ITIL at Celanese
ITIL at Celanese This case can be used to achieve a number of pedagogical goals. In the main, the case gives students co
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ITIL at Celanese This case can be used to achieve a number of pedagogical goals. In the main, the case gives students contextually rich insights into the everyday challenges associated with process improvement work even under the best of circumstance, i.e., implementing vetted best practices with IT professionals who are typically proponents of process improvement as the target. Q1. Describe and assess Celanese’s approach to IT service improvement a. Describe the approach to IT service improvement taken at Celanese. IT initiatives at Celanese were implemented based on their cost-cutting potential. With the recent turndown in the economy only projects that clearly supported the company’s strategic direction and convincingly demonstrated a 1-year payback would be approved. Decentralized approach to IT: Celanese also had a much decentralized approach to IT overall with each department in each country running their own systems and implementing projects often without communicating. This led to not pursuing IT service improvement in a top-down, process-centric manner, so people like the Global IT Operations Manager bootstrapped and implemented unique – albeit ITIL-informed – solutions that addressed Celanese-specific problems.
b. How effective was it? Process Gaps: Celanese IT commissioned HP to assess its IT processes. This assessment uncovered that the Application and Infrastructure groups has similar processes that they nevertheless tackled very differently. For example SAP team has its own Incident, Change, Release and Problem Management processes which were not replicated to other parts of IT. Bureaucratic Perception of IT: Engineering culture of Celanese makes it difficult for the organization for improving internal IT process. The employees already perceived IT as ‘bureaucratic’ and implementing more rigorous process threatens to add weight to this negative reputation. Below average rating: Celanese achieved an IT Service Management score which was below the average of other companies HP has accessed. However company performed well on Financial, security and Supplier Management etc. The entire assessment exercise had highlighted many process gaps apparent in Celanese’s IT organization
c. What factors contributed to its ineffectiveness? 1. Lack of Commitment from senior leader: There was a lack of commitment by senior leadership to focus on IT and only focused on short term results. They
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were sceptical of the value that could be derived from an increase in ITIL process maturity. Insufficient Budgets due to economic downturn: Over the past several years they had focused on their customer’s application and in 2009 they did not have the budget due to the economic downturn. The CIO was not on board in supporting all the initiatives or was supporting them inconsistently as was quoted by the application manager. Communication Gap: There was Lack of communication between ITILers, OSM, and the vendors Long Approval Process: Misconception on how long something should take vs how long it would actually take to implement. For example completion of OSM caused significant delays as OSM took 2-4 meetings before they were approved. Diffused IT structure: Standardizing the PCs used by the company took 5 years Decentralized Culture: Culture at Celanese where centralization was the enemy and also the engineering culture made it a hard road for company to improve internal IT process.
d. What specifically should they have done differently? 1. Celanese in order to make their process efficient did changes in the process but these changes are not done across the organization. For example SAP team has its own Incident, Change, Release and Problem Management processes which were not replicated to other parts of IT. 2. HP assessment makes it clear to follow ITIL however company only implementing an ITIL like Operation Support Model (OSM) which will cater to Celanese specific needs they are not following the standards ITIL framework for process redesigning. 3. Senior leadership should provide and extend support for the IT improvement so that organization use only a single federate tool solution and standard process. Leadership should come forward in changing the culture in which employees perceived IT as be Bureaucratic Q2. The Infrastructure group was more eager to pursue SLAs than the groups that had more interaction with the business, for example, applications area. What explains this difference in the perception of SLAs value? After the assessment by HP, one of the recommendations was to formalize the Service-Level Management process to include a service level agreement (SLA) for every service. For any Business Process Redesign (BPR), there are two challenges: - Technical Challenge - Socio Cultural Challenge Here we see a Socio Cultural Challenge as all groups were supportive of SLA change, this is because: 1. Business groups wanted to work on more new, fancy IT applications, than work on internal process improvement.
2. The business perceived IT as bureaucratic and implementing a fixed SLA would add to this negative perception 3. There was ambiguity in the advantages of having a formalized Service – Level Management process. 4. Budget Constraints: The IT budget was based on allocation model, than a consumption model i.e it was an overhead for the business, and business had no direct control over their IT expenses. Over the past several years they had focused on their customer’s application and in 2009 they did not have the budget due to the economic downturn. 5. The business didn’t want to take interest and responsibility in defining accurate service levels. 6. There was a lack of commitment by senior leadership to focus on IT and when there was it leadership only focused on short term results. The CIO was not onboard in supporting all the initiatives or was supporting them inconsistently. 7. The infrastructure group wanted to pursue SLAs as all IT services were referred to as “best effort”( to be responded by nest business day) whereas, people expected a “high availability” service ( tickets were responded to immediately). Due to cost allocations appropriate service levels couldn’t be defined. Also, payment was made only for ‘Best Effort service’ and expectations were of ‘high availability’ service. But, in case of emergencies, and business critical applications no one followed the Service levels and resources needed to be allocated to immediate needs. 8. The Infrastructure group wanted SLAs for planning capacity, and allocate resources effectively for critical tasks, whereas, Demand group was concerned that if the SLAs were in place would they be followed and their customers would not be disappointed. 9. There was a lack of trust due to lack of knowledge about each other’s functioning and problems. Q3. If you were the CIO and you were trying to decide which of the five ITIL projects you should endorse and support financially, what would your decision be? Why? Continuous process improvement -
Behaviour of people is crucial in making a business transformation successful http://www.cob.unt.edu/itds/faculty/becker/BCIS5520/Presentations/Class_ 13.01_ITSM_ServiceContinuity.pdf
Q4. Do you agree with the CIO’s conceptualization of the process performance trade-off? Why? Why not? a. Do you agree with his characterization of the Celanese and the ITIL path? Why? Why not? -Everything central was evil