Csf for Itil

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ISSN 1822-6515 ISSN 1822-6515EKONOMIKA IR VADYBA: 2011. 16 ECONOMICS AND MANAGEMENT: 2011. 16

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CRITICAL SUCCESS FACTORS FOR ITIL BEST PRACTICES USAGE

Hana Neni kov Brno University of Technology, Czech Republic, [email protected]

AbstractThe objective of this paper is to find, analyze and summarize the most critical success factors (CSFs)

for implementation of ITIL (Information Technology Infrastructure Library) best practices into the managingand delivering ICT services in large companies. The fulfilment of these factors is crucial not only forsuccessful implementation of ITIL into practice, but also for its effective and efficient maintenance in case ofICT services delivery. There are several perspectives which serve to divide CSFs into several groups.Preparation of this group is a secondary objective of this paper. The criteria for group creation are prepared inthis paper from the scientific perspectives and they are supported by secondary research in the researching

journals and case studies. Also key internal business processes related to the CSFs are mentioned (based onthe secondary research). The paper specifies also the way of definition of main metrics and Key Performanceindicators (KPIs) related to the founded CSFs.

The research methodology used for this paper consists of two chosen approaches. The first approachis to provide a secondary research when academic and business journals and magazines have been used. Theinformation related to CSFs setting up has been searched and after that the method of induction has been usedto define CSFs and to split them into the separate groups. The case studies from scientific journals have beenalso used to support the general conclusion creation as an induction.

Keywords: ICEM 2011, ITIL (Information Technology Infrastructure Library), CSF (Critical SuccessFactors), IT Governance, ICT service, KPI (Key Performance Indicators).

JEL Classification : M21, M15.

Introduction

Business is supported by information and communication technology (ICT) departments as anindispensable part of value creation in large companies across the world. ICT department approach is todeliver ICT services to business and help to achieve business goals. That means ICT departments work as

business units which have their own costs and revenues. Today the management of ICT department is facingthe pressure to increase quality (and possible the quantity) of ICT services together with decreasing costs forICT services delivery. There are several useful methodologies and frameworks for ICT management toachieve the close ICT to business alignment in ICT services delivery together with cost reduction. One ofthem ITIL (Information Technology Infrastructure Library) is based on the best practices in the ICTservices delivering. There are some principles and methods described how to implement and manage ITIL.But there also should be the preconditions and boundaries set up to achieve the real success of ITILimplementation and management. This paper is focused on the critical success factors (CSFs) and theirdependencies setting up together with their sorting into several logical groups.

Critical success factors can be defined as the limited number of areas in which results, if they aresatisfactory, will ensure successful competitive performance for the organization(Thiry, 2010). Also theycould be defined as something that must happen if a process, project, plan, or ICT service is tosucceed.(Continual Service Improvement, 2007). CSFs fulfillment is necessary for maximizing value

addition to delivered ICT services. Also it is necessary for effective and efficient management of ICTdepartment. Regarding to that fact in this paper I will consider mainly two aspects of CSF related to theirvisibility for customers:

CSFs which are in close relationship with the customers side (those who are receiving ICTservices); they can be called as external. They influence the ITIL implementation andmaintenance from the perspective of relationships between ICT department and other non ICT

business units. These CSFs are related directly to value addition to ICT services. CSFs which are framed within ICT departments; they serves as a precondition of an effective ICT

management. They neednt be visible for non ICT business units, however they are necessary forICT management according to ITIL principles. These CSFs are related to a valuable managementof ICT department.

The purpose of this paper is to find an appropriate set of CSFs which is crucial for ITIL implementing

and maintenance. This set is divided into some groups to allow establishment of CSFs owners to support the
mailto:[email protected]:[email protected]


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responsibilities of keeping them. Also there is a research of the way how to define KPIs which allowmeasurement of CSFs achievement.

