2011 BSM MATURITY

BENCHMARK STUDY
Copyright © 2011, BSMReview.com
 BSM Benchmark Survey
3
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: Survey Sponsors
 How other companies are assessing the value of BSM.
 How your BSM maturity and initiatives compare to other
 What others are doing to better align business with IT.
 How others are measuring BSM effectiveness.

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.
 What people are saying?
4

“IT agility is dependent upon extreme collaboration and transparency. Tools

and process can't get in the way of getting IT service management work
Matt French
done. IT staff must be able to resolve known business problems with limited
Marketing Director
IT resources. For ServiceNow, this BSM Review maturity report highlights the Service-Now.com
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

Audrey Rasmussen seems fast enough and accurately gauging progress is a continual
Partner challenge. This BSM Maturity benchmark study provides a view of the
Ptak/Noel 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.”
 What people are saying?
5

"The survey results captured in this BSMReview report confirms the

importance of IT Service Management adoption as a means of Troy DuMoulin
focusing IT strategy on business outcomes and objectives. Specific AVP Strategic Solutions
findings reflecting that Business Service Metrics are best improved by Pink Elephant
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

Vance Brown Cherwell, we believe that technology is needed for every aspect of
CEO and Chairman business. The results of BSMreview’s 2011 survey confirms this need in
Cherwell Software 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.”
 Survey Demographics
6
Response

Title Industry Sector Company Size

25%

17% 16% 20% 16%

43%
20% 15% 23%
47%
10% 18%

Executive (CEO, CIO, VP) 5%

Director/Manager 1 to 99
0% 99 to 999
IT Operations
1000 - 4999
IT Consultants 5000+
 About the Survey Demographics
7
The BSMReview survey was able to capture a reasonable breadth and size of survey demographics. From an
BSMReview Insight

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.
 Table of Contents
8

Take Note
 Executive Summary
 BSM Maturity Assessment
We identified survey
summary data in the left  IT Investment Decisions
sidebar with  Business/IT Culture
―Response”.
 Service Level Management
Conclusions and
observations with  ITIL Adoption
―BSMReview Insight”.  Benchmark Conclusions
 Final Recommendations
Executive Summary
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.
 Survey Highlights
10
 Both Business and IT personnel agree on the high-level definition of Business Service Management, i.e. IT
BSMReview Insight

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
 A bit about the BSM Maturity Model
11
BSM Maturity Model
 Effective BSM (IT/Business alignment) Level IT Business Business Business
alignment occurs when IT is operating Maturity Maturity Benefits Metric
at a level that meets business
5 Pervasive Market Sustained Market
imperatives Leadership Competitive Expansion
 Maturity of IT Operations should move Advantage
in a consistent pattern with Business 4 Optimized Competitive Product & Market
Maturity Differentiation Service Penetration
Leadership
 An IT ―aligned‖ organization delivers
the technology/services required for 3 Aligned Business Value Customer Profit
customer focused business value that Acquisition & Maximization
Retention
ensures competitive differentiation
2 Predictive Secure & Cost Effective Revenue
 The BSM Maturity Model can be Reliable Operations Focuses
obtained by clicking here. Operations
1 Essential Business Technology Minimize IT
Fundamentals Supporting Investment
Business
 A Yardstick for Measuring BSM Maturity
12
BSMReview Insight

We derived the current state of

Business Service Management by

Leader
Not Aligned Aligned

Business Maturity
evaluating survey responses along Strategic Business Strategic
maturity continuum:
Immature IT Innovative
 Business Maturity - from
sustaining market share to
obtaining and holding the Aligned
market leader position Not Aligned

Sustain
Utility Strategic IT
 IT Maturity - from providing a Cost Efficient Immature Business
low-cost utility infrastructure to
delivering innovative technology
for strategic advantage Utility Strategic
IT Operational Maturity
 BSM Maturity – The Desired State
13
BSMReview Insight

The optimal or desired state of Business

Service Management is when IT

Leader
operational maturity is aligned with the Not Aligned Aligned

Business Maturity
maturity of the business. Strategic Business Strategic
 Good BSM alignment happens when
Immature IT Innovative
Business and IT are investing and
operating at, or near, same level of
maturity.
Aligned Not Aligned

Sustain
 Poor BSM alignment occurs when one Utility Strategic IT
or the other is operating at a higher Cost Efficient Immature Business
or lower level of operational
performance, creating costly
inefficiencies and/or missed Utility Strategic
opportunities.
IT Operational Maturity
 2011 Benchmark – The Current State
14
BSMReview Insight

2011 Benchmark – Current Reality

The degree of BSM alignment is greater

Leader
than we anticipated, but almost half of Not Aligned Aligned

Business Maturity
shops with immature IT are attempting to Strategic Business Strategic
serve needs of more mature business Immature IT Innovative
leadership.

