Lieberman Software recently took the chance to talk to acknowledged world expert Kevin Behr, IT Governance Consultant and co-author of Visible Ops, on why implementations based on the Information Technology Infrastructure Library (ITIL) can still end in failure and how to avoid it.
Lieberman Software: Can you outline how you arrived at your methodology?
When Gene Kim, George Spafford and I wrote the book Visible Ops, we had a lot of clients in common. Over the years we had developed a list of people with ‘good Kung Fu.’ These are clients that spoke a completely different language than everybody else. What was happening to them wasn’t predictable. Outages were happening all the time and they didn’t know why – their environments were very uncontrolled. These high performers, that we began to call them, spoke a different language – there were very few grey areas, these people believed control was possible, and they were able to get a lot more work done. We decided to study these people and figure out what made them different. That led us to found The IT Process Institute with Gene Kim to really start asking some basic questions about what it is that these folks do that’s very different. We created the controlled benchmark where we examined the processes that high performers actually use.
We benchmarked and surveyed thousands of organisations. The first discovery we made was that the high performers were very much better than everybody else. We carried out three different waves of this research.
If you read The Machine That Changed The World by Womack, Jones and Roos which was the book that described the beginning of what was the lean manufacturing movement, they describe the evolution of a process that can make cars in half the floor space with half the defects with half the cycle time and half the inventory than before. This turned out to be Toyota and a lot of the Japanese manufacturers.
We took that journey as our touchstone . But what we found in IT was much more profound. The difference between the bottom end and the high performers was not half or double as in car manufacturing, in some cases you had factors of 14x the differences between a low perfoming IT department and a high performer. Some places would manage 6x more applications with the same number of staff, or they’d get a tremendous amount more project work done several orders of magnitude faster.
What stood out for us was that they seemed to use less processes than the low performers and less controls. They just selected the right ones. And so we were able to put together a list of foundational controls and processes – the ITPI benchmark. I laugh when people tell me they are implementing ITIL because I don’t know what they’re implementing. In its pure form it is too generic – it’s a foundation to build a final structure on – not a final structure.
What ITIL is missing is the ‘cause and effect’ of scientific study – if you make the following action, the following actions will happen. But that cause and effect stage requires a lot of research and oddly enough for this “de-facto approach to service management” there’s been surprisingly little research done to actually demonstrate its effectiveness.
In America, we still have not replicated Toyota’s success and they’re buying up the buildings in Detroit that are left from GM and Ford’s failure. After all this time, we copy what they do but we don’t understand how they do it. And we cannot get the same level of success in the automobile industry.
At Los Angeles airport there is a departure gate that United was losing out to big time to South West. United decided to emulate South West – everything they saw them doing they copied to get those passengers. The result was that they went backwards. They lost more passengers. Because trait-based improvement is so limited and finite – yes there are gains to be had in any effort by making things more explicit, and training people, and bringing people together with how things should look but they’re very limited. Especially when you don’t have the ability to understand why and what you should put in place. Secondly, the continuous improvement piece in ITIL is very misunderstood and in IT in general, most people treat improvement like an event.
So if you understand some of the thinking behind how Toyota improves every process every day just a tiny little bit, you can see where IT learn from that – we’re very black and white – it’s all or nothing, and we have a hard time with incremental improvements. We like big bangs because we like shiny technological solutions to come riding in on a white horse and fire silver bullets. But the lesson Toyota has showed us over the last 60 years of continual profitability through all economical cycles is that incremental improvement is the way to kill your competition.
Now I spend most of my time implementing rapid improvement programs for IT organisations so that they are continuously learning, continuously improving and because they are constantly moving ahead every single day with amazing problem solving skills. We are examining all behaviour to really understanding the thinking behind it. People are so focused on creating standardised processes in the ITIL movement that people don’t understand as soon as they’re put in place the performance starts to entropy unless you’re doing continuous improvement. In ITILI I don’t find the guidance written about how to improve to be lucid otherwise people would be doing continuous improvement in a way that would be sustainable and observation shows that is not the case.
