[GET SMART] Service Management: Origins and Development

Note to the Reader: This blog is part of our Get Smart series, in which we aim to provide helpful information to anyone who’s looking to learn more about service management, enterprise service management, or enterprise software in general. In today’s Blog, we’ll cover the basics of service management, including its origins, benefits, challenges, and trends.

The roots of Service Management are intertwined, from the beginning, with the potential and power of information technology. Even if you lived through the early days of business technology, from today’s vantage point, it’s still hard to (re)imagine that world: where computers were immense, singular objects, attended by a large team, and provided their own suite of rooms. Of course today the idea of “having that much computing power in our jacket pocket” has become a familiar cliché. Our everyday lives are now carried out through an ongoing information-dialogue with what we refer to as “the cloud.” Computing, once confined and accessed from its own dedicated physical space, is now everywhere around us, both literally and figuratively.

Information Technology Service Management (ITSM) emerged from this period: when computing power was anything but ubiquitous, and the application of best practices helped technology providers and businesses manage these assets and create optimal value. ITSM offered a service management wrapper — which provided very practical benefits in terms of deployment, ongoing usage and upkeep, and planning and expansion. Availability, capacity management, change management — all represented a beneficial blending of the best ideas from business operations and the engineer’s mindset prevalent in IT.



ITIL, The Information Technology Infrastructure Library, emerged in the 1980s under the auspices of the UK Government’s Central Computer and Telecommunications Agency, or CCTA. ITIL codified terminology and best practices for IT service and asset management, and owed a debt to the management theories of William Edwards Deming. ITIL helped advance service management by providing precise, shared definitions for ITSM terminology, and by gathering best practices in a single authoritative reference. However,  it’s important to note that ITIL’s charter and reach was (and is) entirely conceptual. ITSM, on the other hand, operated in the sphere of practicality, offering the tools and workflow to actually put ITIL principles into practice.

Moving Beyond The Mainframe
The best practices identified and continuously tested and improved through the first successful ITSM implementations, have proven their enduring value. As businesses began moving away from mainframe-dependent architectures, ITSM principles held fast. Successful strategies and processes for change management, capacity planning, configuration management, disaster recovery, performance management, and availability were tweaked and modified, but remained principally intact.  These best practices also expanded in scope and grew in value — just as IT became an increasingly pervasive and crucial resource for all facets of business, so too did service management.

Practice > Process
Over time, “Practice” emerged in ITSM as a term preferred to “Process.” Practice reflects a more holistic view, and includes in its purview considerations such as personnel, culture, available technology, and required information & data management support. ITIL, now on Version 4, identifies 34 distinct practices in the scope of ITSM. A brief set of characteristic ITSM practices includes:

Incident Management: Proven methods for responding to unplanned events or service interruptions to maintain operations + service levels.

Change Management: Guidelines for implementing changes to IT infrastructure, including changing existing services, implementing new ones, and fixing coding issues. 

Knowledge Management: The practice recognizes and enacts knowledge as necessity for hitting key objectives within any role and across the organization as a whole. KM helps companies define the best way to create, share, use, and manage task-relevant information. 

You can see, even in this brief set of examples, how the idea of “practice” more precisely fits the reach of service management. Fueling the continued advance of ITSM has been the clear recognition across many businesses that these ideas, implemented properly, can deliver significant business value.


ITSM Software

ITIL was of course only a first step in “codifying” ITSM. As with any business domain evolving in the late 20th century, the serious codification took place as software solutions began to emerge for this space. ITSM solutions were a unique new hybrid: information technology designed specifically to help manage…information technology. But business leaders quickly understood the benefit of abandoning general-use process tools like spreadsheets and service-desk-ticketing to help manage expensive and high-demand IT assets. 

Historically, and right up to the modern day, there are many different types of ITSM software, ranging from standalone applications to large-platform service interfaces, with variations based on needs for different types of businesses and functional domains. In general however, the better tools seem to anticipate that difference between process and practice we discussed earlier. These tools will tend to emphasize:

  • Ease of use: Better tools contemplate the needs of users in a more holistic fashion. They’ll include an easy setup and onboarding process that can be run in-house, with external support being easy to find, understand, and implement.
  • Collaboration: Some tools actually inhibit collaboration across an enterprise through a modular approach that limits visibility and siloes information. Most modern-day implementations will benefit from a tool that’s expressly designed to support cross-functional teams. Value multiplies as common / best practices reach across your organization.
  • Flexibility: As service management practices are implemented throughout an organization, solutions that can scale easily and adapt to varying user needs will return greater value.


Implementing a Solution

Service Management solutions continuously improve, but a “plug and play” reinvention for business operations has yet to roll off the assembly line. Implementing a service management solution is hard work, and requires a long-term vision, thoughtful planning, and iteration and continuous care in execution. That special sense of practice applies here again, as implementation is a multi-step process that requires ITSM sponsors to consider the best way to bring people, solutions, and program management into alignment to achieve desired outcomes. 

As with many business processes, service management implementations should “begin with the end in mind,” as Stephen Covey so memorably phrased it. However, like many aspects of service management implementation, goal-setting can also be an iterative process, where short, interim, and long-range goals are bought into focus and continuously refreshed.  See the Benefits item at the end of this section for some additional thoughts about shaping long term goals.  

