A BUSINESS-FOCUSED IT SERVICE MODEL FOR CLOUD

David Miller and Mark Woodman

School of Engineering and Information Sciences, Middlesex University, Hendon, London, NW4 4BT, U.K.

Keywords: Business-focused IT, Alignment, IT governance, Service assessment, Service measurement, Service per-

formance, Service quality, Services science, Skills profiling, Experience based assessment, Assessment

framework, Service excellence, Cloud computing, Total business experience.

Abstract: The hitherto limited interpretation of service as deployed in IT value creation and solutions implementation

is perhaps a reason why so few IT projects are seen to have successful business outcomes. There are strong

indications that the commonly used measures of quality and performance have never been adequate for

complex services such as IT. As cloud-based technology changes the business and IT landscape it is impor-

tant to consider how IT services will evolve and can be managed to become more business-focused. A ser-

vices-based model for IT is described which has been developed from evidence gathered from business and

IT and ideas from other sectors. Validated in the field, it is designed around the high value touch-points be-

tween business and IT and uses needs-based and experience-based measures for business alignment and

service excellence. It is the first time that services have been identified formally as being necessary for

business and IT alignment. This is of critical importance to businesses using cloud-based solutions and con-

sistent with the service science notion of the co-creation of value.

1 INTRODUCTION

Cloud computing (‘cloud’ for short) is a significant

development in the delivery of IT services. Much of

the cloud discussion is currently of a technical na-

ture but the implications of cloud will be even more

profound for those buying, using and managing IT

services. The dominant worldview for IT service

provision is moving from one in which IT resources

are constrained by available capital, to a cloud-

influenced one where apparent commoditisation

means that resources are available as needed and

paid for on a utility basis: in budgetary terms we are

moving from capital expenditure for facilities (‘cap-

ex’) to operational expenditure (‘op-ex’).

Cloud is bringing about changes to both the IT

industry structure model and to business models.

Enterprises may choose to maintain a ‘cap-ex’ ap-

proach by installing managing their own private

cloud-based infrastructure to create internal services

e.g. the UK Government “G-Cloud” project (HMG

2010). Alternatively externally managed, ‘op-ex’

services can be obtained such as Software as a Ser-

vice, Platform as a Service, and Infrastructure as a

Service. (Whether these are truly ‘services’ is dis-

cussed below.) The range of services is increasing,

old competitive (vendor) advantages are being

eroded, and new ‘big brand’ entrants are now evi-

dent, e.g. Google, Microsoft, Amazon, Sales-

force.com, etc. The attendant new business models

are typically concerned with flexibility to do with

varying scale, dynamic facilities requirements and

operational efficiency; new opportunities are emerg-

ing in terms of how business might interact with

technology – i.e. by becoming both a consumer and

a configurator (Sharif 2010).

Arguably the beneficiaries of the changes will be

the consumers of what we might term commoditised

IT services across all parts of the business ecosys-

tem, from supplier to end user – hereafter collec-

tively referred to as ‘the business’. However, (as

discussed further below) primary and secondary

evidence shows that IT services are not delivering

business value. Hence, for cloud services a resolute

and diligent business focus is needed to be sure of

realizing business value from these services. The

challenge to the cloud-oriented IT services industry

will be whether it can meet the many needs of the

business, which is after all, the most important cloud

entity and the principle quality driver (Vouk 2008).

Cloud technology is still maturing, so there is

considerable uncertainty and much to be done to

309

Miller D. and Woodman M..

A BUSINESS-FOCUSED IT SERVICE MODEL FOR CLOUD.

DOI: 10.5220/0003389203090318

In Proceedings of the 1st International Conference on Cloud Computing and Services Science (CLOSER-2011), pages 309-318

ISBN: 978-989-8425-52-2

 2011 SCITEPRESS (Science and Technology Publications, Lda.)

create a true utility (Buyya et al. 2008), but some

clear trends are emerging. Firstly there is heavy in-

vestment by the IT services industry in cloud tech-

nology which is attempting to commoditize IT

through product homogenization e.g. platform virtu-

alization, unit cost reduction, and ease of access.

