy
The ITIL strategy section talks about how crucial it is to understand your customers. Analyze your customer portfolio and sort customers that have similarities into groups, then you will have a clearer picture of where you should concentrate your efforts.
Here is one simple way of starting your strategy. Take each of the following categories, and rank your current customers with them in mind. You can of course add other categories that are pertinent to your business.
- Duration of the relationship
- How much monthly revenue they have brought you in the past 12 months
- The total revenue they have brought you
Then give each customer a ranking of 1-4 for each category. For example; if you have worked well with company ABC for more than 10 years, their loyalty should be recognized (give them a 1) over company XYZ that only joined you a couple of months ago (give them 4).
When you have gone through all your customers, add up their total scores and those with the lowest number are the ones you should focus your efforts and resources on. Keep in mind that loyalty should be recognized above all other indicators.
Once you have a better understanding of your customers, you need to answer these questions:
- How can we help them reach their objectives?
- How can we differentiate ourselves from our competition?
- What are our standard guidelines? (For example, closing tickets under 24h)
The answers to these questions must be easily found in your service level agreement (SLA).
2) Be transparent when discussing return on investment (ROI)
In most meetings that involve a company’s decision makers, you will discuss ROIs. And without a shadow of a doubt, almost every consultant that has stood before them has given them a sales-pitch style presentation. Their service is revolutionary, it is going to change the way they do business and make them lots and lots of money. But often, there are very few concrete figures to back up their promises.
The ITIL suggests you go in another direction entirely. You should be as transparent and realistic as possible, giving them as much detail as they want when explaining the ROI your customers can expect.
When doing this, the first thing you need to do is to make sure that the data you’re basing your analysis on is credible. If your customer asks where your data is coming from, you need to be able to back up all your figures and make it easy for them to double check the numbers. Then, be as conservative as possible when correlating benefits to your service. As nice as “increasing employees’ positive attitude about IT” it is not as tangible as “increasing billing accuracy by 95%”.
Next, focus your ROI analysis on what really matters to your customer. If they have trouble with billing, you should provide them with an ROI that gives them a solution to their specific problem. Finally, make sure that you leave no costs out of your ROI. If you forget something, it might look like you are being deliberately unclear and that can affect your customer’s satisfaction with your service.
3) Manage your portfolio
The ITIL talks about a process called Service Portfolio Management (SPM). This strategy helps consultants like you to manage resources transparently and dynamically. It creates a lifecycle for the IT services that allows you to scale resources and direct them where they are most needed.
Here’s how SPM works:
- Define the desired outcome of all your services;
- Analyze the value of the services and detail the needed resources (prioritize those that are more relevant);
- Approve the service value and importance to allocate resources.
4) Manage demand
Once you understand your portfolio, you are more equipped to answer the demands of your market. Yet actually managing it is an entirely different challenge. Demand can fluctuate through time and can lead to an uneven workload and frustration within your team. This is why we suggest you follow the 3 stages of demand management proposed by the ITIL:
- Analyze usage: Look at the amount of incidents, requests and problems to understand where you spend most of your time.
- Anticipate: Talk to your customers about their 12 months objectives (sales, operations, marketing, management, human resources) to make sure you’re prepared for any fluctuations (both positive and negative).
- Adjust: If a customer unexpectedly changes their usage of your service (for instance, excessive consumption), be prepared to make adjustments.
5) Build a customer lifecycle
Getting a customer on board with your services can be a complex process. Customers will only give you more responsibility with their IT if you have already proven yourself, and it can be difficult getting that break to prove yourself.
Having a clear lifecycle that takes into account your different product offerings and how to move customer along the cycle can result in more revenue. Here’s a way to do it:
- Break-fix Services: This is the entry point for most businesses. Something is broken and it needs fixing. While this is the least profitable, it allows you to add value quickly to a company that is in need.
- Responsive Services: Once a break-fix customer hits a target of overall money spent with your company, sell them the idea of monitoring their IT (through a Remote Monitoring and Management software). Show them how much they could save on break-fix costs if you were in a position to pinpoint potential problems before they caused any harm.
- Proactive Services: Once they hit another money target, introduce the concept of scheduled maintenance. This is closer to a subscription fee but gives them the flexibility to choose a recurrence interval that best suits them. Show how much they have already spent on repairs, and how many of these could have been avoided if you were doing maintenance on a regular, recurring basis.
- Managed Services: Once maintenance is well rooted in your customer’s processes, it’s easy to make the leap to offer them a full managed services.
There are many ways to build a managed service model, just take a look at this article to give you a sense of how you could become successful.
6) Measure service quality
To measure the quality of your services, you need to have some metrics tied to your service level agreement. The customer will evaluate your service based on how useful it is, and on the consistency of your support.
Here are the 4 questions that the ITIL views as a “perspective of quality” from the customer’s standpoint.
- How good is the service?
- Does it provide value?
- Does it meet our specifications?
- Does it meet or exceed expectations?
You can take into account one or multiple questions when assessing the quality of your service. This process helps improve operations and helps you keep up-to-date with most standards concerning customer satisfaction.
7) Implement a continual service improvement plan
Finally, finding ways to improve important areas of the services you are providing is so critical that there is a whole book in the ITIL collection dedicated to it. One of the key points is that to be of use to your customers, you need to be on top of all changes that impact their business needs in regards to IT.
You should find out from each of your customers:
- Where are they now? What are they currently doing, what results are they getting, are they where they want to be?
- Where do they what to be in 12 months? Understand their key performance indicators (KPIs) and how they are working toward them.
- What is their vision? Make sure you understand what their mid- long term goals are.
- How can we help getting them there? Once you understand where they’re going and how they are going there, provide them with a list of actions that you want to take to work with them on that objective.
- Did we help in getting them there? After sometime, take a look back at what you’ve done and how it helped.
This cycle must be done regularly with the businesses you’re working with. It will give you a precise look of what you need to do to be successful with your customers and strengthen the relationship as work like you’re part of their success.
Change takes time
Managing change is never easy. You need the right mix of strategy, operation and marketing. But there’s another thing that you should do to jumpstart ITSM in the organizations you’re working with: Get the executive board behind you. Make them understand that you are more than a consultant, you’re their business partner and extension of their team.