What is Enterprise Service Management?

InvGate July 1, 2021

Enterprise service management (ESM) is the extension of IT service management (ITSM) principles and capabilities to other areas of an organization. This will typically include not only using the same processes or practices used in ITSM, but also the same technology (for example, tools such as a Service Desk) as a means of work enablement.

As a starting point for better understanding of what ESM is, there’s a need to first understand what ITSM is...

What is Enterprise Service Management?

What is ITSM?

One of the most used ITSM definitions is from the v3/2011 version of ITIL, the popular ITSM best practice framework. This states that ITSM is:

“The implementation and management of quality IT services that meet the needs of the business. IT service management is performed by IT service providers through an appropriate mix of people, process and information technology.” 

Source: AXELOS, ITIL 2011 Glossary

Importantly, ITSM changes the way the IT department and its activities and offerings are viewed, framing it as a service provider that’s working to enable the rest of the organization. Viewing this another way, think of a commercial services business that uses a combination of materials, tools, and expertise to deliver a “product” to their customers and end users. For example, an Internet Service Provider (ISP) utilizes its infrastructure, hardware, software, work practices, and personnel to provide Internet access to customers.

Ultimately, ITSM’s core objective is to structure the design, implementation, and delivery of "services" to improve the efficiency of operations, mitigate risk, and facilitate strategic planning to support business needs. All while co-creating business value.

For internal IT departments, this can be viewed as the IT department no longer managing the network, compute, and storage domains separately but instead delivering IT and support via services. Importantly, through focused services that better meet the needs of customers and end users (consumers). 

An example of this is a managed desktop service where, rather than delivering and managing everything separately, there’s a single service that’s delivered and managed (or an “uber service” that’s made up of other services – for example, an email service is used within the managed desktop service). Importantly, the managed desktop service is what employees, or external customers, use or consume and this can be thought of as a delivered “capability” rather than a set of discrete technology components.

Are there other sources of ITSM and service management best practices aside from ITIL?

While this article refers to the ITIL body of service management best practice guidance throughout, there are many other bodies of best practice that can be employed in IT and the wider organization. These include:

    • COBIT“a framework for the governance and management of enterprise information and technology, aimed at the whole organization.” 
    • FitSM – a free standard for “lightweight ITSM.”
    • ISO/IEC 20000 – a standard that details the requirements needed for an organization to establish, implement, maintain, and continually improve a service management system.
    • IT4IT – a “tool for aligning and managing a Digital Enterprise.”
  • VeriSM“a service management approach for the digital age that helps service providers to create a flexible operating model to meet desired business outcomes.”

How does ESM build on ITSM?

How does ESM build on ITSM?

As already mentioned, enterprise service management is the extension of the successful ITSM principles and capabilities used by IT departments to other parts of the business. For example, human resources, facilities, customer service/support, finance, legal, sales and marketing, and security teams. A commonly used definition for ESM is:

“The use of ITSM principles and capabilities in other business areas to improve their operational performance, services, experiences, and outcomes.”

Ideally, this starts with the sharing of service management principles – from the concepts of service providers and service receivers to the need to focus on value co-creation. This is reflected in the latest version of ITIL – ITIL 4 – where ITSM was replaced by a service management view, with service management defined as:

“A set of specialized organizational capabilities for providing value to customers in the form of services.”

In fact, many organizations choose to call what the IT industry has termed “enterprise service management” simply “service management.” But, no matter the naming, the important thing to understand is that enterprise service management shares many of the common ITSM processes (or practices as they’re now called in ITIL 4) and the enabling technology used by IT with other business functions. This includes:

  • Incident management – 79%
  • Service request management – 68%
  • Asset management – 67%
  • Continual improvement – 67%
  • Knowledge management – 67%
  • Change enablement – 60%
  • Problem management – 60%
  • Service catalog management and/or self-service – 54%
  • Relationship management – 53%

The shown percentages are from a 2021 AXELOS and ITSM.tools global enterprise service management survey and relate to the level of process sharing within organizations with in-flight enterprise service management strategies. Importantly, these ITSM capabilities can be used by the other business functions to not only improve operations but also to improve their outcomes including the delivered employee experience.

