What’s the ROI of ITIL?

Somebody asked me recently how they could get a return on investment (ROI) from investing in ITIL. I found it really hard to answer the question, because of the way that they’d phrased it, so I spent a while thinking about the topic, and here are my thoughts…

ITIL training

The first thing I wanted to know is exactly what they meant by “invest in ITIL.”  I guessed that they were talking about sending their IT staff on ITIL training, but as we’ll see later, there are other investments that they could’ve been talking about.

So, why invest in ITIL training? What return can you expect on your investment? Here are some of the benefits that I’ve seen organizations get as a result of sending significant numbers of staff on ITIL training.

Common language

ITIL provides a common language for people involved in IT service management (ITSM) to use. Like every other field of human endeavour, we need to have common language if we want to communicate effectively and efficiently.

If I call something an incident, you call it a problem, and our manager calls it an issue, then we’re all going to get very confused. This could result in people completely misunderstanding what’s expected from them.

Here’s an example from my past. I worked for a big hardware and software vendor. A customer called to log a problem. Their UNIX server had crashed. The person in my company taking the call had never heard of ITIL, and didn’t know the difference between an incident and a problem. So their response was to make sure that the server had restarted correctly and close the call – after all, the issue was resolved, and everything was now working properly. However, the customer was not very happy because they DID know the difference, and they wanted the problem to be investigated. And the customer was right! They wanted to be sure that the reason for the server crash was investigated and action taken to prevent it happening again.

A focus on value

It’s very common for IT staff who have no ITIL training to be focussed on purely technical issues, rather than on technical issues as they relate to their organization and its goals. If IT staff spend most of their time thinking about applications and infrastructure and organizations need them to be more focussed on actual outcomes, then this requires a huge change of mindset.

This is where good ITIL training comes in. It helps to change the mindset of IT practitioners.

Any good ITIL instructor is likely to start, and end, their training by talking about value, outcomes, costs, and risks (VOCR). The ITIL definition of a service is:

A means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks.

What this means in practice is that everyone involved in ITSM needs to understand how they’re helping to create value with their customers. What outcomes do the customers need, and how do they measure these? How is the service helping the customer to manage costs and risks?

Some of my clients now have big-screen TV displays in the IT department where key business metrics are constantly updated. Everyone in IT thinks about how their actions affect these business metrics, and as a direct result they make better, more business-focused, decisions. Work gets prioritized better, and customers get a much better service. The end result is that the customers get much more value from their investment in IT.

Incorporating ITIL

ITIL training is a great investment, but on its own it will not give the kind of ROI that happens when there is a committed buy-in from the whole organization.  Here are some of the ways ITIL can be incorporated within organizations.

#ITIL training is a great investment, but on its own it will not give the kind of ROI that happens when there is a committed buy-in from the whole organization. - @StuartRance Share on X

Guiding principles

There’s no getting away from it. There are many things that can be solved by having automation, or scripts, or procedures in place; but whatever is in place, IT staff have to make decisions, to prioritize work, to plan improvements, and to resolve conflicts. It’s simply not possible to provide a handbook with all the answers to every issue, adapted to the specific needs of every individual workplace.

What we can do is to provide some tools that’ll help people solve issues for themselves.

In 2015, ITIL introduced the idea of guiding principles and updated them with the release of ITIL 4 Foundation in February 2019. These guiding principles are designed to help people make decisions, prioritize work, plan improvements, and resolve conflicts. The ITIL guiding principles are:

• Focus on value
• Start where you are
• Progress iteratively with feedback
• Collaborate and promote visibility
• Think and work holistically
• Keep it simple and practical
• Optimize and automate

You can read more about these guiding principles in my blog  The 7 Guiding Principles of ITIL 4: Practical Advice to Help You Make Decisions.

An individual who is familiar with these tools can make better decisions, but the real benefits come when they’re embedded within the whole organization. Changes can be implemented faster and more cheaply; people don’t just think about their own little silo; and improvements happen by design, not by chance.

Continual improvement culture

ITIL strongly emphasizes the need for continual improvement to be embedded in everything you do. A great ITIL training course will end with your staff already thinking about what improvements they can make in the way they work. How they can use the ideas they learned on the training to make a difference to the organization they work for, and the customers they support.

This isn’t about creating an improvement process, and having a continual improvement register managed by a continual improvement manager. It’s about everyone recognizing opportunities to improve, taking responsibility for things that are under their control, and sharing ideas for things that are outside their scope of control.

Specific guidance on how to manage work

ITIL contains lots of detailed guidance on how to manage different types of ITSM work. The latest version of ITIL describes 34 practices, including topics such as portfolio management, relationship management, incident management, monitoring and event management, and deployment management. Each practice offers suggestions for how to do the work, but what I want to stress is how important it is to treat these as suggestions.

Sadly, many people have treated the guidance in ITIL as prescriptive, “You must do these things in this order.” Organizations that do this often find that it creates conflicts, and they rarely get much value from their ITIL investment.

Sadly, many people have treated the guidance in #ITIL as prescriptive and organizations that do this often find that it creates conflicts, and they rarely get much value from their ITIL investment. - @StuartRance Share on X

The right way to use the ITIL practices is to read what ITIL has to say, and use the guiding principles to help you decide what will work well in your context. The tools will help you make the best possible decisions, but there’s no substitute for thinking about what you want to achieve in the specific context of your own organization.

ITIL tools and processes

I’ve worked with some clients who called their investment in new tools and processes an “ITIL project.” Sometimes the focus of this project was on replacing a tool that was no longer fit for purpose, and sometimes it was on improving the flow of work in the IT department. The ROI from a project of this type can be very high, but it can also be embarrassingly low.

What makes the difference is the focus and intent behind the project.

If you only think about the ITSM tool, and related processes, then you’re unlikely to achieve the returns you expect. When you run a long project to replace your ITSM tool, and you get external consultants to document new processes that don’t fit your culture, then you’re likely to get a negative ROI. You could spend lots of money and end up with services that are no better than when you started.

Alternatively, you could start with a focus on value. To do this, you really do need to think about how your customers are going to benefit, and to engage with your customers throughout the whole project.

Start by understanding what their issues are, and how IT is helping them with those issues. Then think about how you could do a better job, think about value, outcomes, costs, and risks. Think about the ITIL guiding principles. Talk to your customers about what you could measure to demonstrate that you’re doing a better job for them, then make iterative changes and measure how they impact your customers.

Keep improving, and you’ll get a great return for your investment.

See my blog How to Replace Your IT Service Management (ITSM) Tool for an example of how to run a project of this type.

So, what is the ROI from investing in ITIL then?

Let’s return to the question that started this blog. How can you get an ROI from investing in ITIL?

The answer is actually very simple. Use the tools to guide your thinking and behavior.

How can you get an ROI from investing in ITIL? The answer is very simple says @StuartRance. Use the tools to guide your thinking and behavior. Share on X

Talk to your customers. Think about value, outcomes, costs, and risks. Know what you already do well. Decide what needs to be improved, and how you can measure that improvement. Then think about how you could get there. Proceed as simply as you can, getting feedback and acting upon it as you go.

Somewhere along the journey you may want to consider replacing tools, updating processes, training staff, and all the other opportunities to spend money on an “ITIL project,” but don’t focus on these things.

Keep a laser-like focus on the value, outcomes, costs, and risks for your customers, and I guarantee that you’ll get a great return on your investment.