Modern technologies and software tend to offer easy access and quick answers to critical business information and questions. Companies are, therefore, rapidly deploying modern technologies like AI and cloud computing to enhance business performance. One practical approach toward adopting such technologies is Enterprise Service Management (ESM).
To be sure, it can and should become a critical component of your company’s digital transformation.
Defining Enterprise Service Management
In short, ESM simply refers to using the principles of IT Service Management (ITSM) in business operations. The aim is to enhance business outcomes, performance, and service delivery. It involves the provision of enterprise IT services to various departments and teams of an organization.
Enterprise IT service refers to a standards-based method of encasing enterprise functionality that can be used as a reusable business service.
Furthermore, it can be combined with other services to tackle new business requirements, allow new business processes, or create new applications.
In other words, ESM is the process of applying ITSM principles to all other areas of an enterprise beyond the IT department. The need for ESM has arisen mainly because employees across an enterprise wish to use IT services to improve their workflows. An employee that has evidently become used to convenience and quick insights (thanks to mobile apps) would want the same at their workplace.
Let’s use an example to explain this concept further.
Human Resource Management System as ESM
Imagine an HR department that’s looking to hire new talent. Historically speaking, the entire hiring process is done manually. All the steps are carried out manually, from reaching out to potential hires via recruitment portals to ensuring swift onboarding. As a result, this costs the HR department more time and money.
An HR manager would love to have some of these processes automated, if not the entire hiring exercise. Enter the Human Resource Management System (HRMS). It goes by many other names, such as Human Capital Management (HCM) and Human Resources Information System (HRIS).
But whatever you may call it, the purpose of an HRMS is to enable easy management of human resources, data and business processes. It brings together various HR functions like employee appraisal, payroll management, attendance management, employee training records, etc., on a single platform. This is one good example of enterprise service management. A merger of HR principles and IT methodologies to automate the functions of HR. How cool!
What is IT Service Management?
IT service management (ITSM) refers to all the activities, processes, and policies companies use to deploy, manage, and enhance IT services. However, the traditional ITSM approach focused only on setting up computer networks and hardware. Moreover, it offered service desk help only when issues arose.
But the narrow ITSM of yesteryear no longer operates in our digital era. Nearly all work processes today are tech-enabled. Thus, ITSM also encompasses all other business services today, be they IT-related or non-IT-related. It has transformed IT departments from being visible only when needed to becoming service providers that help all departments meet their goals efficiently.
Providing IT services, internally or externally, thus makes up the ITSM practice. It chiefly aims to improve operational efficiency, reduce risks, and assist strategic planning. But are ESM and ITSM the same? No.
Let’s look at the difference between ESM and ITSM.
ESM vs. ITSM: The Difference Between the Two
The key difference between ESM and ITSM is that the latter does not necessarily imply providing IT services to other departments within an organization. On the other hand, ESM means providing IT services to other departments within the organization.
It takes the best of ITSM practices and applies them enterprise-wide. ESM applies the goals of ITSM to all departments and uses the following aspects of ITSM:
- Principles and theories of service management
- Service desks
- Knowledge management and self-service tools like chatbots
- Automation of business processes
- Incident request management solutions
ITSM Frameworks and ESM
Companies have the luxury of choosing from various ITSM management frameworks, which can cover both centralized and decentralized systems. These frameworks also reflect international best practices. Some of the most well-known service management frameworks include:
For the purposes of this article, we will only discuss the ITIL framework in detail. That is because each framework is suitable for a specific purpose, and ITIL suits ESM.
ITIL stands for IT Infrastructure Library. It was first launched in the 1980s and is one of the most popular service management frameworks. It aids organizations in deciding how best to deploy IT for development, change, and business transformation.
Its latest version, the ITIL 4, offers a best practice framework for providing services from design to retirement. Its goal is continuous improvement. Unlike its earlier iteration (ITIL 3), ITIL 4 focuses on how work flows between and within organizations. It also highlights the critical role incident management plays in all this.
Moreover, it brings together a set of highly sought-after service management capabilities by businesses. ITIL 4 uses innovative technologies like AI ML, Agile, and DevOps to strengthen service management capabilities.
Also, offers two new features, the Four Dimensions Model and the Service Value System, explained below:
Four Dimensions Model
The Four Dimensions model of ITIL 4 enables a company to pursue a comprehensive approach to service management. Its four dimensions are:
- Organizations and People
- Information and Technology
- Partners and Suppliers
- Value Streams and Processes
Service Value System (SVS)
Another vital component of ITIL 4 is its Service Value System (SVS). It gives an operating model for how to create, deliver, and continuously improve services. The core elements of SVS are:
- Service value chain
- Guiding principles
- Continual improvement
So how does ESM fit into all this? Quite simple! ESM brings together these service management strategies and applies them to the entire organization. The aim is to improve efficiency, support business operations, and increase user satisfaction. Thus ITIL 4 serves as an excellent foundation for enterprise management services.
Advantages of Enterprise Service Management
The most significant outcome of using enterprise service management is that it removes siloes and propels an organization to create an integrated work environment. It, therefore, catapults the company from being slow and reactive to being efficient and proactive.
However, the benefits you can reap from enterprise service management depend largely on how widely you implement its principles. If you include many business departments and processes under your ESM, you can expect the following benefits:
- Increased productivity – Employing an easy request tracking process can enable your team to respond to requests quickly, thereby improving productivity.
- Better control and visibility of processes – By establishing reporting mechanisms, you can use reliable metrics to identify issues and rectify them accordingly.
- Minimal waste of resources – ESM can help you avoid redundant activities that add no value by mapping processes and identifying the value each process adds. It can therefore evolve into a long-term improvement and cost optimization strategy.
- Increased user satisfaction – Internal users are more satisfied with request expectations as processes determine roles and responsibilities. This internal user satisfaction also translates into increased external user satisfaction.
- Competitive edge – All businesses must transition to innovative technologies like AI and tech-enabled systems to survive in the digital era. Hence enterprise service management gives your business that edge.
- Higher ROI (return on investment) – Your company’s ROI can significantly increase as you deploy enterprise service management to more departments and processes. Consequently, your company will perform better than its competitors.
- Improved service and support performance – Analytics and reporting capabilities lay the foundation for continual service improvement. This, in turn, also positively impacts user experience and service delivery.
Who should use Enterprise Service Management?
Although the advocates of ESM say that all business units can utilize ESM, it falls on each team, department, and the whole organization to determine who would gain the most from ESM. However, teams or departments that have the following characteristics are best-suited to using enterprise service management practices:
- Teams that receive a large number of similar requests
- Requests that need to be tracked and are time-sensitive
- Processual gatekeeper teams that manage approvals and actions
- A high number of reporting requests
Good examples of such teams include:
- Customer service
- Accounting and finance
- Human resources
- Marketing and sales
- Legal teams
- Building services
- Procurement and purchase
Summing it up
In the light of the preceding paragraph and the list of suitable candidates for ESM, it can be safely concluded that it is appropriate for nearly all business teams to implement enterprise service management.
Undoubtedly, every business looks to optimize processes and costs, increase growth, and achieve user satisfaction. As a result, enterprise service management has emerged as an excellent way to achieve all that and much more.
However, companies that fail to utilize the IT service management principles in the form of enterprise service management will become laggards. In other words, it will mean that they consciously chose to remain behind. Who would want that in a world continuously progressing toward a more connected and IT-enabled business ecosystem? Basically, very few to none.
In case you want to know more about enterprise service management, please contact us at [email protected].