3gamma's whitepaper on The state of IT service management in agile organizations. Swedish companies are struggling with the balance between governance, control and stability, and the need for greater innovation and flexibility. Conflicting forces are driving complexity. Regulatory requirements are increasing the demand for greater control and governance whilst at the same time customer demands are accelerating and changing. IT is caught in the middle – trying to balance stability, control and maintaining operations whilst, at the same time, delivering innovation. 3gamma has surveyed 100 IT leaders on how to manage the balance between control and innovation with a special focus on the perceived conflict between IT service management frameworks and agile methodologies. An agile IT organization is not created through the adoption of an agile development methodology. There is no quick fix. Becoming a high-performing IT organization cannot be attributed to a single factor. It is done through focused execution of a business-driven IT strategy encompassing people, processes and technology. 3gamma’s survey shows that the issues experienced within the participating organizations can’t be attributed to any specific methodology or framework. They are generic and wide-spread. From the financial sector, through retail, to media, the pre-requisites vary. The companies and organizations within 3gamma’s study that are successful in meeting their businesses’ requirements, regardless of size or industry, share a set of common traits: * Customer centricity * Communication * Continuous improvement * Removing obstacles

1. The state of IT service management in AGILE
organizations - delivering agile innovAtion
while supporting stable IT operations
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3. The state of IT service management in agile
organizations - delivering agile innovation
while supporting stable IT operations
Swedish companies are struggling with the balance between governance, control and stability, and the need
for greater innovation and flexibility. Conflicting forces are driving complexity. Regulatory requirements are
increasing the demand for greater control and governance whilst at the same time customer demands are
accelerating and changing. IT is caught in the middle – trying to balance stability, control and maintaining
operations whilst, at the same time, delivering innovation.
Jens Ekberg, Head of Solutions, 3gamma
3gamma has surveyed 100 IT leaders across a range of industries in Sweden and interviewed eight high-profile companies on the topic of the state of IT service management
in agile organizations. The purpose of the study was to
quantify the perceived issues in the interface between agile development methodologies and IT service management
frameworks. To better understand how companies maintain
stable and controlled IT operations while at the same time
delivering agile development and business development.
Within this study the term agile development methodologies refers to iterative and incremental software development methodologies. Agile IT organizations are IT organizations that are quick to respond to changing external or
internal circumstances and have made the process of
change a routine part of their organizational culture.
The study has shown that Swedish companies are facing a
set of well-known IT-related issues. These issues are connected to both internal, external challenges and requirements. However, it seems that these issues are unrelated to
any specific framework or methodology. Success is not tied
to any specific methodology, it’s about execution.
The way to an efficient and value-creating IT delivery is
based on a disciplined approach to whatever method or
framework that is used. There is no correlation between any
specific set of methods and the identified or perceived issues.
Successful IT organizations focus on the customers’ needs.
They create a truly service-oriented organization that is supported by the right technical pre-requisites, a well-tailored
delivery model, and stringent fit-for-purpose delivery methods. Most importantly, it is their communication across
teams and with their customers and stakeholders that truly
sets them apart.
The successful IT organizations are focused, base their delivery methods on fundamental capabilities within requirements management, communication and planning, and
have the right technical and cultural pre-requisites. There
is no quick fix or silver-bullet solution. They work hard and
diligently with an unwavering focus, they do not jump ship
to ‘the next buzzword’-method.

