ITIL + Service Management solution = ROI?
Thursday, March 04, 2010
Does implementing ITIL alongside a service management solution make good economic sense? Are organizations realizing a positive ROI on their ITIL initiatives and/or their service management solution of choice?
What would Einstein say about EMC?
Recently we were approached by a large government organization that are looking to replace their current service management software. At the helm of the product replacement team are seasoned ITIL practitioners and long-time helpdeskers who, in their words, are the "vanguard" of ITIL implementation.
The software to be replaced is one of the leading, top-tier products on the market today.
The reason for the replacement?
- Not because it lacked functionality,
- Not because it was clunky
- Not because it did a bad job at aligning with ITIL
None of these things.
The basis for replacement was because the maintenance costs were too expensive!
To be sure, the annual cost of software maintenance and support is a factor in ROI and TCO, and its cost should never be overlooked in any software purchase decision. Industry norms for software and maintenance renewal costs seems to hover around 20% give or take.
What makes this case interesting is the economic statement it makes about the following things:
- The ROI of ITIL
- The ROI of a top service management solution
- The total cost of ownership of an ITIL based, service management focus
ITIL advocates and evangelists around the world have long spruiked about the cost savings that ITIL can bring to a organization that effectively implements the service management framework. Although quantifying the savings and return on investing (ROI) ITIL delivers is tricky, many believe that it worth the effort. Others are sceptical and many more just don't know where to start.
The debate is unending.
From what I can tell about the ROI of ITIL, the jury is still out - particularly on how to measure it.
On the other hand, service management solution vendors are quick to highlight the economic benefits of implementing their solution. There is no end the number of white papers that vendors pump into the industry. Some even go so far as to provide Excel ROI calculators where you can plug in operational metrics and watch the numbers come out in your favour before your very eyes!
The questions remain though.
If both ITIL and service management software solutions claim to have a positive ROI, why are companies and organizations around the world who have, or are implementing ITIL, dropping support for the big tools in favour of lower-cost alternatives?
What happened to their ROI?
2 comment(s) so far...
By Joe Beauchamp on
Wednesday, April 28, 2010
Re: ITIL + Service Management solution = ROI?
Couldn't agree more.
In the end, after the dust settles, I believe a lot of companies will not see the value originally hoped for prior to implementing ITIL. They may see results regarding service management, but I feel those results will not be a sufficient return on their investment.
I suggest people consider the Gartner Hype Cycle, www.gartner.com/pages/story.php.id.8795.s.8.jsp. I believe we are entering the "Trough of Disillusionment" phase with regards to ITIL.
In the past, I was unable to find any articles/sites critical of ITIL; most were raving about it and/or selling it. However, articles are now sporadically beginning to appear questioning the value, ROI and TCO with having implemented ITIL.
I am ITIL certified and have always suggested a cautious approach to ITIL adoption...most of the time, I was ignored. Now, I am seeing a majority of those companies struggle under the weight of a failed implementation.
I do think, however, that the rush to implement ITIL is indicative of a bigger issue. What was missing prior to ITIL? Why did it take off the way it did? Shouldn't we, the IT professionals, begin to look at the cause rather than the effect of the ITIL craze?
By Rod on
Thursday, May 13, 2010
Re: ITIL + Service Management solution = ROI?
Thanks for stopping by and commenting. Sounds like you've done a few miles in the service management space. I hadn't heard of the Garnter Hype Cycle before - thanks for the link - it's great. Time will tell with ITIL, but you're right - the times are a changin', and there's a lot more discussion about ITIL, and not all of it positive either.
I like the question you put forth - "What was missing prior to ITIL?". I often say to people who are keen on ITIL, "If ITIL is the answer, what's your question?". www.helpmasterpro.com/community/blogs/entryid/23/if-itil-is-the-answer-whats-the-question.aspx