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What is Enterprise Service Management?

Enterprise service management (ESM) is an approach to providing customers with value in the form of services through the adoption of service management practices. The term is used somewhat generically to describe the use of service-oriented business models initially developed for IT (like those found in ITIL, TOGAF and YaSM) to non-IT functions across the enterprise. Some common examples where ESM is applied include, HR, finance, legal, facilities management and customer service functions.

There is no generally accepted set of industry standards governing enterprise service management and as a result, definitions and interpretations of ESM concepts can vary greatly from company to company. Most enterprise service management implementations also include the notion of a service lifecycle, either aligned to ITIL definitions for service management or following some sort of adaptation of the Deming Cycle of continuous improvement: Plan, Do, Check, Adjust.

Generally, ESM is comprised of 2 components (reference):

A management discipline providing the concepts, goals and process structure that describe what ESM is and how it will be used
ESM tools or software used by companies to support their ESM processes

Some companies have also used enterprise service management as a framework for delivering services that span multiple functions. A 2017 article in CIO magazine explained it this way: “The key factor [for these companies] is collaboration or sharing, whether that means processes, tools or even departments” Another term used for this application of ESM is “shared service management”

ESM vs. ITSM

Enterprise service management is a term used to describe the use of service-oriented processes and tools across and organization (hence the use of “enterprise” as a qualifier in the name). ESM is meant to be a broad term (like ERP, EAM and CRM). This is a contrast to IT Service Management (ITSM) which is only concerned with the management of IT services. (reference)

While the intended scope of ESM and ITSM are different, they share common roots (usually ITIL) and are often implemented using a common set of concepts, processes and tools within the organization. Many companies leverage ITIL domains and process areas as the foundation for their Enterprise Service Management operations and ITSM platforms to provide technology and information support for ESM processes.

The growth of ESM and the driving forces behind it

Service Management has emerged as a highly effective business model for delivering value to customers either directly or through the internal operations of a company. It takes the value-chain concept and orients it from a customer centric perspective – enabling the use of supplier eco-systems, LEAN approaches to efficiency and continuous improvement methodologies for quality to be applied effectively as tools to increase value and productivity. The overall idea of ESM is to:

Improve process efficiency within the individual functions that contribute to a service to keep the cost of delivery as low as possible without compromising quality
Reduce the friction that often occurs between departments, so services can be delivered in a coordinated way.
Increase the consistency and predictability of service delivery

These driving ambitions behind enterprise service management are the same forces that have led to operations management breakthroughs in the areas of Manufacturing (LEAN, Six Sigma and TQM), Information Technology (ITIL, TOGAF, CMMI, Agile, etc.), and other business disciplines over the past few decades. While the scope is different, the ambition is the same.

What we know as ESM today has largely evolved from the field of IT Service Management (ITIL specifically) as companies seek to leverage best practices to solve new and emerging problems.

Service management emerged as a general concept and discipline back in the 1980’s when the British government found that many of the IT services it built and purchased were not meeting organizational expectations. They commissioned the development of a set of methods and standards to enable IT services to be delivered with better quality and lower costs.

This work evolved into a set of standards and best practices which have evolved into the IT Infrastructure Library (ITIL) standards that continue as the benchmark for service management today. Although ITIL has evolved somewhat and been updated over the past 30+ years, its core concepts have remained stable and the advice it provides is widely adopted by most present-day IT organizations.

ITIL was developed specifically to support the IT function and has some very technical components that aren’t applicable outside IT. However, the service management concepts that ITIL describes have been found to be widely applicable to non-IT functions within the enterprise as well. Things like understanding the needs of customers and having a structured set of methods in place for offering and managing services that fulfill those needs.

As ITIL grew in popularity companies realized that ITIL and ITSM best practices could add value outside of the IT function and IT companies. Some of these examples included healthcare, HR, legal function and finance services. In addition to the concepts being transferrable, ITIL compatible tools for things like helpdesk management, knowledge management and self-service were found to provide capabilities that business functions needed to enable productivity.