As I look across the IT landscape, it really is amazing to me that we are so functionally aligned in IT. We don’t understand the flow of work, we don’t understand in many cases why we’re there. So a lot of the work I do is coming in and making those system level design issues, saying okay here is what the business is giving us in terms of resources – they’re giving us these staff, they’re giving us these dollars, they’re giving us this infrastructure and equipment – and here’s the product they want out of it. Almost like an industrial engineer we’re building a process at some level inside of all of that system to manufacture the stuff that the business needs.
There is very little work and research into the way we work affecting the outcomes that we get. That’s what I think is tragically wrong with IT right now. We have built systems that appear complicated, there is a large group of people out there that believe you can’t successfully perform route cause analysis on these new systems because they’re so ‘complicated’. The truth of the matter is we actually need to start approaching this whole notion of complexity and managing IT more with a physicists point of view rather than a social scientists point of view.
Social scientists do believe in complexity but physicists don’t, they do believe that there are a few hypothesis that do explain the majority of the world. I see this lack of scientific approach in IT where, ironically, we all used to wear lab coats and be seen as scientists. Now we don’t understand cause and effect at any level, and there are many folk that believe cause and effect is an effective way to understand what’s going on in IT. I think we’ve travelled far in the wrong direction.
Lieberman Software: However, we are here, we are where we are. How do we move on?
We need to look more from the general to the particular. Instead of corporates fixating on their quarterly results what we need to be looking at is how they’re positioned from an infrastructure standpoint – how are they poised to capitalise on the next two to three to four quarters. Those kinds of numbers that are actually front facing leading indicators, versus trailing indicators, are much more important and lead to less knee jerk behaviour.
The Information Technology Infrastructure Library (ITIL) is a customizable framework of best practices that promote quality computing services in the information technology (IT) sector. ITIL addresses the organisational structure and skill requirements for an IT organisation by presenting a comprehensive set of management procedures with which an organisation can manage its IT operations. These procedures are supplier independent and apply to all aspects of IT infrastructure.
Classic reasons for ITIL Failure
- Lack of Top Management Commitment
- Inadequate Requirements Definition
- Poor ERP Package Selection
- Inadequate Resources
- Resistance to Change/Lack of Buy-in
- Miscalculation of Time and Effort
- Misfit of Application Software with Business Processes
- Unrealistic Expectation of Benefits and ROI
- Inadequate Training and Education
- Poor Project Design and Management
- Poor Communications
- Ill-advised Cost Cutting
websites for further information
• ITIL wiki
• ITIL definition site
• ITIL Community Forum
• ITIL Service Leadership
Q&A with Clare George-Hilley, co-founder, Centropy PR
Clare George-Hilley is the co-founder of Centropy PR
Global Banking and Finance Magazine recently caught up with Clare George-Hilley, co-founder of fintech and financial services specialist PR agency Centropy, as the company toasts to three years of trading. We asked Clare about what life is like running an agency in the city, the trends she is seeing in the financial services space and what the future holds following the Covid-19 outbreak.
Why did you decide to set up Centropy PR?
I was looking for an opportunity to launch my own agency, both my husband and I had been in the public affairs and public relations industry for over a decade and we thought the time was right to go out on our own.
We could see that the financial services industry was surging, with challenger brands and new technology transforming traditional banks and setting new standards of customer service. There was a huge market opportunity to create and launch a PR agency that could provider first class comms support, alongside a deep understanding of complex regulations such as AML, KYC, and the GDPR. Likewise, many traditional technology firms are diversifying their offerings, to tap into the growing market opportunity posed by the fintech boom.
So, we worked on a business plan, designed a strategy for winning clients and officially launched in September 2017. Within a few months we had a growing portfolio of clients and a thriving business, since that point, we have never looked back!
How is Centropy doing now and what are you plans for growth?
The last three years have flown by and our client portfolio has grown and diversified quickly. We now manage PR campaigns for clients on everything from cryptocurrency, wealth management to payments and trading software.
We’ve also hosted parliamentary debates with key industry figures, including Members of Parliament (MPs) on topics such as the future of the financial services industry and the impact of challenger banks on traditional providers. The team is expanding quickly and we’re investing heavily in the latest training and support to ensure our team members are equipped to reach their full potential.
