ITIL 4 – The New Operating Model for Turbulent Times

The Coronavirus – A Pandemic that Requires a New Operating Model

Over the last few months the world has been dealing with a new pandemic – the Coronavirus, or COVID-19. First experienced in China, the new virus has now spread to 177 countries around the globe.

  • Total cases reported as of 3/19 globally: 230,041Coronavirus status - 3/20
  • Deaths to date: 9,386
  • Recovered cases: 86,256

 

Source: https://www.worldometers.info/coronavirus/

A Disaster We Were Not Prepared For

The world economy is taking a tremendous hit.

  • Stock markets have lost 1/3 of their value, and retirement saving has been decimated
  • Organizations of all types are struggling to cope with the situation.
  • Markets are being swamped with customers, panic buying for fear that they will run out of supplies during the next few months (or however long the virus lasts).
  • Organizations cannot respond quickly enough with the unanticipated demand – the supply chains were not designed to react quick enough to such surging demand.
  • As a result, market shelves are being emptied, stores are limiting their hours and access to products/services, and trucks are lined up at big producers to replenish retail outlets – for example, Proctor & Gamble to supply more toilet paper (for which there has been a hug demand!)

Governments and organizations of all types worldwide were not expecting this disaster.  According to reports, the virus was not treated for several weeks while it continued to grow withing China.  And due to the frequent travel of Chinese between their country, and the US (particularly Washington and California), as well as across Europe, the virus began to spread – and very quickly turned from am epidemic to a “pandemic” – a virus that is now affecting the entire globe.

For sure China, America, Europe, the Middle East, and all countries affected are now responding with containment procedures, new regulations that that are designed to limit the spread, while R&D labs work on a cure.

But why couldn’t we have been more prepared?  Why didn’t we anticipate that a global pandemic would break out, especially after the the H1N1 (Swine Flu) that occurred in 2009, the Ebola virus outbreak in Africa, and the terrible flu pandemic of 1918 that killed an estimated 60 million people worldwide.

Could we have been more Prepared? Yes.

Bill Gates predicted during a TED talk back in 2015 that the world would soon face a global pandemic of disastrous proportions.  He warned, rightly so, that the biggest looming threat was not massive nuclear war, but rather a tiny virus – one we had not previously seen, and for which we were not adequately prepared for. He suggested that governments and organizations of all types consider

  • The impact of previous epidemics and pandemics, and how a new pandemic would visit havoc on the world population, economies, and people’s well being
  • How we should plan and invest in medical corps that could partner with the military, and bring rapid medical help to areas affected
  • How we ought to invest in R&D to more rapid develop treatments for a new virus never before seen

Rather than relying on the tradition approach of slowly reacting to crises, we could have behaved differently. Organizations could have moved more rapidly to a new operating model – one that assumes a dynamic, unpredictable, rapidly changing environment.  That assumes rapid respond and delivery is the norm, rather than the exception. Unfortunately, governments and business didn’t listen.  They failed to be proactive, to plan and anticipate. For the most part, they have been slow to adopt new business models, and invest in new ways to respond.  And then that pandemic did in fact strike – COBID-19 – in China, in December of 2019.

The Traditional Approach is No Longer Sufficient for Most Organizations

My view is that too many organizations are still operating with a “traditional” business model that assumes:

  • Slowly reacting to a dramatic change is good enough
  • The external environmental factors – the environment itself, the legal system, the political environment, and the economy are all relatively stable over time
  • That a structured, “waterfall” approach to planning, development, and deployment is sufficient to deal with sudden and unpredictable demand for products and services, or new/changed opportunities

While it may be true that some organizations can rely on a relatively stable external environment for the planning, design, and production of their products and services, the factor of the matter is that the world is rapidly becoming a different “playing field”, one with …

  • Dynamic and fast changing external factors – such as political, social, and economic changes
  • Interdependent organizations that rely on a network of suppliers and vendors to plan, design, develop and deliver their products and services
  • A digital economy, where most business transactions transpire over mobile devices
  • Rising customer expectations in terms of speed, quality and price for the products/services they consume

How the ITIL 4 Framework Can Help Organizations Meet Such Challenges

ITIL 4®, a new “operating model” for the fast changing world we are moving into was was introduced by AXELOS in February 2019, after several years of development by thousands of contributors, and several task forces of designers.  The business and IT model is now being rapidly rolled out across the globe, with increasing adoption by all types of governments, business and organizations.