Secondly there is a gradual ‘convergence’ of busi-

ness and IT:

• business people who are IT literate;

• businesses sometimes operate as the configu-

rators when purchasing cloud services;

• businesses are behaving as process engineers

using tools such as BPM;

• service concepts are transferring from the

business world to the IT world.

As IT is becoming more business-focused, prob-

lematically, the established IT service management

methods are grounded on the use of IT resources and

production processes (OTGI&OGC 2008); in a

cloud-based environment the business may have no

knowledge of these. The emergence of cloud com-

puting is an opportunity for businesses and IT ser-

vice providers to not merely improve current stan-

dards of IT service delivery but to adapt to the

changes now taking place within the industry so that

this improvement can be maintained.

This paper discusses the changing relationship

between business and IT. It considers new service

models and measures of performance and quality

that are more appropriate to a cloud environment

and which will impact on the way cloud facilities are

packaged, either as commoditised products or value-

enhancing services.

The paper is structured as follows. Section 2 out-

lines the research programme and the data from

which concepts used later have emerged. Section 3

discusses the nature of an IT service, how this can be

made to be totally business-focused, and describes a

service model and related concepts. Section 4 re-

views developments over recent years for measuring

services in IT and other sectors – going in some

depth into ideas from other disciplines to make the

point that metrics other than the traditionally techni-

cal need to be considered for cloud services. Sec-

tion 5 defines an assessment framework that meets

our definition of IT services and which is suitable

for cloud. Section 6 is the summary.

2 BUSINESS PROBLEMS WITH

IT/CLOUD SERVICES

The approach to cloud service provision is based on

output from a research programme that is looking to

maximize the business impact of IT.

The research approach is practice-based. It has

two parallel aspects - empirical (Miller 2008) and

grounded theory (Corbin and Strauss 2008). The

data for the grounded theory consists of 100 inter-

views with different people in several large interna-

tional enterprises from business (consumers of ser-

vices) and IT (suppliers of services). Each conversa-

tion is focused upon IT service improvement. So far,

100 codes or concepts have been identified from

almost 2000 coded segments of text. Five major

themes (or categories) have emerged to define the

complexity of the relationships between business

and IT, which must be managed if the business im-

pact is to be maximised. The central theme is the

total business experience of the service and its po-

tential as a measure for improvement; this will be

discussed. Space does not permit a full exposition of

the data and it’s coding; instead, interview fragments

from three of the companies, denoted ORG1, ORG2

and ORG3, will be quoted to provide a flavour of the

evidence.

Among the research aims is a better understand-

ing of the opportunities for value creation and the

role and nature of the service relationship between

the business and IT against the background of the

changes taking place within the IT industry such as

the emergence of cloud.

There are many facets to the problems if IT ser-

vices that affect cloud. Since businesses are con-

cerned with value, it is appropriate to start with that

concept. For example, a senior IT operations man-

ager from ORG1 said that

“Customers are probably

satisfied with the service from operations but would like

systems to respond more quickly to providing new or

additionalcapabilities... IT isnowmorewilling toprovide

value‐add services.”

Cloud makes this possible and

introduces an agility for provisioning that was not

available previously, although

“combined with the

other IT constraints of security, global standardization

etc. can mean long delays and frustration for the user.

Toomuchofadelayandthereisariskthattheywillstop

asking for help, a risk that they may go elsewhere and

sourcesolutionsoutsideoftheIT

domain.”

Cloud makes the combination of facilities tech-

nically easier too. However, the technology was not

the concern in either of the just quoted cases: there is

a need to manage the business experience such that

business value is added by IT services (of whatever

kind) and corporate controls are maintained. What

the IT manager of ORG1 has implicitly recognized

is that regardless of any current measure of service

quality, businesses operate on at least perceptions of

utility and value. As a senior IT applications man-

CLOSER 2011 - International Conference on Cloud Computing and Services Science

310

ager from ORG1 put it:

“[IThas]majorconcernsabout

managing expectation and delivering a service to meet

the business needs.”