There were only a few cases where IT was Current Reality

operating ahead of business maturity.
Aligned Not Aligned

Sustain
The current reality is that IT is playing Utility Strategic IT
catch-up with business maturity, and the fact Cost Efficient
is that businesses are maturing at faster Immature Business
rate than IT. The challenge for IT is to
maximize the pace of change and
demonstrate strategic value to the business. Utility Strategic
IT Operational Maturity
 IT is at Risk at being Marginalized
15
As a result of disconnect between current and desired state, IT is at risk of being increasingly marginalized.
BSMReview Insight

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.
BSM Maturity Assessment
In this section we converge on the definition of BSM and assess both IT and
Business maturity.
 What best describes your definition of
Business Service Management?
17

The definition of Business Service

Response

Management is gaining consensus, but BSM Definition Response

there remains a need to better define BSM to

achieve market clarity and expectations. BSM is measurable activity for aligning IT with
business objectives
34.9%

 2/3 or 66.7% defined BSM as a: BSM is a business-oriented approach to IT

31.8%
 Business-oriented approach to IT operations and deliverables
operations & deliverables
 Measurable activity for aligning IT with BSM is a (mature) process oriented approach to IT
Business objectives 17.1%
service management
 Rejected, but still existing in the industry:
 Running IT as a business (11.6%) BSM focuses on "running IT as a business entity" 11.6%
 Process approach to ITSM (17.1%)
 Managing application performance (3.9%) BSM is managing and analyzing application
3.9%
performance
 Increasing consensus that Business needs to
drive definition of BSM
18
For almost a decade, the discipline of Business Service Management (BSM) has been largely focused on
BSMReview Insight

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.
 What best describes your company’s
business goals?
19
Response

Response Options Exec IT

All groups tend to view their company’s business
(Strongly agree or agree) View View
goals as very mature - meaning the company has a
unique competitive differentiation and is a market
The company does only what is necessary to sustain
the business 55% 30% leader.
Business Maturity – Level 1
 Strong agreement that their businesses are
The company focuses on tactical operations that secure
short-term value to stockholders and employees 55% 55% operating at levels 3 & 4 (mature businesses)
Business Maturity – Level 2
 Good agreement that their business are
The company emphasizes strategic initiatives that operating at level 5 (market leader)
maximize long-term profitability and business value 82% 80%
Business Maturity - Level 3  Yet 55% of executives also feel that company is
The company focuses on creating product and service only doing what is necessary to sustain business
leadership for competitive differentiation 82% 80%
Business Maturity - Level 4  Whereas IT staff and mid-level managers
strongly disagree with this statement
The company is recognized as the market leader and
uses that unique competitive advantage to enter new 73% 67%
markets
Business Maturity - Level 5
 Are Company’s Really this Mature?
20
The consistency which all groups view the maturity of the business as ―very‖ mature was surprising. Few
BSMReview Insight

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.
 What best describes your company’s view
of Technology?
21

Large majority of employees view technology Response Options

Response

Business
IT View
as critical to company’s success - yet IT feels (Strongly agree and agree) View

much more can be done with technology to We use technology to create product and
84% 55%
enhance competitiveness service leadership in our industry

 Every role views contribution of technology in

We leverage technology to focus on
very positive way customer acquisition and retention
84% 75%

 Healthy disagreement that technology is limited

to performing basic business functions We use technology to ensure cost
91% 80%
effective operations
 Using technology as a unique competitive
advantage was agreed to by business & Our technology provides us with a
consultants (83% combined) unique, sustained competitive 83% 30%
advantage
 but disagreed by IT oriented roles (70%)
We limit the use of technology to basic
42% 67%
business functions
 How does your company recognize the
benefit from technology?
22

