Enterprise Service Management Explained

While the concept of enterprise service management (ESM) has been around for well over a decade, the terminology isn’t necessarily something that people are aware of. Especially because the term “enterprise service management” isn’t the most commonly used way of pointing to what it is and does. So, with this Enterprise Service Management Explained article, I’m going to attempt to describe what ESM is, along with why it helps.

Check out this in-depth article from @SophieDanby on what enterprise service management is, its many other names, adoption levels, & where it fits in with digital transformation. #ESM #ITSM #digitaltransformation Click To Tweet

Enterprise service management explained

As with anything these days, the advent of the Internet has meant that anyone can create and share their definitions of things. An added issue with enterprise service management is that there isn’t an industry-agreed definition as to what it is. Plus, as covered in the next section, ESM isn’t a universally used term.

However, the following is a good example – definition-wise – of what ESM is:

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

The many other names for ESM

There have long been other names for what this article is calling enterprise service management. For example:

• Beyond IT (or beyond ITSM)
• Outside IT
• Taking the IT out of ITSM
• Service management
• Shared services.

Then, more recently, digital transformation and digital workflow enablement have been added to the list of possible enterprise service management alternatives.

To put these name differences into context, a 2021 global survey by AXELOS and ITSM.tools found that both service management and digital transformation are more popular names, for the use of ITSM capabilities outside of IT than ESM. However, enterprise service management is still commonly used for the marketing and selling of these capabilities, especially from a tool perspective.

While the term ESM is commonly used for the marketing & selling of the capabilities, a new survey finds that both service management & digital transformation are more popular names for the use of #ITSM capabilities outside IT. Click To Tweet

Adoption levels

The aforementioned AXELOS and ITSM.tools survey found that two-thirds of organizations (67.6%) currently have enterprise service management strategies in flight. 37.5%, i.e. over half of these organizations, were considered to be well advanced with their strategy – this is up from just 7% in 2019.

Importantly, for those organizations that are loath to consider the benefits, they’re in the minority – with only 11.0% of organizations having no plans for ESM in the future.

More granular adoption statistics are included later.

A little history

Enterprise service management is well over a decade old, even though the growth in its adoption has been in the last half-decade. Originally, ESM was simply the “tactical” use of the corporate ITSM tool by another business function. This was likely to improve the business function’s operational efficiency and effectiveness and to reduce costs.

While this tactical approach to sharing service management capabilities worked and still does, these use cases were often a “force fit” of the ITSM tool – it was simply a “lift and drop” of the ITSM tool, rather than something that fundamentally changed how service delivery and support is done.

Now, enterprise service management is more likely to be a strategic approach that not only improves business-function operational efficiency and effectiveness while reducing costs but also enables distributed working and delivers better employee experiences. Thanks in part to a better industry understanding of how service management capabilities, that have been proven in ITSM scenarios, can be leveraged to:

• Improve service quality and the associated experiences
• Increase efficiency and effectiveness
• Reduce costs
• Improve insight into operations and outcomes.

Strategic versus tactical enterprise service management

The previous section speaks to both tactical and strategic ESM and you need to understand how they differ.

The decade-old, singular use of an ITSM tool in one other business function can be considered “tactical” enterprise service management. Think of it as a one-time improvement, and a quick fix to a business-function need. For example, the human resources (HR) department’s use of the ITSM tool to move work out of email inboxes and spreadsheets to benefit from workflow management, and wider work-enhancement, capabilities across all three of “better, faster, cheaper”.

Strategic versus tactical enterprise service management… here @SophieDanby explains why you need to understand how they differ #ITSM Click To Tweet

“Strategic” enterprise service management, on the other hand, is the business-driven sharing of ITSM capabilities across the organization. Here, it’s more than a quick fix for a specific business function need. Instead, the aim is to improve as much of the organization’s operational capabilities as possible and, as outlined later, strategic enterprise service management can fulfill an organization’s need for digital transformation in digital workflow enablement terms. For example, related improvements might start with facilities, then progress to HR, the customer service/support team, finance, etc.

Given that there’s no industry definition for ESM, it’s unsurprising that the use of tactical and strategies as differentiators of approach aren’t an industry standard either. It’s important to understand the differences though when looking at ESM statistics or when considering the possible benefits. In terms of the latter, it’s simply logical that the more your organization is improved, the greater the benefits it can reap.

The key factors that have driven ESM adoption

As humans, we often want to know the what, then the why (and then the how). So, it’s not enough to understand what enterprise service management is – the “why” is important too. Here, the “why” can be viewed from two perspectives. First, the benefits that organizations reap from the adoption of ESM and, second, the factors that have helped to drive the growth in its adoption.

