Improving Service Quality by Implementing Information Technology Infrastructure Library (ITIL) Best Practice

Term Paper for BA509 IT Governance

By Prof. Michael Shaw

Ya Tang

May 2007

Abstract

IT organizations are facing the fundamental issues to justify the value of IT investment. Adapting a service approach, IT service organizations must manage their customers’ expectations and perceptions and understand who their customers are and what their needs are. ITIL framework provides the consistent and comprehensive best practices for IT service management and delivery. ITIL framework focused on service support and service delivery, which is believed to be one of the best ways to increase service quality. This paper reviews service quality gap model and SERVQUAL methodology to evaluate service quality. Praeg and Schnabel (2006)’s assess criteria based on SERVQUAL approach for ITIL implementation are also discussed for future applications.

Keywords: ITIL, Service Quality, SERVQUAL approach

1. Introduction

During the last twenty years, market-based services expanded rapidly and have been the main driver of productivity and economic growth. Today more and more attention is paid to the service sector of the economy. The rapid growth has led it to outstrip the agriculture and industry sectors (Chesbrough and Spohrer 2006). The business goals of companies are changed from reducing cost to increasing the revenue by providing better services to the customers (Rust and Kannan 2003).

IT organizations today face fundamental issue relating to the value of, sustainability of, and satisfaction with information technology. IT organizations within business today are under increasing pressure to justify the value of IT and reduce IT costs. External factors are contributing to changing perceptions of the IT organization and pressure to demonstrate its value. Internal factors such as poor visibility of IT value in the past has led to poor understanding of what value IT brings to the business and a need for justification. Many IT organizations today have a stated emphasis on customer satisfaction and are seeking to transform themselves by becoming more customer-focused (IBM Global Services 2001).

Under such circumstances, service quality becomes one of the most important problems for IT organizations today. Service quality has been reported to be significantly related to costs, profitability, customer satisfaction, customer retention, behavior intention, and positive word-of-mouth communications (Cronin and Taylor 1992). IT organizations face the problems of how to improve service quality and how to measure the service quality.

The Information Technology Infrastructure Library (ITIL) is a framework of best practice approaches intended to facilitate the delivery of high quality information technology services. ITIL outlines an extensive set of management procedures that are intended to support businesses in achieving the service quality and value in IT operations. ITIL is believed to be one of the best ways for IT organizations to improve service quality.

The remainder of the paper is structured as follow. In Section 2, I reviewed the nine processes in ITIL framework. The focused attentions are paid to the service support and service delivery processes. Further I reviewed the literature in services and service quality. A service quality model is also examined in section 3. In section 4, I examined the SERVQUAL methodology and discussed Praeg and Schnabel (2006)’s assess criteria to measure service quality of implementing ITIL framework. Finally, related discussion and suggestions for future research are presented in Section 5.

2. ITIL Framework

One of the major challenges facing Chief Information Officers (CIOs) is aligning IT with business strategy and processes. In today’s competitive environment, individual IT processes must now share knowledge in a systematic and standardized way. Information Technology Infrastructure Library (ITIL) is helping to drive the convergence of information management and knowledge management through processes, databases and organizational structures. Developed by the U.K. Office of Government Commerce (OGC), the ITIL is an important ingredient in building the enterprise of the future (Murray and Mohamed 2007). ITIL establishes the best practice approaches intended to facilitate the delivery of high quality IT services. In addition, ITIL provides the guidance for companies to build management procedures to support businesses in achieving both quality and value, in a financial sense, in IT operations (Wiki ITIL). IT service management is a subsection of ITIL framework.

Service Management is the management of service producing industries, in contrast to manufacturing and agricultural industries. Since the term Service Management is most widely used as the component of Operations Support Systems responsible for service delivery and service support, it is also called as Information Technology Service Management (ITSM). Contrast to previous technology focused approaches to IT management and cost reduction, IT service management focused on the customers’ perspective of IT contribution to the business. It is quoted in the IT service management literature that “providers of IT services can no longer afford to focus on technology and their internal organization, they now have to consider the quality of the services they provide and focus on the relationship with customers” (IT Service Management Forum 2002) .