With concepts, processes and supporting tools becoming more widely adopted across the enterprise (in consistent ways), the concept of Enterprise Service Management emerged as a more holistic way of looking at the capabilities that organizations were implementing.

Modern trends such as “Digital Transformation of Business” are continuing to fuel the growth of ESM in modern organizations – addressing the operational challenges associated with business processes and technology components that are highly dependent on each other.

While ESM grew from the service management roots that were planted in ITIL to address the necessities of managing technology infrastructure, companies are now harvesting its fruits to feed a hunger for innovation and a demand for greater efficiency in the delivery of services to customers.

Benefits of implementing ESM

Companies implement enterprise service management processes and tools for the same reasons they undertake most strategic initiatives: productivity, efficiency and quality. Because ESM is both customer focused as well as operationally grounded, it has been found to deliver significant quantifiable benefits to adopting organizations. Highlights of those benefits include:

Sustainable value

Tracking incidents as they move through different support teams is difficult and can lead to frustrating experiences for end users. Help desk software provides a single place for managing the incident from the time it reported until the issue is resolved.

Decreased cost of delivery

Help desk software can provide more self-service and user enabled capabilities along with the ability to access support resources from wherever the user happens to be through mobile tools and web-based interfaces. It puts more tools in user’s hands and reduces the resource burden on help desk staff.

Better quality services

leads to greater responsiveness, efficiency, and consistency in your help desk operations allowing your helpdesk to support a larger and more diverse business/IT ecosystem.

Improved internal business alignment

With actionable intelligence to help your IT Service Management organization manage the evolving challenges of delivering effective service in increasingly complex environments. Provide your teams with a detailed view of your infrastructure and its dependencies with diagnostic data, performance information, and actionable knowledge.

Better informed governance decisions

With increased operational visibility. When it is clear what each function is supposed to be doing and there is transparency into how service delivery is really taking place, it is easier for management to make better informed decisions and more impactful leadership guidance to the organization.

These are by no means all the benefits that companies will receive by implementing Enterprise Service Management. To explore additional benefits of implementing ESM in your organization, check out the Fresh Service blog: 14 Benefits of Enterprise Service Management

Who Can benefit from ESM?

Enterprise Service Management is a general set of practices and concepts that is applicable to most organizations (both public and private) and spanning almost all industries. For traditional organizations with operational excellence ambitions, ESM can help you refine your operations for cost savings, efficiency and better control. For modern “digital enterprises” and/or organizations with transformational ambitions, ESM can help you structure and integrate your business functions to efficiently fulfill customer needs and provide the operational agility needed to respond to changes in the environment.

If your organization is looking to implement ESM for the first time, you need to start somewhere. The best place to start is with those functions within your organization where adopting ESM can either have the most internal benefit (to the function) or the most impact (to the organization as a whole). There are some common characteristics of these candidate functions to help you identify them:

They receive many requests on the same topic(s) that need to be addressed consistently
Requests are time sensitive and need to be tracked to ensure consistent and prompt resolution
The function acts as a gatekeeper – either at the start of a set of processes or at an approval step
Objective, data-driven reports are used for managing operations.

Call-centers, helpdesks and other centralized “support” type functions are often the best place to start with ESM implementation as they require high levels of efficiency and are accustom to standardized processes and tooling in the work environment. Some examples where you might find these within your organization include:

Employee HR support

Answering employee questions about things like payroll, benefits, ethics and HR processes

Finance

handling requests for invoices, payments, billing, collections, purchasing and financial questions

Legal

Requests for contract creation, reviewing and approving documents and responding to legal questions

Customer Service

Both in-person and call center support for customer questions and requests

Sales Support

Processing quote and ordering transactions, pricing approval and customer contract terms

Security

Processing both information and physical security requests, reviewing security events and providing security related services such as security checks and audits.

