The advantage of using SWOT analysis for companies with implemented ITIL framework

processes

Aida Granulo, Anel Tanović Faculty of Electrical Engineering, Sarajevo, Bosnia and Herzegovina

Abstract - Each company aims to remain competitive in the market and provides the services that their clients seek, all in accordance with the cost-effectiveness and fulfillment of customer expectations. In order to do the same, companies are looking for the best practices that help in organizing their work and delivery of their services, as well as maintaining and determining the competitive advantage. In this paper an example of such practice is explained in the ITIL framework. The purpose of the SWOT analysis is to identify strategies that match the resources and capabilities of the company with the needs of the environment in which it competes. The purpose of this analysis is to use the company advantages, to explore its capabilities, to correct weaknesses, and to counteract the threats of the environment. The aim of the paper is to demonstrate the benefits of SWOT analysis with companies with the implemented ITIL framework, which is mainly reflected in simplicity, flexibility, low cost, but with tremendous efficiency, good estimates, and finding negativity and positivism in business.

Keywords - ITIL framework, ITIL v3, SWOT analysis, Gap analysis,Balanced Scorecard

I. INTRODUCTION This paper describes the benefits of SWOT (Strengths,

Weaknesses, Opportunities, Threats) analysis for companies that have implemented the ITIL (Information Technology Infrastructure Library) framework. The motivation for writing this paper is to analyze the market and provide guidance to companies, as well as to research the ITIL framework and its practical application.

Section II gives basic theoretical concepts of ITIL and SWOT analysis. Section III shows the implementation of ITIL in the company, and section IV deals with the application of SWOT analysis in the business environment of the company. Section V presents a comparison of the SWOT analysis to the other analyzes and highlights the benefits of the SWOT analysis. A conclusion is reached at the end of the paper in section VI.

II. THEORETICAL BACKGROUND

A. ITIL ITIL is a 20-year-old commonly used framework for

managing IT services and the ITIL structure is a wellspring of good practice in service management. ITIL is utilized by associations worldwide to set up and

improve abilities in service management. This paper focuses on ITIL version 3. (V3) ITIL V3 is more attuned to today’s market needs. The ITIL framework will help companies develop and improve their overall IT Service Management capabilities, increase organizational cohesion, optimize and demonstrate business value. The framework consists of best practices, procedures and processes to be followed for IT Service Management provision. ITIL provides a valuable body of information to achieve different standards and goals in service management. It was developed in the 1980s by CCTA (Central Computer and Telecommunications Agency, now Central Office of Government Commerce, OGC) at the instruction of the British government. The organization needed to develop a vendor-independent approach to make the most efficient and cost-effective use of IT resources from the Ministries and other UK public sector organizations [1].

The ITIL framework consists of 5 components of the service life cycle. Each component describes the content of the life cycle in detail, and those components cover the life cycle stages. Furthermore, each stage of the life cycle demonstrates how processes are used to improve service management in the organization. [1] It is very important to assign and define roles well within the life cycle. In order for the requirements and results of the process to be fulfilled, it is necessary to share tasks and roles well with individuals [2]. ITIL offers a set of roles: Service Owner, Process Owner, Service Manager, Product Manager [3].

The service lifecycle as mentioned above consists of 5 phases as follows:

1. Service Strategy

2. Service Design

3. Service Transition

4. Service Operation

5. Continual Service Improvement

In total, the ITIL framework consists of 5 phases, 26 processes [4].

Service Strategy phase represents the strategic approach to managing an organization's services and the core of he life cycle. This phase explains who the customers, services offered to meet customer expectations. It also explains IT capabilities and resources

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needed to develop offers and requirements for successful execution [2], [4].

The Service Design phase offers guidelines for designing services based on customer requirements and guarantees that the services are designed to meet their expectations. In addition, the processes required to manage services are also part of this phase [2], [4].

The Service Transition phase enables the transition of services to the environment. This phase binds to change management, asset control, and configuration items (hardware, software, etc.) [2], [4].

Service Operation manages the day-to-day delivery of services, including optimizing efficiency and effectiveness. This phase provides the service on an ongoing basis, monitoring the daily overall behavior of the service [2], [4].

Continual Service Improvement is a phase that provides guidance for maintaining the created service, but also for its continued alignment with business needs. Offers a mechanism to measure and improve the level of service, technology, effectiveness and efficiency or processes used in overall service management [2], [4].