4. Time to market and the ability to quickly adapt to changing
customer requirements have become a competitive necessity
Increased demands for shorter time to market
Companies today are pressured to deliver new products and
services at an increasing pace as the technology share of
each new product and service increases. IT is struggling to
keep up! IT has become an integral part of new business development initiatives, 84 % of the respondents in 3gamma’s
survey state that time to market is the key focus. In face of
this change, IT organizations have deployed three key strategies:
54%
30%
Legacy modernization
Modernize the underpinning infrastructure and applications
services to enable a more flexible development and delivery.
Key initiatives include transformation to a service orientated
architecture, cloud-based services (both infrastructure and
application services) and application rationalization.
A major telco in 3gamma’s study is implementing an internal
cloud to support rapid deployment of new business applications. This new internal cloud is seen as an enabler of agility,
as it improves the IT department’s ability to quickly respond
to the development teams, and ultimately the business’
changing requirements.
It also reduces the amount of hardware specification and
‘techno jargon’ needed to set up a new service to their business. Simply put, through adoption of a service-oriented
delivery model based on a cloud-style infrastructure, time
to market can be reduced and business orientation is improved.
11%
2%
2%
Disagree
Somewhat disagree
Somewhat agree
Agree
Dont know
Chart: 84 % of the respondents somewhat agree or agrees that the demands for shorter time to market have
increased in the last five years.
Outsourcing
Right-source IT capabilities to ensure the right mix of internal and external competencies, access to a flexible resource pool, cost efficiency and scalability. Many second
and third generation outsourcers are transitioning to a
multi-sourcing model based on selective right-sourcing.
The length of each contract has been shortened to support a more flexible service portfolio. In some cases the
purchasing pattern of IT services closely resembles a
consumer pattern with a monthly subscription/pay as
you go-model.
A fast moving consumer goods company in 3gamma’s
study uses several cloud-based services to improve time
to market, reduce cost and improve flexibility within
marketing. There is no traditional contract, just a simple
subscription paid with a credit card.

5. New ways of working
Adopt an agile methodology to improve time to market and
internal efficiency. The adoption of these methodologies
mark a shift from the waterfall model where a product or service could or would be detailed upfront to a more evolutionary approach. 73 % of respondents in 3gamma’s survey work
at companies that have adopted an agile method. The adoption is widespread within development organizations. Agile
principles are also applied to IT service delivery organizations
to ‘cut through red tape’ and improve service quality.
IT has become an integral part of business development
44%
46%
10%
0%
Disagree
0%
Somewhat disagree
Somewhat agree
Agree
Dont know
Chart: Over 90 % of the respondents somewhat agree or agrees that IT has become more important to
the business in the last five years
Increased demands on a high availability
32%
13%
Disagree
0%
Somewhat disagree
Somewhat agree
Agree
As such, an operations perspective is typically taken during
the hand-over from development to operations. The effect of
this is often a considerable delay for the business. IT service
management on the other hand has come further, where service introduction and integrations are widespread.
The need for an agile and flexible development organization
has not offset the need for operational stability. IT is expected
to deliver high-quality services at all times as the stability of
the services is key, the lack of communication between development and operations is accentuated. Changes are forced
into production with little or no control.
50%
5%
It is notable that IT operations have typically been left out of
the agile transformations and are seldom represented within
the agile teams, and are therefore often expecting a waterfall-oriented delivery from the development teams.
Dont know
Chart: Over 80 % of the respondents somewhat agrees or agrees that the demands on high availability
and continuous delivery have increased in the last five years
77 % of respondents within 3gamma’s survey highlight ITIL
as an enabler of quality delivery of IT services. Their primary
focus is on the basic core processes: Incident management,
problem management and change management. The top
performers supplement this with an exceptional demand
management and extensive collaboration and communication. There are indications of increased bureaucracy when
IT service management frameworks are extended to a wider
scope of processes.