Figure 1 ITIL Framework (Source: Office of Government Commerce)

2.1 Service Support

The two major components of IT Service Management in ITIL are service support and service delivery, which are by far most widely used. The Service Support discipline is “focused on the User of the ICT services and is primarily concerned with ensuring that they have access to the appropriate services to support the business functions” (Wiki ITIL). The discipline consists of the following processes:

Service Desk is focused on incident control and keeping the customer informed of progress and advising on workarounds. Service desk not only handles incidents, problems and questions but also provides an interface for other service activities (Wiki, ITIL).

Incident Management is to “restore a normal service operation as quickly as possible and to minimize the impact on business operations, thus ensuring that the best possible levels of service quality and availability are maintained” (Wiki, ITIL).

Problem Management is to “resolve the root cause of incidents and thus to minimize the adverse impact of incidents and problems on business that are caused by errors within the IT infrastructure, and to prevent recurrence of incidents related to these errors” (Wiki, ITIL).

Configuration Management is a process that “tracks all of the individual Configuration Items (CI) in an IT system which may be as simple as a single server, or as complex as the entire IT department” (Wiki, ITIL).

Change Management is to “ensure that standardized methods and procedures are used for efficient handling of all Changes, in order to minimize the impact of Change-related incidents and to improve day-to-day operations” (Wiki, ITIL).

Release Management is used for platform-independent and automated distribution of software and hardware, including license controls across the entire IT infrastructure (Wiki, ITIL).

2.2 Service Delivery

The Service Delivery discipline is primarily “concerned with the proactive and forward-looking services that the business requires of its ICT provider in order to provide adequate support to the business users. It is focused on the business as the customer of the ICT services” (Wiki ITIL). The discipline consists of the following processes:

Service Level Management provides for “continual identification, monitoring and review of the levels of IT services specified in the Service Level Agreements (SLAs)” (Wiki, ITIL). Service Level Management ensures that arrangements are in place with internal IT support providers and external suppliers.

Capacity Management supports the “optimum and cost effective provision of IT services by helping organizations match their IT resources to the business demands” (Wiki, ITIL). The high-level activities are Application Sizing, Workload Management, Demand Management, Modeling, Capacity Planning, Resource Management, and Performance Management.

IT Service Continuity Management helps to ensure the availability and rapid restoration of IT services in the event of a disaster (Wiki, ITIL). The high level activities are Risk Analysis, Contingency Plan Management, Contingency Plan Testing, and Risk Management.

Availability Management allows organizations to sustain the IT service availability in order to support the business at a justifiable cost (Wiki, ITIL). The high-level activities are Realize Availability Requirements, Compile Availability Plan, Monitor Availability, and Monitor Maintenance Obligations.

Financial Management is to give accurate and cost effective stewardship of IT assets and resources used in providing IT Services. It is used to plan, control and recover costs expended in providing the IT Service negotiated and agreed to in the Service Level Agreement (Wiki, ITIL).

While the Service Support and Service Delivery are by far the most widely used, ITIL provides a more comprehensive set of practices as a whole, such as Planning To Implement Service Management, The Business Perspective, Software Asset Management, Security Management, ICT Infrastructure Management, and Application Management.

Planning to Implement Service Management deals explicitly with the question of where to start with ITIL. It outlines the steps necessary to identify how the organization would benefit from ITIL. It helps identify current strengths and weaknesses and gives practical guidance on evaluating current maturity levels of service management within the organization (Wiki, ITIL).

The Business Perspective is designed to familiarize business management with the architecture and components of information and communications technology (ICT) — infrastructure required to support the business processes. It helps business leaders better understand the benefits of best practices in IT service management (Wiki, ITIL).

Software Asset Management encompasses the necessary infrastructure and processes for effective management, control, and protection of the software assets within an organization throughout all stages of their life cycle (Wiki, ITIL).