The same organization’s quality

manager put the dangers more bluntly:

“End users

consider themselves the best and expect the best. Don’t

knowwhattheythinkofusbutitmaynotbegood.”

That fear is well founded. A board member of

ORG2 stated:

“…ITinvestmentprioritymustbegivento

initiatives which improve the design and delivery proc‐

esses.InITterms,[we]mustcontinuetostoplocalinitia‐

tives.When making investment decisions we must be

vigilanttoensurethattherearebenefitsandthatweare

notjustinvestingtomake

peoplehappy.”

A senior group manager in ORG3 said:

“The

whole business needsa betteruser experience.I expect

this to be achieved technically using portal and small

footprint devices to aprivate cloud.”

She also went on

to say that the problem went beyond simply engi-

neering the right technical solution. Because there

may be no direct control IT will need to be managed

differently; we have to think about what constitutes

the business experience and how this matches the

business need and the service specification. These

considerations are at the heart of the research re-

ported here: establishing the principles for services

in general so as to maximize the value returned by

utilizing cloud services

3 MAKING IT SERVICES

BUSINESS-FOCUSED

A significant confusion in practice is concerned with

the notions of service and product – not necessarily

about their definitions but about their role. For ex-

ample, the senior IT operations manager for ORG1

opined that IT

“could be offering a greater prod‐

uct/servicerange”.

Hence to start to address the busi-

ness challenges with the provision of cloud facilities,

a.k.a. services, a brief discussion of terminology is

useful.

Traditionally products and services have been

contrasted by describing ‘products’ as capable of

being manufactured and held in stock prior to pur-

chase (transfer of ownership). By contrast, the key

characteristics of ‘services’ are frequently referred to

as being their intangibility (e.g. consultancy), in-

separability (i.e. delivery and consumption happen

simultaneously), variability (i.e. each instance of the

delivery will vary depending on the subject busi-

ness) and perishability (i.e. service capacity not con-

sumed is lost forever).

IT has adapted, extended and even distorted

these ideas through firstly the standardization of

process and then the introduction of automation –

making them essentially products. Thus a business

service becomes an information service orchestrated

by a software product – e.g. using a web ‘service’ or

service oriented architecture. The existence of a

product in the delivery of a service also changes the

nature of the service required to support it; thus

though management has tended to focus on the

product element the product/service mix is what has

to be managed. By invoking measures of product

performance to assess the whole the critical act of

the co-creation of value becomes neglected. If the

same mistake is made with cloud-based services

major business opportunities may be missed.

A distinguishing attribute is the potential for

ownership: the consumer of a product can acquire

ownership, whereas the consumer of a service can-

not. This also has a significant effect on how a busi-

ness perceives the value and utility it might need

from a product or service such as cloud.

Ultimately, a full debate on the appropriate ter-

minology is probably needed. For brevity in this

paper we will generally assume a consensus on their

meanings. In the context of cloud-based IT our posi-

tion is that if the value is inherent in a product and is

realized by its consumption then we have a product-

orientated supply chain. If the value is co-created by

the supplier of the service and its customer – who

implicitly enter a mutually dependent relationship –

then we have a service-orientated supply chain. Ac-

cordingly, we see services as people-dependant ac-

tivities, which may be exploiting product within the

mix.

By definition hardware and software product and

information services such as web based applications

or requests for shared resources (e.g. from a cloud)

are perhaps firstly an output from a value creation

service and secondly potential inputs to other people

services where it has been recognised that there is

value in their consumption. The business, however,

may see both the people-related services and the

information-based services as integral and will judge

the IT services provider accordingly. For instance, a

director of ORG2 stated:

“IT must adequately equip

Company2toworkwithcustomers,partners,andsuppli‐

ers as a virtual team.”

