New technologies promise greater speed, increased accuracy, improved productivity, and more efficiency. Many organizations invest in these new technologies to address those challenges and unlock new capabilities.
But in many cases, after significant investments in time, resources, and people, these new technologies don’t deliver those promised results. What happened?
Did internal silos and outdated processes get in the way? Are workflows clumsy, with poor handoffs between departments? Are those workflows even defined? Were the results promised by the new technology internally translated into quantifiable goals, frictionless interactions, and clear accountabilities?
While a technology first approach is often followed for solving business problems, such an approach rarely achieves the intended results. Why? Because the problem is not a technology problem. The problem is often in the organization’s operating model. What if enterprise service management (ESM) is the new operating model?
The challenges of operating models
McKinsey defines an operating model as “a strategic blueprint that defines how a company organizes its people, processes, technology, and governance to deliver value to customers and achieve long-term goals. It acts as the functional bridge, translating a high-level business model (the “what”) into daily actions (the “how”), ensuring efficiency, scalability, and alignment across the organization.”
The fact is that every organization has an operating model. Work is being done somehow, whether it is by design. And design and adoption of the operating model is the problem that ESM adoption could resolve.
But organizations resist changing, much less defining, their operating models – even though organizational leaders agree that they should. Many executives say that their operating model must be rethought, yet over 30% of those executives point at internal resistance as a barrier to redesign.
So, if defining and implementing operating models result in better ways of working within organizations, why do executives get resistance?
- Fear of the unknown – People fear the unknown and worry about how new roles, workflows, or decision rights will affect them.
- Internal politics – Concerns over losing control, influence, or decision right results in pushback against defining operating models.
- Siloed operations have become deeply embedded – In the absence of an operating model, internal teams and departments have locally optimized the work that they are doing without considering the impact on the overall organization.
Introducing technology in the absence of a defined and agreed operating model only exacerbates these issues.
Why ESM is your operating model is ESM
Good ESM helps organizations understand their existing (even if undocumented) operating model. But ESM is not just ITSM extended across the organization. ESM is an organizational capability for holistically delivering business value and outcomes, based upon shared processes, appropriate technology, increased collaboration, and better communication across the organization.
To me, the purpose of an operating model and the purpose of ESM sound the same. Should ESM be your operating model? Should your operating model be ESM?
When organizations commit to defining, implementing, and following an operating model, the result is clarity regarding roles, responsibilities, and decision rights. Functions align better with business strategy and customer outcomes.
ESM succeeds by empowering people, clarifying responsibilities, and supporting cross functional collaboration to deliver business outcomes.
When organizations commit to good ESM, the result is standardized processes and enhanced visibility regarding how value flows through the organization. This makes it easier to identify problem areas, simplify workflows, and clarify expectations and roles.
When organizations commit to defining and implementing an operating model, that operating model becomes the blueprint for service delivery. Processes facilitate the actions that bring the blueprint to life.
The introduction of new technology changes the enterprise operating model by reshaping how the whole business creates, delivers, and captures value across structure, processes, people, and governance—not just how IT runs.
Good ESM illustrates how technology enables or supports processes and people in delivering business outcomes and value.
Governance is a core enabler of good ESM, by providing the structures needed to effectively govern emergent technologies and distributed processes at an operational level.
An operating model defines how governance happens on a day-to-day basis.
5 Steps toward adopting ESM – and defining your operating model
How can business executives accomplish both defining the operating model and adopting ESM? Here are five steps to getting started:
- Stop thinking of ESM as “ITSM everywhere”. It’s not. ESM applies service management concepts across the organization to enable a clear understanding of how work and value flows from start to finish – across departments. Many ITSM adoptions are (incorrectly) focused internally on IT.
- Clarify the technology strategy. When business strategy and technology strategy are developed independently, the result is poor technology decisions and missed business opportunities. For success in the digital economy, the business and technology strategy must be integrated.
- Understand the current state. Identifying and mapping the current ways that value flows through the organization not only brings transparency and clarity into how work is being done, it also identifies improvement opportunities. It will also highlight the need for operating models and ESM.
- Think, talk, and act in terms of “PPTG”. The key to success with both ESM and operating models is thinking through PPTG – People, Process, Technology, and Governance. What skills and competencies are needed for organizational success? How should work flow across the organization? What systems and technology are needed? How will decisions be made? Thinking, talking, and acting in terms of PPTG establishes the foundation for success for operating models and ESM.
- Start with what’s most important – Identify and begin with the critical few end-to-end processes within the organization. This will get the right parts of the organization involved. It also enables a bigger impact on the organization, validates the value of operating models and the use of ESM, builds momentum for continued improvements, and shifts the mindset of business executives from just buying-in (“nice idea”) to commitment (action).
When organizations embrace ESM as their operating model, technology starts working for them – not the other way round – unlocking clarity, alignment, and measurable value.
Share 