As a new business model and operating framework, ITIL 4 includes several characteristics that can help organizations of all types more quickly and effectively deal with unforeseen challenges such as the Coronavirus (COVID-19) pandemic:

  • ITIL 4 stresses the need for an organization to continually monitor the PESTLE external factors that influence it in the external environment. PESTLE factors, as they are know, should be carefully monitored as they can trigger the need for a new product/service, or a change in an existing offering.
    • Political factors – A crisis such as a pandemic can impact the local, state and national government, and the manner in which they operate.  Which in turn can directly or indirectly affects businesses and organizations to comply with new laws, regulations, or guidelines.
    • Economic factors – Due to a pandemic, the economy may be adversely affected rather quickly.  This may mean shifting to online rather than in-person services, or delivering products to customers rather than requiring them to come pick them up.
    • Social factors – Due to the rise in the popularity of social media (Facebook, Twitter, etc.) by consumers, an organization must now pay close attention to the impact that such channels of communication have on demand for its products/services.
    • Technological factors – New advances in technology, such as diagnostic tests and ultimately vaccines for such outbreaks, will affect consumers behavior, and demand for products and services.
    • Legal factors – An organization must continually monitor the local, state and national legal environments for any new laws which might impact their operation. For example, new rules/regulations may require the business to change its operating hours, or the way it distributes products/services
    • Environment factors – The virus itself is a key driver for these other factors, as well as a rapidly changing and evolving factor in the external environment, All organizations must pay close attention to the status of the infection, and its migration and growth.

Unless an organization is continually monitoring these factors, it may fall victim to missing an opportunity for a new product/service, may fail to adjust its product/service offerings, or may decline to meet shifting market demand.  The business or organization may ultimately fail as a result.

  • In contrast to a slow “traditional waterfall” approach, ITIL 4 is based on a Service Value System (SVS), a system of interacting components that can be combined in different ways to quickly take advantage of any new demand or opportunities in the external environment:
    • The SVS is composed of a set of five key elements: 1) Guiding Principles which help direct sensible actions and improve decision making in all circumstances;  2) Governance, which ensures alignment with the external environment, and internal alignment of organizational departments to products goods and services that enable value; 3) a Service Value Chain, the heart of the SVS, which acts as a core operating model to quickly respond to any new or changing demand, and produce products and services quickly to meet that new demand or opportunity; supporting 4) Practices, which empower the Service Value Chain to deliver quality products and services; and 5) Continual Improvement, which ensures that the organization, its services, products, and supporting practices are always improving to meet new challenges.
    • Considering the increasing pace of business and technology change, the transition to a new “digital economy”, the increasing use of mobile devices to conduct business, it makes sense that organizations move to a new “systems” approach rather than remain on a slow, “traditional” planned approach. ITIL 4 is just the new “systems approach” that is needed to meet such challenges.
    • To survive and thrive, organizations must transition to a new “operating framework”, which requires them to monitor external factors, any change in market demand and opportunities, collaborate more fully internally and externally, focus on using their capabilities to deliver products and services that enable real “value” for stakeholders.
  • ITIL 4 also includes the Four Dimensions of Service Management.  These four areas must be considered whenever considering how to react to a change in demand or opportunities in the external environment, so that a “holistic” solutions can be properly provided for.
    • Rather than just assume that a minor change in an existing product or service will do, considering the four dimensions of how to react and satisfy the demand effectively ensure a quality solution.  
    • It is especially important to consider the Four Dimensions when devising a response to the challenges brought on by such an external factor as the Coronavirus.  An organization must consider Organizations and People – how its own organization should respond, and how its people will be affected, as well as its partner organizations, and consumers.   How it will use Information and Technology also must be considered – for example, leveraging email, chat, and video channels to inform customers about any changes in its products/services which might help them cope; Partners and Suppliers must be consulted and coordinated with, so that an effective response can be marshalled and driven by the organization; finally, the organization must consider its existing Value Streams and Processes, and modify these as necessary to expedite the provision of new products and services to enable customers to deal with the crisis.
  • As a new operating framework, ITIL 4 also integrates key aspects from other emerging best-practices that have take hold over the last decade. These complementary best-practices have been well integrated into ITIL 4, so that organizations can use ITIL 4 as the overall framework, and these other practices to address certain areas – all working seamlessly together.  These complementary practices include:
    • Agile development practices, which emphasize speed, quality, and time to market
    • Lean practices, which underscore the importance of doing the minimal number of steps to produce something, eliminating “waste”, and delivering value
    • DevOps, which emphasizes collaboration and cooperation between organizational departments, especially development snd operations – increasing the quality and speed of delivering solutions to customers.

In Summary, Don’t Delay Your Adoption of ITIL 4

ITIL 4 is the new operating framework for governments, organizations and businesses of all types, to equip and enable them to quickly and effectively deal with sudden massive changes in the environment.  Whether those changes be political, economic, social, or the result of a terrible virus such as COVID-19.  With ITIL 4, and its integral support of Agile, Lean, Devops, and other best-practices, an organization can effectively monitor the changing environment, respond quickly and effectively to speed new products and services to market, deliver fast relief to consumers, and thrive in the fast paced, interdepent, digital world we find ourselves in.

 

Paul M. Dooley, MBA
ITIL Service Manager, ITIL Expert
Certified ITIL 4 Instructor, Consultant and Author
AXELOS and PeopleCERT Affiliate
ITIL 4 Managing Professional
DASA Training Partner

Optimal Connections, LLC

Acknowledgements

ITIL® is a registered trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved. The Swirl logo™ is a trademark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.

 

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