This is a crucially important

point when designing cloud-based services: business

assumes that people are part of a service (in which

value is co-created) and judge the service according

to how well it meets their needs. Technology may

enable a service to be provided in the first place, and

automated to minimize people dependency, but the

technology options, the service specification, the

delivery, the discussions about service improvement

A BUSINESS-FOCUSED IT SERVICE MODEL FOR CLOUD

311

opportunities, etc. come from people. Thus the busi-

ness will look to IT to not just deliver good product

but also to contribute to value creation – achieved by

matching the service to the business need.

If an enterprise is to maximise its opportunities

to gain business value from cloud, it must reflect

these principles in the technical and management

models it adopts. In other words, while the technical

developments of cloud computing progress (and are

sometimes packaged as ‘services’), deep service

ideas that connect to business needs and the realisa-

tion of value must also be progressed. Our experi-

ence shows that there are significant beneficial con-

sequences associated with maintaining a business

focus. As an engineer in ORG2 said,

“Improvements

willprobably comethrough a moreintegrated effortand

amoreintegratedteam,i.e.businessandITpeoplework‐

ing together.”

, and “ORG2 must have a more homoge‐

nous technical environment that improves the connec‐

tivitybetweenORG2,Corporate ,restofthegroup,part‐

nerandclientorganisations.”

Figure 1 shows the layers of a particular tried-

and-tested IT service model (Miller 2009) and iden-

tifies the related concepts that have had to be rede-

fined not just for a business-focused service model

but also in a cloud context:

• The expression of service quality

• Business–IT alignment

• Governance

• Maturity

• Transformational change.

Miller’s IT service model shows that business

needs, the total business experience and a service

specification are interrelated through a five-layer

‘service stack’: (1) service management, (2) business

engineering, (3) service/process engineering, (4)

service execution and (5) Core services and Opera-

tional IT service management.

This is an important shift from the past focus on

the IT requirements specification which embodies

only the bottom layer of the five service categories

described by the service stack. We argue that this

has contributed to the persistently low success rates

in terms of the business outcomes of IT projects over

the last forty years, e.g. (Standish 2009) and others;

see (Miller and Woodman 2010) for that discussion.

The consequences for maximizing business value

from cloud services are that mere IT requirements

specifications are not enough.

Our evidence shows a ‘perception gap’ between

business and IT. This perception gap arises not just

because of the poor success rates just mentioned but

also because IT typically uses a product orientation

to measure IT service performance, according to the

IT requirements specification and the service

specification or service level agreement, whilst the

business is asking itself whether the total business

experience of using the service meets their needs –

an assessment of satisfaction with a broad range of

services, not products. Hence the business

Figure 1: Expanding the management model.

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312

inclination is to measure and assess services, while

the IT inclination is to measure a assess product.

This product orientation by IT has limited the nature

of discussions with the business, limited business

expectations of IT and limited IT’s ability to add

value. There is a question as to whether the manner

in which IT services are currently measured has ever

been adequate for something as complex as IT,

never mind cloud. Add to this the necessity to deal

with the complexities of modern businesses: the

business ecosystems and service supplier and solu-

tion relationships make the co-creation of value a

more significant opportunity.

Arguably the existing IT management methods

are even less helpful in the context of cloud if they

rely on controlling the IT resources and processes.

Those management methods are of diminishing

value in an environment in which cloud has an in-

creasing influence, except perhaps where it is possi-

ble for an informed cloud user to have total visibility

of, if not control over, the IT resources and proc-

esses used by the cloud service provider. For these

reasons the way all IT services, including cloud ser-

vices, are managed must now include a measure of

which reflect the business experience of the service.

ORG2’s director reflected a common business

stance on the consequences of ignoring this:

“The

culture of the group is such that if IT does not listen or

failstorespondtodemand,thenotherswilldotheirown

thing.”

An IT service model suitable for cloud such as

that described provides the means of bringing about

this change. It tells us which activities need to be

embraced and we now have to ask if current metrics

and expressions of business value are all that is

needed for service management and service

improvement purposes.