What’s the difference between enterprise service management and ITSM?

On the one hand, they can be considered the same thing but applied in different parts of the business. On the other, however, they do need to be thought of as different beasts – if only to help with the successful extension of service management best practices across the organization.

So, even though ESM is built on ITSM best practice, it is different. It’s derivative of ITSM. Especially since the mantra of ITIL applies to ESM too – that of “adopt and adapt.” Whereby organizations take only what they need and tailor it to those needs. This not only applies to the adopted practices/processes but also how they function, including the employed terminology. For example, few business functions (outside of IT) will not want to use ITSM’s and ITIL’s incident management and problem management terminology, say, with HR teams likely instead using the term “case management” for the former.

Plus, there’s an argument to say that, as ESM matures as an enterprise-wide operating model, ITSM will be seen as a particular flavor of enterprise service management in the same way HR service management or customer service management currently is (rather than that ESM is seen as a particular flavor of ITSM).

What’s driving the growth in ESM adoption?

What’s driving the growth in ESM adoption?

The results of the aforementioned AXELOS and ITSM.tools survey also showed that 68% of organizations currently have enterprise service management strategies in flight. Over half of these consider themselves to be well advanced with their ESM strategy and only 11% of organizations had no plans for ESM adoption.

There are some common drivers for the adoption of ESM. Some relate to how enterprise service management will help business functions and the parent organization. Whereas others can be viewed through a business-function needs lens.

The high-level facilitators of ESM’s growth include: 

  • Constantly rising employee expectations. Quite simply, employees now expect more from their corporate service providers, with this increasing even more rapidly on the back of the global pandemic’s forced need for remote and distributed working. This requires better and more employee-centric ways of working for service providers, with ITSM in the form of enterprise service management a readymade solution to the corporate and business functions that need to improve.
  • The need for improved business-function operations and outcomes. This driver was again in play pre-pandemic, with the need also amplified in light of the adverse economic impact of the crisis.  
  • Digital transformation enablement. While an extension of the previous bullet, the acceleration of digital transformation strategies caused by the global pandemic has increased the demand for enterprise service management to deliver the much-needed digital workflows and other digital enablement capabilities across business functions.
  • ITSM tool enhancements.  ITSM tools have become better enablers of enterprise service management over the last half-decade as demand for ESM has increased. This includes additional capabilities, increased flexibility (especially the ability to change ITSM capabilities to cater for specific business function use cases), and additional enablers of multi-departmental use.
  • The increased sales and marketing of ESM. Whereas enterprise service management was once an afterthought in the ITSM tool selling process, the ESM opportunity is now front and center. Whether this is on the demand side – with customers requesting it – or that ITSM tool engagements will commonly lead with the increased-value proposition of tool use for both IT and other business function use cases. The availability of customer ESM success stories has also reinforced the opportunities for prospective tool customers in benefits terms. 

Why do organizations need enterprise service management?

In many ways, this reflects the first three of the common drivers for ESM growth – with organizations and individual business function teams seeking to improve on a number of fronts. For example:

These are covered in more detail in the benefits section below.

What are the benefits of enterprise service management?

What are the benefits of enterprise service management?

The benefits that can be realized from the adoption of enterprise service management can be split into four different groups:

  1. Internal to each business functions
  2. Enabling cross-business-function working
  3. Business-level 
  4. IT department related.

Each of these groups is expanded upon below.