Objective of Critical Success factors for ITIL best practices usage analysis

A key goal of ITIL driven ICT department (no matter if the ICT is internal department or outsourced)

is a value-adding (Aitken, 2003). The objective of CSFs investigation is supported by the issues ICT mostcritically need to do most effectively in functions in order to optimize ICT services delivery. That means themain CSFs should be defined as a result of the investigation of optimizing value-added business. Thefollowing objective is to find main metrics transformed into KPIs as the essentials measurement criterianeeded for CSFs achievement auditing.

There should be organization assumptions taken into account. In this paper the CSFs are not managedwhether it is internal IT organization or the external IT organization. According to Kumbaara, 2008 eachorganization should adopt the guidelines, principles and concept of ITIL and adapt them to suit theirorganization context. Also CSFs should be adopted as implementing activities arising from the CSFsdefinition. Also according to Ko & Fink, 2010 no matter if the IT is centralized, decentralized or federal, theCSFs summarized should be adopted for all organizational types of ICT departments.

The perspectives which are taken in into account in this paper (Ko, & Fink, 2010) are built from two

following perspectives: Process perspective which means the ITIL processes aspect. This perspective is based on the

optimized functions and workflows in IT processes (both internal and external). People perspective focused on management and operational team working in ICT department

together with customers and users behavior (that means it is going on both external and internal perspective).

The objectives of this paper are to be achieved by two main research methods. The scientific papersaccessible through international databases of journals and books are researched. Outputs from these papersserve also as supporting materials for general CSFs induction. The summarized CSFs should be extended totheir main key performance indicators (KPIs) which serve as a tool for measuring and analyzing the CSFsfulfillment. Also the KPIs serve as preconditions for ITIL successful implementation and maintenance inICT services delivering area. KPIs are not identified in this paper because of their variances in commonorganizations. There are several steps and hints analyzed how to define them.

ITIL background for CSF definitions

Information Technology Infrastructure Library (ITIL) framework was coming from the UnitedKingdom Office of the Government Commerce (OGC) which released the first version in the 80s(Kumbaara, N., 2008) . Today it is the most widely accepted ICT service management standard in the world.ITIL framework consists of the best practices verified in practical use. Today, we are facing the version 3 ofITIL, which has been released in 2007. Five core ITIL books, dedicated into 5 sections of ICT service lifecycle, provide key processes required for providing integrated ICT services to customers. ITIL has beenwidely adopted by organizations in Europe and other parts of the world. Enterprises implement ITIL best

practices for many reasons, for example they are following (Kumbaara, 2008): Increase ICT predictability and efficiency Reduce support costs. Improve customer service quality Comply regulatory requirementsThere are many drivers for the popularity of ITIL for managing ICT services. Those include

(Kumbaara, 2008): The pressure to reduce cost or do more for less cost The push for end-to-end service management Introduction of Service Level Agreements (SLAs) for measuring user experience Requirement of ICT to comply with legislationsAll these reasons and drivers serves as a basis for CSF s summarizing in this paper.


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The alignment could always cause a small gap among ICT and business units which should becarefully managed (for example by Service Level Managers responsible for Service LevelAgreements among ICT department and business units as customers).The sub factor is

Relationship development containing development of trust among business units and ICTdepartment and communication management as a focal point of relationships improvement.

Performance tracking and measurement it is useful for balancing business and technicaloutcomes. The measures could include both technical (for example response time) and nontechnical (for example customer satisfaction rating) parameters. Performance tracking must beeffective by sharing the outcomes among all stakeholders.

People related: Leadership the necessity of moving from reactive cost leadership of ICT management to

proactive, strategic leadership. There should be also a dialogue between CIO (ICT director) andsenior management established.

Roles and responsibilities establishment by defining roles and responsibilities to ensureeffective execution of ITIL processes in case of ICT service delivery. The sub factor shall benamed as: Conflict management system which is based on the responsibilities for potential conflict

areas and complaints resolving. The roles of the compliance management on both businessand ICT sides must be established.