4 RELATED WORK

This section reviews work related to the points

raised. It considers developments pertaining to the

measurement of service performance and service

quality not just in IT but in other sectors and other

management disciplines. Due to space limitations

and to highlight how a non-IT view of service qual-

ity can be relevant, this brief review somewhat over-

emphasises the concepts from other disciplines.

As business has moved from the industrial era to

the services era (Grant 2000) performance manage-

ment systems have had to adapt. Quantitative service

performance measurement has been the main means

of monitoring and improving performance in deliv-

ering services. IT too has adopted this approach by

managing the production processes that have been

developed to automate the information services. The

receiver of cloud services does not control the pro-

duction process and so to improve services to busi-

ness involving cloud a greater emphasis must be

placed on analysing and measuring the experience

received. The business experience of general service

consumption can be always assessed regardless of

who delivers it and how it is delivered – provided

we can agree on the measurement method. Business-

focused measurement of IT services (i.e. of the kind

relevant to business people) is not yet widely used

but we can expect it to include service performance,

service quality and other measures that are ulti-

mately connected to cloud computing including

what is already available to us.

Service quality measurement has been under de-

velopment by marketing professionals for the busi-

ness-to-consumer sector since the 1980s as a means

of understanding customer expectation and satisfac-

tion. This has given rise to the concept of ‘discon-

firmation’ (Zeithaml et al. 1988) as described within

a service quality model. Disconfirmation uses the

pre-consumption expectation as a reference point for

a comparative judgment that is made following the

actual delivery of a service. Service quality is as-

sessed using what is referred to as the attitudinal

headings of: tangibles, reliability, responsiveness,

assurance, knowing the customer, and access. Ser-

vice quality has been controversial not least because

of its relative subjectivity. Some would argue that

measures of service performance are all that is

needed (Cronin. and Taylor 1992). However, be-

cause much of this debate was in a business-to-

consumer context there was little concern for the co-

creation of value.

Customers generally expect more than they get;

so there is a risk associated with trying to improve

customer perceptions if the assessment is made from

a single viewpoint (Rosen et al. 2003). Be that as it

may, when businesses (as the consumers of cloud

services) perceive the cause of service failure to be

within the control of the service provider, and so

likely to occur again, they will be more dissatisfied

than when the opposite conditions hold (Bitner

1990). We conclude that to eliminate the most likely

causes of failure we must understand them, especial-

ly those that may occur again.

Methods of assessing IT solutions focus on

measuring value, which is also close to the service

performance viewpoint. Where possible, and more

precisely, these assessment methods measure the

price-value comparison of systems from the perspec-

A BUSINESS-FOCUSED IT SERVICE MODEL FOR CLOUD

313

tive of value for money. Value-based software engi-

neering (Boehm 2003) introduces seven key ele-

ments that provide the foundations: benefits realisa-

tion analysis, stakeholder value proposition elicita-

tion and reconciliation, business case analysis, con-

tinuous risk and opportunity management, concur-

rent system and software engineering, value based

monitoring and control, and change as opportunity.

A value perspective also implicitly requires a focus

on outcomes.

By contrast, COBIT (ISACA) and ITIL (OGC

2010) are IT-focused methods for auditing the de-

ployment of IT resources and the production proc-

esses that are constantly being updated to keep pace

with changes in technology. Their focus is opera-

tional systems.

These and as many as twenty other frameworks,

methods and standards (each typically with their

own operational focus) are used in combination by

many but have they been criticised because there has

been little attempt at internal standardisation or

process definition (Galup et al. 2007).

Another problem relevant to cloud services is the

confusion between notions such as IT service man-

agement (ITSM), business services management

(BSM), and IT governance (Winniford et al. 2009).

Some suggest a closer alignment with business.

