Exploring the Relationship between Information ...

Knowledge and Process Management (2014) Published online in Wiley Online Library (www.wileyonlinelibrary.com) DOI: 10.1002/kpm.1437

■ Research Article

Exploring the Relationship between Information Technology Infrastructure Library and Process Management: Theory Development and Empirical Testing Jon Iden1* and Tom Roar Eikebrokk2 1

NHH—Norwegian School of Economics, Department of Strategy and Management, Helleveien 30, Bergen 5045, Norway 2 University of Agder—Information Systems, Kristiansand, Norway

This paper investigates whether information technology (IT) departments that implement the IT Infrastructure Library (ITIL) processes also employ process management. This is a pertinent issue, as ITIL not only implies a time-limited program for redesigning vital IT processes according to best practices but a complete transformation to ITIL also implies that processes are managed on a daily basis. Without process management, ITIL will not be a success beyond its initial implementation. A survey of 444 Nordic ITIL experts was conducted to examine if there is a correlation between the implementation of ITIL processes and process management. The results are unambiguous and promising for sustainable success; firms that are implementing ITIL are also implementing process management. The results show that the level of process management increases as the implementation status of the ITIL processes increases. The relationship is strongest for process documentation, process monitoring, and process certification, and weakest for process improvement and process ownership. Overall, however, IT departments are still in an early stage with their ITIL and process management implementations. Copyright © 2014 John Wiley & Sons, Ltd.

INTRODUCTION Implementing Information Technology Infrastructure Library (ITIL) is a challenging undertaking for information technology (IT) departments. ITIL requires orientations toward the customers’ needs, services, and organizational processes, which more technically oriented IT departments may find challenging. ITIL consists of 25 processes, covering almost every task in IT operations, which must be analyzed and redesigned during an ITIL implementation, and consequently, ITIL will affect almost every member of the staff and lead to the rearranging of work practices and worker roles (Cater-Steel et al., 2006). In order to implement ITIL, several competences and skills are required (Pollard et al., 2010). A thorough understanding of ITIL’s concepts and *Correspondence to: Jon Iden, NHH—Norwegian School of Economics, Department of Strategy and Management, Helleveien 30, Bergen 5045 Norway. E-mail: [email protected]

Copyright © 2014 John Wiley & Sons, Ltd.

perspectives is needed among management and staff, and in order to implement improvements based on ITIL’s best practice recommendations, the details of each of the various processes and their interdependencies must be learnt (Cater-Steel and Toleman, 2010). Process thinking skills are necessary for process modeling, analysis, and redesign, which are essential activities in an ITIL implementation. System skills are needed in order to acquire, customize, and implement ITIL software that can support the individual processes, their workflows and data records, and their interdependencies. Project management skills are needed for organizing and making the implementation effort and for achieving the goals within the time and resource budget (Cater-Steel and Pollard, 2008). And finally, change management skills are needed to transform the organizational practices and cultures in the IT department (Iden, 2009). Because ITIL implementation is challenging, a full adoption of the ITIL processes may take years and requires the dedication of managers as well as personnel. The final success of ITIL relies not only on how well the organization

J. Iden and T. R. Eikebrokk performs the implementation project but also on its ability to redesign and employ its processes according to the prescribed best practices. Sustainable success depends on the IT department’s ability, on a permanent basis, to manage the many processes for continuous control and improvement. This is a central message in the ITIL literature (van Bon, 2002; Taylor, 2007). Different models for process management have been suggested (Hammer and Stanton, 1999; Smith and Fingar, 2003; Rosemann and de Bruin, 2005; Hammer, 2007). Most models emphasize the following dimensions as essential: The performance of the processes should be standardized, the central characteristics of the processes should be documented, a process owner should be appointed for each process, processes should have goals, the achievement of goals should be monitored, and processes should be improved when necessary. In addition, being certified according to an international standard is increasingly being regarded as evidence of process management. Although all seven dimensions are recommended as necessary conditions for a complete process management practice, it is found that, in practice, not all of them are equally implemented, and their maturity level may vary (Hammer and Stanton, 1999; Albizu and Olazaran, 2006; Hammer, 2007). The main research question for this research is as follows: Do companies that implement the ITIL processes also implement process management? Our basic assumption is that because of ITIL’s evident orientation toward processes, and the argumentation found in the ITIL literature for managing these processes, firms that are implementing ITIL will consequently implement practices for process management. It is also reasonable to believe that the level of process management in firms varies; those firms that are most established when it comes to ITIL are also expected to be most established when it comes to process management. In other words, as the implementation level of ITIL increases, so does the level of process management. We approached our research question by applying the seven characteristics of process management mentioned earlier, and we used data from a survey among 444 members of the Nordic itSMF chapters. This article proceeds as follows. First, the theoretical foundations are presented and discussed. Then, the hypotheses are accounted for, followed by a presentation of the research methodology. Next, measurement quality and hypotheses are tested, and results presented. The article concludes by discussing the results, giving possible explanations and issues to consider, and suggesting paths for further research.

THEORETICAL FOUNDATIONS Information Technology Infrastructure Library Information technology service management (ITSM) is becoming more and more popular in the IT Copyright © 2014 John Wiley & Sons, Ltd.

community (Pollard and Cater-Steel, 2009). As a management concept, ITSM places emphasis on IT services, customers, service level agreements, and the handling of the daily activities of an IT department through processes (Office of Government Commerce, 2007). This stands in contrast to more technologycentered approaches to IT operations. The following formulation is characteristic of its perspective: 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