Commitment and participation strong management together with stakeholders commitmentis expected. The executive staff must be active in involvement to make decisions as well as tosupport executive activities. The commitment could consist of two perspective: Management leadership mainly in implementation phase of ITIL and in case of strategic

decisions performing and appraising Long term commitment very needed in ITIL implementation (because the implementation

can take from months to several years). Awareness and understanding to ITIL framework and ICT service delivering principle both

on the customers side and the ICT side. There must be an acceptance of ICT service principles(according to value creation of ICT services) on business and ICT side. The sub factor of this CSFis defined as: Organizational learning focused on the continual development of organizational awareness

and understanding which must be broad together with organizational awareness andunderstanding.

There shall be several internal CSFs defined like following (Aitken, 2003). These CSF are focusedmainly to value-added ICT services which can typically best be achieved by focusing ITIL practiceeffectiveness improvement on flowing areas:

Process related: Optimizing competitive advantage of ICT department - optimizing the identification of ICT

opportunities in ICT services delivery areas that will yield the business competitive advantage.

Optimizing ICT services portfolio alignment - optimizing the alignment between the producedICT services and their demand and the priority needs of the business units that they support Optimizing ICT costs alignment to benefits and risk identified in ICT area to produce ICT

services for justifiable and predicable costs together with its optimized planned portfolio. Optimizing ICT services delivery - sustaining the value-adding imperative throughout the ITIL

processes supporting the ICT services delivery. Optimizing benefits realization in project and process area by optimizing their realization

(implementation) by maximizing expected benefits.

People related:

Optimizing IT functions focusing on optimizing the strategic alignment of the IT function withthe part of ICT services it delivers (so they share common strategy goals related to ITIL and ICTservice management).


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Key Performance Indicators setting up

Once the CSFs are identified, there shall be KPIs for each CSF identified. These will enable themeasurement of the delivery of the CSFs achievement. The KPIs are essentially a measure of the CSFs; theyare also helpful for demonstrating the CSFs were achieved. One easy way to define measures for the KPIs isto identify a criterion of measure, the level that needs to be achieved and the acceptable range. There are a

few basic rules for selecting KPIs (Thiry, 2010). KPIs should be: Measurable in quantitative terms Feasible in terms of finances, equipment, skills and time Relevant and accurate to reflect what is to be measured in an accurate way Sensitive to enable identification of changes over time Timely to inform in time for effective decision-makingThe choice of the right KPIs is as essential as that of the CSFs. But the KPIs should be adapted to

actual conditions in organization. The 7s step to improvement technique based on ITIL framework (Office ofGovernment Commerce, 2007) should be applied. The most useful steps for KPIs creation are the 1 st and the2nd but for completeness below are all 7 steps mentioned. .

Step 1 Define what you should measure the metrics related to CSFs identified shall beestablished. The importance for ICT services delivering is focused. It should be driven by

business requirements (also in case of internal CSFs defined inside ICT department). Step 2 Define what you can measure because every organization may find that they have

limitations on what can be actually measured. This is a technical point because it is based on thesoftware tools already in place or to be implemented to measure the metrics. Some information forKPIs establishment is found within processes, procedure and work instructions. The tools aremerely a way to collect and provide the data.

Step 3 Gather the data consisting of the common procedures to follow in monitoring. There isa space for defining data collection requirements, frequency of monitoring and developing datacollection procedures.

Step 4 Process the data - This step converts the data into the required format and for the requiredaudience.

Step 5 Analyze the data - Data analysis transforms the information into knowledge of the eventsthat are affecting the organization.

Step 6 Present and use the information - The final stage is to take out knowledge and present it,turn it into wisdom by utilizing, reports, monitors, action plans, reviews, evaluations andopportunities.

Step 7 Implement corrective actions - requires resources to build or modify the services and/orservice management processes, potential new technology or modifications to existing technology.

