CIO Priorities

Stephen Mann

Principal Analyst & Content Director at ITSM.tools

As the CIO or a senior IT decision maker within your organization, you’ll be focused on helping it to rebound post pandemic through better operations and outcomes. As part of this, there’s the need to make potentially tough decisions around the IT service management (ITSM) status quo and where the costs are not sufficiently proportionate to the delivered business value. With this not only the obvious costs of the “ticket price” but also the associated costs of “doing things a particular way,” A good example, that might be overlooked in the busyness of day-to-day operations, are the additional operational costs and the opportunity costs caused by the current ITSM solution’s limitations. Or, stating the blog title differently, “Is your current ITSM solution making your IT department’s life harder and more costly than it needs to be?”

Please keep reading to see how many of the following issues your current ITSM solution is guilty of – with all of them having an unnecessary or unwanted operational and/or financial cost that can be reduced or even eliminated.

Unwanted ITSM solution cost #1: Your organization is simply paying too much for its ITSM solution

It seems fitting to start with this unwanted ITSM solution cost – that your organization is paying more than it needs to for modern ITSM-enabling capabilities. Or it might be paying too much for capabilities that are no longer sufficient for modern organizations.

This overpaying has multiple dimensions. For example, there’s the solution cost itself – whether simply the license/subscription cost or the total cost of ownership (TCO) when implementation and ongoing costs are added in, when better value solutions are available.

There are many costs to consider when looking at your current ITSM solution’s TCO. Some of which are also called out separately as unwanted ITSM solution costs below. Examples of your ITSM solution TCO cost elements include:

  • The solution licensing/subscription costs, which can include additional costs for certain modules or add-ons
  • The solution implementation costs, the set up including processes and access rights
  • The hosting costs for on-premises solutions
  • The management costs for on-premises solutions
  • The support and maintenance costs for on-premises solutions
  • The business-as-usual (BAU) administration costs
  • The costs of solution change, whether during the initial implementation, ongoing customizations for “required improvements,” or upgrades
  • Integration-related costs, whether it’s their creation or the need to update them in line with solution upgrades

Plus, there are the additional non-tool costs caused by the solution’s limitations, which includes not-insignificant additional people costs. Think of these as day-to-day use costs and the people costs of using an ill-fitting ITSM solution might far outweigh the technology costs.

So, do you truly know what your current ITSM solution is costing your organization? The TCO is usually far more than the initial ticket price and will vary significantly across ITSM solutions. For example, and to give you an order of magnitude, our customers find that their ITSM solution TCO is 40% lower than with ServiceNow.

Unwanted ITSM solution cost #2: Inflexibility 

In many ways, this can be considered to be part of the TCO costs outlined above. For example, your people and process might have to work the way that the ITSM solution wants you to work, rather than the solution being molded to fit your organization’s preferred ways of working. This likely increases the required manual effort and costs when using the ITSM solution. This is definitely a cost that shouldn’t be underestimated, especially when missed intelligent automation opportunities are factored in too.

The flip side to the above “people-based inflexibility” is the need to customize – which can be a barrier to change because of the associated costs. Here the ITSM solution can work in exactly the way that your people and processes need it to, but it’s neither easy nor cheap to do so. Because customization is needed. Whether this is done through internal staff or, more realistically, expensive professional services staff, it’s a high-cost journey that not only takes upfront time to deliver value – there’s also a likely knock-on, in terms of both costs and time, to ensure that the customizations still work as the solution is upgraded over time.

There are other associated costs too. Difficult-to-use technology, including ITSM solutions, causes people to circumvent the agreed ways of doing things. Quite simply, they find easier ways to do their work. This likely increases the manual costs of tasks and activities, but it can also:

  • Increase the probability of human errors and rework costs
  • Adversely affect the speed and the quality/consistency of service and support
  • Interfere with mandated governance requirements.

Unwanted ITSM solution cost #3: Change isn’t easy

As already mentioned in unwanted cost #2’s customization point, your ITSM solution, and potentially its use, will change over time. This could be changing the ITSM solution to fit the initial business needs at implementation, ideally with fast migration from any old ITSM solution offering quick time to value, or ongoing changes such as new requirements (of the business or IT) and solution upgrades that bring about new features and required security improvements. Sadly, such change isn’t always easy. In fact, it might not always be possible.

So, how easy is it to change your ITSM solution as and when needed? And what does it cost? Plus, as with unwanted cost #2, does the pain and/or cost of change prevent a change from occurring? Making it an opportunity cost, where potential benefits are missed out on. This is most evident in terms of ITS solution upgrades that, when the total impact of the change is considered, are forgone in favor of sticking with the easier (and cheaper) status quo.

Over time, change might also get harder and harder. As the ITSM solution gets more and more complicated to manage and change thanks to the history of customizations. In many ways, the solution customer ends up in a situation akin to the adage of “spending good money after bad” as they struggle to make their now-customized ITSM solution match the new needs of both the business and IT.

Unwanted ITSM solution cost #4: Paying for features that aren’t used

While this could sit in the overpaying section above because it’s another variant of overpaying for an ITSM solution, it warrants a section of its own. Think about how much of your current ITSM solution isn’t currently used by your ITSM team and the reasons for this.

It could be due to solution selection mistakes, where the RFP asked for far more than is actually needed (both initially and going forward). It might mean that a Swiss Army ITSM solution was procured, with many “just in case” capabilities available that only add to the solution complexity and cost. It could also be a solution-side issue, the current ITSM solution includes a long list of extra capabilities but they’re simply not used (or not used sufficiently enough to justify the additional cost).

The remedy for this unwanted cost ultimately comes down to rightsizing. Finding the best-fit ITSM solution to your organization’s needs – which includes avoiding the provision of features and functions that, while being paid for, aren’t being used to create or deliver business value.

Unwanted ITSM solution cost #5: Poor ITSM solution vendor support costs too

In many ways, the poor support services and scenarios experienced with ITSM solution providers are similar to the internal need for employee experience measurement. That while “agreed” service level targets are being met, the operational reality is that the supply-side failure has a significant adverse impact on both IT and business operations.

This failure could come in many forms, from the non-availability of a cloud-delivered ITSM solution causing the need for manual, “pen and paper” support operations within your organization. Which is something that is even harder to do, and potentially causes and even bigger business-level impact, with post-pandemic distributed working structures. To the ITSM solution vendor not responding in an appropriate manner to your organization’s support needs, with them not appreciating the impact of their support delay on your organization’s business operations and outcomes.

Hopefully, this blog has you thinking about whether your organization is overpaying for its current ITSM solution. There are so many costs, not all of which are initially financial, that make some ITSM solutions too costly relative to what they’re used for and the value they deliver. Request for Demo