6. Agile methods are being adopted to improve time to market
but confidence is low
The key driver behind the adoption of agile methods is time to market. However, only
27 % of respondents in 3gamma’s survey believe their implementation of an agile
method has led to shorter time to market. This exceptional lack of confidence in the
agile delivery methods is attributed to a set of classic short-comings:
▪▪ Poor requirement’s management,
▪▪ Poor cooperation with ‘the business’, and
▪▪ Too many parallel activities
Several of the respondents in the survey have experienced methodologies that were
being implemented from the top-down. However, agile methodologies are highly oriented towards empowerment of the individuals and teams. Agile is built around selforganizing teams. However implementing agile through a top-down approach is not
easily done. Support and commitment from IT development, and likewise, IT operations teams are a pre-requisite.
A key finding within the study is that successful companies keep focus through their
implementation projects making sure to operationalize the entire value chain, from operations via service development to end customer and user. They often start small with
a single team and gradually expand and fine-tune.
STILL SAME OLD IT ISSUES – AGILE OR NOT
Poor release
testing
54 %
Poor change
communication
46 %
Lack of
documentation
73 %
TIME
The ‘new way of working’ cure to delivery issues can be outright detrimental to quality, cost and time. The organization focuses internally on its own processes and capabilities rather than on customer needs. The tendency for this is higher with IT service
management than agile methodologies. Agile methodologies seem, based on the survey, to be originating from business requirements and not from within IT.
They typically have a fairly mature IT service management organization with a tendency
for bureaucracy. When they implement agile it is often driven from the top-down by
management with the purpose of reducing bureaucracy. It is often done as a one-off
project, leaving the delivery teams to sort out the details. The effect: agile is used as an
excuse to become undisciplined and unstructured.
QUALITY
It is clear from 3gamma’s survey that there is little to be gained from a top-down
framework implementation. Changing the way of working needs to be fine-tuned to
the organization’s specific pre-requisites and context, while being implemented with
the utmost discipline. A company in the financial sector clearly highlighted that a key
obstacle to efficient IT delivery was the fact that each unit within IT was busy implementing a new way of working, all in isolation from each other. Implementing a new
way of working became more important than the actual delivery of the IT services to
the end users and customers.
Companies that are suffering from issues between agile and IT service management are
often new to agile.
41 %
Too much in parallel
56 %
Poor requirements
management
56 %
Poor cooperation with
the business
COST
41 %
54 %
Too complex
processes
Poor process
compliance
54 %
Poor process
knowledge

7. Swedish companies are facing challenges in combining agile
methods and IT service management
Challenges in combining agile and IT service management frameworks
IT service management frameworks like ITIL are wide
spread through Swedish IT organizations today. 70 % of
respondents in 3gamma´s survey state that their organization is working with IT service management.
42%
As noted, increased demands for shorter time-to-market
and better responsiveness to customer requirements
are driving implementation of agile methods. 62 % of
respondents in 3gamma’s survey have stated that they
face challenges in combining agile methods and IT service management. The challenges are primarily related to
the interface between development and operations and
are accentuated in areas where the business requires a
higher release frequency.
Change management is one area where organizations
face many challenges in the interface between agile
and IT service management. The change management
process is often developed and adjusted for ‘traditional’
waterfall development methods using a ‘command and
control’ approach, requiring the change requestors to
plan well in advance in order to get approval. Agile teams
releasing new code frequently have difficulties fitting into
the traditional change management process.
For some of the companies in 3gamma’s study there is a
four week notification period for changes. This is actual
longer than the average sprint in an agile method. One
company within the study used daily change advisory
board meetings to offset this and to improve communication and collaboration with the business stakeholders.
21%
20%
14%
3%
Disagree
Somewhat disagree
Somewhat agree
Agree
Dont know
Chart: 62 % of the respondents somewhat agree or agrees that there are challenges in combining agile methodologies and IT service management frameworks
The result was improved commitment from the business,
improved quality in the change requests and better understanding for the overall process.
to development projects becomes too long. This is often
accentuated through an internal focus on methods rather
than service delivery.
Request management is another area where the survey
respondents have identified challenges. Due to bureaucratic request management processes, slowed down by
delivery organizations working in silos and complex financial set ups, the delivery time of new infrastructure
What underlines is that IT service management processes
can become too complex and bureaucratic. They sometimes become too task-oriented and misaligned with the
business’ requirements. There is a disconnect between IT
and the business.