Starting with the latter of these, four factors are commonly called out as key enterprise service management adoption drivers:

1. Increasing employee expectations. This might have started with what the industry called “the consumerization of IT” but in the last five years the concept of employee experience has grown in importance. Most recently being turbo-charged by the global pandemic’s need for remote and distributed working and the resulting employee reliance on efficient and effective service delivery and support from corporate service providers.
2. Corporate mandates for improved business-function operations and outcomes. Both pre- and post-pandemic, teams have been under pressure to improve upon the status quo, with this dovetailing into digital transformation initiatives designed to deliver “better business.”
3. ITSM tool enhancements. Quite simply, in the last decade, ITSM tools have become better enablers of enterprise service management. From the additional capabilities, through increased flexibility, to specific enablers of multi-departmental use.
4. Increased sales and marketing activity. A decade ago, ESM was something that was only talked about when needed. Now, many ITSM tool engagements lead with the value of tool use of both IT and other business functions, with this reinforced through greater insight into the ESM successes of other organizations. 

A new survey by @ITSM_tools & @AXELOS_GBP finds the top 3 anticipated benefits of ESM to be process standardization & optimization, digital transformation enablement & employee productivity improvement. Click To Tweet

In terms of what organizations commonly hope to achieve through the adoption of enterprise service management, the aforementioned AXELOS and ITSM.tools survey found the top three anticipated benefits to be:

1. Process standardization and optimization
2. Digital transformation enablement
3. Employee productivity improvement.

The benefits of ESM are covered in more detail later.

What enterprise service management commonly includes practice/process-wise

Theoretically, enterprise service management can include any of the 34 practices included in the ITIL 4 body of service management best practice guidance. The reality is, however, that as with the adoption of ITIL within IT is that some practices are more popular – in adoption terms – than others.

The aforementioned AXELOS and ITSM.tools survey found the most commonly shared service management capabilities to be:

• Incident management – 79.4%
• Service request management – 68.2%
• Asset management – 67.2%
• Continual improvement – 66.9%
• Knowledge management – 66.9%
• Problem management – 60.2%
• Change enablement – 59.5%
• Service catalog management and/or self-service – 53.6%
• Relationship management – 53.3%

Where each can be used by other business functions to not only improve operational efficiency and effectiveness but also to improve outcomes including the employee experience.

For example, the introduction of formalized service request management best practices and technology will help HR service and support staff to quickly address employee needs – improving employee productivity and thus the employee experience. Or the provision of self-service and self-help capabilities will provide employees with quick access to information and help related to their facilities-related issues and requests.

How ESM helps your organization

The generic benefits of ESM include:

• Better service experiences and more consistent outcomes
• Improved effectiveness
• Improved speed/efficiency and reduced costs
• Improved visibility into operations and performance
• The opportunity for ongoing improvement
• A better return on investment (ROI) on the corporate ITSM tool
• Standardization of service and support, which can be built around the needs of employees rather than the disparate service providers.

An example use case

Customer service/support is the most common recipient of shared service management capabilities at 73.5% of the organizations with in-flight ESM strategies. However, one of the most common early use cases for enterprise service management spans business functions – employee onboarding. This complex business activity might involve:

• The gathering of employee data by HR
• Conducting employee background checks and contract negotiation by legal and HR
• The provision of induction education and training delivery by HR
• The provision of role-based IT equipment, services, and access by IT
• The provision of an appropriate work environment and equipment by facilities
• Physical access permissions by security and facilities.

All of these processes and their constituent tasks benefit from the introduction of digital workflows and other ITSM-tool capabilities that include self-service, notifications, approvals, automation and orchestration, work-status monitoring, and associated escalation routes.

Enterprise service management and digital transformation

Savvy organizations have realized that ESM can fulfill certain digital transformation needs. This is best viewed when digital transformation is split into three elements:

Enterprise service management can fulfill certain digital transformation needs, and here @SophieDanby looks at how. #ITSM #digitaltransformation Click To Tweet

1. The introduction of new products and services based on the increased exploitation of technology and data
2. The improvement of customer engagement mechanisms across the entire customer lifecycle through technology and data exploitation
3. The improvement of business operations, especially the modernization of antiquated manual procedures through digital workflows.

ESM can be used to enable the third of these – the improvement of business operations through digital workflows and other digital-work-enabling capabilities. This leverages the core ITSM capabilities and best practices that include:

• Workflow automation and orchestration
• Knowledge management
• Omnichannel support
• Reporting and analytics capabilities.

If you’d like to add to the above or have ESM-related questions, then please post a comment below.