(Velitchkov 2008) points to the vast array of devel-

opment/management methods and the generally ac-

cepted view that IT is failing to meet business ex-

pectations. He suggests that the fault lies in the lack

of business and IT alignment, problems with IT

strategy and inadequate control mechanisms. As a

solution he advocates extending the architectural

approach (Zachman 1987; Zachman 1978) by com-

bining the objects within the domains of enterprise

architecture and IT strategy. Others also focus on

enterprise architecture and advocate its use as a cor-

porate planning tool by the inclusion of business

model components like goals, products, markets, or

competitors (Winter and Schelp 2008). Such archi-

tectural developments have been the basis of many

automated tools and they will become more impor-

tant but there is a risk that reliance on approaches

such as this underestimate the dynamics between the

IT service provider and the business required for the

co-creation of value.

If we are to rise to the challenge of maximising

the value business experiences with cloud comput-

ing, we must progress the theory of service value

creation, or co-creation, (Chesborough and Spohrer

2006). To achieve that we must look beyond the

traditional IT boundaries and recognise that the ser-

vice science is becoming multi-disciplinary

(Glushko 2008). As an example, (Pinhanez 2008)

describes the benefits of applying services science

principles to the design of on-line service applica-

tions. Worldwide there is an interest in innovation

in the services industry and (Feldman et al. 2006)

describe the importance they attach to business de-

sign and implementation, business optimisation and

management, and service delivery. Two key themes

here are the component business model and virtual-

isation, combining different disciplines in creative

ways to make this successful. Many of us are locked

into a manufacturing/production paradigm” (Spohrer

and Maglio 2008) and as the nature of the relation-

ship between the business and the IT service pro-

vider changes, driven in some part by cloud-based

technologies, we must consider how that relationship

needs to be managed in the future.

In a converged world where a business is able to

utilize commoditised IT services from cloud, we

should model and assess those services using a wide

range of management skills (including IT). Recog-

nising the importance of the more intangible proper-

ties of service in the context of marketing profes-

sional services, (Kotler et al. 2002) developed the

concept of brand equity. Here it is used to describe a

brand’s overall strength as a function of its image,

the price-value relationship it offers, and customer

loyalty. They explain that all three factors influence

each other though in the case of IT services the dura-

tion of a business-supplier relationship can often be

the result of product inertia or lock-in rather than

service loyalty. Lock-in will arise in cloud as a con-

sequence of a lack of standardisation (Buyya et al.

2008). When applied to something as complex as IT

services the work suggests that a wide range of qual-

ity and performance measure are appropriate..

A number of strategic frameworks for managing

organisational performance were developed in the

1980s and 1990s to overcome the obvious dangers

of simply relying on financial information. These are

the Malcolm Baldridge National Quality Award

(MBNQA), European Foundation for Quality

Management(EFQM)and the Balanced Scorecard.

The limitations of each have been identified (Dror

2008). These models were not designed for anything

as complex as today’s businesses in which a de-

pendency on complex IT is embedded and it can be

safely assumed that they are not contenders for

measuring IT services in any context including

cloud.

The added complexities of outsourced services

cannot be omitted from this discussion as it is an-

other area where the IT resources and IT processes

may be obscured from the business. The work of

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314

(Vandaele et al. 2007) describes the management

relationships between consuming organizations and

service suppliers and usefully separates the concepts

of contractual governance and relationship govern-

ance. Both are treated equally but the relationship

between them is not further defined. Contractual

governance in the context of cloud is important and

may break new ground where it is necessary to seek

guarantees, e.g. that data storage or processing must

only be undertaken within countries with adequate

data protection legislation.

In some parts of the services sector organizations

seek to manage customer experiences and to use this

to design service delivery systems (Zomerdijk and

Voss 2009). Although their work was limited in

scope and complexity they advocated designing ser-

vices around the key touch-points. This applies to IT

and cloud services in particular and the service stack

is such a service model.

IT must embrace a wider range of measures that

more reasonably reflect the complexities of the rela-

tionship between the business customer and IT and

that this is likely to lead to a heightened awareness

of the opportunities to add value.