  1. Business function benefits:
  • Improved productivity and speed. The use of service management best practices and the enabling technology gets a department working more efficiently and effectively. For example, by allowing work to happen more quickly and smoothly by reducing email inbox clutter, enabling faster request processing, and allowing the easy tracking of tickets throughout their lifecycle.
  • Reduced costs and waste elimination. By mapping and defining processes using best-practice guidance, your organization can eliminate – or automate – low or non-value-adding activities. Plus, provision resources and headcount to meet needs based on known demand without an unwanted surplus and the associated costs. This can be evolved into a “continuous improvement” methodology to add long-term operational benefits through better ways of working.
  • Improved external customer satisfaction. External customer satisfaction increases because services (both internally and externally facing) are more reliable, roles and responsibilities are clearly defined, and the expectations of requesters and service providers are better aligned. Ultimately, your organization is working better and the external customer benefits from this.
  • Enhanced visibility and control. Well-established service management reporting techniques and metrics, plus the enabling technology, allow a higher level of visibility and tracking to identify problem areas and improvement opportunities. Not only in day-to-day operations but in other activities too. For example, change management/enablement processes help to maintain continuity of services by limiting unexpected outcomes for any given change.
  • Effective knowledge management. Using service management best practices and the enabling technology, business function teams can capture and reuse knowledge more easily. Allowing them to respond to requests faster and more comprehensively, as well as sharing learning from their previous work. Ultimately, with knowledge management capabilities everyone benefits – service and support staff are assisted in their work, and the people they serve get better and quicker service experiences.
  • Increased stability. The consistency of operations and outcomes provided by ESM gives predictability. For example, the ability to accurately forecast and for informed strategic decision-making. Enterprise service management practices also help to create a “steady-state” in operations – increasing the quality/reliability of service provision and helping to avoid errors or unexpected outcomes that cause delays, unwanted costs, and unhappy customers.
  • Improved employee satisfaction. This improvement is from two perspectives. First, ESM helps to boost the satisfaction of service-provider teams by offering best-practice processes, defining what’s expected of them, permitting an understanding of their role in a wider context, and ensuring they receive the appropriate capabilities, training, and support to do their job. Second, as a result of the better service-provider operations (and a more motivated workforce), the service receivers get better service experiences and outcomes.
  1. Across business function benefits:
  • Improved alignment. The use of a consistent operating model and a single workflow-enablement solution helps to align business function operations as they collectively work to support their organization’s vision and goals. In doing this, ESM helps to breaks down functional silos, allowing work to flow easier between different parties, and enabling communication and accountability. It also helps the employees in each business function to see their contribution to the bigger picture in terms of business operations and outcomes.
  • Enhanced collaboration. For activities that span business functions – such as the onboarding of a new employee – ESM and the enabling technology facilitates collaboration by simplifying communication (in particular by eliminating lengthy email chains), defining responsibilities, automating workflows and status updates (including keeping track of who’s responsible to act next), and providing audit trails for review.
  • Improved visibility. Having a clear and complete view of end-to-end operations across business functions allows management to monitor performance and progress, and make critical decisions when necessary. ESM also creates the foundation for the application of business intelligence and facilitates value stream mapping, attribution, and the identification of process inefficiencies or bottlenecks.
  • Better knowledge sharing between teams. ESM enabling technology capabilities such as knowledge bases and employee self-service portals create hubs for knowledge sharing and exploitation. This ensures that all teams can easily access and benefit from up-to-date and authoritative information regarding standard processes, helpful resources, available services, or upcoming events.
  1. Business-level benefits:

In many ways, the business-level benefits are the aggregation of the business function benefits. For example, improved speed, reduced costs, and increased satisfaction – which, while achieved at a business function level, translate to business-level wins too. But some benefits should be deliberately recognized at an organizational level, for example:

  • Increased competitive advantage through better business enablement
  • Improved flexibility and increased agility/speed of change
  • Agreed accountabilities – both within and across teams 
  • Improved governance, risk management, and compliance
  • A business-wide approach to continual improvement.
  1. IT department related benefits:

By sharing its 30+ years of ITSM experience and enabling tool(s) with other parts of the business, the IT department is helping to improve business operations and outcomes. This is not dissimilar to the corporate technological “revolution” of the 1990s – when many business practices were automated – where the IT department was seen as a business innovator not just the custodian of the IT infrastructure and provider of IT support.

Hence the key benefit to the IT department of ESM adoption is the ability to once again be seen as a driver of value-adding innovation across the enterprise. This time providing best practice service management operations not just technology-based work enablement. 