(van Bon, 2002). According to the literature, the IT operations department should be a service organization that provides ITservices to the business, and the goal is to build and deliver IT services that meet business needs and requirements (Office of Government Commerce, 2007). The literature sets out great expectations. Adapting ITSM may, according to the literature, lead to improved customer satisfaction, increased quality of service, lowered production costs, clearer organizational structure, increased management control, a service-oriented culture, and a uniform frame of reference for internal and external communication (van Bon, 2002). Various process reference models for ITSM exist, among which ITIL is most accepted and used (Cater-Steel et al., 2009a). ITIL version 1 was developed during the 1980s by a British public body called the Central Computer and Telecommunications Agency, having grown from a collection of best practices observed in the industry. The aim was to develop an approach for organizing the work in the IT operation independent of any supplier (van Bon, 2002). ITIL was not used on a large scale until the mid-1990s, but as a result of the popularity of ITIL version 2, which was released between 2000 and 2002, it is now counted as a de facto standard for ITSM worldwide. The ITIL reference model is process based, which means that ITIL focuses on the flow of activities that cross organizational units, both inside and beyond the IT operations function. ITIL defines process as “a structured set of activities designed to accomplish a specific objective. A process may include roles, responsibilities, tools and management control required to reliably deliver the outputs” (Office of Government Commerce, 2007). ITIL version 3 details 25 processes that explain how the various tasks of a supplier of IT services must perform. Together, these processes describe how an IT service moves through its life cycle: how the IT service should be planned for and built; how the IT service and related changes should be validated, tested, and deployed; how events and requests regarding the IT services should be handled; how the basic configuration supporting the IT service should be controlled; and how operational problems should be solved. Know. Process Mgmt. (2014) DOI: 10.1002/kpm

Relation between ITIL and Process Management Information Technology Infrastructure Library is characterized as a common best practice, which means that ITIL is based on concrete solutions that have proven to be effective in a variety of IT organizations (Cater-Steel and Tan, 2005). As a process reference model, ITIL thus seeks to capture characteristics common to a wide range of IT departments (Iden, 2009). A reference model may be defined as “an abstracted depiction of reality that serves as a standardized or suggestive conceptual basis for the design of enterprise-specific models, usually within a like domain” (Taylor and Sedera, 2003). The recommendations found in ITIL are comprehensive. Few organizations, if any, are capable of doing a complete implementation of a process to ITIL standard in one step but will normally undergo a conversion from being in an early phase of implementation to reaching a complete adoption. Studies show that IT departments are approaching the introduction of ITIL in different ways. For example, Cater-Steel et al. found that although firms normally were establishing projects and change programs for their ITIL implementations, some firms chose to introduce ITIL as part of business as usual (Cater-Steel and Pollard, 2008). Although it is confirmed that most firms start by prioritizing the user-centric areas such as the service desk and incident management and, from there, gradually continue with processes such as service level management, change management, and problem management (Cater-Steel et al., 2009a; Iden, 2010), there are also more ambitious firms that are implementing the whole range of processes in one united and coordinated effort. When it comes to ITIL software, most firms apply one of the many standardized off-the-shelf software packages available, but there are also those that are applying and customizing open-source software using their own in-house resources (Iden, 2009). ITIL is a framework, and the organization must decide how to actually apply the best practices it catalogs; each organization must design its own processes on the basis of ITIL principles. It is found that for some processes, the reference model is used almost as a blueprint, whereas other processes must be profoundly adapted to suit the context and the needs of the implementer (Iden, 2009). Adapting to ITIL includes two major aspects: first processes must be analyzed, redesigned, and implemented on the basis of ITIL’s best practice recommendations, and thereafter, processes must be managed for control and continuous improvement. Information Technology Infrastructure Library research is essentially concentrating on issues related to its implementation (Iden and Eikebrokk, 2013). Popular research questions are as follows: reasons to adopt (Grewal and McDonald, 2006; Cater-Steel et al., 2009b; Pollard and Cater-Steel, 2009), the implementation status of ITIL in firms (Cater-Steel et al., 2006; Cater-Steel et al., 2009a; Iden, Copyright © 2014 John Wiley & Sons, Ltd.

2010), benefits achieved (Hochstein et al., 2005; Potgieter et al., 2005; Marrone and Kolbe, 2010), and challenges met (Cater-Steel, 2009; Tan et al., 2009). Research has also identified factors that are vital in order to succeed with an ITIL implementation project (Iden and Langeland, 2010). Management support, education and training, employee involvement, and information and communication are among the factors frequently mentioned (Iden and Langeland, 2010). ITIL research that focuses on the after-project situation has not been identified.

Process management A process is a collection of all the activities of a firm, including the roles, resources, and rules necessary to produce and deliver a product or a service to an external or internal customer (Harmon, 2003). Most work in organizations is carried out in processes, and although processes do not show on the organizational map, companies in all sectors are increasingly paying attention to them as a means to coordinate activities and resources. In the early 1990s, process orientation, under the notion of business process reengineering, incorporated the idea of radical process redesign in order to lower costs and increase performance (Hammer, 1990). This “clean slate” approach was and continues to be too difficult for most organizations (Grover et al., 1995), and as a consequence, process orientation has changed meaning to become an incremental and non-comprehensive approach (Albizu and Olazaran, 2006). Recently, and in parallel with this conceptual transformation, process orientation has gained a new dimension, process management, which emphasizes the continuous management and improvement of an organization’s processes (Harmon, 2003; Smith and Fingar, 2003). Smith and Fingar describe business process management as follows: BPM not only encompasses the discovery, design and deployment of business processes, but also the executive, administrative and supervisory control over them to ensure that they remain compliant with business objectives for the delight of customers (p. 4).

The literature offers various models for process management (Hammer and Stanton, 1999; Pritchard and Armistead, 1999; Gulledge and Sommer, 2002; van der Aalst et al., 2003; Becker et al., 2007; Küng and Hagen, 2007). For our investigations and analysis, we have divided this term into seven dimensions: process standardization, process documentation, process ownership, process goals, process monitoring, process improvement, and process certification, each of which is discussed later. Know. Process Mgmt. (2014) DOI: 10.1002/kpm

