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“We don’t need IT service management, we buy all our services from the cloud!”


I’ve heard a number of people explain that they don’t need IT service management because they buy all their IT services from the cloud. If they really understood what IT service management could do to help them deliver more value to their customers then I think they might take a different approach.


It’s certainly true that services you buy from a cloud service provider need to be managed differently, but deciding not to manage them at all seems very risky to me. If we think of the service lifecycle described by ITIL then here are some things you need to think about in each stage:


1.      Service Strategy


You still have to understand who your customers are, and what outcomes they need to achieve. You must decide what services to buy, and this should be based on understanding how these services contribute value to the business. You may not call this service portfolio management, but that is the term we use in IT service management to cover this area.


You also need to have business relationship managers, who talk to customers about their needs and help to make strategic decisions about what services you will buy, and how you will source these.


You will definitely need financial management for IT services. When you buy services from the cloud it is essential that you fully understand the costs over the whole of the service lifecycle, so that you can make good sourcing decisions.


If you are buying your services from the cloud then the increased flexibility may allow you to reduce the time and effort spent on demand management. If the cloud service has the ability to grow or shrink on demand, then there is less need to predict future usage, but you do still need to make some predictions as purchasing decisions often commit you to minimum and maximum workloads.


2.      Service Design


Service design is the stage in the lifecycle where we define the detailed requirements for the IT service and ensure that the new or changed service will be able to meet these. Planning to meet the business requirements for availability, capacity, continuity and IT security are essential, whether you are building the service yourself or buying it from the cloud. The way you set about meeting these may be different in the cloud though, so make sure that your procurement process is able to ensure cloud service providers really will meet your business needs.


This stage of the lifecycle is also where ITIL describes the supplier management process, which is clearly going to be an essential element of how you manage your cloud services. If you don’t have a structured way to interact with suppliers, making sure that they know what you expect and that they deliver to their commitments, then you are likely to be disappointed in the cloud services.


You will need to manage service levels very differently in a cloud environment, but you do still need to agree with the business what service levels will be delivered and then ensure that this agreement is met. It is likely that service level management will have to work very closely with supplier management to ensure you meet customer expectations.


3.      Service Transition


There will be big differences in how service transition works for your cloud purchased services, but you do still need to plan changes and releases to ensure that these work for your customer.


One area that may need increased focus is the people aspects of change management, often called Management of Organizational Change (MoC). Introducing a new cloud service will require significant changes in the attitudes, behavior and culture of IT staff and IT users. If you don’t have plans to ensure these happen, then you will fail to get the required value from the services.


4.      Service Operation


When people talk about IT service management they often think only of things that happen during the service operation stage of the service lifecycle. How you manage incidents, problems and requests will need to be very different if you buy all your services from the cloud. You may even not run your own service desk if the cloud service providers deliver this as part of the service you purchase.


I suspect it is these differences in service operation that lead people to think they no longer need ITSM if they use cloud services.



5.      Continual Service Improvement


Continual service improvement ensures that the services you provide remain aligned to the changing needs of the business, and that you deliver them as efficiently and effectively as you can.


How you measure and report on your services will be very different in the cloud, but the underlying principles remain the same. It is possibly even more essential that you practice continual service improvement, since it may be harder to make small changes to IT services to track small changes in business needs. This could result in services moving more and more out of alignment with business needs until they are sufficiently bad that you are prepared to make a new sourcing decision.



I have just briefly described some key aspects of the IT service lifecycle, and how IT service management remains relevant even if you buy all your IT services from the cloud. The key thing that you need to do is to be flexible. Make sure you really understand IT service management and how it can help you. When you attend IT service management training, don’t learn how to implement rigorous bureaucratic processes — instead, internalize the really important things about IT service management, what it is for and how it can help you to create value, then adapt the principles to make sure that it works for you.


If you want to learn more about IT service management and how it can help you then read about ITSM education from HP, and the ITIL training curriculum



If you want more ideas to help you think strategically about IT services, then read some of my other blogs (most recent blog is at the top):

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Perhaps this is indicative of a phenomenon that you (Stuart) and I have discussed before. It seems that there are organizations that still believe that the technology (servers, applications, storage) are the “tokens of commerce” between IT and the rest of the business. Others believe that services are better defined as capabilities which allow the organization to conduct business. 


I think that we agree that the latter is a more appropriate view of IT services. I would argue that this even holds true when the service is technology (e.g., hosting services and other technology providers). The business (generally) does not see the service as an application or technology, but as a means to an end (e.g., the ability to print an invoice, the ability to admit a patient). 


I’m reminded of an engagement several years back with a very forward looking CIO. He had been brought into the organization to transform it to a more service (less technology) based IT department. I worked with him and his team for several months. On one of my last visits, I had a one-on-one meeting with one of his direct reports. During that meeting the senior manager said “Now I get it, the applications are NOT the services”. When I told the CIO about the meeting he said “That one sentence was worth the entire engagement.” 