8. This is visible in 3gamma’s survey, especially amongst respondents working with system development. 80% think
that IT service management processes prevent shorter
time-to-market and 50% experience them as being bureaucratic and time consuming.
Successful companies within 3gamma’s study focus on
communication and collaboration. They have created a
culture of collaboration across teams and departments
and they readily share information across the organizational boundaries, often supported by easy-to-use tools.
They include their outsourcing providers in their processes, as well as their business stakeholders. Additionally, they strive for transparency. This is often exemplified
through the use of whiteboards showing the progress of
an activity.
They do not focus on forms for changes and/or requests
to support multiple hand-overs. In a sense they have
adopted the principle of self-organizing teams where they
make sure that all competence required to solve an issue is available within the process. In short: ‘customer
collaboration over contract negotiation’, as stated in the
manifesto for agile software development [1] .
For operations, a corresponding agile operations manifesto has been articulated[2]:
▪▪ Customer satisfaction over service level agreement
compliance,
▪▪ Attitude and collaboration over certification,
▪▪ Focus on results over focus and on activities,
▪▪ Adaptivity over procedures.
The principles articulated within the agile operations
manifesto are clearly visible in the successful organizations within 3gamma’s study. These are also underpinned
by the notion of self-organizing teams containing all resources, knowledge and competencies for the task at
hand.

9. There’s a disconnect between IT operations and the business;
IT operations have no insight into business demands
IT in general, and IT operations in particular believe that
there is a gap between their organization and the business. The level of understanding within IT operations of
the business need for the services is poor. The customers
do not see IT as a service provider but rather a hardware
and application provider. This gap is larger in organizations
that have adapted an agile development methodology.
IT development and IT operations professionals that participated in the survey highlight:
▪▪ A lack of collaboration with business customers as a
key reason for not being able to reduce time to market for new development/IT services.
▪▪ The lack of a proper hand-over to IT operations as the
number one reason for lack of quality in the IT delivery.
The disconnect between the business stakeholders and IT
operations creates a bullwhip effect: the lack of an operational perspective in the development phase creates an
unsustainable delivery situation. IT does not know what
is expected and it is too late and too expensive to do anything about it.
3gamma’s study shows that 89 % of the respondents feel
the need to make IT operations more attentive to changed
business needs or changed end-customer needs. IT operations needs to be included within the development/
design phase. This, in turn, means that IT operations need
to become a business partner. IT operations must focus
on “delivery as is” as well as on business value and results.
Forrester notes that “[…] most Agile adoption in the past
decade has seemed to focus on optimizing workflow
within a development team rather than across the entire value chain”[3]. 3gamma’s study shows that Swedish
companies are suffering from the lack of a holistic value
chain-approach to agile. IT operations have been left out
and cross-team synergies are not being realized, as noted
above in the example with the company within the financial sector.
At this time, DevOps has not been adopted on a broad
scale by companies participating in the 3gamma survey;
as noted above, there are signs that there is a need to
increase agility and time to market for IT operations.
Successful companies within 3gamma’s study are using a
holistic approach, to some extent based on DevOps ‘principles’. They are empowering teams to deliver end-to-end
services across their entire life-cycle. Key approaches are:
▪▪ Inclusion of IT operations into the agile development
teams,
▪▪ Inclusion of operational requirements in the defini-
tion of done,
▪▪ Clear, communicated and agreed ‘rhythm’ for deliv-
ery frequencies across both development and operations,
▪▪ And visualization of operations’ activities through the
use of e.g. Kanban boards, and
▪▪ Using disciplined feedback processes and retrospec-
tives to support learning.
Several successful companies are also actively striving
to minimize the amount of parallel activities to create a
focused organization. Using a set frequency for delivery
and visualization on e.g. Kanban boards support this. The
companies that have deployed these methods are experiencing an improved efficiency and an increase in customer satisfaction as the delivery becomes aligned with
business priorities.

10. Legacy technology is an obstacle to agile –
agile is what agile does
Several of the companies within 3gamma’s study have pinpointed legacy technology, monolithic solutions and applications/infrastructure strategies as an obstacle to agile:
▪▪ One size fits all enterprise resource planning systems are
not easily developed, especially as they are often delivered
under a contract not supporting incremental deliveries.
▪▪ Centrally defined top-down technology stacks are locking
down innovation and driving cost as they are less ideal to
the solutions that are being developed and driving shadow
IT.
▪▪ Centrally defined hosting strategies are locking down de-
livery options for new IT services, often accentuated by a
sourcing strategy based on a prime vendor.
Legacy systems of record, often containing massive amounts of
data and transactions, are often designed for stability and reliability. System of engagement; the systems used to interact with
end customers, are changing rapidly, due to the advent of mobile and increased self-service. These systems are often tightly
connected to the legacy system records, creating the need for
an increased frequency of change in these systems.
To facilitate and support agile and technology, contractual obstacles need to be removed. Systems of record need to be every
bit as agile as the systems of engagement, supported by an agile
delivery model. The first step is this journey is often to adopt a
cloud-like model for infrastructure services and to start breaking up the legacy monoliths.