J. Iden and T. R. Eikebrokk Process standardization The first dimension, and a criterion that is central with ITIL, is the standardization of the way a certain process is executed. The objective is that matching cases are handled in the same way; cases should follow the same predefined workflow and are subject to the same organizational procedures and rules every time they occur (Hammer and Stanton, 1999). Standardization leads to predictability, for both staff and customers, and is often viewed as the first step toward process management (Rosemann and de Bruin, 2005). Process standardization is a fundamental principle of ITIL: There is one best way to handle a certain type of case, and this way should be followed by every function and every staff member (Taylor, 2007). A process management firm has standardized its processes. Process documentation The second dimension of process management is that the characteristics of a process must be captured and documented (Ungan, 2006). Process documents describe the processes by its activities, roles, resources, rules, and outcomes (Harmon, 2003). The purpose is to provide employees collectively with detailed information on how the process as a whole is executed, as well as the more detailed characteristics relevant to each role. Process documentation is also the basis for further refinement and improvement. ITIL consists of documented processes, and this is one of the attributes that make ITIL a reference model. The recommended practice for each process is documented according to a standard format, including process models. Likewise, implementing ITIL involves describing the new practices in standard document templates, as recognized by case studies (Cater-Steel et al., 2006). A process management firm has documented its processes. Process ownership The third dimension of process management is that processes are led (Harmon, 2003; Spanyi, 2006). Each process should have a process owner who is responsible for process performance and outcome. The process owner’s primary tasks are to oversee the implementation of a new design, to follow up on its performance, and to coordinate with functional managers and other process owners (Hammer and Stanton, 1999). ITIL emphasizes the role of the process owner and portrays the role comparably with the description discussed earlier (Taylor, 2007). Although the process owner is a novel role for many IT functions, organizations implementing ITIL have found it effective to appoint them (Cater-Steel, 2009; Tan et al., 2009). A process management firm has established process ownership. Copyright © 2014 John Wiley & Sons, Ltd.

Process goals The fourth dimension of process management is that a process should have explicit goals for its performance. The process literature identifies a variety of relevant goals (Davenport and Beers, 1995; Kueng, 2000; Garretson and Harmon, 2005). Harrington (Harrington, 1991), for example, suggests goals for effectiveness, efficiency, and adaptability, but the literature offers alternative approaches (Kueng, 2000). ITIL includes the process goal in its definition of process (Berkhout et al., 2000). According to ITIL, all processes should have explicit goals (Taylor et al., 2007). A process management firm has set goals for its processes. Process monitoring The fifth dimension of process management is the continuous monitoring of process performance (Harmon, 2003; Smith and Fingar, 2003). Process goals must be translated into performance indicators that can be monitored. The firm must continuously assess process performance and verify that goals are met (Hammer, 2007). Case studies confirm that such monitoring practices have been adopted by firms implementing ITIL (Cater-Steel et al., 2006). A process management firm monitors its processes. Process improvement The sixth dimension of process management is that processes should be improved when monitoring reveals that they are not meeting the requirements set or when new requirements arise (Harmon, 2003; Smith and Fingar, 2003). Improvement efforts should be based on factual information. They can be minor adjustments to the existing layout or can take the form of a large project if a major revision or a totally new design is required (Hammer and Stanton, 1999). Improvement is central in ITIL, and one set of standards is dedicated to continual improvement (Taylor et al., 2007). The main message is that once implemented, the ITIL processes should constantly be evaluated and improved in order to fulfill changing business needs. A process management firm improves its processes. Process certification The seventh dimension of process management included in this study is that the system of processes in the firm should be certified according to an international standard. We acknowledge that this is a criterion that is beyond most definitions of process management; however, several forces provide a strong impetus for firms to invest in process certification. International institutions such as ISO—International Organization for Standardization––argue that process certification is necessary in order to fulfill customer expectations and requirements for product and service quality (ISO, 2000). A certification gives evidence that Know. Process Mgmt. (2014) DOI: 10.1002/kpm

Relation between ITIL and Process Management processes are documented and that accountability has been defined and is a strong indication that the firm has started to analyze processes and start change programs (Harmon, 2003). Two standards are especially applicable in accordance with ITIL, the general ISO 9000 quality standard and the area-specific standard ISO/International electrotechnical commission (IEC) 20000 for ITSM. Research finds that there is a growing interest among ITIL firms in these standards (Cater-Steel et al., 2009a). A process management firm has certified its processes according to a standard. Studies have found that the implementation level of the previously mentioned dimensions vary within firms; not all dimensions are equally mature (Hammer, 2007).

Contextual influence By drawing on the strategy, entrepreneurship, and IT management literatures, Sambamurthy et al. (2003) argue that the ability to utilize IT investments and related capabilities is influenced by several contextual contingencies both within these organizations and their surroundings. If market conditions allow it and if the organization has sufficient resources, capabilities, and skills, then IT will have the potential to improve firm performance through the ability to innovate new processes, products, and services. The effect on business performance will come as the result of interactions between organizational capabilities and strategic processes, which themselves are defined by their agility, capability building actions, and adaptations, digital options, and entrepreneurial alertness. In the context of utilizing ITIL in firms, this way of thinking means that if the organizational and market conditions are supportive, ITIL will have the potential of impacting business value—assuming, that is, that the firm has capabilities and strategies that stimulate the necessary actions to utilize the potential of ITIL. The organizational resources will thus reflect the business condition and the financial strength in the market and define important characteristics of the ITIL project, including its management, budget, and staff.

HYPOTHESES The article investigates the relationship between ITIL implementation and process management; specifically, do companies that implement the ITIL processes also implement process management? The rationale for this question is that ITIL not only encompasses improvement efforts by analyzing and redesigning processes according to the best practices found in the ITIL books. ITIL is also very much about managing processes on a daily basis. We therefore expect to find process management Copyright © 2014 John Wiley & Sons, Ltd.

practices in firms that are implementing the ITIL processes. We also expect that process management practices are gradually increasing as ITIL process implementation progress increases. We hypothesize the following: H1: As the implementation status of ITIL increases, so does the level of process management. We also expect that the implementation status of the seven dimensions of process management varies; some dimensions are more implemented than others. In order to inspect any variations among the seven dimensions, the following hypotheses are also suggested: H1a: As the implementation status of ITIL increases, so does the level of process standardization. H1b: As the implementation status of ITIL increases, so does the level of process documentation. H1c: As the implementation status of ITIL increases, so does the level of established process ownership. H1d: As the implementation status of ITIL increases, so does the usage of process goals. H1e: As the implementation status of ITIL increases, so does the level of goal monitoring. H1f: As the implementation status of ITIL increases, so does the level of process improvement. H1g: As the implementation status of ITIL increases, so does the level of process certification.