How do you see the next 12 months?
The Covid-19 outbreak has crippled the economy, forcing millions of people to work from home due to the very serious health risks. The knock-on effect of this crisis will lead to companies cutting costs where possible to save jobs, so tech will play a vital role in ensuring many businesses stay afloat.
We are already working with contactless payments specialists and other fintech companies that offer solutions to help companies survive and thrive despite the inevitable challenges ahead.
We aim to continue building our portfolio of expertise, testing ourselves with new challenges and delivering the best possible service to clients
This is a Sponsored Feature.
Lessons from past recessions and advice for business owners during the coronavirus pandemic
By Neil Davis, managing director and co-founder of Sterling Networks
What is Sterling Networks?
“Sterling Networks is a professional organisation founded in 2014 which facilitates networking events for businesses across the Midlands, Oxfordshire, Wiltshire and the South West. Over 300 members attend our fortnightly breakfast and lunchtime meetings.”
What is your background prior to establishing Sterling Networks?
“During the 1990s, I worked in the corporate team for Halifax. My wife, Tracey, and I went onto own a manufacturing business, which was also called Sterling, and produced a range of gifts, merchandise and promotional items.
“We soon realised tradeshows were a great way to meet distributors and clients. From there, the business grew exponentially, and we managed to build a network of around 500 distributors. Eventually, we became ground down by the manufacturing business – in part because the local manufacturing sector was being devastated by competition from China – and took the decision to sell the business and relocate to Spain.
“After spending several years living abroad, we moved back to the UK to set up Sterling Integrity (EXPO’S) & Sterling Networks (Networking) We were inspired by a desire to help businesses make meaningful connections with one another, and we haven’t looked back since.”
The UK has recently entered a recession, brought about by the coronavirus pandemic. What have you learned from past recessions and how are these experiences helping you to navigate the current crisis?
“I’ve lived through a number of recessions and have seen the pain that insolvency causes companies on a large scale. It’s taught me that there are those who win and sadly those who lose, and that businesses must adapt to a rise in demand for certain products or services at a time of financial crisis.
“Given the nature of what Sterling Networks offers [an opportunity for business owners to connect and grow together] I decided we could build upon the brand due to the demand for new business during the pandemic. We therefore moved our networking events from face-to-face to virtual via tools like Zoom and have gained a steady stream of new members in recent months, reaching an overall total of well over 300.
“On top of that, we’ve taken new staff on during the crisis and have launched a number of new regional groups across the country. I was determined that Sterling should come out of the pandemic with a head start, so my attitude to the recession has been much more positive than those who are forecasting nothing but doom and gloom.
“We can’t pretend high street retail wasn’t suffering long before the pandemic came along, and thousands of new businesses are sure to start up to meet the demand for the products and services that people require at a time such as this. In order to develop and grow businesses need to focus on where changes need to be made to meet this demand.”
Sterling Networks has been providing emotional support to its members throughout the pandemic. What advice have you been giving to members that could be useful to other business owners?
“I try not to be too opinionated and respect other people’s views when giving advice to members, as there are always two sides to every circumstance. I’ve been careful not to say to people that they should be doing one thing or another, as I don’t know their business and its needs quite like they do. The only thing that I have been telling members is the importance of setting up one-to-ones with one another. By doing so, they can listen to the needs and concerns of other, like-minded business owners and work out ways that they might be able to help one another.
“The pandemic has meant we all have a bit more time on our hands, so the advice I would give to people is to use this extra time wisely. Not having to travel physically from one meeting to another means there is a greater opportunity to connect with more people. It’s important to remember that individuals outside of your business can be just as valuable as those within it.”
What makes you hopeful for the future and are there any words of encouragement you can give to budding entrepreneurs?
“The key events that have happened to this country during my lifetime – whether wars, recessions, or the pandemic – have enabled me to take stock of things. While these experiences are certainly challenging, we all become stronger for living through them, and it gives me great confidence that the world will ultimately improve as a result of the pandemic.