My point is that many of us know intellectually that the technology is the tool by which IT does it job, not the job itself. 




You are spot on, as usual. 


This is also what is wrong with a lot of ITSM training, it gives people the impression that ITSM is about the processes. This is just as bad as people who think that IT is about the technology. We somehow have to engage our people so that they all understand that their main goal is to facilitate business outcomes. 



Stuart, in a general sense "this" is currently my favorite topic and your post caused me to think back to thermodynamics and entropy. I submit that the tendency towards disorder will accelerate in the absence of sufficient controls. How bold! I submit that without decent controls, the promise of the cloud, becoming more agile, let alone deriving business value will be very elusive. Maybe a bit more bold.


I think that the Service Integration and Management (SIAM) approach has a lot to contribute in establishing a proper framework.


Lastly, I expect that you purposefully didn't mention Service Portfolio Management and its more popular cousin Service Catalog out of your quick tour.






Thank you for reminding me of my early days as a physics teacher. That brings back some funny memories!


I agree that a good Service Integration and Management approach has a lot to contribute here.


I'm surprised at your comment on service portfolio management as the section on service strategy says "...You may not call this service portfolio management, but that is the term we use in IT service management to cover this area"

Hi Stuart &all,

I very much like your article and the comments because it speaks out of my heart. While creating the service integration and management (SIAM) consulting and product solution portfolio we paid attention to separate those competencies (being internalized capabilities) that an IT should retain from the ones that can be out-tasked based based on the nature of an IT service set (e.g. in terms of their degree of commoditization). By coincidence or I'd better write by a common experience nearly all of the competencies you discuss in your blog are part of the SIAM operating model organizational layer that should be retained.
I personally find it funny how today's marketing messaging claims IT should become a broker as the ultimate target state of a service business. A broker is a legally defined term that must not be confused with what a Service Integrator does. However many people believe there is a maturity continuum when you move from an in-house IT via e.g. a shared service center towards a broker role. While such a continuum indeed exists with regards to management capabilities there is unfortunately no silver bullet brokering operating model. Rather this very much depends on the organizational culture, industry and business environment and a dozen of additional influencers. So I fully agree that there will nevertheless for a very long time be hybrid service delivery and support constellations. And good Service Management practices are more required than ever!




Thank you for your comments. It's interesting that both you and Chuck saw the importance of SIAM in relation to managing cloud services. I suspect there is an interesting blog that one of us should write about that.



Hi Stuart,


First off - great post. Whole heartedly agree with what it stands for and what everyone has said about SIAM. 


Most people are yet to understand what a Service Integrator stands for - and organizations think about SIAM being of value only in cloud solutions. I think your statements/blog is also valid for any situation in which a company is receiving IT as a Service, as opposed to managing it's components - be in outsourced to a service provider, or recieving everything through a portfolio of cloud based services. 


The SI (operating) model becomes a good target when you think about any situation in which you (as the IT for the business - yes I said 'for') - become the one who now has to provide value by leveraging those services. 


The one additional thought that comes to mind is that the ownership of Services - even though received from outside - becomes a critical aspect of the SIAM principles - and service ownership is embedded in core of ITSM. Also, the concept of an ISG (Sterring Group) as mentioned in Service Strategy becomes the source of all decision making. 


Once again, great post.







Thank you for the comment. I do agree that exactly the same argument holds for outsourcing as for cloud, or any other situation where there are external organizations providing IT services.


An interesting, very inside-out, viewpoint.


I don't see at this time that our "IT's) customers, the rest of the business, much care about ITIL or the "processes" of ITIL.


It seems to me that they "buy" services.  Whether from internal IT, or from outsourcers, or the "cloud."


Organizing IT around services, almost as if IT is a real estate developer, seems to be more to the point.

The RE developer develops products (services) and subcontracts out all the "supporting" services. 

Pretty much how manufacturer product managers do.  Stan Shih Curve, etc.


When we reorganize our thinking to an outside-in, service provision view,  and consider a "federal" organization, keeping those things that need to be central, central, and those things that can be distributed, distributed - we'll reach a better alignment with our customers.


Maybe even regularly demonstrate Value for Money for each service every month. 


Thank you CaryKing for this comment. You are of course correct that this is a very inside-out description of why IT organizations need IT service management.


In many contexts I am a passionate proponent of an outside-in approach to how IT organizations should think about that they do, but I don't think this should be instead of the inside-out view, but as well. I think of these two views as being like two aspects of a balanced scorecard, which considers 4 things:

  • Customer
  • Internal Business Processes
  • Financial
  • Learning and Growth

The outside-in view supports the customer goals, inside-out tends to focus on the internal business processes. We need to get both of these right, as well as the financial and learning and growth areas.


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