There are other benefits too. For example, the greater use of the corporate ITSM or service management tool(s) brings with it beneficial economies of scale. Plus, the different business functions working together more closely allows for the sharing of good practices beyond those encompassed within bodies of service management guidance such as ITIL.

What are the key challenges of ESM?

What are the key challenges of ESM?

Enterprise service management is still evolving and consequently, unlike with ITSM, there’s little formalized industry best practice available to organizations looking to adopt it. However, and thankfully, many of the common enterprise service management mistakes and barriers have been captured. To help, this section shares five of the most common ESM challenges that need to either be avoided or traversed.

  1. Don’t treat enterprise service management as an IT project – it’s a business initiative

ESM isn’t just the sharing of the corporate ITSM or service management tool(s). Instead, it’s about improving business operations and outcomes. It’s a business-change initiative that involves people-change – because it changes the traditional ways of working in business functions. As such, enterprise service management needs organizational change management tools and techniques to help bring about the required behavioral change (including employees understanding the “What’s in it for me?” for ESM) for success.

  1. Don’t share sub-par ITSM capabilities with other business functions 

The rule here is simple – if your IT department hasn’t got it right yet, then don’t share it with the wider business. For example, offering self-service capabilities that aren’t highly adopted by employees just extends the issues (with the capability) from IT to other business functions. Instead, ensure that ITSM capabilities are optimized before they’re shared. Your business colleagues will thank you for it.

  1. Don’t expect enterprise service management to sell itself 

First, the term “enterprise service management” will mean little to business colleagues outside of IT. Instead, they’ll likely be looking for help with digital enablement or digital transformation. Second, rather than talking in capability terms, such as incident management, express (and sell) the advantages of ESM and the associated benefits in business terms – whether this is better employee experiences (and productivity), greater agility, cost savings, reduced risk, or something else. 

  1. Don’t ignore the “differences” between business functions

Hopefully, we all know that business functions differ from each other in many ways. For example, enterprise service management will be more attractive to some than others. Or a business function might see ESM as attractive but it’s currently a low priority relative to the business function’s other initiatives. There will also be differences related to each business function’s capacity and appetite for change. Plus, of course, the expected differences related to each business function’s objectives, working practices, and terminology.

  1. Don’t rush into an enterprise service management “big bang” delivery approach

In terms of sharing ITSM capabilities across the enterprise, doing everything at once – i.e. taking a “big bang” approach” – is high risk (although the benefits will be realized more quickly). Instead, successful organizations usually take a phased approach to ESM. Either starting with a specific business function, and its needs, or a specific capability being shared across all business functions. This allows mistakes to be made within smaller groups and for important learnings to be gathered for the wider good.

Why implement ITSM and not another business process framework?

Expanding the use of ITSM – via enterprise service management – rather than adopting another business process optimization methodology is attractive to organizations for a number of reasons. These include:

  • Proven benefits. ITSM processes are well established, after 30+ years of refinement, and supported by comprehensive toolsets. Plus, when properly implemented, they’re proven to provide greater accountability and control, increase capacity and efficiency, and facilitate strategic business planning.
  • A faster ROI. Expanding the scope of an already implemented system is logistically far easier than a new implementation, both reducing cost and decreasing implementation time. Since the roll-out process has already been executed at least once (in IT), this experience can be leveraged to increase adoption rates and reach ROI targets more quickly.
  • A simplified buy-in process. Because the IT department already understands, uses, and maintains the ITSM tool(s), buy-in from IT stakeholders is more straightforward. Likewise, the detailed analysis of the benefits IT has gained from ITSM makes it easier to create a robust business case for business-wide change.
  • Access to the latest technologies. Nobody is more demanding of software than the IT department and this means that ITSM tool vendors are typically evolving their offerings faster and incorporating the latest technologies to provide additional benefits ahead of other software providers.
  • Integration capabilities. Using a common tool across business functions eliminates the expense and time required for integration between the various business systems and tools. 

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