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Midmarket slow to adopt ITIL version 3

ITIL version 3 was released with much fanfare, but the midmarket has been slow to adopt it. Many CIOs are turned off by the complexity of this latest version.

ITIL gets a refresh. Does the midmarket 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, ITIL version 3 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 ITIL version 3 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," said 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 One of the big changes is that the former buzzword -- alignment of business and technology -- has been replaced by integration.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 ITIL v3 mean for them? Not that much.

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 said. "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 said. "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 said. "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 said. "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 said he went with a pick-and-choose approach, rather than implementing the entire series. "I knew what our pain points were," he said. "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 noted that midmarket CIOs should actually find it easier to implement ITIL v3 than their counterparts at bigger enterprises. "There are fewer behavioral issues to tackle," he said. 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 said. "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 re-engineering 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.

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