A prevalent approach to Enterprise Service Management (ESM) today is to extend the use of the IT Service Management (ITSM) tool to other areas of an organization outside of IT. Some organizations also try to apply their existing ITSM concepts, like managing requests or service interruptions, to those other areas.
This approach is essentially dropping the “IT” from ITSM and adding an “E”. Sorry, that doesn’t make it “ESM”. While good ITSM practices can be adapted for use across the enterprise, ESM has to be more than just arbitrarily imposing ITSM across an organization.
What is ESM?
ESM is the application of service management principles and technologies beyond just IT and across an organization. ESM applies service management principles to other areas of an organization to improve performance, measurability, effectiveness, responsiveness, and efficiency.
Does this sound familiar to you? Well, it should if you’ve been around this blog before! ESM mirrors what good ITSM practices accomplish, except on a larger scale.
ESM is much more than applying IT processes and principles outside of IT. It’s a holistic way of including and blending individual departmental approaches into common and shared processes, systems and technology across the organization. It requires organizational change just as much as a technological change. It requires strong leadership, clearly articulated vision and business goals, and clear communication and collaboration between departments.
ESM is all about how to best enable and support the value streams of an organization. ESM must take an enterprise, not IT, perspective regarding how to best facilitate the delivery of end-to-end value through an organization. ESM is not about trying to fit organizational capabilities and work products into predefined IT(SM) processes, but rather ensuring the most effective approach for leveraging all of the capabilities of an organization.
With ESM, the organization develops a holistic approach to integrating, connecting and working together to leverage technology by creating processes, systems and workflows that benefit the company, the employee, and the customer.
Why is ESM important?
The best business value is created when all parts of the business are contributing and collaborating to deliver value in the most effective and efficient way. In the digital age, organizations must be able to quickly shift and react to changes in market spaces is critical for business success. It won’t be enough that IT makes a change to an application or the marketing department launches a new campaign. The enterprise must be able to shift or pivot as needed – when needed.
This is why good ESM is so important.
- Provides business decision support – Good ESM provides transparency into how work is done within the organization. Decisions become data-driven, based on objectives measures captured as part of enterprise value streams.
- Enables organizational agility – Well defined, interdepartmental value streams and workflows enable organizational agility because there is clarity and shared understanding regarding those value streams and workflows. This helps leaders understand where to pivot if needed. Good ESM results in improved cohesiveness and collaboration within the organization and aligns activities toward shared organizational goals, not on departmental objectives.
- Improves organizational understanding of the business – Individual departments not only understand their workflows and processes, but also how information, work, and value flow across the organization. There is a greater awareness of the interdependencies between the various departments within the organization.
- Enables an enhanced customer experience – Good ESM removes the internal friction that gets in the way of a good customer experience.
How ITIL4 can open the door for ESM?
ITIL® 4 introduced in February 2019, is the latest evolution of the popular ITSM framework. Among the new or revised concepts within ITIL4 are two nuggets than can help open the door for ESM – the Service Value System (SVS) and the Four Dimensions Model.
The Service Value System
The SVS “represents how the various components and activities of the organization work together to facilitate value creation through IT-enabled services”. The SVS starts with an input of either “demand” or “opportunity” and ends with value. A “demand” represents the need for something to happen, whether it’s a product or a service. An “opportunity” represents a potential for value-add or improvement for the organization. “Value” is the perceived benefits that will or should result from acting upon the demand or opportunity.
Applying the SVS concept to ESM, an enterprise value stream similarly begins with a demand – an order from a customer, on-boarding of a new employee – or an opportunity – a new product line. To realize value from either of these scenarios requires the actions of multiple parts of the organization. No single part of the organization alone can by itself deliver the value required from that demand or opportunity. Good ESM recognizes and facilitates those actions across the enterprise.
Drilling into the SVS a bit more, there are three key components that I think can be directly applied to ESM:
- Guiding Principles – Overarching recommendations that guide an organization in all circumstances.
- Governance – Ensures that the policies of the organization are defined and carried out; keeps all parts of the organization pointed in the same direction.
- Continual Improvement – Activities that ensure that the organization is proactively improving; that the organization collectively and individually is anticipating and responding to changing conditions, both within the organization and the marketplace, to meet the needs of the customer, the organization, and the employee.
The Four Dimensions Model
The Four Dimensions Model describes factors that have influence on the delivery of value. The Four Dimensions are:
- Organizations and People – In addition to the “org chart”, this dimension looks at culture, skills, competencies, and capacity of the organization.
- Information and Technology – Technologies and the appropriate use and protection of information are crucial enablers for today’s enterprises.
- Partners and Suppliers – Every organization and every product and service delivered by an organization, has reliance on partners and suppliers.
- Value Streams and Processes – The enablement and delivery of value depends on effective and efficient workstreams, controls, and procedures.
I look at the Four Dimensions Model as a tension matrix – any change in any one dimension will have an effect – good or bad – on the other dimensions. The Four Dimensions Model encourages a holistic look at how an organization facilitates value for all stakeholders of an organization.
Applying the Four Dimensions to ESM adoption, without the proper training and development of skill sets, the organization cannot successfully exploit information and technology nor realize value stream effectiveness. Just extending ITSM tools into the enterprise ignores organizational cultural and competency aspects, does not address enterprise value streams, or recognizes the partnerships (both within and external to the organization) that make enterprises work.
The key takeaway
I’ve long thought that a good ITSM implementation is key for success in the digital economy. And that service management also must move outside of IT. With new concepts like the SVS and the Four Dimensions Model, ITIL4 seems to be thinking the same thing.
ITIL4 can open the door for ESM – and that’s a good thing.
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