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G00270519

80/20 ITSM: Prioritize With Pareto's Principle


Published: 12 February 2015

Analyst(s): Tapati Bandopadhyay

Persistent low maturity of I&O indicates low maturity of the leadership and a
failure to prioritize and execute high-impact transformations. I&O leaders
should use Pareto's 80/20 principle to prioritize people, process, technology
and information when making service improvements.

Key Challenges

Most I&O leaders report on lack of bandwidth available for leading transformational IT service
management (ITSM) practice improvement initiatives.

A deep dive into the reasons behind this lack of bandwidth shows that the I&O teams lack a
sense of business-relevant priority and spread themselves too thin across several initiatives at
once.

Lack of focus on top-priority services, processes and people leads to wasted time, money and
efforts by I&O teams, without yielding any significant results.

Recommendations
I&O leaders should:

Identify and prioritize ITSM initiatives for the top 20% of business-critical services that enable
the most business value for the organization.

Plan to deploy 80% of ITSM initiatives and resources on delivery, management and
improvement in the service levels and the QoS of the top 20% of business-contributing IT
services.

Focus on strongly differentiated rewards and recognition systems for the top 20% of I&O
staffers who demonstrate the right priorities and proactively contribute to maximum value.

Table of Contents
Introduction............................................................................................................................................ 2
Analysis.................................................................................................................................................. 2

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Identify and Prioritize ITSM Initiatives for the Top 20% of Mission-Critical IT Services........................ 2
Plan to Deploy 80% of ITSM Initiatives and Resources on the Top 20% of Business-Contributing IT
Services........................................................................................................................................... 3
Focus on Strongly Differentiated Reward and Recognition Systems for the Top 10% to 20% of I&O
Staffers.............................................................................................................................................4
Gartner Recommended Reading............................................................................................................ 5

Introduction
Persistent low maturity of I&O also indicates low maturity of the leadership (see Note 1). If leaders
do not transform the way they perceive their own function, role and contributions, their teams
cannot manage their priorities well. Therefore, despite all the well-intended time, efforts and money
spent, neither the ITSM practices nor the service or processes show any visible and significant
signs of improvement.
Pareto's principle offers a simple, intuitive and common-sense approach toward prioritizing IT
service and process improvement initiatives. Prioritization through a transparent and consistent
logic can be key to the transformation of I&O both internally and externally that is, their image as
perceived by business. Instead of trying to do too many things at the same time and spreading
themselves too thin, given the limited bandwidth and talent, if the I&O leaders focus at least 80% of
their efforts and resources on the top 20% of mission-critical IT services, their contribution and
value will become more visible, meaningful and business-relevant. Linked to wolf I&O leader
concepts (see "Seven Habits of Highly Effective 'Wolf' I&O Leaders to Improve ITSM") on balancing
between "lion" and "rabbit" approaches by prioritizing services based on business outcome/value
(see "Four ITSM Strategies for a 'Wolf' I&O Leader").

Analysis
Identify and Prioritize ITSM Initiatives for the Top 20% of Mission-Critical IT Services
Overstandardization through ITSM processes have wrongly painted all IT services with the same
brush. All services, projects and assets; technologies and customers; or users and employees are
usually given equal treatment, but their contributions to business outcomes are not equal. For real
service orientation, business-value-based service levels and cost and quality differentiation are
critical both from internal and from external perspectives.
I&O teams must work with customers to identify and prioritize improvement initiatives for the top
20% of mission-critical IT services that support/deliver maximum business value for the
organization. The number of manageable ITSM initiatives in flight and in parallel will vary across
organizations depending on many factors. I&O should not wait on the business but proactively
suggest manageable ITSM initiatives and a set of priorities based on their production experience in
order to manage the queues of potential ITSM initiatives by business relevance, value and criticality.
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This will help start the trust-building process where the business will see the desire from I&O to
make improvements that benefit the business. This should be an iterative process where
improvements are made and delivered with every iteration.
For example: External to IT operations, all customers and business stakeholders expect equal
priority and treatment. Business and IT must work together instead to create a transparent and
consistent prioritization logic depending on:

How much IT dependency the customers have for example, to perform their jobs

How critical the IT services are to business process productivity and to business contributions
of roles

How much of what IT services the business uses the most and, more importantly, why it is
consuming these services at certain service levels and quantity

One-size-fits-all-type approaches neither help the IT teams to prioritize by business value nor help
the customers to be responsible about the IT service and support costs. Prioritization must be done
together by the business customers and IT. This is a management function that determines how to
make the best use of resources to maximize outcomes, for example, in support of the stakeholders'
direction. This is why the top 20% of business-contributing IT services that may contribute as much
as 80% of key organizational outcomes such as profitability, revenue, market share and growth
need to be identified and then prioritized over the other services.
Action items:

Identify, along with your key business stakeholders, those business processes:

That are heavily IT dependent that is, those that will not run without IT services

That support significant business outcomes for example, without these processes
running smoothly, the revenue, profitability, productivity, sales, costs, transactions, market
share, brand image and so on will be impacted significantly.