Implementation approaches are seemingly as plentiful now as solutions. Most IT organizations will already know which methodologies work best for their team(s) and organization. Agile, lean, collaborative, outsourced and combinations thereof have all been used successfully for standing-up ITSM programs. Well-planned iterations always help teams manage complexity, and can help create momentum and a regular cadence for analysis and continuous improvement. Many implementations start with a single process, or tightly related subset of use cases, and build from there.

Customers are Users
The approach and implementation path for ITSM should also explicitly include “customers” as well. After all, the very core of service management is delivering service to customers: needed information, knowledge, decision support, capability — all for use by specific personnel in a defined (or at least well-understood) work environment. This means that context and culture have to be contemplated as well as strategy and processes. ITSM sponsors will always want to assure that key users become advocates for the new solution, so it’s crucial to make sure they’re being provided with the right training and support to become informed ambassadors for the team and the effort.

Gathering Stakeholders
Stakeholders include both power and occasional users, but successful implementations will include the full spectrum of areas that will be impacted. That means both the users and customers of the solution — and those impacted by the process of implementation itself.  We can think of implementation like building a new road through town: who needs to know?  When? What do they need to know? What do they need to do in order to be prepared and help out? 

Uniting The Team
As sponsors consider how or where to start, many quickly realize that team representation and role definition is just as important as a familiar implementation methodology. Team members need to be aware of their roles, and be able to provide input and guidance regarding those roles: good practices are built with an awareness of the insight, skill, and capacity users bring to the process. Setting mutual goals and expectations, and providing regular updates are keys to team’s building momentum and success. The road for many ITSM implementations will invariably deviate from “the shortest distance from A to B,”  so transparency, and strong team dynamics can be vital.

Solution Selection
One of the major decisions for any team is making a choice for the right software solution. Sponsors can structure this process and representation in a variety of ways, but emphasis should be given to assuring that those who will use and benefit most from the proposed solution, are well-invested in the evaluation process. Technical and business considerations should always be considered together.

Going The Distance
The last keynote about implementation is to recognize before beginning that these projects can require significant follow-up. Thankfully, after some initial paddling, many start to build momentum quickly, as the implemented solution begins to pay dividends and the team reaches or exceeds goals. But even for the most successful implementations, oversight and continued two-way communications are critical. A to B may be a very smooth ride — but be ready for B to C, and beyond…


ITSM Benefits

At its current phase of maturation, ITSM has moved well beyond its origins as a kind of “resource management” discipline. It still has those roots: but ITSM has become a much more comprehensive and influential model for the everyday conduct of modern business. We want to note that the benefits we list below are not always optimally achieved with today’s solutions — but these are the kinds of benefits sponsors should be thinking about as they frame their business goals:

  • Responsiveness: ITSM is defined by a thoroughgoing customer focus. Response times for addressing and closing out incidents, and measures taken to prevent future interruptions, are frequently one of the early achievements for an ITSM  implementation. As more services are added, companies also begin to benefit from improved information access and clarity, which can be more broadly characterized as…

  • Transparency:
    Yes, this is a very wide-ranging concept — but the aggregated impact of transparency can be significant. ITSM enables you to have a solid record of inputs, actors, decisions, outputs, and results. In a business world where decisions are increasingly defined by data, ITSM can provide a bedrock for process data. The more integrated you implementation becomes, the more powerfully you can see how these various factors interconnect and synergize…or, not. If you’re constantly iterating and improving, either outcome can be helpful. Finally, it almost goes without saying that transparency is invaluable for regulatory and compliance purposes — but we wanted to make sure we mentioned it anyway.

  • Efficiency:
    When they can be achieved, cross-functional efficiencies eliminate rework, missing information, and the delays associated with them. At the individual level, efficiencies can also be gained from re-imagined workflows, improved knowledge management, timely decision support, and automation of repetitive and cyclical processes.  Let us note again that efficiencies can also be realized when measurement shows the opposite of improvement.  …It may just take a bit longer.

    Iterative Improvement: Service management provides a combination of access, clarity, and control that encourages businesses to test various approaches and iteratively improve both discrete and connected processes.  As we’ll see when we discuss ESM, returns on these investments can multiply much quicker when the solution and its principles are integrated across the entire business.


Implementation Challenges

Realizing the highest goals for service management requires addressing some common practical challenges, whether an organization is pursuing ITSM deployment, or attempting to develop a true ESM environment.  

One common hurdle is a simple cultural shift in the way the organization relates to and receives services from IT.  For organizations with less ITSM experience, this can create challenges for both the business “customers” and IT “providers” of these services. Patience is key, and incremental approaches can help companies new to ITSM make needed practice and solution adjustments as they move upward along the learning curve.

“Cost Center” Perspective

As we discussed in our brief history of service management, many organizations have historically viewed IT as an entirely separate entity — and primarily, as a resource to be metered and protected. Thus IT’s ignominious designation as a “cost center.”

