Can ITIL Help Businesses Survive (and Thrive) in the Recession?
A panel of industry experts agree that ITIL promotes better investment analysis and decision making and could help companies gain a competitive edge that will help them grow as we come out of recession.
The adoption of ITIL increased significantly in the previous two recessions. As the most widely accepted approach to IT Service Management in the world, businesses are again turning to ITIL as a way of improving efficiency and saving costs. ITIL provides a hugely powerful tool to not only survive but also thrive in the current economic climate. With its step-by-step guidance on cutting costs and improving productivity, ITIL can help businesses emerge from the recession as stronger more efficient firms.
According to IT Service Management expert, Shirley Lacy, Director of ConnectSphere, "In a recession you either cut costs or transform your business. To do both without damaging your activity requires a good understanding of your portfolio. ITIL provides the tools to look at what you do in a standard way and prioritise objectives." Stuart Rance, Business Critical Consultant for HP agrees, "Sit down and look at ITIL processes with anyone in IT and they will see how it can save you money."
The value of ITIL is in its two fold approach of helping businesses identify where they should make improvements and then providing practical guidance on how to make the necessary changes. As a best practice tool which is independent of specific suppliers and vendors and supported by a community of dedicated IT professionals, ITIL is used by hundreds of SMEs as well as major players like Microsoft, IBM, and Hewlett Packard.
Stuart Rance has a stark warning for companies failing to recognise the importance of service management, "Come the end of the recession, many IT companies will have gone out of business, as many as three quarters who perform poorly in terms of service management don't see the need to improve."
Cutting Costs
Many businesses need to save money and so are scrutinising the cost of IT. ITIL offers a suite of efficiency driving tools which can help businesses identify where they can make savings.
Malcolm Fry, Independent IT Service Management Consultant, believes that simple, well-established ITIL principles can offer huge cost savings: "I worked with a company that wanted to outsource its helpdesk which fielded thousands of calls. With ITIL's route call analysis, I discovered we could reduce the volume of calls by up to sixty per cent. Outsourcing was no longer an attractive or necessary option."
He continues, "I worked with another business focussed on configuration management and within a year it had announced the cutting of customer costs by twenty five per cent. Similarly if you have dedicated people doing analysis of the incidents, you can realise huge cost reductions." Shirley Lacy emphasises the value of ITIL's 'Service Catalogue' idea, which promotes greater transparency and visibility, helping both businesses and the IT service provider optimise expenditure and investment. "By re-evaluating the cost of individual services, organisations can make better informed decisions about ways to save costs."
Stuart Rance adds that, "Whilst the direct value of an IT service can sometimes seem intangible, when you see that by creating a document faster with ITIL you can knock two days off the procurement cycle, you can quickly see the monetary benefits."
A Common Language
In the current climate mergers and acquisitions are a daily occurrence. When two organisations are brought together ITIL provides a common language and a platform to merge their service management processes. In a globalised environment there is more need for a standard way of working that can be adopted across the world. ITIL is at the forefront of this process.
A Cultural Shift
According to Ken Turbitt, Best Practice Director at BMC, ITIL can help promote a positive cultural shift, "Some organisations are very hierarchical, they don't ask the front line staff what the problems are. The most progressive businesses speak to those at the coalface."
Megan Pendlebury, Head of Service Management for the itSMF, agrees that it is easy to see the effectiveness of ITIL in this context, "If people know what their role is and can see how they are contributing to the business, they are more comfortable, therefore your staff attrition is lower". Staff turnover, training and recruitment are hugely expensive to a business. ITIL saves costs through encouraging a more transparent, listening, and positive culture.
Emerging from the Recession
Whilst good news is hard to come by in the current climate there are still massive growing markets. With more than 1.5 billion people now online, sales from online shopping are thought to exceed over $8 trillion*. With internet usage increasing exponentially year-on-year this figure is likely to rise significantly. As companies seek to capitalise on this and move into new market segments they are changing and developing their business products and services. The Service Portfolio in ITIL enables a service provider to prioritise its investments and develop service offerings that will maximise value to the business.
Government initiatives over the next 18 months are likely to lead to massive IT investment focused on economic recovery and improving financial market stability and transparency. IT firms with ITIL know-how and IT consultants and firms with ITIL accreditation can help make sure that the government invests wisely in IT by ensuring that services are modeled around business outcome and valued desire.
Industry experts agree that ITIL provides a hugely powerful tool for creating economical IT services and also enabling service providers to define the direct profit that a service creates. Businesses able to utilise this are well on the way to becoming recession-proof. ITIL offers a blueprint for building a strategy for IT Service Providers and their customers to combat the recession and emerge as more competitive and efficient businesses.
For further information and to discuss a corporate subscription to ITIL please email ITILOnline@tso.co.uk or view the white paper, ITIL in a Recession (PDF - 1.48Mb).
* Source IDC Top 10 Predictions.
