One of the things we frequently hear from individuals who attend the advanced ITIL® 4 classes such as High Velocity IT and Drive Stakeholder Value is how very different ITIL 4 is, and more specifically, how relevant it is to challenges currently facing organizations. So how can organizations leverage this guidance? They need a strategy.
More specifically, they need a set of aligned strategies that are linked to the organization’s overall objectives. According to ITIL 4® Digital and IT Strategy, this set of strategies includes:
- A business strategy – how an organization defines and achieves its purpose
- A digital strategy – a business strategy that is based all or in part on using digital technology
- An IT strategy – a technology strategy and corresponding architecture that supports the digital strategy; along with the back-office strategy and administrative elements of information technology (e.g., the data center and infrastructure)
While seemingly separate and distinct, these strategies merge in response to an organization’s growing reliance on technology. A reliance that has been amplified by the COVID-19 pandemic.
Most organizations have been adopting some form of digital technology for decades. What differentiates a digital organization is the extent to which it uses digital technology as a basis to differentiate itself. Digital organizations rely on digital technology as a fundamental component of their business and operating models.
Even before the pandemic, most organizations recognized the need to undergo a digital transformation in order to survive and grow in our increasingly digital society. According to Gartner, 69% of boards of directors accelerated their digital business initiatives in the wake of COVID-19. According to a McKinsey survey, companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by 3 to 4 years, and the share of digital or digitally enabled products in their portfolios has accelerated by 7 years.
The term digital transformation, as defined in ITIL 4® High Velocity IT, is used to indicate major investment in digitizing, robotizing and other forms of automation that enables organizations to:
- Do business significantly differently (e.g., switching to a predominantly remote model for healthcare (telemedicine) or education (online training))
- Do significantly different business (e.g., introducing new lines of business based on digital technology (e.g., amazon web services)
The term transformation is defined as dramatic or radical change. Transformation does not, however, imply a big bang adoption, although it could be based on the approach selected to achieve the change. Transformation can be achieved, and is often more successfully achieved, by making many small, continuous changes.
According to Mark Blanke, President and CEO of OwlPoint and Chairman of The CIO Initiative, business and IT leaders are narrowing in on four priorities:
- Maximizing the velocity of product development and innovation efforts
- Keeping products reliable
- Enhancing the customer experience
- Driving cost-efficiency
While the order in which these priorities are addressed will vary from one organization to next, most leaders recognize the risks they face when sacrificing one (e.g., quality or reliability) for another (e.g., speed) These leaders recognize that to undergo a successful transformation they must nurture a digital culture that embraces constant change and evolution, and that supports agility and resilience.
Admittedly, some organizations have scaled back their digital initiatives and made budget cuts in response to the global pandemic. These organizations are, for now, focused on surviving. Others, however, are taking action to make sure that when the crisis ends, they’ll be stronger than they are today.
For some organizations, the pandemic has accelerated the adoption of digital technologies across the enterprise. For these organizations, the need to change wasn’t as evident before, but the pandemic and the need to support remote workers forced the adoption. Other organizations found that they needed to transform to stay alive. For example, many small businesses such as restaurants and retail outlets had to rapidly adopt digital technologies in which they hadn’t previously invested. This was a total change in strategy brought on by the need to support digital engagement with their customers and to facilitate touchless interactions.
Regardless of their approach, it is important that all organizations identify and capture lessons learned during the pandemic, and use those lessons to reset the organization’s strategies, build resilience, and improve organizational readiness.
Given the current high levels of volatility, uncertainty, complexity, and ambiguity (VUCA),
Blanke suggests doing periodic strategy alignment reviews of the organization’s projects and programs. There is no rule that specifies how frequently these reviews occur. Rather, the frequency should match the volatility of the organization’s environment.
Creating and maintaining this set of strategies is not a one-off or annual activity. In fact, according to ITIL 4® Digital and IT Strategy, organizations that both define and review their strategies annually tend to be more reactive. This is because technological innovation and competitive disruption of industries and markets occur frequently. Strategies must, therefore, be managed within shorter cycles, taking into consideration more scenarios and strategic options than has been done in the past. Having said that, not everything has to be evaluated at once. Different levels of strategy (e.g., the enterprise vs. individual business units) usually have different review and update cycles. Strategies are supported by other strategies and subordinate strategies may be re-evaluated more frequently. The higher the strategy is in the hierarchy, the less volatile it should be. The key is to strike a balance between the time and effort needed to perform the reviews, and the time and effort needed to execute the strategy and turn the organization’s vision into reality.
Written by Donna Knapp and Mark Blanke
To learn more, consider the following ITSM Academy certification courses:
ITIL Leader: Digital and IT Strategy
ITIL Strategist: Direct, Plan and Improve
ITIL Specialist: High Velocity IT
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