― … 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‖
 Conflicting Views of Technology Contribution
23
There was a strong, healthy majority of respondents that deemed technology as critical to the company’s success.
BSMReview Insight

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.
IT Investment Decisions
In this section we discuss how IT investment decisions are made and assess, to
what extent, those decisions are aligned with the business.
 What BEST describes how IT technology investment
decisions are assessed and made within your organization?
25
Response

There tends to be a strong feeling IT investments

are a collaborative effort, especially with top 38.6%
management in the company.
 Majority of Business, IT and Consultants 24.6%
(Executives and Managers) felt that IT
investment decisions were jointly sponsored by 14.0% 13.2%
IT and Line-of-Business executives and that 7.9%
CIO and CEO were working in tandem
 However, IT Staff felt IT was making IT
decisions based primarily on cost justification Sponsored Limited to Jointly CEO and CIO is
solely by IT cost sponsored CIO are trusted to
or sponsored solely by IT. justification by IT and working in make
with our CFO LOB tandem independent
executive decisions
 IT investment decisions, differing perspectives
26
Probably one of the most telling symptoms of IT/Business alignment involves how IT investment decisions are
BSMReview Insight

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.
 What are the top obstacles that your company faces in
terms of aligning business and IT investments?
27
Response

Both IT and business see poor alignment due

Lack of budget and resources
applied to creating alignment
between business and IT
Lack of business understanding of
the value of IT alignment
Lack of IT understanding of the
value of business alignment
Ineffective communication of
business strategy to IT management
team
to the general lack of understanding of the
―value of alignment‖.
50.9%
 The lack of understanding is rooted in
Ineffective Communication (47%)
53.5%
 The lack of understanding is no doubt
affecting the level of commitment
43.0%
through Budget/Resources applied to
alignment (51%)
47.4%
 BSM Immaturity Surfaces as an Obstacle
28
Certain obstacles that are frequently identified as causing a disconnect between IT and business were only
BSMReview Insight

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.
 Considering how your company makes IT financial investment
decisions, please indicate your level of agreement with the
following statements.
29
Response

Strongly agree Agree Disagree Strongly disagree

IT investment decision criteria is highly
consistent with views expressed on company 5%
5% 7%
goals – that business goals and IT investments 13% 15%
21% 23%
are focused on Maturity Levels 3 and 4 36%
 Significant disagreement (63%) that decisions 50% 47%
are focused on cost containment – particularly by
62% 55%
mid-level/staff and IT (68-78%)
42%
 Significant agreement that decisions are based 25% 18%
on revenue contribution (68%), profit margins & 5% 6% 12% 7% 5%
customer relationships (67%) – particularly by
Solely based Determined by Focused on Prioritized to Create unique
business & consultants (88-96%) on cost revenue maximizing optimize technology
containment contribution profits and market infrastructure
and cost strengthening penetration for unfair
containment customer competitive
relationship advantage
 IT Investment Decisions - Quotes
30
Best Case
Response

―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‖
 Business Goals Impact IT Investment Decisions
31
The survey identified a strong cause/effect relationship between the ―business‖ goals of the company and the
BSMReview Insight

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.
Business/IT Culture
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.
 How is business operations involved with IT?
33
48%
Response

Biz View IT View

Functions (Business and IT Operations) are fairly
43% consistent regarding business involvement with IT.
37% 38% Differences surface in roles -- with Executives feeling
34% Business more involved and IT staff feeling Business is
30% 30% 30% much less involved.

22% 22%  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%)

Business expects Business accepts Business requires Business insists Business holds IT  Yet, significant difference between IT and
IT to operate IT operational regular IT upon accountable for Business exists regarding that "business accepts
like a utility and requirements updates measurable continuous IT operational requirements and finance
has no other and finance regarding IT results within 6- business approves minimal budget."
interest in IT approves investment 12 months of IT improvement
minimal budget targets and investment through
operation results decision technology
 How is business operations involved with IT?
34
Response

“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.‖

 Better IT Communication = Better Alignment
35
There was healthy agreement that ―business holds IT accountable for continuous improvement through
BSMReview Insight