From the IT service portfolio, map all IT services to these business processes as identified in the
step above, and ensure that they run/deliver/support effectively (that is, without these services,
the business processes will not run, hence, there will be significant business losses).

From Steps 1 and 2, identify the top 20% of IT services that contribute the most to critical
business outcomes. For example, if you have 50 services in the service catalog, identify the top
10 services in terms of the business outcomes that they support by delivering/enabling the
constituent business processes.

Plan to Deploy 80% of ITSM Initiatives and Resources on the Top 20% of BusinessContributing IT Services
Spend most of your efforts and resources on delivery, management and improvement in the service
levels and the QoS of the top 20% of business-contributing IT services and on the user groups that
consume these services to run their heavily IT-dependent, critical business processes.

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For example: Plan to spend the most of your business relationship management efforts and
resources on the top 20% of business users who consume a significant portion of the IT services
and support to produce and enable around 80% of the company's profits and revenue. These are
your high-value, high-visibility, high-dependency "customers." Keeping them and the services
consumed by them in good health will keep at least 80% of your I&O budget in good health, with
likely growth and sustainability.
Similarly, regarding prioritization of new services or service and/or process improvement initiatives,
plan to spend most of your planned expenditure on the top 20% that are most likely to drive 80% of
improved value. Differentiate 80/20 in portfolio and pipeline as well for example, when you
prioritize the queue in the pipeline.
Action items:

Deploy as much as possible of your running budget and resources, time and efforts on
improving the 20% of IT services that drive 80% of business impact, as identified in the
previous section.

Deploy more resources where it matters more and is most visible for example, for closer
monitoring, faster responses and restorations, proactive and pre-emptive processes for these
services.

On those services that are identified as the top 20% of critical services from the service catalog,
do a deeper-dive analysis on their service maps. Take this data from the configuration
management database (CMDB), if implemented, for accuracy and updated information on
dependencies, shared resources and so on.

Evaluate the new technologies and tools from the perspective of what will impact your business
outcomes most significantly (around 80% or above). For example, identify not more than two or
three technology opportunities out of top 10 technology trends on the basis of the most
significant impact they can make on top line/bottom line in your organization, and build all your
I&O strategic initiatives around only those two or three lines.

Spend 80% of your budgetary allocations for future projects on two or three technologies that
are most likely to drastically improve your organizations top line/bottom line for example, IT's
contribution in a new channel (say mobility-enabled) leading to significant growth of the
organization.

Focus on Strongly Differentiated Reward and Recognition Systems for the Top 10%
to 20% of I&O Staffers
Talent management is a key area for leaders as well as for any transformation to yield results, so
focus on strongly differentiated reward and recognition systems for the top 10% to 20% of I&O
staffers who have demonstrated the right priorities and contributed to maximum business value.
Otherwise, a top-performing employee loses motivation to take up any service/process
improvement work proactively because everyone is getting equal treatment. Baseline-based
performance management does not convey the right message to the organization overall because
the top performances are often seen subsidizing the not-so-good performances. Both lose

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motivation this way: Top employees don't care, and bottom employees don't feel the urge to
improve.
Those employees who have not only "run the show" successfully (which is a performance baseline
anyway) and "resolved tickets using scripts," but also have proactively achieved beyond their
expected baselines by trying innovative approaches and taking CSI initiatives, must be recognized
and rewarded. They have understood the business imperatives and have taken steps to proactively
deliver business value. This may mean going "above and beyond" their normal demand and making
an effort to link IT services to business outcomes.
While prioritizing on top performers or contributors can be a good motivational program, another
aspect of this practice can be to use these performers to mentor and help others to improve and
prioritize. That way, the internal best practices of the top contributors can motivate their colleagues
to adopt them, and others also get opportunities to improve.
Action items:

Identify 10% to 20% of your top performers in I&O who deliver 80% of the value. Give them
flexible career path options and choices. Progress must be strictly performance-based, and this
approach must be well-communicated.

Spend most of your people management efforts to manage, retain, develop and leverage
effectively the top 10% to 20% of your I&O workforce that deliver 80% of proactive service
improvement/process improvement efforts on business-critical IT services.

Analyze the prioritization logic and behavioral traits of these business-value-savvy resources,
and build and communicate these as a target profile to motivate others to achieve these right
traits.

Utilize these top performers to mentor and assist other potentially good resources and to hone
knowledge and skills for business-relevant ITSM practices. Monitor how this culture change
across your organization is working by specifically testing the understanding of business
imperatives of your people on a regular basis.

Gartner Recommended Reading


Some documents may not be available as part of your current Gartner subscription.
"Seven Habits of Highly Effective 'Wolf' I&O Leaders to Improve ITSM"
"Four ITSM Strategies for a 'Wolf' I&O Leader"
"A Fresh Approach to ITSM Strategy"
"Use the Five A's Framework to Design an ITSM Strategy and a Transformation Road Map"

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Note 1
Gartner's ITScore for I&O (ITSIO) data shows that more than 80% of I&O organizations have a selfassessed maturity below Level 3, which is considered the starting point of maturity, where I&O's
contribution to business value becomes visible.

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