TABLE I. ITIL LIFECYCLE PROCESSES

Service

Strategy

Service

Design

Service

Transition

Service

Operation Conitnual Service

Improvement

Strategy

management

for IT

services

Design

coordination

Transition

planning and

support

Event

management

Seven-step

continual

service

improvement

process

Financial

management

for IT

services

Service

catalog

management

Change

management

Incident

management

Demand

management

Service

level

management

Service asset

and

configuration

management

Problem

management

Service

portfolio

management

Capacity

management

Release and

deployment

management

Request

fulfillment

Business

relationship

management

Availability

management

Service

validation

and testing

Access

management

IT service

continuity

management

Change

evaluation

Information

security

management

Knowledge

management

Supplier

management

B. SWOT analysis SWOT is an acronym for Strength, Weakness,

Opportunity, and Threats. It is often used to evaluate a business or a proposal. It is especially used when future progress is to be made. The process involves defining the strengths and opportunities that an organization has against the weaknesses and threats of the market [5].

Figure 1. SWOT Analysis

SWOT analysis is a customizable and very popular tool, but it uses a lot of subjective opinions and decisions and it is good to use it as a guide. Also, there is no template and default analysis to be used, but each analysis is specific and depends on the goal to be achieved. Internal factors: strengths and benefits are those that can be measured and can be influenced in some way. But external factors: opportunities and threats are factors that cannot be influenced.

Strength- internal factors favorable to achieve the goal, factors that are re currently good and need to be maintained, but used as a foundation

Weaknesses - represent internal factors that are not favorable to the goal, bad practices, factors needed to be replaced or repaired

Opportunities - Represents external factors that are favorable for the goal, factors good for the future, needed to be prioritized, it is good to have and save them, optimize and use in improvements.

Threats - Represents external factors that are not good for the goal, are bad for the future and should be avoided or overcome [5].

Depending on the organization, but also the goal, the strengths and weaknesses could be changed. It is a dynamic process where decision making and thinking need to be involved. For the purpose of creating the SWOT analysis, meetings are organized which are attended by people of interest, with competent knowledge and skills. Sometimes, it is difficult to reach factors that fall under weaknesses, because people in an organization find it difficult to talk about the them. Participants should be encouraged to provide as much information as possible. The strength of SWOT analysis is that it can be used for different organizations, and the disadvantage is that it requires clear and smart thinking as well as good judgment, decision making and value creation [5].

There is no exact number of steps in the analysis process. In this paper, the process of SWOT analysis will be explained through four simple steps:

1. Select a target, collect and evaluate key

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2. Classification of data into external and internal categories, respectively into 4 groups of factors

3. Creating a SWOT matrix

4. Using analysis to make strategies and decisions

SWOT analysis is a good defense mechanism for any

company [6], [7].

C. GAP analysis Gap analysis is a technique of comparing current

conditions with the desired ones in order to identify the gap. Thus, it serves to find and analyze the gap between the current and desired state.

Gap = Preferred Performance - Current Performance

After identifying the gap, it is possible to move on to planning the solution. Steps in conducting the gap analysis include:

Determine the purpose and topic of the analysis, as well as define organizational goals

Determine your current position based on metrics or attributes

Determine the desired position within a specific time frame

Determine the gap between the two positions

Create a report based on quantitative data collected, qualitative reasons why the data is below the benchmark, and identify the action elements needed to achieve the organization's goals [8]

D. Balanced Scorecard In the early 1990s Robert Kaplan and David Norton,

developed Balanced Scorecard technique and singled out the fact that companies base their business management on financial measures as the main business problem. However, Kaplan and Norton recognize the value of information in decision making and for this reason create the Balanced Scorecard technique. Balanced Scorecard is a management system that enables a company to set, monitor and achieve key business strategies and goals. It consists of 4 perspectives that relate to vision and strategy:

Financial, User, Internal business processes, Learning and development [9].

III. IMPLEMENTATION OF ITIL FRAMEWORK IN DISNEY COMPANY

The ITIL framework has been implemented in various companies around the world. Some of these companies are: Ohio State University, Yale University, AXA Insurance Group, Disney, Honda, Sallie Mae, Shell Oil, UnitedHealth Group, Visa, Australia Post, Bank of Canada, Bank of Montreal, Cebra, Harris Bank, British Airways, British Telecom, CERN, Müller Dairy, Telkomsel, PT Telekomunikasi Selular [10].

