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21 April 2010 | Ian Clayton Blog
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It all Depends on What Your Definition of 'up' is...
This week Ian looks at how inside-out thinking to managing IT services will help you to focus on internal processes and what constitutes a service...

  Ian Clayton

The term ‘inside-out’ is associated with the genetic trait of some organizations and individuals to focus on the work in front of them, ahead of who they are doing the work for, and why.  Inside-out thinking is generally blamed for failing the customer, placing an undue bias on internal processes and measures at the expense of customer outcomes and satisfaction.

This article, taken from a series designed to illustrate how inside-out thinking impacts one or more aspects of the relationship between a service provider and a customer organization, contrasts the effect of inside-out thinking with outside-in, or customer first thinking. 

It was a typical summer’s day at Millennium Fangel Incorporated (MFI).  It was very, very quiet.  A good time for sabbaticals.  A great time for change.  Overall MFI’s business had been flat during the early part of the year, and even flatter approaching summer as the economy continued to bump along the bottom of the line chart.  There was little call for spraying their primary product – ‘fangels’, an attotechnology that monitors any electronic components, and reports in over the internet on the health of everything electrical.

On Friday afternoon Martin Cannard, Vice President of IT Operations, was closing his weekly meeting with the IT Directors with some re-assignments to cover absences during the holiday break.  “Roy (Pulvermacher), as Director of Service Management I’d like you to take over my responsibilities next week while I’m on my sabbatical break, I’ll be back in four weeks. The formal letter notifying everyone has just gone out, and as we’ve discussed offline, I’m keen to see you take this window of opportunity to rollout some of your ideas about making us more customer sensitive”.

Monday started like any other Monday. Roy had convened his Service Opportunity Board (SOB), a core team of service management specialists.  It was the beginning of a new month and the support calls were already rolling in from customer management about the recently released availability reports. Following a lengthy discussion in which everyone agreed the reports were as accurate as they could create without new and improved technology, it was agreed that Roy should get an up to date customer perspective on the issue by paying a visit to a major sales office operation.

Roy arranged to spend a day with Bill Melater, an old friend and Manager of the Dallas Sales office, the third busiest operation in North America. 

“Its simple, what we see on the reports is not what we are experiencing”, Bill explained to Roy.  “For example, last month your reports said the SOS service, the sales order system, was 99.5% available.  Yet I know for sure there were distinct and prolonged periods during my folks could not complete orders.  This is in part why we missed our target number.  I have the status reports here from Mark and Steve, two of my best people, I trust them implicitly”, Bill added. 

On the journey back to the IT location in Atlanta, Roy checked with both Tony Alamo, Director of the Customer Response Center, and Alan Kirk, Director of IT Operations.  Both sympathized with Bill’s statements but stressed the reporting method, linking application uptime with that of the service had been in place on agreements for as long as they could both remember.

As Roy strode into the data center on Wednesday lunchtime he took special notice of the service status dashboard, displayed on a huge 72” flat screen behind the receptionist.  It was proudly announcing all the service uptimes in bright, bold colors, well one color actually – green.  All seemed healthy last month.  Roy called Bill from his desk to check on things.

In polite terms Bill explained how today had started busy, which was good news, orders were up, but the system was sticky, even slow, to his sales people at least.  Again Roy checked with key IT staff, although the systems were busier, and a few support calls had been logged with complaints of a slowdown, everything was operating within agreed targets, hence the green displays.

“Bill, its me Roy again, can we try something here?  I’m keen to understand exactly what you are experiencing. Are you open to your staff writing down every occasion they can’t do their work on the sales order system over the next few weeks?  Good!  I’ll email you a simple form I’ve prepared right now.”

Each day Bill’s people diligently recorded every occasion where they felt they could not enter an order properly, or where their work slowed to the extent it was noticeable.  They noted the time it started and ended, and the duration.  Every evening they faxed the sheets to Roy’s assistant Louise.  They were entered into a spreadsheet and summary and detail report produced.  It was emailed to Bill, who confirmed it as reasonable, signing it and emailing it back to Roy. 

Roy had the service status board changed so the SOS figures for Dallas were shown separately.  With some trepidation Roy authorized the figures he had in front of him to be posted to the service status board, showing the Dallas SOS availability separately.   He did not have to wait long before his phone rang. 

The SOB meeting was where Roy really discovered how much his decision had ruffled feathers within the IT organization.  “Look Roy, with all due respect, 45% is ridiculous.  We can’t have the customers generate these key statistics based upon a whim, or their perception of whether the service is available or not!  Our end of year bonuses are tied to these figures.”  It was Alan Kirk, Director of Operations. 

Roy defended his decision and the status board stayed.  He continued to compile the figures sent in by the Dallas office and added to his report back to Bill a list of support tickets, each related as best he could to a period on the worksheet.

Later that week Allen Letni the CIO dropped in to see Roy unannounced.  “Hi there Roy, I bet you’ll be glad to see Martin back tomorrow!  Anyway, I want to ask you a quick question.  How much faith do you place in the accuracy of the information you are receiving from Bill in Dallas?  Seems like an increasing number of our people are rather suspicious and frankly upset by the low figure, and them being posted in such a public place.”

The next day, Martin returned.  Roy gave him a complete debrief on the matter.  “Well Roy, I fully understand your approach and personally think it’s a good one.  That said, I took a call from the CIO yesterday.  It seems the impact has widened.    Evidently during a tour by other sales offices recently, the Dallas figure was noticed and each office on the tour asked if their availability could be similarly measured. And reported.  The CIO feels we need to regain control of this before staff morale is hit further.  So effective tomorrow, Dallas will revert to the original reporting approach, sorry.”

Although disappointed by Martin’s decision, Roy was upbeat when he returned to his original role of Director of Service Management because Martin also asked him to work on a proposal to record service availability at the customer activity level.

This simple story illustrates how inside-out thinking to managing IT services, where the performance reporting and thereby the management approach, places a focus and bias on internal processes and the view of what constitutes a service.  What Roy attempted, was an outside-in approach, where the customer perception takes precedent and is the basis for every decision within the service provider organization.

What do you think about the situation – do you think it’s a valid approach to use customer perceptions of availability?  Do you understand why the IT organization reacted as they did?  What do you think the reaction of Bill and the other sales office was to IT reverting to the original approach?  What would you suggest be done to introduce a more outside-in view of availability?

If you are interested in discussing these questions further, please consider joining the Outside-In Service Management™ discussion group on Linkedin or visiting www.oi-sm.com.

Disclaimer: The events depicted in this article are fictitious and based upon a combination of the personal experiences, opinions, and creative license of the author. Any similarity to any person living or dead is merely coincidental.  The author’s position is that everything was done to protect both the innocent, and the guilty.  The company used is also fictitious.  Millennium Fangel Incorporated is the primary case study used by the author in his own education and consulting practice.   

Any feedback and comments are always welcome!!   


23rd April 2010

Hi Ian

Just read the article on “Definition of Up”.  I think this represents the problem which much of large company management (not just of management of IT).

Problem one is the tying of Bonuses to metrics.  While at first glance this might appear as a great “pay for performance” opportunity.  However once pay is tied to metrics, you have provided great motivation to game the system. You have also motivated middle management to deal with problems by cover-up.  What you want is for problems to be openly identified and addresses.

You also need to motivate the staff to work on what is important to the business.  That is the more important take away of your definition of “outside-in” thinking.  I have seen IT organizations put enormous effort in to addressing issues that are only seen by automated systems and NEVER reported by end users.   This is not an efficient use of resources, but it is what happens when the wrong metrics are being followed.


Patrick Brewer


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