RESEARCH METHODOLOGY Research design To test the hypothesis, an anonymous survey was initiated in Finland, Sweden, Denmark, and Norway. The targeted sample was drawn from the members of the Nordic itSMF chapters who were using ITIL, resulting in a total of 5943 active e-mail addresses. See APPENDIX A for the survey instrument.

Operationalization and measurement Three sets of operationalizations are directly involved in the investigation of our hypotheses; one set is concerned with the firm’s ITIL implementation status, and one set is concerned with the firm’s process management status. The third set of operationalizations concerns the possible contextual influence on ITIL implementation. Know. Process Mgmt. (2014) DOI: 10.1002/kpm

J. Iden and T. R. Eikebrokk

INFORMATION TECHNOLOGY INFRASTRUCTURE LIBRARY IMPLEMENTATION The ITIL implementation status was measured using a 25-item scale initially adapted from CaterSteel et al. (Cater-Steel and Tan, 2005; Iden et al., 2007), and adjusted to cover the processes found in version 3. The 25 items represent all the processes within the five ITIL version 3 books: service strategy, service design, service transition, service operation, and continual service improvement. The respondents were asked to state their implementation status according to a five-point ordinal scale: not started (1), early (2), half way (3), advanced (4), and completed (5). The final measure of ITIL implementation status for each firm is constructed formatively as a combination of the scores of all of the 25 items (processes).

PROCESS MANAGEMENT Process management status was operationalized using a seven-item formative scale adapted from literature about business process management models such as Hammer (2007) and Rosemann et al. (2004, 2005) but which was designed specifically for this study. The seven items represent central dimensions of process management such as “processes are standardized,” “processes are documented,” “process ownership is established,” “goals for processes are set,” “processes are monitored,” “processes are improved,” and “the IT department is certified.” The respondents were asked to indicate the relevance of statements related to each of the seven dimensions. A five-point ordinal scale from 1 to 5 was used, where 1 means that the statement has a low grade of validity and 5 means that it has a high grade of validity. The final measure of process management for each firm is constructed formatively as a combination of the scores of all seven indicators.

CONTEXTUAL INFLUENCE Contextual influence describes the potential impact on ITIL implementation, which is a result of organizational and market characteristics as described by Sambamurthy et al. (2003). The organizational characteristics will be investigated through indicators of management involvement, organizational commitment, and project group efficacy. Management involvement and organizational commitment were operationalized according to the work of Basu et al. (2002). The final measures for each variable are the results of two reflective indicators, respectively: “senior management provides continuous feedback and guidance to the ITIL project,” “a member of senior Copyright © 2014 John Wiley & Sons, Ltd.

management champions the ITIL project,” “sufficient resources have been allocated for the ITIL project,” and “key people are staying on the ITIL project from its start to finish in order to maintain continuity.” The operationalization of group efficacy is based on the work by Bandura (1997) on self-efficacy. We have extended the concept of self-efficacy from the individual to the group in terms of the group’s ability to cope with the task as a result of available resources, welldefined tasks, and effort, based on the perspectives of Gibson et al. (1999, 2000). We included three indicators that are reflective in nature: “The ITIL project has sufficient knowledge about ITIL and process thinking,” “the ITIL project is using a well-defined method for process development,” and “the ITIL project members are trying their hardest to implement ITIL.” Other organizational characteristics are also included in terms of experience with the ITIL project (time), and resources available for the project (size and budget). Time is operationalized as the number of years passed since the ITIL project was initialized. Size is operationalized as the firm’s number of IT employees, its staff in total, and economic turnover. Budget is operationalized as the amount of economic resources made available for the ITIL project. Market characteristics are operationalized as the business sector and the business condition. Sector indicates whether it is a private (1) or governmentowned (2) company, and business condition is operationalized as the level of organizational stability during the ITIL project. These factors are measured with one indicator each.

Study procedure Of the 5943 e-mails sent, 444 responses were returned: Finland 46, Sweden 150, Denmark 55, and Norway 193 (a response rate of 7.4%). The resulting sample covers many sectors, of which IT represents 36% of the respondents. More than 50% of the sample represents large companies with more than 2000 employees. Nearly 30% of the respondents work in firms with more than 300 IT professionals. Still, firms of various sizes and numbers of IT personnel are well represented. The respondents represent different roles in their ITIL projects, with project manager, project member, and process owner as the three most frequent roles. Around 60% of the respondents possess ITIL training and certification at the ITIL foundation level, whereas 20% have gained the ITIL intermediate and the ITIL expert levels. About 65% of the respondents have at least 4 years of experience with ITIL. At the firm level, most firms have up to 4 years of experience with ITIL, reflecting the growing popularity of ITIL in the Nordic countries from 2006 to 2008. All in all, our sample represents a variety of firms and project characteristics, with many levels of ITIL implementation and process management Know. Process Mgmt. (2014) DOI: 10.1002/kpm

Relation between ITIL and Process Management activities. Table 1 provides an overview of the characteristics of the sample.

RESULTS Descriptive statistics of the final sample are shown in APPENDIX B. Data analysis and hypotheses Table 1

Profile of responding organizations and respondents (n = 444) Percent

Business sector IT Public government Health and social affairs Telecommunications Finance and insurance Education and research Transport and logistics Others

36 21 7 6 5 5 5 15

Turnover Less than €5.0m Between €5.0m and €15.0 m Between €15.5m and €50.0 m More than €50.0 m Don’t know

7 6 10 53 24

Number of employees More than 2000 500–2000 100–499 Less than 100

52 18 17 13

Number of IT employees More than 300 Between 100 and 300 Between 50 and 99 Between 25 and 49 Less than 24

29 22 13 17 19

When was the ITIL project started? 2008–2009 2006–2007 2004–2005 Before 2003

25 34 25 16

Budget for ITIL project Less than 50,000 euro Between 50,000 and 100,000 euro Between 100,000 and 300,000 euro More than 300,000 euro No budget

14 13 11 16 46

Respondent’s role in ITIL project Process owner Project manager Project member Project owner Process developer

23 22 22 17 16

Respondents’ years of experience with ITIL 3 years or less 4–6 7–9 10 years or more

36 39 16 9

ITIL, Information Technology Infrastructure Library.


testing were performed using XLSTAT-PLSPM (www.xlstat.com). We chose partial least squares as the method of analysis for several reasons including the early status of theory development in this research area, the fact that several of our latent variables have formative indicators, and the complexity of our research model. For a discussion of the complementary nature of covariance-based and partial least squares analyses, see Chin (2010).