Implementing the ITIL framework in a business environment requires certain actions, knowledge and skills. Pink Elephant is a company that helps in implementing ITIL framework to other companies. Usually, the first step is to evaluate the benefits of the ITIL framework and the processes in which it can be applied. So, the processes most commonly applied to ITIL are problem management or change management, incident management, but also financial accounting, supply chains and capacity management. After that, the current situation in the company is documented and process assessments are made. Setting goals to create successful strategies is the next step. After selecting a project management methodology and implementing the ITIL framework, progress should be monitored, and goals met [11], [12].

The implementation of the ITIL framework brings changes in the company, and the changes affect technology, employees, human resources management. Implementation should improve business results, IT process efficiency, which often leads to reduced IT costs and service delivery [11], [12].

An example of a European company that has adopted ITIL is CERN (European Organization for Nuclear Research). Implementation of ITIL started with a service catalog describing the services available. CERN has embraced best practices from ISO 20000 and ITIL V3 to run a ServiceNow driven facilities management technology database that serves 25000 people on its campus. ISO/IEC 20000 provides a standardized and uniform framework for companies that are pursuing evaluation and validation of their service management capability. Although ISO/IEC 20000 is a standard to be followed and upheld, ITIL provides a valuable body of information to meet the standard [13].

The Disney company was officially formed in 1923 by the Walt Disney brothers and Roy O. Disney. Company is best known for its products in the movie studio, Walt Disney Studios, one of the largest and best-known studios in American cinema. But the company has 5 segments: Media Networks; Parks, Experiences and Products; Studio Entertainment; and Direct-to-Consumer and International [14].

In mid-2000, the company began adopting the ITIL framework. But in 2008, Glen Taylor, the company’s vice president and chief information officer, brought ITIL adoption into the company. Taylor has previously been a proponent of this framework. He says that “ITIL aligns IT with business, and our goal was to become a more proactive IT organization. We were looking for an improved level of service. ITIL helped provide tools and metrics to define the value of IT services. " [15].

As the main goal was to meet customer expectations, for IT it meant accessibility, reliability and sustainability. For the company, this meant that it had to ensure that broad change did not result in incidents. It is also necessary to increase and ensure the management of releases and new capabilities as well as that outsourcing contracts are managed with professionalism. ITIL is the solution to all these challenges [15].

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The implementation of the ITIL framework in this company has been carried out through three main steps: presenting ITIL to employees, training employees and selecting experts. Introducing the ITIL framework to employees means getting them familiar with the framework. The second step involved training employees. The training was attended by 250 employees and training sessions of 2 to 3 days are organized, as well as those specific to Disney and its use of ITIL, or its application. [15].

Finally, in the last step, 20 experts from across the segment were selected. They were selected for the ability to adopt and understand information provided by ITIL, a character that can persuade and influence people, work in a team and fight resistance, the ability to articulate a vision for the processes they manage or operate, and to reap ITIL benefits.

Tips from this company regarding the implementation of the ITIL framework relate to the importance of communication, which is crucial for them to succeed, utilize existing tools and documents. They also advise that you should not waste time on things that already exist and on the importance of uncomplicated and practical behavior [15].

IV. DISNEY COMPANY SWOT ANALYSIS Below is a SWOT analysis of the Orlando resort

(Disney Park and Resort). The SWOT analysis is applied to the process of continuous improvement.

Strengths

The most visited entertainment center in the world

Largest entertainment center Diversity in topics such as Magic kingdom,

Hollywood studios Great benefit from the brand

Weaknesses

The size of the center prevents visitors from visiting it in its entirety

A large number of hotels and entertainment centers make centralized management and monitoring difficult

Opportunities

The Disney brand name makes marketing campaigns easier

The company has experience in managing resorts and entertainment venues and is extremely popular around the world

As travel abroad is popular, it is possible to attract people from all over the world

Many promotions and discounts attract customers

The introduction of new attractions and facilities attracts many users

Threats

High operating costs Local competitors are gaining in popularity

Competitors are slowly taking market share if the company fails to create innovation constantly [16]