Integrating ITSM as an end-to-end service that connects an entire organization can pose some new and healthy challenges to the way organizations think about and manage their IT resources. As noted, a focus on value creation has begun to change this perspective for the better. The ideal outcome is a tighter partnership and identification of common goals between IT and business leaders. ITSM can help organizations model and encourage that perspective.

Future Focus
Implementation can also re-introduce the familiar tug of war between current need or  “fighting fires,” vs. resourcing for a future with less fires altogether. Chances are that any technology that you are bringing on board to help with your business needs will create a conflict between onboarding the new product and taking care of the problems that it’s there to solve.  A clear vision and case for benefit, and an iterative approach that proves benefit as the project progresses can help leaders manage this skirmish. 

Change Management
Let’s return momentarily to our “new road” metaphor — which we introduced when talking about team communication and planning. Let’s recognize that new roads can bring about some significant inconveniences for residents when they go in. You can’t park on the street or move about freely; there’s noise and distraction, rain means mud — and even at its best, roadbuilding isn’t pretty. 

Similar challenges apply when implementing a service management solution. Without stretching our metaphor too far, we can identify some common sources of disruption:

New alignments:
Existing silos and varying maturity levels complicate alignment: most medium to large-sized organizations have several business-aligned IT organizations that have “grown up” working independently of one another. Deconstructing and rebuilding new, broader alignments remains a key challenge for leaders.

Short term demands:
It’s not uncommon for an ITSM implementation to require extra work in the short term, as users adjust to learning and implementing a new technology. In addition, organizations can see longer turnaround times in the short run: process improvement can take some tinkering to get right, and more tinkering to optimize. Sometimes even “low hanging fruit” can take longer than expected to be harvested.

Consulting Help:
Most organizations won’t have the expertise in-house for full integration of an ITSM solution. In these instances, consulting outside expertise can be effective. The change management ask here is building strong new alliances with new people — another “practice” that can take some time.


State of the Industry

ITSM is a steadily growing industry and business practice. According to Fortune, in 2019, the size of the market stood at 4.15B, and it’s expected to have reached 15.65B by 20201.  Between 2020 and 2027, the projected growth rate for the ITSM solutions and services sector is a robust 18.2%. 

Fueling this growth are a number of factors, including: the high volume of startups using cloud-based applications; increased investment from key market players (Atlassian, ServiceNow, PLC, BMC Software, IBM Corporation, etc.); and the rising adoption of related core technologies such as big data, AI, and cloud computing.  Of course, business successes are also fueling this growth.

Pandemic Effects
Remote work, which reached what we might call “breakaway velocity” during the Covid 19 pandemic, has been another significant factor for catalyzing the need (and showing the value in flexibility and adaptability) for cloud-based IT services, across many industries.

In their State of 2021 report, ITSM provider Ivanti noted that 67% of businesses accelerated the adoption of service management because of the pandemic. They also noted that there are still many more core business processes to be automated. Two-thirds of businesses say they’ve automated only 30% or less of their IT services. IT (91%) and HR (65%) are the most common domains for the deployment of self service tools. These efforts are seen as a major component of Digital Transformation, which is currently viewed as the #1 challenge faced by IT organizations today.  Another way to gauge the pace and breadth of this phenomenon is to take the measure of those who are not participating: only 3% of businesses surveyed have no plans to offer self-service for IT and other services!

Trends in Service Management
As service management has grown it has also matured and adapted. One of the key dimensions of change has been an increasing emphasis on people, performance, and cultural factors. Users of ITSM solutions have helped solution makers evolve to a higher ground where the solution capability more fully contemplates users and their work-environments: not only their service needs, but also the skills and knowledge they bring to the table. Today, optimal solutions support great performers, and a diversity of capabilities, rather than imposing a rigid standard in tightly defined domains.  Value-creation has become the North Star for ITSM, bending aways from ITSM’s historical focus on resource management and operational efficiencies.

This “higher aim” has also contributed to a strong general trend toward flexibility.  As service management practices have moved beyond IT and more deeply into the enterprise, a broader palette of best practices and methods has been contemplated and enabled. Solution flexibility has proven to be a key factor in continuously optimizing outcomes.

One of the real-world tests for flexibility has been the need to enable remote work. During the pandemic — almost overnight — distributed and virtual teams became a reality for most industries. Clearly, remote work is here to stay: it’s now part of the competitive landscape, especially for finding and keeping top talent.

ESM Emerges
The most comprehensive expression of ITSM’s higher aims has been the emergence of Enterprise Service Management. ESM shares and consolidates practices and toolsets across the organization in order to provide a more streamlined and effective working experience — throughout the enterprise. ESM will continue to have a big influence on this market, and its highest expression: communication and connection among partnered enterprises, will raise the bar for solution flexibility and people- and team-centered solutions for the next several years to come.

Current Market Participants

The chart below depicts the current state of the ITSM solution space. In the next section, we’ll talk about the evolution of SaaS to its current iteration: SaaS 3.0, and the ways that this evolution merges with the movement to ESM, and how it might potentially cause some reconfiguration of this chart.

Source; Top 10

2020 IT Service Management applications market shares split by top 10 IT Service Management vendors and others, %

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David Blonski

David Blonski

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