Tests of measurement quality The variables in this study are measured with both formative and reflective indicators; as a result, the measurement quality will be evaluated according to separate criteria for formative and reflective indicators, as indicated in the guidelines suggested by Götz et al. (2010), Gefen and Straub (2005), and Straub et al. (2004). In validating formative indicators, content validity is suggested as a first step (Straub et al., 2004). Content validity describes whether the indicators appropriately capture the full domain and scope of the construct. Götz et al. (2010) argue that by selecting formative indicators based on a combination of previously published work and subsequent qualitative assessment through interviews, expert statements, and so on, the likelihood of content validity will increase. Here, we have combined these procedures. The 25 indicators of ITIL implementation were adapted from CaterSteel et al. (Cater-Steel and Tan, 2005; Iden et al., 2007). These indicators have been used and refined through qualitative feedback in many successive surveys each year from 2005, and the results from 2009 produced similar results as in previous years (Cater-Steel et al., 2009a). These indicators were adopted to our context and updated to cover the processes found in ITIL version 3, thus representing all the processes within the five ITIL version 3 books on service strategy, service design, service transition, service operation, and continual service improvement. Six of the seven indicators of process management are adopted from Eikebrokk et al. (2008) who found evidence of construct validity of the indicators through a two-step procedure from exploratory factor analysis to convergent validity of each dimension through coefficient alpha. The last indicator targets whether the IT department is certified and represents a new indicator that has not yet been tested for psychometric properties in this context. All in all, we believe that these indicators adequately capture the theoretical content and domain of the variables included in our model. In addition to content validity as the first step, the second step of validation addresses multicollinearity between the formative indicators. Because formative indicators form the variance of their latent variable through regression analysis, multicollinearity can be Know. Process Mgmt. (2014) DOI: 10.1002/kpm

J. Iden and T. R. Eikebrokk a serious threat to validity (Diamantopoulos and Winklhofer, 2001; Petter et al., 2007). Table 2 shows the indicator loadings on their respective latent variables (bold) and the cross loadings between indicators and latent variables. The table shows that the formative indicators are substantially more related to their own latent variables than to other variables, thus indicating no serious problems with multicollinearity. Our research model includes three reflective variables: management involvement, organizational commitment, and group efficacy. The indicators of management involvement and organizational commitment are all adopted from Basu et al. (2002), where confirmatory factor analyses found sufficient measurement quality in terms of convergent and Table 2

discriminant validity. The indicators of group efficacy are adopted from Bandura (1997) and adjusted to the context on the basis of the work of Gibson et al. (1999, 2000). To our knowledge, no explicit tests exist yet of convergent and discriminant validity for these measures used in this context. We have adopted similar procedures for validating the quality of the reflective indicators and constructs, and we found sufficient discriminant and convergent validity both at the indicator and construct levels. Table 3 summarizes these tests and shows that the average variance extracted for each construct is higher than the cross loadings between constructs, indicating discriminant validity.

Cross loadings of formative indicators

ITIL impl.

Project char.

Time

Process management

Business condition

Sector

ITIL implementation ServiceCatalogueManagement ServiceLevelManagement CapacityManagement AvailabilityManagement ITServiceContinuityManagement InformationSecurityManagement SupplierManagement TransitionPlanningandSupport ChangeManagement ConfigurationManagement ReleaseandDeploymentManagement ServiceValidationandTesting Evaluation KnowledgeManagement EventManagement IncidentManagement ProblemManagement RequestFulfillment AccessManagement ServiceDesk ServiceStrategy Lifecycleprinciple ContinualServiceImprovement FinancialManagement ServicePortfolioManagement

0.372 0.659 0.533 0.514 0.566 0.559 0.435 0.577 0.737 0.558 0.513 0.531 0.533 0.430 0.480 0.776 0.590 0.531 0.487 0.656 0.439 0.509 0.581 0.524 0.411

0.098 0.013 0.009 0.022 0.018 0.003 0.009 0.030 0.084 0.012 0.048 0.043 0.003 0.002 0.013 0.028 0.006 0.018 0.041 0.014 0.032 0.006 0.053 0.057 0.018

0.054 0.187 0.180 0.169 0.172 0.184 0.193 0.168 0.271 0.214 0.188 0.156 0.160 0.104 0.125 0.261 0.196 0.078 0.163 0.185 0.113 0.161 0.175 0.210 0.130

0.313 0.491 0.417 0.448 0.409 0.386 0.345 0.430 0.525 0.423 0.460 0.406 0.453 0.394 0.364 0.547 0.479 0.417 0.418 0.388 0.395 0.398 0.438 0.337 0.381

0.028 0.043 0.006 0.043 0.027 0.095 0.050 0.043 0.054 0.028 0.014 0.026 0.004 0.021 0.014 0.045 0.017 0.054 0.061 0.103 0.012 0.031 0.017 0.043 0.021

0.018 0.143 0.128 0.183 0.195 0.182 0.104 0.130 0.058 0.055 0.044 0.153 0.104 0.200 0.108 0.072 0.074 0.118 0.108 0.010 0.125 0.124 0.108 0.133 0.166

Project characteristics Budget

0.048

1.000

0.172

0.022

0.013

0.057

Time Yearinitiated

0.334

0.172

1.000

0.216

0.052

0.037

Process management Processesimproved Processesstandardized Processesdocumented Processownershipestablished Explicitgoalsareset Goalachievementmonitored ITdeptcertified

0.436 0.481 0.537 0.499 0.434 0.454 0.351

0.007 0.026 0.055 0.002 0.004 0.017 0.004

0.086 0.192 0.219 0.143 0.148 0.112 0.111

0.658 0.725 0.810 0.752 0.654 0.685 0.529

0.007 0.016 0.005 0.026 0.042 0.067 0.006

0.001 0.088 0.062 0.113 0.042 0.129 0.210

Business condition Businesscondition

0.098

0.013

0.052

0.016

1.000

0.037

Sector Sector

0.128

0.057

0.037

0.156

0.037

1.000

ITIL, Information Technology Infrastructure Library.