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.
 How do business and IT interact or
cooperate in your company?
36
Response
IT is trusted to do the "right" thing in
26%
leveraging technology for business benefits
Business effectively leverages IT for core
operating processes (supply chain, CRM, 30%
product innovation...)
IT has a history of success in automating 26%
business process improvements
IT is recognized for contributing to reduction
in production costs of existing products & 33%
services
Business feels IT is responsive to reasonable
30%
IT requests, not expecting IT miracles
Business does not trust IT and has minimum 19%
confidence in IT meeting business needs
Biz View
While IT feels responsive, there is definite lack of trust
25%
& cooperation between IT and Business regarding
meeting the needs of the business.
33%
 The majority of IT roles (52%) view IT as responsive to
reasonable business requests, but are not expecting
25% miracles, while just 30% of Business responses see IT as
responsive.
34%  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
52%
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
30%
 Business less supportive of all descriptions of Bus/IT
interaction …ranging from 19-30%
IT View
 How do business and IT collaborate?
37
Response

“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”
 Evidence of Collaboration is Minimal
38
Responses to this question seem to confirm the unfortunate trend that while IT is getting better and better at what
BSMReview Insight

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‖
 What is your opinion of IT operations?
39

One of the most interesting responses in the survey Strongly Agree/Agree

Response

with significant contradictions (safe vs. strategic)

and disagreements (real-time visibility & early
adopter): Is core to strategic business 70% 74%
execution
 Strong agreement (all roles, all functions):
 IT operations uses only proven, safe technologies and Is an early adopter of leading edge 36% 86%
is not an early adopter of leading edge technology technologies
 IT operations is core to strategic business execution
Provides real-time visibility into 48% 96%
 Differences surface: business impact of technology issues
 Business (96%) agree that IT provides real-time
visibility into business impact of technology issues, Uses only proven, safe technologies
while IT is less convinced (46% of IT responses) 66% 75%
that have been validated and
 Business perceives IT is an early adaptor of leading tested elsewhere
edge technologies (86%) while IT disagrees (only
36% agree) Has little to no technical strategy
(services are managed to be "good 48% 50%
enough")
IT View Biz View
 Technology Understanding is a GAP
40
This set of questions provoked some of the most interesting responses in the survey. For example, there was
BSMReview Insight

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.‖
Service Level Management
In this section we explore the impact of service performance and outages on
business operations.
 What is the level of impact of
performance and service outages?
42
Response

Business Impact IT View Business

IT and Business View View
IT and Business have different, sometimes Lost Revenues High High
opposing views on how IT service outages
and performance impact business operations Poor Customer Retention Medium High
High
Both agree on lost revenues and employee
productivity, but Increased Time-to-Market Medium Medium
Decreased Business Agility Medium High
 Business places higher impact on poor
customer retention and decreased business
agility (business issues) Employee Productivity High High

 IT Operations places higher impact on Increased Cost to Business Medium Medium

visibility by external customers (perception Operations
issues)
Visibility to External Customers High Medium
 What is the level of impact of performance
and service outages?
43
Response

Role/Title View
Business Impact Executive Mid-Level IT Staff
Opposing views surface on how IT service s
outages and performance impact business
Lost Revenues Medium High Medium
operations based on role and title.
Poor Customer Retention Low Medium Medium
All roles (Exec, Mid-level, Staff) agree that High
IT issues have highest impact on employee
productivity, but Increased Time-to-Market Low Medium Medium

 Mid-level roles tend to have greater Decreased Business Agility Low Medium Medium
awareness of IT issues on lost revenues,
customer retention, increased cost and
Employee Productivity High High High
external visibility
Increased Cost to Business Medium Medium Medium
Operations High

Visibility to External Customers Medium Medium Medium

High
 Limited Alignment of ―Business Impact‖
44
Both IT and business strongly agree that there is a high impact of IT performance and service outages on lost
BSMReview Insight

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.
 How have IT service metrics changed in
the past 12 months?
45
Response

 High consistency between IT and

Improved or Stayed the Same Business regarding how service metrics
Business View IT View have changed, with two exceptions:

95% 90% 90%

84% 80%  IT feels time between service slowdowns
77%
70% 70% 73%
60%
70% 65% 65% 66% has marginally improved (65%)
compared to optimistic view of Business
(90%) – implying slowdowns are not
visible to Business community
 Business responds optimistically (65%)
Service Time between Service Time between Number of Business staff Understanding regarding IT/Business alignment while
availability service performance service issues or satisfaction of IT/Business IT responds on average that services
outages and/or slowdowns incidents with services alignment
response times and/or reported managed by IT requirements have not improved, mostly stayed the
brownouts operations same
 Business/Executives View Metrics Improving
46
There is both good and bad news in these responses on metrics. On one hand, IT has been able to maintain
BSMReview Insight

