by Reginald Lo
Date Published - Last Updated February 25, 2016

In order to run IT like a business, a technical service and support organization needs to have a clear picture of the services it provides and how these services create value for its customers. Many organizations find it difficult to define services from the customer’s perspective because they’re used to thinking in terms of systems and technologies. This article explains how to define end-to-end IT services by analyzing business capabilities and business processes.

The Basics

Before one can define IT services, one must first understand the different types of services within the enterprise. Services can be broadly classified into business services and IT services. A business service is a service that the business provides to external customers; an IT service is a service that the support organization (or, more generally, a service provider) provides to its customers. Those customers may be internal (i.e., the business) or external (i.e., customers). In the latter case, there’s often a business department between IT and the external customer. A supporting service is a service that one team provides for another; for example, the infrastructure team might provide hosting services for the application management team. For the purposes of this article, we will focus on customer-facing services as opposed to supporting services. 

According to ITIL, “a service is a means of delivering value to customers by facilitating outcomes customers want to achieve without taking on the ownership of specific costs and risks.” And so, to define IT services, one must first understand the customer’s desired outcomes. This may seem obvious from the definition of a service, but many IT departments start by analyzing their systems and technologies first, instead of customer outcomes. So how do we do it?

The business uses capabilities to deliver business services. Capabilities represent an organization’s ability to coordinate, control, and deploy resources to produce value. A particular business capability may be used by multiple business services; in the banking example below, for instance, both the checking and savings account service and the credit card service use the support center business capability.

Business capabilities can be broken down into business processes. In the banking example, the most obvious business process for the support center is handling the customer inquiry. However, the support center also performs other business processes, such as shift scheduling (i.e., ensuring the support center is staffed 24×7).

An IT service typically automates a business process and so should contain all of the necessary components for the successful execution of that business process. In the banking example, the IT service that underpins the customer inquiry business process includes the support center application, the workstation used by the support center representative, and the phone system. Therefore, by modeling business capabilities and business processes, one can define end-to-end IT services that focus on customer outcomes.

The industry is currently divided on whether IT services should map to business capabilities or business processes. Some argue for the former because it avoids getting too granular and loosing focus on the big picture (i.e., how IT enables the business). Others, such as ITIL, advocate for the latter.

If your organization as a whole hasn’t defined its business capabilities or processes, you don’t necessarily have to reinvent the wheel. Be pragmatic and use whatever is available. For example, enterprise architecture (EA)—which comprises four interrelated domains: business, data, application, and technology—may already have defined business capabilities. Similarly, the business continuity management (BCM) department may have already inventoried the business’s processes. If you don’t have access to existing resources, look to standard, industry-specific frameworks for guidance. The American Productivity and Quality Center, for example, provides both generic and industry-specific business process frameworks.

Practical Application

One useful side effect of leveraging work done by EA, BCM, and other departments is that it helps legitimize a service portfolio/service catalog initiative as more than just an internal project, one that is, in fact, critical for aligning IT with the business.

There’s a lot of confusion surrounding the service portfolio, service catalog, and request fulfillment processes. The service portfolio is a strategic tool used by IT and business executives to determine the level of investment the business will make into each service. The service catalog is a tactical tool used by IT management to communicate the services the IT organization currently offers. The request catalog is an operational tool that enables users to make specific requests of the service desk or fulfillment team (if it’s a separate function from the service desk).

Many people confuse the service catalog and the request catalog. As mentioned before, a service is an end-to-end capability that facilitates customer outcomes; many services, like email, are delivered regularly. A request is transactional; the customer asks for something, the request is fulfilled, and then it’s considered to be done. If email is a service, the requests associated with the email service are typically for new email accounts, new email distribution groups, expanded email folder space, etc. Hence, there’s a one-to-many relationship between services and requests. (In some cases, there may be a many-to-many relationship. For example, new hire setup might be a request that spans the desktop service, the email service, etc.)

The diagram below sketches out the relationship between these strategic, tactical, and operational tools. These numbers will vary widely depending on the nature of the business; some businesses are very focused, while other businesses might have multiple business units competing in a range of industries.

Before you can run IT like a business, you must first have a clear understanding of the services your IT department delivers and how they provide value for the customer. Defining services is just one step on the journey, and it doesn’t end there. Once you’ve defined your organization’s services, the support center must manage the service portfolio and service catalog, identify service owners and other key roles, promote cost transparency, and provide the business with the tools it needs to manage the trade-offs between cost and quality.


Reginald Lo is the vice president of professional services for Third Sky, an ITSM consulting company focused on business-driven IT. Reg is a certified ITIL Expert who has helped hundreds of organizations adopt ITSM best practices. He has spoken at HDI and itSMF events and was a reviewer for the ITIL 2011 edition and TIPA, a framework for assessing ITIL and ISO/IEC 20000 maturity.

Tag(s): business value, business alignment


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