V. COMPARISON OF SWOT ANALYSIS TO THE OTHER ANALAYSIS

A. SWOT vs. GAP analysis An example of the gap analysis is presented below:

TABLE II. GAP ANALYSIS Objectives: Achieved: Family fun Kids and teen parties

Honesty and Integrity Money driven business Friendly and imaginative Friendly and imaginative Creativity and innovation Creativity without innovation

International brand International brand [17]

After the analysis, certain strategies for improving the business were elaborated. But the main conclusions are about improving and innovation. As competitors appear in the market every day with innovation, so does this company need to keep up with them. The company itself must work on the definition of innovation, but also on its realization. Also, the problem was how to innovate rather than spoil tradition, and it was necessary to create with these guidelines.

The gap analysis is quite cumbersome and provides less information than SWOT analysis does. It has been proven that SWOT analysis really gives a complete picture of the company in the market, but also a picture of its competitors so that the company can create better strategies. The gap analysis only identifies shortcomings that could be further analyzed by SWOT analysis and is more suitable for smaller processes. SWOT analysis can minimize deficiencies, increase power, eliminate threats and seize opportunities. SWOT analysis is used for long-term planning, while gap analysis corresponds to short-term goals. SWOT analysis assesses many aspects and competitors and, as such, is a comprehensive study, while gap analysis is focused on a single process.

Thus, gap analysis is there to identify the weaknesses and poor utilization of the potential that the company has, while SWOT analysis facilitates activity planning and decision making. Collaboration and visualization play an important role in presenting both analyzes visually.

The gap analysis is there to reveal gaps and weaknesses, while SWOT analysis is a key process for finding what needs to be done to reduce it. Some authors point out that the gap analysis is only an analysis or comparison of current strengths and weaknesses. As such, it provides only one piece of information that is opposed to it by the SWOT analysis. When used in the ITIL framework, both are put in the same context only when analyzing the company on the question "Where are we now?".

The biggest advantage of a SWOT analysis is gaining advantage over competitors emphasizing strengths and acting to correct weaknesses or address potential threats.

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B. SWOT vs. Balanced Scorecard An example of a Balanced Scorecard analysis for

Disney is given [18]. TABLE III. DISNEY'S FINANCIAL PERSPECTIVE FINANCIAL PERSPECTIVE

Objective Measurement Target

Company assets Increase in assets Number of new assets submitted for each year

Work efficiency Increase work efficiency

Obtain ISO certification

Annual revenue Increase in annual revenue

Increase in revenue

New Investor More Potential Investors

Increase the number of investors

TABLE IV. DISNEY'S CUSTOMER PERSPECTIVE THE USER'S PERSPECTIVE

Objective Measurement Target

Increasing

stakeholder

satisfaction

Meeting the

expectations and

needs of stakeholders

Holding all the

expectations and

needs of stakeholders

New users Gaining more users Constant increase

User loyalty Keeping customer

loyalty

Old user data saved

Improving customer

service

Quality customer

service

Achieving customer

satisfaction

TABLE V. DISNEY'S INTERNAL PROCESS PERSPECTIVE

PERSPECTIVE ON INTERNAL PROCESSES

Objective Measurement Target

Retention of assets

and good employees

Extension of contract

to good employees

Retention of all good

employees

Strengthening the

improvement of the

management process

Performance

evaluation

Magnifying

enhancement

graphics

Administration systems

Countable administration systems

Weekly reports on administration systems

Rapid Employee Progress

Changing employee positions to higher levels

Annual number of new employees

TABLE VI. LEARNING AND IMPROVEMENT PERSPECTIVE A LEARNING AND IMPROVEMENT PERSPECTIVE Objective Measurement Target

Sustainable technical aspect

Meeting technical standards

Achieving ISO certification

Sustainable Human Resources Aspect

Meeting minimum standards

Obtaining certification

Developing employee

skills and productivity

Employee skills and

productivity

Getting certified

Healthy environment

and relationships

Strengthening

relationships

Involvement of all

employees

This kind of analysis leads to the creation of a plan that can be acted upon. So, from a financial perspective, the action plan calls for spending money to buy new assets, standardizing every aspect of work, reducing unnecessary costs. The user perspective, as an action plan, requires creating the ability to propose changes anonymously and in an easy and accessible way (creating a suggestion box), creating a Customer Club, rewarding users.