The KPIs should be divided into quantitative and qualitative. According to CSFs defined there should be inducted a rule, that the process related CSFs needs to set up quantitative KPIs. They shall be focused onthe process performance, level of optimization according targeted values and statistics of monitored dataflows in processes supporting ICT services delivery. To the contrary the people related CSFs needs to set upqualitative KPIs. They shall be focused on the relationship quality, the qualitative level of business to ICTalignment and the feedback from management roles assignment. KPIs must be set internally in theorganization according to step 1 and 2 possibilities from the 7 steps to improvement method. Also metricsshall be defined in KPIs and their targeted values.

Conclusion

Critical Success Factors related to ITIL implementation and management should be set up fromseveral perspectives to cover all areas needed for the successfully ITIL driven ICT organization. Their mainobjective is to support value creation of ICT services. There are several generic CSFs which are defined inthis paper. They are usable for all types of ICT organizations but they should be adopted according to currentneeds in the department and related business units Those critical success factors which are needed forsuccessful ITIL implementation, maintenance and continuous development,should be sorted by several ways

according to secondary research and induction used in this paper. The first perspective should be filledaccording to type of ICT services delivery environment which is participated on (CSFs visibility for


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customers) internal and external CSFs. The second group of CSFs should be defined according toorganization perspective resources (people) involved and process involved (containing technology,methodology, knowledge etc.). There is no need to found or to identify CSFs from the perspective of timethey are needed for such as on the implementation project and during the maintenance (development).

All identified CSFs are summarized in following table:

Table 1. Critical success factors summarizationType of CSF

Relation of CSFExternal Internal

Right tools and techniques Optimizing competitiveadvantage of ICTdepartment

Alignment of IT and business Optimizing ICT services portfolio alignment

Optimizing ICT costsalignment

Process related

Performance tracking andmeasurement

Optimizing benefitsrealization

Leadership

Roles and responsibilitiesestablishment

Commitment and participationPeople related

Awareness and understanding

Optimizing IT functions

As it is seen in the Table 1, the external CSFs are mostly people related and the internal CSFs aremostly process related. I found the relation based on the needs inside ICT focused on assuming ITIL processimprovement and on the needs in business to ICT alignment assuming relationship and communication

among stakeholders.Identification of KPIs related to each CSF I found as not applicable in general. There are several

factors need to be taken into account when defining KPIs and metrics. After their assessment KPIs can be setup and after that measured. On the general level only the steps how to define KPIs and metrics can beidentified.

References

1. Aitken, I. (2003). Value-Driven IT Management. CFFs and CSFs for Effectiveness Improvement Programmes(Chapter 3.20). Burlington: Butterworth-Heinemann .

2. Chin, K. S., Chan, B. L., Lam., P. K. (2008). Identifying and prioritizing critical success factors for competitionstrategy. Industrial Management & Data Systems Vol. 108 No. 4, 437-454.

3. Ko, D. & Fink, D. (2010). Information technology governance: an evaluation of the theory-practice gap. CorporateGovernance, Vol. 10, No.5, 662-674.

4. Kumbaara, N. (2008). Managed IT services: the role of IT standards. Information management and computersecurity, Vol. 16, No. 4, 336-359.

5. Office of Government Commerce (2007). Continual Service Improvement. London: TSO (pp. 27-39, 41-92, 167-168).

6. Repa, V. (2007). Podnikove procesy. Procesni rizeni a modelovani. Praha. Grada Publishing.7. Smida, F. (2007). Zavadeni a rozvoj procesniho rizeni ve firme. Praha. Grada Publishing.8. Spanyi, A. (2006). More for Less. The Power of Process Management. Tampa. Meghan-Kiffer Press9. Thiry, M. (2010). Program Management. Formulation (Chapter 7). Burlington: Gower Publishing Limited.10. Weill, P., Ross, J. W. (2004). IT Governance. How Top Performers Manage IT Decision Rights for Superior

Results. Boston. Harvard Business School Press.11. Rasiel, E. M. (2000). The McKinsey Way. McGraw Hill.12. Koch, M., Dovrtel, J., Hruza, T., Nenickova, H. (2010). Management informacnich systemu. Brno. CERM.
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