Know. Process Mgmt. (2014) DOI: 10.1002/kpm

Relation between ITIL and Process Management Table 3

Discriminant and convergent validity, squared correlations versus average variance extracted, and Cronbach’s alpha for reflective indicators

Mgmt. involvement Org. commitment Group efficacy Mean communalities (AVE) Cronbach’s alpha

Size

Mgmt. involvement

Org. commitment

Group efficacy

0.010 0.002 0.005 0.622 0.725

1 0.345 0.162 0.828 0.790

0.345 1 0.360 0.795 0.746

0.162 0.360 1 0.608 0.682

AVE, average variance extracted.

Moreover, convergent validity in terms of coefficient alpha is above 0.7 for all constructs except for group efficacy where alpha is slightly below 0.7, thus indicating sufficient validity at the construct level. The indicator reliability is also satisfying. All standardized loadings are significant and above 0.7 for most indicators, as indicated in Table 4, and thus acceptable for early stages of theory development.

Tests of hypotheses Figure 1 shows the research model with control variables, path coefficients, degree of support of the hypotheses, and explained variance. Overall, the research model is able to predict ITIL implementation and process management with R squares of 0.26 and 0.44, respectively. The overall goodness of fit index (Tenenhaus et al., 2004), is above the recommended level of 0.9 for the relative model fit (0.94), measurement model (0.99), and structural model (0.94), thus indicating an acceptable overall fit of the research model (Vinzi et al., 2010). Hypothesis H1 states that a positive relationship will exist between ITIL implementation and process management; that is, firms that implement ITIL are also implementing process management. This was strongly supported (0.663; p < 0,000). Hypothesis H1 Table 4 Latent variable Size Process management

Mgmt. involvement Org. commitment Group efficacy

includes seven sub-hypotheses stating that the relationship between ITIL implementation and process management will differ as a result of the dimensions of process management involved. The support for the sub-hypotheses will be revealed through the individual weights of the dimensions involved, as illustrated in APPENDIX C. Here, the weights for process standardization (H1a), process documentation (H1b), goal monitoring (H1e), process improvement (H1g), and IT department certified (H1g) are significant, thus supporting these hypotheses. The weights for process ownership (H1c) and explicit goals are set (H1d) and were not significant, indicating that these hypotheses were not empirically supported. Our structural model involves formative indicators whose weights will indicate the contribution of each indicator to the variance and predictive ability of its latent variable (Götz et al., 2010). Ideally, each weight should be significant, but in the early stages of theory development, this is unrealistic. As a result, the weights will indicate to what extent different parts or dimensions of a variable are relevant in explaining the predictive ability of the structural model. APPENDIX C shows the relative weights for the indicators involved in the formative variables. As is evident from APPENDIX C, five of the seven indicators of process management have a significant impact on the structural relationship with ITIL implementation. Of

Standardized loadings, reflective indicators Indicators

Standardized loadings

Critical ratio (CR)

ITemployees Staffintotal Turnover Processesimproved Processesstandardized Processesdocumented Processownershipestablished Explicitgoalsareset Goalachievementmonitored ITdeptcertified Mngtfeedback Mngtchampion Resources Keypeoplestaying Sufficientknowledge Welldefinedmethod Tryingtheirhardest

0.911 0.753 0.685 0.658 0.725 0.810 0.752 0.654 0.685 0.529 0.908 0.912 0.922 0.860 0.862 0.769 0.699

20.302 6.186 6.513 11.183 13.124 19.083 13.866 9.666 11.239 6.825 49.871 43.633 56.086 28.115 29.290 17.599 12.730




Figure 1 Results of hypotheses tests with path coefficients and explained variance

these indicators, explicit goals are set, and process ownership is not significant. Of the other five indicators, process documentation is the most influential dimension (0.386) followed by goal achievement monitored (0.269), IT department certified (0.253), processes standardized (0.237), and processes improved (0.182). Of the 25 formative indicators involved in measuring ITIL implementation, we see that as many as 20 are not significant. The most influential among the remaining five indicators are incident management (0.464), change management (0.271), service portfolio management ( 0.255), service level management (0.213), and access management (0.171), respectively. We included several contextual control variables when investigating our hypotheses. Management involvement and group efficacy were positively related to ITIL implementation with (0.145; p = 0.005) and (0.207; p < 0.001), respectively. There was no support for a positive relationship between organizational commitment and ITIL implementation. Furthermore, sector, which represents private or public companies, was negatively related to ITIL implementation ( 0.123; p = 0.003), which shows that ITIL implementation status sinks as the number of public companies increases in our data. Furthermore, size (0.108; p = 0.015) and time (0.281; p = 0.000) were positively related to ITIL implementation, reflecting that the degree of ITIL implementation is positively related to resources in terms of employees and turnover, as well as to the time since the ITIL project was initiated. We found no significant relationship between the other control variables (budget and business condition).

DISCUSSION This study investigates whether IT departments that are implementing the ITIL processes also are implementing process management. We raised this question for two reasons. First, firms implement ITIL in order to adapt to a more service-oriented IT operation, and process is central to this transformation. However, conducting a Copyright © 2014 John Wiley & Sons, Ltd.

program for redesigning the processes based on ITIL’s best practice recommendations is only a first step. In order to succeed in the long term, processes must be managed on a daily basis, which means that ITIL firms must implement process management. Second, it is evident that firms in general find process management difficult (Hammer and Stanton, 1999; Hammer, 2007). As Hammer says it, “All change projects are tough to pull off, but process-based change is particularly difficult” (Hammer, 2007, p. 112). In general, the results confirm our main hypothesis H1, which states that as the implementation status of ITIL increases, so does the level of process management. This supports our general assumption: Firms that are implementing the ITIL processes are also implementing process management. The ITIL industry and all those firms that are on a route to an ITSM practice may find this gratifying and motivating. Additionally, results from H1a, H1b, H1e, H1f, and H1g are statistically significant. As ITIL implementation increases, so do process standardization, process documentation, goal monitoring, process improvement, and process certification. However, there was no significance for H1c and H1d, process ownership and process goals. The lack of support for these two dimensions could imply that process management still needs to be improved in our sample. Future studies should investigate whether these dimensions are present and important in companies at higher levels of process management maturity. As the results from this study suggest, ITIL not only leads to benefits at the operational level but also contributes to the more strategic capabilities of the firm. It does this by improving the firm’s ability to manage its IT services and the service levels provided to customers, and thus creating sustainable competitive advantage. There are, however, two attributes of the results that must be discussed. First, of the 25 ITIL processes, only four processes have been given mean values above 3.00 (half way), which means that for the majority of the ITIL processes, the implementation level in the firms is low (“not started” or in an “early” phase). The most mature Know. Process Mgmt. (2014) DOI: 10.1002/kpm