“The whole world is effectively rebooting right now, as is the business community. I like to think entrepreneurs will recognise this opportunity to take better care of their peers, and this translates to greater collaboration between organisations. Speak to as many people as you can, ask all the questions that you need to and do your homework. This might well be a difficult time for us all but planning for the future must start now if it is to become as prosperous as I know it can be.”
Exclusive Interview with Ugo Loser, CEO of ARCA Fondi SGR
Arca Fondi SGR is a mid-sized Italian active asset management company. Founded in 1983 by a consortium made up of 12 regional banks, the company has grown in time, expanding its network of distributors and its client base. Nowadays Arca manages Mutual Funds, Pension Funds and Institutional Accounts with total AUM exceeding 30 € bln, reaching more than 100 banks and financial institutions and serving more than 800,000 final clients.
What are the key contributors to ARCA Fondi SGR’s success over the past 35 years?
Arca has always put clients and distributors first. That is to say we have always privileged fair pricing for funds and developing high quality products and services for our customers. This requires constant innovation as an objective and looking for people’s talent to be free to produce its effect
Why are people the founding element of ARCA Fondi SGR and how have you sustained this vision over the years?
We work in small teams, people are young and motivated and can perform duties with a high level of autonomy and responsibility. Innovation is asked to everyone, everyday
What makes Arca Fondi SGR different from other asset management firms in Italy?
Arca is a company focused on doing what it can do very well, that is to say mutual and pension funds, services for clients and banks. We never follow short term trends but always look for long lasting impact on the industry, like we’ve done may times in the past
What products/services has ARCA Fondi SGR pioneered?
Arca has been the inventor of “Arca Cedola”, fixed-horizon, coupon paying funds, which have been with no doubt the greatest product innovation of the past 12 years on the Italian market. This type of funds, at first strictly based on bonds and later as a balanced product, has encountered an enormous success both with clients and distributors due to its simple and effective value proposition. Arca is a market leader also in the “PIR” segment of funds, a range of product focused on mid and small sized companies, that have been the best performers in the Italian stock market for the last few years. In services, Arca is a leader in technology applied to asset management. Our website, app and digital services for clients and banks are award winning, state of the art combination of data, technology and channels, and the best is yet to come on this side.
What strategies do you have in place to sustain your market position and withstand professional competition in the country?
As I mentioned, we do not waste resources on projects with dubious results, instead we constantly invest on people, products and services. The high level of profitability that Arca has been able to maintain even in difficult years for the markets of the banking sector is a further testimony that this strategy works very well
How do you use technology to create meaningful experiences for your customers?
First of all, we have created a whole new division, Arca InnovAction Lab, dedicated to technology, data and processes. This ensures projects are delivered quickly and they are free to leave bad past practices behind. Arcaonline.it, Arca’s website, provides distributors with detailed information on clients’ portfolios, asset under management and subscription/redemption requests. It monitors aggregate selling data offering to our partners a suite functions and analytics to track commercial campaigns. And if the banks branches need assistance, they may ask Sara, our digital chatbot. A broad and timely multimedia production, covering exclusive reports, comments, presentations, videos, webinars and newsletters is also available on the website.
Customers, subscribing Arca’s funds through its distributors’ network, may access Arcaclick, a dedicated area on Arcaonline.it. With Arcaclick the client can easily browse through her portfolio of funds, analyze its characteristics, view transactions and historical funds’ performance in customizable views. Arcaclick is also a powerful source of information on Arca product range: Prospectus, KIIDs and other literature is easily accessible along with news, comments and reports. Arcaclick may also be accessed via Arca Fondi App, a free application for mobiles and tables, running on both iOS and Android. Available 24/7 and in mobility, Arcaclick gives clients the opportunity access information, news and details of their personal portfolio anytime and anywhere.
What key trends will drive pension growth in 2020 and beyond?
The Italian market for pension funds is still very small and therefore there is a great opportunity to grow. Arca Fondi manages the biggest open ended Italian pension fund and it’s been constantly at the top of its rankings. As people and workers are looking for yield and to weather short term volatility, the pension fund is very well poised to profit from this trend.
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