11. The advent of ‘agile’ operations - think big, empower and start
small
An agile IT organization is not created through the adoption of an agile development methodology. There is no quick fix.
Becoming a high-performing IT organization cannot be attributed to a single factor. It is done through focused execution of a business-driven IT strategy encompassing people, processes and technology.
To become a successful, agile IT organization, it is important to think big, empower and start small.
▪▪ Articulate and communicate a clear vision across
3gamma’s survey shows that the issues experienced within the participating organizations can’t be attributed to any
specific methodology or framework. They are generic and wide-spread.
From the financial sector, through retail, to media, the pre-requisites vary. The companies and organizations within
3gamma’s study that are successful in meeting their businesses’ requirements, regardless of size or industry, share a
set of common traits:
Customer centricity
They are customer and service oriented. They invest
heavily in creating and maintaining a well-defined, disciplined and transparent demand process. Often with
the explicit purpose of creating focus and reducing the
number of parallel activities while managing stakeholder
expectations.
Continous improvement
They are disciplined in their approach to change. They
avoid framework implementations and have a structured
approach for continuous improvement in their ways of
working. These processes are often supported by robust
feedback loops and retrospectives making the IT organizations aligned with the needs of their customers.
Communication
They communicate in abundance with all stakeholders,
both orally and through the use of physical and digital
tools. They understand their business’ needs and have
the ability, processes and culture to meet these requirements.
Removing obstacles
They create the right pre-requisites by removing obstacles to agile, primarily legacy technology and applications. They are avoiding “the monolith” approach to
technology and are avoiding one size-fits all solutions for
system of records to support rapid development of their
systems of engagement. They are revising static contracts
with outsourcing providers to cater for agile approaches.
the organization, both within and outside of IT.
Answer the ‘why’ over and over again.
▪▪ Empower a team or a part of the organization
to start the change journey. Use an incremental
approach to change. Include business stakeholders in the change project to continuously adapt
to their needs and requirements. Make sure to
maintain the customer perspective. Answer the
‘how’ using a bottom-up approach.
▪▪ Execute with discipline. Focus on people, cul-
ture, processes and technology. Do not jump
ship to test the latest buzzword methodology.
Stay focused and continue with incremental
change. Avoid over-formalization and overdesign. Remove technical obstacles to agile
through modernization and modularization, enabling self-organizing teams with low dependencies to other teams. Think ‘spot on’ and ‘good
enough’.
▪▪ Steal with pride from new methodologies and
include them as appropriate continuous improvement initiatives. Apply discipline in feedback processes and retrospectives to create a
learning organization. Do not stop changing. Expand, evolve and adapt!

12. Author
Jens Ekberg is a Director at 3gamma and Head of Solutions at 3gamma Sweden. 3gamma
is an international IT consultancy organization, covering IT strategy through sourcing and
operations. Jens can be contacted on jens.ekberg@3gamma.com
About the survey
3gamma has conducted a quantitative survey of 103 IT management professionals within
IT operations and IT development. A selection of these has been interviewed to deepen the
understanding of the issues covered within this paper.
Research team
Linda Lyxell Ahnsberg, Senior Consultant at 3gamma with a specialization in IT operational
excellence. Contact Linda through linda.lyxell@3gamma.com
Johan Rams, Senior Consultant at 3gamma with a specialization in IT operational excellence. Contact Johan through johan.rams@3gamma.com
Bibliography
[1] http://agilemanifesto.org/
[2] Dave Van Herpen, http://blog.unicom.co.uk/agile-operations-closing-the-loop-anddelivering-on-the-agile-promise/
[3] Kurt Brittner, Continuous Delivery Is Reshaping The Future Of ALM (Forrester, 2013)

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