Relation between ITIL and Process Management processes are service desk, incident management, and change management, which are at an “advanced” level, and problem management and service level management, which are at a “half way” level. The analyses show that only five of the 25 processes are significant for the forming of ITIL implementation in this study. From this, we can conclude that overall, the level of ITIL implementation in the Nordic countries is still in an early stage. This situation is not exceptional; a recent Australian survey reports comparable results (Cater-Steel et al., 2009a). Second, and similarly, the mean values of the seven dimensions of process management reveal that although ITIL firms are now changing their management practices in favor of a more process-oriented style, most firms have a way to go before these practices are fully implemented. Especially, the two central dimensions “explicit goals are set” and “goal achievement is monitored” received low values, which is alarming with respect to continuous process improvement. In addition, the data reveal that few firms have achieved process certification. Several contextual control variables were significant and are influencing the degree of ITIL implementation in our sample. As sector increases, representing the level of public companies in our sample, the degree of ITIL and process management implementation decreases. However, as size and time increase, the first representing the degree of personnel and monetary resources, and the latter the degree of experience with the ITIL project, the degree of ITIL implementation and process management also increases. These findings confirm the general view of ITIL implementation as a demanding activity in need of substantial resources. Because our sample has a slight overrepresentation of larger enterprises from the IT industry, which we should expect to be more professional on these issues than other firms, we might create an overly optimistic picture of the relationship between ITIL and process management. Our data lend some support to this possibility by showing that as the degree of public sector companies increases, weakening the relative influence of IT sector firms, both ITIL and process management implementation decrease. Future studies should investigate whether this in fact is the case and a result of competence and maturity or whether other dimensions of the public sector are relevant. This study provides a contribution to both research and practice. The contribution to research is twofold. First, the area of ITIL is in an early stage of theory development. Few scholarly works have empirically attempted to test and validate measurements and instruments for empirical-based model building. Our work thus contributes to theorizing in an important area of practice. Additionally, this research opens paths for further research. Future studies should especially look at instrument development for measuring levels of ITIL implementation. Many of the 25 processes in our variable turned out to be insignificant. This may be as a Copyright © 2014 John Wiley & Sons, Ltd.

result of time and maturity. It takes years to implement all the ITIL processes, and 60% of the firms in our survey have been working with ITIL for 4 years or less. However, ITIL implementation may also be measured by other and additional indicators, for example, by the utilization level of ITIL software, the level of ITIL competence among staff, and the use of ITIL terms among personnel. Although processes have a prominent place in ITIL, ITIL is more than its processes. ITIL is also about strategies, markets, services, customers, software, and culture (Taylor, 2007). For practice, our research model can serve as a guideline for IT managers who are planning to adopt or already are adopting ITIL. Particularly, managers must consider how they can build their process management practice, based on the principles of the seven dimensions. Further, the results clearly reveal that it takes time to fully adapt to ITIL and a service-oriented IT operation. This must be considered when plans are set; being too optimistic about schedules that never can be met will only create hopelessness and despair. Only Nordic companies participated in the study. There is an over-representation of larger enterprises within IT and public government, and more frequent answers from the Norwegian and Swedish chapters than from the Finnish and Danish. As noted earlier, this may influence the results in two ways: The high percentage of large firms with many resources may create a too-positive picture of the relationship between ITIL and process management, and the high percentage of public government firms, on the other hand, may influence the levels of ITIL and process management implementation found. We also would like to raise the point that we have measured the respondents’ perceptions of their firms’ implementation progress and, likewise, the level of their process management practices. No wide-ranging and thorough assessments of these elements have been conducted in the companies that are represented. Such data are seldom collected for any company.

CONCLUSION Over the last decade, we have witnessed an increasing interest among IT departments to invest in ITIL. Research has found that various operational benefits may be realized from utilizing this best practice framework and have identified factors important for project success. Little attention, however, has been put on ITIL’s strategic prospects and on the factors that are required for retaining the initial effects. One such factor is process management. Without process management, it is unfeasible for an IT department to control all the different processes initially defined and improved by the ITIL implementation program. Know. Process Mgmt. (2014) DOI: 10.1002/kpm

J. Iden and T. R. Eikebrokk This study finds that companies that adapt to ITIL also adapt to process management. It shows that as the implementation of ITIL increases, so does the implementation of process management. The study reveals, however, that overall, firms are still in an early stage with ITIL and process management. The contributions from this work are twofold. From the perspective of practice, it contributes to the understanding of what is required for an IT department to succeed with ITIL in the long run. From an academic perspective, it contributes to theorizing an important area by testing and validating measures that can be used in further research aimed at better understanding what an ITIL implementation involves.