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.
 What actions should be taken to improve
IT performance metrics?
47
Belief by all roles & functions that process
Response

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 66.3%
supported by only 29-31% of respondents
 The vast majority, 66%, of respondents
believe that IT operational metrics can be 38.4%
improved by improving service management
16.3%
processes. 29.1% 31.4%
 We believe that this indicates better
awareness and expectations of ITIL and Outsource 12.8%
service Invest in
higher adoption rates of ITIL processes service Improve
management service Invest in new
management technology Upgrade
 That is a huge change from 10 years ago, solutions management existing Don't know
processes
when the focus was largely on tools. technology
 Improving IT performance metrics - Quotes
48
Response

“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.”
 Focus on ―Process‖ to Improve Service
49
The important finding is that all roles and all functions believe strongly that implementation of service
BSMReview Insight

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.
ITIL Adoption
In this section we explore how ITIL v2 and v3 process adoption is
progressing.
 What ITIL v2 process capabilities are you
using today and planning to use?
51

No big surprise here!

Response


Implemented
 IT has largely implemented, the
core ITIL processes: 79%
66%
 Incident management 60%
54%

 Problem Management
 Service Request Management
 Change management
Incident Change Problem Service Request
Management Management Management Management
 What ITIL v2 process capabilities are you
using today and planning to use?
52
Response

ITIL V2 Planned  To a lesser extent, respondents either

40% 43% 41%
implemented or plan to implement
30%
27%
35%  Service Level Management
21% 28%
13% 25%  Configuration Management
 Release Management
 Planned for the future include:
 Capacity Management
 IT Service Continuity Management
 Availability Management
 What ITIL v3 process capabilities are you
using today and planning to use?
53
Interest (…and understanding) is maturing with ITIL V3.
Response

There seems to be a higher correlation between V3 and

Top ITIL 3 Planned improved Business/IT alignment catering to more mature
BSM levels 3-4.
35% 36% 41% 44% 49% 54%
 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
 ITIL v3 process capabilities using today
and planning to use?
54
Response

Not Planned or Don't Know Our initial surprise to this question is the
number of respondents that indicated that
62%
58% 57% they either had no plan to implement or
54%
52% 52%
48%
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.
 ITIL v2 and Adoption of ITIL v3
55
There are no surprises in responses from V2 of ITIL. The top four categories of ITIL implementations include
BSMReview Insight

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.
Conclusions and Recommendations
In this section we wrap up on the 2011 BSM Benchmark with some overall
conclusions and industry recommendations.
 Conclusions
57
 Business is maturing (moving beyond consistently ―reliable‖ to ―customer driven‖ and ―competitively
BSMReview Insight

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.
 Recommendations (part 1)
58

 Create a BSM Alignment Executive role who is measured on improving

To begin to BSM Maturity (strategic and operational alignment)
realize the  Consider integrating Business and IT liaison roles
potential of
 Benchmark both company and IT maturity to assess the current state of
BSM, we
alignment and determine next steps
recommend
 Utilize BSM Maturity Model as a assessment template
you consider
taking the  Conduct a State-of-the-Business workshop for IT
following  Ensure IT executives/mangers have a solid understanding of the company’s
business strategy, goals and competitive challenges
actions:
 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
 Recommendations (part 2)
59

 Conduct an annual ―Technology for Business Summit‖ that enlightens line-

To begin to of-business executives with what is possible from a technology/service
realize the point-of-view
potential of  Provide vision and insight into technology trends that can improve competitive
BSM, we differentiation and customer retention
recommend  Cloud computing, mobile computing, social media, etc.
you consider  Bring the consumer/customer experience into play

taking the  Develop an IT Marketing Strategy and Plan that builds a positive,
following trusted IT brand identity with the business
actions:  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
 Credits
60

Authors/Editors Sponsors
 Rick Berzle
 GoToMarket Publishing
 rberzle@bsmreview.com
 858-271-4351

 Bill Keyworth
 Editor-in-Chief, BSMReview
 bkeyworth@bsmreview.com
 949-600-6255

Copyright © 2011, BSMReview.com

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