5 DETERMINING THE TOTAL

BUSINESS EXPERIENCE

As services become dominant in many economies,

and as cloud is adopted for IT service provision,

there need to be consequential changes to business

models and to the IT industry, especially in the way

service quality is expressed. Some way of measuring

performance is needed which enables us to improve

the quality of those services to the business cus-

tomer, including value creation, success rates, and

hastening the onset of maturity, in a way that hasn’t

been achieved before.

The proposed method has been used during suc-

cessful consultancy assignments for improving IT

services and should be seen in the context of a Ser-

vice Excellence Model (SEM) (Miller 2008, Fig. 2.2

p28). The model is a business-to-business extension

of the business-to-consumer service quality model

(Parasuraman et al. 1985). The SEM as depicted in

Figure 2 is used for establishing service excellence

by checking for the existence and nature of any ser-

vice gaps. These can either be gaps in service plan-

ning or service delivery. Cloud should have benefi-

cial implications for many aspects of service plan-

ning, e.g. Funding Gap and Resource Gap, and so

improve expectation. Whereas the consumer model

used in marketing is based on the perception of ser-

vice and the buy/no buy decision, the SEM is based

on the total business experience for the purpose of

service improvement. For cloud computing the focal

point of the SEM is the service engine at the heart of

the model, which is circled in Figure 2, and its out-

put, the Total Business Experience (TBE). The ser-

vice engine encompasses the functions provided by

the core service(s) actually supplied and service

management. (These are explained later.) By being

able to comprehensively assess the TBE against the

Figure 2. Service Excellence Model, adapted from (Miller, 2008).

A BUSINESS-FOCUSED IT SERVICE MODEL FOR CLOUD

315

business need the service engine can be improved

and thus the TBE provides a measure of alignment

Consider for example the different cloud experi-

ences from software as a service, platform as a ser-

vice, and infrastructure as a service in the supply

mix of the service engine. Will the business express

its preferences for cloud facilities as ‘true’ services

rather than as rented products?

By applying the work of Kotler et al. to IT ser-

vices we could argue that the TBE is a function of

the price-value relationship of the core service and

the brand value created by its externally facing ac-

tivities. In order to make this useable in an IT and

cloud context we have substituted the term ‘core

services’ (C) for ‘price-value relationship’ and ‘ser-

vice management’ (M) for the ‘brand value’ of the

externally facing activities. This can be expressed as

follows:

Total Business Experience (TBE) = ƒ(C, M)

Picking up on the multi-disciplinary nature of

value creation in the preceding section, this relation-

ship has been developed further by considering the

properties of the business experience that contribute

to delivering core services and service management

respectively in the context of IT and how a value for

the TBE can be derived from these properties; this is

covered in more detail in the next section.

Miller (2008) has devised a framework for un-

derstanding TBE. Table 1 illustrates the approach

for profiling the properties that the business experi-

ences when consuming a service. It is based upon

elements from the review in Section 4 used in com-

bination with the SEM. Together they identify and

address issues of:

• Commonality (common causes of concern)

• Cause and effect

• Supply and demand.

The table represents a summary of an assessment

of the properties of a given IT service. The resulting

profile is typically based upon multiple perspectives

and constitutes a consensus view or one held as true

by the key stakeholders (Becker and Bjorn 2007). It

expresses the extent to which these different proper-

ties of the service meet the ideal needs of the busi-

ness. Comparisons with other suppliers or with con-

ventional maturity models are not introduced into

the assessment unless these are relevant to any of the

stakeholders or the business case thus avoiding any

risk of the over-engineering of the services.