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APPENDIX A: THE SURVEY USED 1: 2: 3: 4: 5: 6: 7: 8: 9:

10:

11: 12: 13: 14:

15:

16:

17: 18: 19: 20: 21: 22: 23: 24: 25: 26:

Which ITSM forum are you a member of? What is your role in the ITIL project? Are you ITIL certified? How many years have you been working with ITIL? Why did your organization chose to implement ITIL? Who took the initiative to introduce ITIL in your organization? In what year was your ITIL project initiated? How big is your overall budget for the ITIL project? What percentage of your project’s budget will be spent on the following: external consultant, ITIL software, and ITIL training? Please rank the relative significance of the following statements concerning senior management involvement, organizational commitment, and group efficacy. Please rate your organization’s implementation progress in ITIL, the service design processes. Please rate your organization’s implementation progress in ITIL, the service transition processes. Please rate your organization’s implementation progress in ITIL, the service operation processes. Please rate your organization’s implementation progress in ITIL, the service strategy, and the continual service improvement processes. Please rank the relative significance of the benefits that the ITIL implementation has provided to your organization. Please rank the relative significance of the effects that the ITIL implementation has provided to your organization. How do you evaluate your ITIL project? To what extend has ITIL met the expectations of your organization? Did your organization consider interrupting the ITIL project during its implementation? If yes to question 20, what was the main reason for not wanting to implement ITIL? How would you describe your organization’s business conditions during the ITIL implementation? What is your position in the organization? To which business sector does your organization belong? Approximately how many full-time IT professionals are employed in your organization? Approximately how many staff in total does your organization employ? What is your organization’s annual turnover? Know. Process Mgmt. (2014) DOI: 10.1002/kpm


APPENDIX B: DESCRIPTIVE STATISTICS Variable ITIL implementation ServiceCatalogueManagement ServiceLevelManagement CapacityManagement AvailabilityManagement ITServiceContinuityManagement InformationSecurityManagement SupplierManagement TransitionPlanningandSupport ChangeManagement ConfigurationManagement ReleaseandDeploymentManagement ServiceValidationandTesting Evaluation KnowledgeManagement EventManagement IncidentManagement ProblemManagement RequestFulfillment AccessManagement ServiceDesk ServiceStrategy Lifecycleprinciple ContinualServiceImprovement FinancialManagement ServicePortfolioManagement Time Yearinitiated Process management Processesimproved Processesstandardized Processesdocumented Processownershipestablished Explicitgoalsareset Goalachievementmonitored ITdeptcertified Management involvement Mngtfeedback Mngtchampion Organizational commitment Resources Keypeoplestaying Group efficacy Sufficientknowledge Welldefinedmethod Tryingtheirhardest


Minimum

Maximum

Mean

Std. deviation

1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000

5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000

2.544 2.956 1.954 2.032 2.317 2.324 2.044 2.258 3.349 2.450 2.552 2.177 1.833 1.976 2.478 3.944 3.095 2.769 2.375 3.963 2.158 1.993 2.098 2.070 2.016

1.012 1.030 0.954 1.007 1.062 1.123 1.030 1.103 1.095 0.986 1.075 1.063 0.911 0.962 1.239 0.925 1.135 1.179 1.172 0.973 1.014 0.963 0.996 1.142 0.954

1.000

16.000

4.283

2.367

1.000 1.000 1.000 1.000 1.000 1.000 1.000

5.000 5.000 5.000 5.000 5.000 5.000 5.000

3.590 3.506 3.429 3.374 2.988 2.667 1.680

0.907 0.921 0.966 1.076 0.977 1.068 1.178

1.000 1.000

5.000 5.000

2.877 3.288

1.164 1.256

1.000 1.000

5.000 5.000

3.134 3.367

1.110 1.064

1.000 1.000 1.000

5.000 5.000 5.000

3.684 3.389 3.664

0.929 0.961 0.919


Relation between ITIL and Process Management

APPENDIX C: INDICATOR WEIGHTS

Latent variable

Manifest variables

ITIL impl.

ServiceCatalogueManagement ServiceLevelManagement CapacityManagement AvailabilityManagement ITServiceContinuityManagement InformationSecurityManagement SupplierManagement TransitionPlanningandSupport ChangeManagement ConfigurationManagement ReleaseandDeploymentManagement ServiceValidationandTesting Evaluation KnowledgeManagement EventManagement IncidentManagement ProblemManagement RequestFulfillment AccessManagement ServiceDesk ServiceStrategy Lifecycleprinciple ContinualServiceImprovement FinancialManagement ServicePortfolioManagement Project char. BUDGET Time Yearinitiated Size ITemployees Staffintotal TURNOVER Process Processesimproved management Processesstandardized Processesdocumented Processownershipestablished Explicitgoalsareset Goalachievementmonitored ITdeptcertified Business condition Businesscondition Sector Sector Mgmt. Mngtfeedback involvement Mngtchampion Org. commitment Resources Keypeoplestaying Group efficacy Sufficientknowledge Welldefinedmethod Tryingtheirhardest


Outer weight 0.115 0.213 0.075 0.057 0.118 0.055 0.093 0.064 0.271 0.038 0.062 0.043 0.180 0.004 0.023 0.464 0.051 0.098 0.171 0.127 0.126 0.073 0.146 0.154 0.255 0.676 0.422 0.435 0.241 0.163 0.182 0.237 0.386 0.134 0.051 0.269 0.253 0.909 2.503 0.467 0.442 0.572 0.452 0.587 0.377 0.390

Critical ratio (CR) 0.962 2.494 0.587 0.454 1.156 0.520 0.941 0.597 2.623 0.423 0.604 0.356 1.437 0.047 0.281 3.879 0.593 1.160 1.690 1.106 1.054 0.581 1.183 1.458 2.177 39.756 21.999 5.641 2.850 2.475 1.694 2.030 4.490 1.395 0.394 2.309 3.937 44.819 28.375 10.207 12.086 12.076 9.738 9.578 6.678 5.738

Lower bound (95%) 0.296 0.001 0.291 0.291 0.116 0.155 0.171 0.236 0.009 0.175 0.330 0.197 0.100 0.199 0.232 0.182 0.204 0.041 0.280 0.195 0.403 0.289 0.055 0.087 0.473 0.648 0.390 0.330 0.035 0.015 0.046 0.036 0.167 0.054 0.325 0.038 0.132 0.875 2.324 0.361 0.352 0.489 0.329 0.461 0.280 0.249

Upper bound (95%) 0.201 0.384 0.301 0.308 0.317 0.266 0.275 0.256 0.437 0.218 0.125 0.305 0.437 0.181 0.111 0.698 0.156 0.340 0.137 0.325 0.130 0.266 0.445 0.383 0.004 0.720 0.469 0.636 0.338 0.282 0.466 0.465 0.543 0.329 0.201 0.534 0.407 0.958 2.700 0.570 0.524 0.688 0.540 0.748 0.545 0.506