The Internal Process Perspective proposes to increase pay, create reports for each transaction, evaluate employees. The perspective of learning and improvement suggests meeting the standards of work, organizing courses, but also shared vacations, trips, or team building.

As noted above, SWOT analysis is useful in broader planning, while the Balance Scorecard is a tool that helps achieve a specific goal. The main difference that needs to be pointed out regarding these two analyzes is their use. Namely, SWOT analysis is used to define a goal and Balance Scorecard is is a tool that helps achieve a specific goal.

Both methods are relatively inexpensive to design and implement, and they both provide valuable insight into the key aspect that will determine an organization's success. Although differences between these methods are often sought, they have been proven to be complementary and can be used together.

In the ITIL framework, Continual Service Improvement process more specific, Balanced Scorecards is used for metrics, measurements, or answers to the question "How do we know we have reached a certain goal or stage?" So, it refers to the part where monitoring, measuring success and acting are performed.

It was mentioned earlier that the SWOT analysis answers the question "Where are we now" and analyzes the current situation. SWOT analysis helps identify key strengths, weaknesses, opportunities and threats. Also, the analysis gives results in terms of strategic planning, such as the market, customer needs, et cetera. In this way, it enables the company to analyze the current situation and current positioning in relation to competition, market conditions.

SWOT analysis is also a step that precedes the creation of Balanced Scorecard analysis. In most cases, weaknesses, opportunities, and threats will provide the most insight into what the goals of the business of the company should be. All of this helps the company identify and implement improvement initiatives that try to identify the most important areas where performance is not at the desired level. It is important to emphasize that periodic review of deficiencies in order to check progress towards goals is crucial.

Also, the Balanced Scorecard is not able to decide on the strategies to measure and analyze. Since explaining an association's vision and system is the initial phase in leading a similar investigation, it is conceivable to characterize a lot of procedures to break down and center around utilizing SWOT examination. By connecting SWOT examination to Balanced Scorecard investigation,

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an association can adjust its qualities against shortcomings and advance its market openings.

SWOT examination is useful here in light of the fact that it will assist us with nailing down the reasons why we need to embrace a best practice, what are our present difficulties to be tackled through this, what are the limitations that cutoff our capacity, what is at present conceivable and what benefits we will harvest on the off chance that we are successful. An overview of the comparison of analyzes is given in Table VII [19]. TABLE VII. COMPARISON OF ANALYZES SWOT GAP Balanced Scorecard

Evaluate long-term opportunities

Address and identify short-term threats and needs

Balance between short-term and long term goals

Focuses on external factors and evaluates competitors

Used internally No focus on competitors and external factors

Understanding relative market value in a measurable way

Reveals gaps No focus on competitors and external factors

Comprehensive analysis

Focused on a single process

Focus on both high-level strategy and low-level measures

Helps with identifying a company’s value

Helps to identify if a company is performing to its potential

Visual picture of the strategy; tool for accomplishing goals

VI. CONCLUSION The aim of the paper is to show the advantages of

SWOT analysis for companies with implemented ITIL framework. One of the benefits of SWOT analysis is identifying potential pitfalls while allowing the company to react on time and take the necessary actions to avoid them. The biggest advantage of SWOT analysis is gaining an edge over competitors by emphasizing strengths and acting to correct weaknesses or address potential threats.

SWOT analysis is comprehensive study and does not necessarily have to be focused on one process. Thus, it facilitates activity planning and decision making. Also, this analysis is a tool for defining a goal, but not for achieving it. This analysis can help investigate the impact of introducing new services and products, easily apply new business processes and functions. It is also useful in assessing the effectiveness of technologies, markets, and suppliers.

It is appropriate for companies that have an ITIL framework implemented. The framework clearly identifies and outlines the processes by which SWOT analysis helps facilitate decision making and pave the way for strategies.

ITIL provides better visibility of costs and assets, better business alignment, cost reduction, better risk management, stable support service environment, better knowledge of the process by employees. And when SWOT analysis for any service is added to these benefits, the change is clear and company will get an accurate

analysis of the market and will be able to better match business with the market and with customer satisfaction.

A small number of companies in the region have implemented ITIL. Future work is based on the idea of creating a manual that would give clear guidelines for the implementation of ITIL in a small specific local business, as well as the use of SWOT analysis after its implementation with the aim of creation another case study.

VII. REFERENCES

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