The properties are generic to any service but here

are modelled on IT service provision in a business-

to-business context. Each property is broken down

into some detailed dimensions and measured using

appropriate criteria incorporating the standard quan-

titative and qualitative measures. If we compare the

scope of this approach with existing practice in IT,

the service performance metrics used with the many

IT methods are principally confined to the properties

concerning the definition and the delivery of the

products and services of Table 1. This can be seen,

for example, in the work of the SFIA Foundation

(SFIA 2003). Thus existing investment in these

methods is not wasted but that investment may be

insufficient. Service quality data used in IT is simi-

larly restricted to assessments of the people and the

culture. Thus, current IT-related methods only par-

tially address 3 of the 10 properties within the scope

of this new framework.

Table 1: Assessing the service experience.

PROPERTY SCORE PROPERTY SCORE

Definition of prod-

ucts and services

85 Business and sector

awareness

Delivery of prod-

ucts and services

85 Marketing and

communications

Bought-in products

and services

75 Sales and value

creation

Security 80 Commercial, finan-

cial, compliance, &

admin

Technology 75 People, organisa-

tion and culture

Core services score

(C)

80 Service Mgt score

(M)

Total Business Experience (TBE) 51

The table identifies the key elements of the as-

sessment arranged in two pairs of columns; the first

pair contains the five properties representing the

core service/product with a score (out of 100) for

each, the second pair contains the five properties that

influence service management and their scores. The

whole constitutes what the business experiences as a

result of receiving the service. Each score represents

the extent to which those properties meet the ideals

required by that business. The scores represent the

consensus view resulting from a 360 degree assess-

ment by business people, representatives from the IT

service provider, and other key stakeholders across

the ecosystem. The improvement and developmental

ideas resulting from the gap analysis are subjected to

CLOSER 2011 - International Conference on Cloud Computing and Services Science

316

importance/performance assessments.

Overall, the core service activities have more

quantitative performance measures than the service

management activities where qualitative judgments

are more prevalent.

The average score for the core services (C) and

the service management (M) are the statistical mean

of the properties of which they are comprised. The

Total Business Experience (TBE) is calculated as the

product of the score for the core service and the ser-

vice management and expressed as a percentage of

the ideal, i.e.

C = (85 + 85 + 75 + 80 + 75) / 5 = 80%

M= (65 + 60 + 50 + 80 + 65) / 5 = 64%

TBE = (80

x 64) / 100 = 51%

The empirical evidence from several commercial

case studies suggests that poor service management

reduces the impact of the core service and that this

formula yields the closest expression of the func-

tional relationship between the core services, service

management, and the TBE. The scores for the TBE

contrast markedly with those from typical customer

satisfaction surveys which are often treated as public

relations exercises and where much higher scores

have come to be expected. From a business im-

provement perspective the output from an assess-

ment and discussion of the TBE is likely to yield

many more improvement opportunities for attaining

service excellence.

Subjectivity is minimised but not eliminated by

the detailed breakdown of the properties into their

dimensions and by the assessment methods used

such that there has never been any dispute about the

results of the analysis amongst stakeholders. The

model is also frequently used in workshop sessions

following minimal explanation with good results.

6 CONCLUSIONS

Current IT-focused methods of managing IT ser-

vices have not, on their own, been totally successful

as far as business is concerned; arguably they will be

less relevant where there is no knowledge of the

resources or production processes used, e.g. cloud-

based technologies.

The emergent service based method of assess-

ment and alignment with business builds on a key

concept of service science, that of the co-creation of

value. This is believed to be the first time that ser-

vices have been identified as formally being neces-

sary for business and IT alignment.

The hitherto limited interpretation of services

deployed in IT value creation and solutions imple-

mentation is perhaps another reason why so few IT

projects are seen to have successful business out-

comes. By contrast a study based on these ideas for a

global financial services organisation generated

around a hundred service improvement initiatives

across ten work streams.

By taking ideas from sectors where the concepts

of product and service are easier to comprehend, we

have shown that IT management, including where

services are in the cloud, can be redefined to become

more business-focused using new service models:

• The Service Stack: designed around the high

value touch-points between business and IT

• The Service Excellence Model using gap

analysis as an indicator of service quality

• Total Business Experience: framework for

assessing and aligning service needs.

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