Pink Elephant’s Troy DuMoulin Discusses ITIL v.3 and Beyond

Posted March 25th, 2008 by Dennis Powell

As a fan of Troy DuMoulin’s blog, “The Hitchhiker’s Guide to the ITIL Galaxy and Beyond“, we knew we were in for a treat when he presented at this year’s Pink Elephant Conference. But after hearing Troy’s presentation, we knew we had to get more information.

Troy is the Director of Product Strategy at Pink Elephant, and his main focus is to deliver strategic and tactical level consulting services to clients based upon a demonstrated knowledge of organizational transformation issues.

Troy is an experienced Executive Consultant with a solid and rich background in business process re-engineering and is a frequent speaker at ITSM events as well as a contributing Author for the ITIL “Planning to Implement IT Service Management Book.”

This is part one of a two part interview with Troy.

You can also listen to his audio responses below, or download using the link after each question.

StackSafe: How did you get into best practices and standards, what made you become interested in the topic?

Troy DuMoulin: I’ve been doing this for the past ten years and I started getting into it from being introduced to Pink Elephant as one of first North American employees. We were discussing something new and interesting called ITIL. As I got more into it I realized how rare service management and standards are.

How many industries have a common code of practice for conducting business or doing a certain activity? Think about it, is there a course or university where you can go to get a standard process for accounts payable, or a standard way of engineering? No.

But in IT we have a rare commodity which is a standard approach to managing and delivering services. What I found fascinating is the connection to other things that IT does; relationship to project management, application development, governance, etc.

The challenging part is the concept of growing awareness of service management in one sense, that our education institutions are still producing people with no knowledge of the management side of IT. They know how to create a system, develop an application, and configure a data center but have no concept of what it means to be a Service Provider. I find that astounding. The education side of our industry is still behind.

Download audio here.

StackSafe: How can companies benefit from implementing ITIL v3? What would you cite as the ROI? (Financial savings? Freeing up resources? Technological advantages?)

Troy DuMoulin: The benefit of implementing standards is a big topic. Think of IT as three broad categories of activity –

managing operations,
managing projects, and
managing services and service delivery

These are three different things.

Because of our historical background, we’re very segmented by silo and technology domain. Most frequently organizations will first focus on optimizing and reducing cost in an operational sense, or focus on project management methodologies to improve the ROI on projects to receive benefits more quickly.

The challenge with this is that it is still very fragmented. You can get projects up and running and get good at delivering on time and on budget, or you can optimize the technical domains to a certain point– but the real benefit is when you realize there is all this redundancy across these silos. Each silo has to recreate the same practices over and over again, so there is redundancy across the entire system.

When we talk about version 3 and ROI you have to understand that it’s only when you start looking across the silos for new ways to optimize across the organization as opposed to within a specific project or domains that you begin to get that benefit.

There are three different types of improvement you can realize when you talk about ROI or improvement by using standards: cost-savings, quality improvement, and productivity. We did a survey recently with BMC of 800 companies on usage of best practices and what they got out of it. The majority said efficiency which falls under the categories of productivity and quality. Hard cost savings are difficult to attest to when you don’t have a good understanding of your current costs.

If you think of ROI primarily in terms of cost-savings, then it is very difficult to find justification for implementing practices that don’t currently exist. You will be successful at reducing outages, incidents and failed changes however most companies will find it hard to equate these to hard savings. The adoption of best practice typically means the reduction of waste and redundancy however it also means an increase in net new activity that was not done before. This means that while quality and productivity can improve dramatically the new reduction of cost is less apparent. This is why we prefer to talk about Value On Investment versus Return.

The challenge here is that most organizations have no clue what the current cost is. Companies ask what is the ROI for implementing a process like change management or incident management? To answer that question you have to determine what is the current cost of an outage? Once that is reduced by a certain percentage, I can give a real number.

The area where you can actually see a hard cost savings relatively quickly is around the IT Management tools in use in an organization. Many companies have significant redundancy here. When you have multiple monitoring, ticketing, or inventory tools in each silo, you will start to connect the fact that these processes and services are organizational wide – you will begin to understand tool usage is not by domain but is an enterprise issue. You must have a SINGLE workflow process and supporting tool for the entire enterprise. That reduction of redundant management tools based on reduced management and maintenance cost represents true hard savings and ROI from a service perspective.

Download audio here.

StackSafe: Are there legitimate reasons why a company should stay at ITIL v2 for the time being?

Troy DyMoulin: If you truly understand what version 3 is, you’ll realize it’s not that different. All the processes that you know and understand in version 2 are still inherently a part of the package of version 3 but the scope has simply been enhanced.An analogy I like to use is the idea of the Wizard of Oz. We have a person who is lost, and they find a path – the “Yellow Brick Road”, which is ITIL. Somewhere out there is the “Emerald City”, which is ITIL version 2, where all these processes are working flawlessly and integrated. On the way to the Emerald City, there are issues that arise (“flying monkeys”) in daily operations, but you continue down the path. Just as you are looking over the horizon, you see Emerald City, and think that’s the end. But to your shock and horror, you realize it wasn’t the end, it was simply a milestone. Just beyond it is the “Diamond City”, which is version 3.

Version 3 is not a different beast or animal, it’s simply a different milestone down the path. The way organizations implement between version 2 and version 3 hasn’t changed. From an operational perspective, it’s the same. You’re simply walking a path and reaching a strategic level.

Download audio here.

StackSafe: What is the top challenge that you hear from companies who are in the midst implementing ITIL?

Troy DuMoulin: Without a doubt it’s organizational change and IT culture. The concept of working in a service mindset is a world of difference to a complete focus on the domain where each person manages their box or application as if it lives in mythical isolation from other technologies let alone the business.That comes back to the session in our recent conference in Vegas where I talked about focusing on optimization and cost-reduction as a total goal for IT. I believe that the majority of executives believe that the “Total” goal of IT is to optimize performance and cost or technology silos.When you do this year over year you get down to the point where you’re razor-thin, consolidating data centers, moving to virtualization, and reducing people resources. You get down to a skeleton crew that is barely sufficient to manage the box and the application, which gives no extra bandwidth to do these service management value-added activities above and beyond the technology optimization.

These organizations now have all these services to provide, but can’t afford to do it with the time and resources they have. There is a total paradigm shift from total cost-reduction as the primary goal to now adding value as a service provider. Being a service organization is about thinking, acting and being different in relationship to business value. The problem is they’re no longer at the resource level to expend the time and energy to do this. It’s kind of a Catch-22 situation. They want to get better and move to a service perspective, but often don’t have the resources.

Download audio here.