Facilities / Building Management

Managing requests for repairs, office moves, maintenance/upgrades of facilities and provisioning facilities resources.

Administrative support

New-hire onboarding, requesting office supplies, scheduling meeting rooms, executive support and tracking of action items for an individual/organization.

What is ESM Software?

Enterprise service management is a category of business management software, typically offered as a platform or suite of integrated application capabilities that an organization would used to support the various pieces of data and facets of their ESM processes. Because ESM involves a lot of data, an ESM software solution is essential to help capture, manage and analyze data critical to service delivery and managing the enterprise service portfolio. The ESM software solution should provide an integrated view of the core processes related to service delivery, track resources (people, parts, assets and other components) that the organization will use in providing the services as well as the status of any customer requests or commitments (service requests, orders, SLAs, contracts, etc.). Many ESM solutions also include capabilities for workflow management, knowledge management and self-service capabilities for various service stakeholders.

In addition to capturing and managing information, ESM software plays an important role in facilitating the flow of information between different departments, external supplier, customers/users and management. One of the key benefits of implementing ESM practices is the reduction of process friction – ESM software plays a big part of enabling service management processes to operate efficiently.

ESM Software vs ITSM Software

Because enterprise service management evolved out of ITSM, there are a lot of commonalities between the software packages that support each of these disciplines. Many ESM software offerings align to the ITIL process definitions for things like Service Level Management, Request Management, Service Definition and knowledge management. Because these are core processes for both ESM and ITSM, many companies choose to use the same software solution for both. There are a few differences between ESM and ITSM software that are important to consider.

The core objects in the underlying data model. ITSM software is primarily centered around managing technology components and technology services. As such, many ITSM software packages draw a strong dependency on configuration management and technology stuff. Enterprise service management may not be as concerned with technology an instead may be more concerned with things like products, org structures, supplier networks and other business-related objects as the core components for configuring services. The process and concepts may be similar, but the underlying data objects are different between ESM and ITSM
Technical savvy of users. Most ITSM software assumes that users are technical and often include more technology-oriented user interfaces (this is starting to change). The users of ESM software tend to be more business oriented and require user interfaces that center around processes and/or data objects like orders or products.
Integration with external parties/systems. ITSM software is often constrained for use internally to the IT organization and frequently restricted to prevent external parties from accessing data from they system and/or using the ITSM system directly. ESM systems tend to have more external integrations and a broader user base outside the organization – particularly in companies that rely on a network of suppliers for the services being delivered.

Implementing ESM in your organization

The starting point for implementing enterprise service management in your organization is to develop a clear understanding of what it means to operate from a customer-centric services orientation. The purpose of service management is to understand and fulfill customer needs, so to get started, you need to figure out what those needs are. This will provide a reference for identifying the different parts of your organization that need to be involved in creating and providing services to meet those needs. Once you’ve identified what functions need to be involved, the next step is determining the degree and nature of interactions that need to take place for them to work well together.

In enterprise service management, collaboration is a key concern. The processes you put in place, the ESM software you will use and the speed at which you drive ESM across your organization will all be based on your need for collaboration. In general, your rollout of ESM will go through 4 stages of maturity:

Individual functions working in siloes.

This is where everyone starts, its okay if you are still here. Before you can effectively contribute to a team, you need to understand how to play your position.

Use of shared tools and terminology.

By getting different functions “speaking the same language” and using a common set of tools, they will be able to better interact with each other and each begin to develop their own understanding of service management.

Consolidated user interfaces.

This may be a shared service desk, or it may be a self-service capability. The idea here is to provide a consistent and unified experience to customers and users, masking them from any internal chaos or friction that is happening behind the scenes.

Coordinated service delivery.

This is where ESM really adds value in orchestrating service delivery processes across functions and providing a unified set of workflows that can be configured and tuned for efficiency and cost performance.

Enterprise Service Management