Security Management looks at security from the service provider perspective, identifying the relationship between security management and the IT security officer, as well as outlining how ITIL provides the level of security necessary for the entire organization. It further focuses on the process of implementing security requirements identified in the IT service-level agreement (Wiki, ITIL).

ICT Infrastructure Management covers all aspects of infrastructure management from identification of business requirements to acquiring, testing, installing, and deploying infrastructure components. It includes the design and planning processes, deployment processes, operations processes, and technical support processes (Wiki, ITIL).

Application Management addresses the complex subject of managing applications from initial business requirements through the application management life cycle, up to and including retirement. A strong emphasis is placed on ensuring that IT projects and strategies are tightly aligned with those of the business throughout the applications’ life cycle. Once an application is approved and funded, it is tracked throughout its life cycle by the software asset management function of ITIL (Wiki, ITIL).

3. Services and Service Quality

3.1 Services

Adopting a service approach to IT provide a framework for the IT organizations to deliver value to its customers. A service is a provider/customer interaction that generates and captures value. The service provider and customer (i.e., enterprise) coordinate their work and during the process, both of them are able to reap the benefits (IBM 2006). Services have four distinguishing characteristics: intangible, inseparable, variable and perishable.

3.2 Service quality

One that is commonly used defines service quality as the extent to which a service meets customers’ needs or expectations (Lewis and Mitchell 1990; Wisniewski and Donnelly 1996). Service quality can thus be defined as the difference between customer expectations of service and perceived service. If expectations are greater than performance, then perceived quality is less satisfactory and hence customer dissatisfaction occurs (Parasuraman et al. 1985; Lewis and Mitchell 1990).

Service quality is an abstract and elusive construct. An appropriate approach to assess and define service quality is to measure customers’ perceived quality (Parasuraman et al. 1988). In the context of services, perceived service quality refers to the gap between customers’ expectations and their perceptions of service performance. Figure 2 illustrates the well perceived service quality model.

Figure 2 Model of Service Quality Gaps (Parasuraman et al. 1985; Curry 1999; Luk and Layton 2002)

The purpose of gap analysis is to help organizations decide who can improve service quality. The shorter the gap, the better the service quality. There are seven major gaps in the service quality concept, which are shown in Figure 1. Gap 1 is the understanding gap between customers’ expectations and management perceptions, which is as a result of the lack of a marketing research orientation, inadequate upward communication and too many layers of management. Gap 2 is the design gap between management perceptions and service specifications, as a result of inadequate commitment to service quality, a perception of unfeasibility, inadequate task standardization and an absence of goal setting. Gap 3 is the management gap between service specifications and service delivery, as a result of role ambiguity and conflict, poor employee-job fit and poor technology-job fit, inappropriate supervisory control systems, lack of perceived control and lack of teamwork. Gap 4 is the external communication gap between service delivery and external communication, as a result of inadequate horizontal communications and propensity to over-promise. Gap 5 is the service quality gap between customer expectations and their perceptions of the service delivered, as a result of the influences exerted from the customer side and the shortfalls (gaps) on the part of the service provider. In this case, customer expectations are influenced by the extent of personal needs, word of mouth recommendation and past service experiences. Gap 6 is the delivery gap between customer expectations and employees’ perceptions, as a result of the differences in the understanding of customer expectations by front-line service providers. Gap 7 is the internal communication gap between employee’s perceptions and management perceptions, as a result of the differences in the understanding of customer expectations between managers and service providers. The understanding gap (Gap 1), service quality gap (Gap 5) and delivery gap (Gap 6) are the three important gaps, which are more associated with the external customers since they have a direct relationship with customers. According to Brown and Bond (1995), "the gap model is one of the best received and most heuristically valuable contributions to the services literature". The model identifies seven key discrepancies or gaps relating to managerial perceptions of service quality, and tasks associated with service delivery to customers. The six gaps-understanding gap, management gap, design gap, service delivery gap, external communication gap, internal communication gap are identified as functions of the way in which service is delivered, whereas service quality gap (Gap 5) pertains to the customer and as such is considered to be the true measure of service quality. In the following section, the SERVQUAL methodology is demonstrated to have influence in service quality gap.