Midmarket slow to adopt ITIL v3

ITIL gets a refresh. Does the middle market care? Maybe.
Last summer the IT Infrastructure Library (ITIL) released a new version
of its best practices framework, dubbed version 3. Published by Great
Britain's Office of Government Commerce (OGC), ITIL v3 has been touted
as a huge leap forward in making IT services cheaper, more efficient and
vital to the business.

"The refresh has transformed the guidance from providing a great service
to being the most innovative and best in class," ITIL itself promised.
"At the same time, the interface between old and new approaches is
seamless so that users do not have to reinvent the wheel when adopting it."

But analysts say the actual reception to v3 by CIOs has been more muted
than you'd expect from such a purported big advance.
"There was a lot of hullabaloo and talk about the release, but it's
really been very quiet," says Simon Mingay, an analyst at Gartner Inc.
in Stamford, Conn. "At the same time, a lot of organizations have been
shocked at the scale of what ITIL v3 is addressing -- judged either by
the number of pages or the transformational implications. The reality is
the transformation into a service organization was always that big. ITIL
just didn't talk about it."

The new version breaks down service management into five core books:
service strategy, design, transition, operation and continual
improvement. One of the big changes is that the former buzzword --
alignment of business and technology -- has been replaced by integration.

What about midmarket companies already in the throes of reinventing
their IT organizations? What does v3 mean for them? Not that much.

ITIL tough but worth it, says midmarket telco firm Dave Hahn, director
of IT operations at Physicians Mutual Insurance Co. in Omaha, Neb., says
ITIL is an important part of a $100 million re-engineering project
called Greenfield. The $700 million business is moving its technology
platform from 25-year-old apps run on a mainframe to a new distributed
Java environment using service-oriented architecture.

"We embarked on ITIL two years ago," he says. "We took a couple of
courses and got a certification. We needed a systems management
framework to be successful. We've seen early benefits; there will be
more to come."

While the IT shop is committed to ITIL, Hahn says it has been harder to
win buy-in from C-level executives. "Upper management isn't sure if this
is just another process the industry is selling," he says. "They like to
hear processes as opposed to winging it, but what they see in process is
delays. I don't know if they see the value of the overhead."

That sort of skepticism is keeping many CIOs on the sidelines with the
new version. "Most CIOs are not engaging with v3 as much as they
probably should," Mingay says. "ITIL brings together a lot of good
practices. Many organizations have already done many parts without
calling it ITIL. Very few organizations are jumping into implementing v3
soup to nuts."

Upper management isn't sure if this is just another process the industry
is selling. They like to hear processes as opposed to winging it, but
what they see
in process is delays. Dave Hahn director of IT operations, Physicians
Mutual Insurance Co.

Oded Haner, CIO of Monster Cable Products Inc. in Brisbane, Calif.,
began an ITIL implementation a couple of years ago but says the new
version will have to wait until his schedule becomes less hectic. "V3
doesn't mean much to me yet," he says. "ITIL means adopting a persistent
practice, thorough change management. More than anything else it's meant
increased customer service, in measurable terms. I'll have to check if
v3 improves any of that and how."

Even with v2, Haner says he went with a pick-and-choose approach, rather
than implementing the entire series. "I knew what our pain points were,"
he says. "Customer service in my organization wasn't good. If v3 does a
couple of things better with low effort, I'll implement. The question is
how much effort will it take?"

Mingay notes that midmarket CIOs should actually find it easier to
implement v3 than their counterparts at bigger enterprises. "There are
fewer behavioral issues to tackle," he says. Nevertheless, midmarket IT
decision makers such as Hahn say they expect to move very cautiously
down the ITIL refresh road.

"Before we move further we need to make sure we get the best value we
can from what we have," Hahn says. "I can never see our company
incorporating everything across the board. We've bitten off a pretty
good-size chunk. Now we need to digest that. We're probably four years
into a 10-year reengineering effort. What we need to do is mature what
we have in place today."

Michael Ybarra is a monthly columnist for SearchCIO-Midmarket.com and a
former senior writer at CIO Decisions magazine. He is also the author of
Washington Gone Crazy. Write to him at editor@searchcio-midmarket.com.