Business is increasingly reliant on information technology. This has led to the development of the IT service management (ITSM) solutions market aimed at delivering IT management capabilities to help organisations to continually optimise the design, delivery, support, use and governance of IT services to cut costs, increase productivity and efficiency, and improve employee and customer satisfaction.
ITSM is essentially about improving business performance through better IT services and delivery or enabling business to get the most value from IT investments.
In the digital and post-Covid era, the demand for ITSM is set to grow as organisations across all industry sectors pursue digital transformation projects to achieve the goals of reduced cost and increased efficiency, productivity, and user/customer satisfaction. This drive to digital transformation and the growing need to support working from home in the post-Covid era will increase the reliance of businesses on IT services. This, in turn, increases the need to ensure those services are well-managed and secure.
Essential elements of ITSM solutions
ITSM solutions focus on IT service operation and improvement. ITSM aims to increase the efficiency and benefits of IT services. ITSM solutions, therefore, typically include all the tools necessary to create, deploy, manage, optimise, retire and support an IT service throughout its lifecycle.
Measuring the right metrics is key to any successful management programme. In the context of ITSM, there are five key metrics that ITSM solutions should enable organisations to measure and track. These are:
Customer satisfaction (CSAT);
First-contact resolution (FCR) [% of contacts resolved on first contact];
First-level resolution (FLR) [% of contacts resolved without escalation];
Cost per ticket;
Mean time to resolution (MTTR).
There are several frameworks that organisations can use to set an ITSM strategy, create a design, manage change, handle service operation and management, and make continual improvements to ensure that the right ITSM processes, technology and skills are in place to meet business goals.
Popular frameworks that provide guidance on and best practices in delivering ITSM include:
It is important for organisations to understand which framework best suits their needs and to choose their ITSM solutions accordingly.
Growing importance of ITSM
While ITSM is a mature software market, as the drive for digital transformation accelerates in the post-Covid era and most companies seek to cut costs in the face of fierce competition during a global economic downturn, this market is evolving and growing.
“Given the wide variety of ITSM solutions available, organisations need to have a clear understanding of their needs and invest the appropriate amount of time and effort in identifying the one that best meets those needs”
Warwick Ashford, Kuppinger Cole
As a strategic approach to design, deliver, manage and improve the way businesses use information technology, ITSM is becoming essential to most businesses. Companies are increasingly looking to introduce ITSM or improve existing ITSM capabilities to drive productivity and cut costs in a competitive global market, particularly as businesses become increasingly reliant on IT.
A wide variety of suppliers serve the ITSM market, ranging from specialists to large IT services firms, each with a particular focus that will appeal to different companies depending on the size of the organisation and where they are in their ITSM journey.
Business benefits of ITSM
In addition to driving productivity and cutting costs, companies are looking to ITSM as a way of ensuring better alignment between IT and the business, especially when it comes to the ability of IT services to adapt and respond to changing business needs and goals in an effort to remain competitive in a constantly changing business, IT, and regulatory environment.
Benefits of ITSM include:
Better business-IT alignment and greater returns on IT investments;
Reduced IT costs by increasing IT efficiency and reducing IT wastage;
Predictable IT performance and cost;
Minimal risk of disruption due to IT service outages;
Reduced risk in IT implementations through improved change management;
Ability to establish well-defined, repeatable and manageable IT processes;
Continual improvement in effectiveness and capabilities of IT services;
Improved satisfaction of employees, customers and IT department;
Improved governance and reduced risk.
ITSM differentiators
Most suppliers meet the basic ITSM requirements by providing service, change, problem, incident, asset and configuration management facilities. An increasingly important differentiator for suppliers is the ability of their product or service to work with other suppliers’ products, standards or technologies. Those that score highly in terms of interoperability typically support access through a well-documented and secure set of application programming interfaces (APIs).
Other differentiators include a focus on user experience, the provision of management facilities for bring your own device (BYOD) or shadow IT, and support for enabling organisations to automate repetitive, manual tasks to free up employees to do more strategic work.
Automation is an emerging and important trend in the ITSM market, not only for automating tasks and workflows once a ticket has been raised, but also for automating actions to remediate issues or to initiate investigations by incident response teams to reduce the number of tickets being generated. Automation is increasingly being applied to ensure issues are resolved before employees are affected and need to ask for help.
In future, this automation of proactive remediation, tasks and workflows will increasingly be supported by machine learning (ML), natural language processing (NLP), virtual assistants, chatbots and other artificial intelligence (AI) technologies.
Supported by these AI technologies, ITSM solutions will increasingly enable organisations to:
Provide self-service capabilities;
Automate things like level-1 ticket resolution and predictive maintenance;
Build knowledge bases to help service desk staff carry out root cause analysis and identify solutions;
Monitor IT asset performance and identify the need for replacement or upgrades;
Proactively identify potential IT issues;
Classify and route issues more efficiently;
Analyse ticket sentiment to help improve the CSAT score.
Direction of the ITSM market
The ITSM market is clearly evolving not only to respond to changing business requirements and tap into the benefits of new and emerging technologies, but also to expand beyond IT services. A growing number of ITSM suppliers are being joined by new market entrants in focusing on improving collaboration between service departments and applying ITSM principles and goals to non-IT assets in other business areas such as human resources (HR), finance, facilities and procurement.
As a result, many ITSM products are either being expanded to provide collaboration across service departments or re-engineered as enterprise service management (ESM) solutions. We see ESM as a major trend, with a growing number of suppliers shifting to this broader focus.
While ITSM is a well-established and mature market, it is continually evolving and, consequently, even the longest-standing suppliers have cloud-based versions available, giving companies the flexibility of deployments in the cloud, on-premise or through a hybrid model.
Choosing the right ITSM tool
ITSM or ESM provides the functionality that organisations need to remain productive and competitive in the digital era, but given the wide variety of solutions available in the market, organisations need to have a clear understanding of their needs and invest the appropriate amount of time and effort in identifying the ITSM solution that best meets those needs.
Ultimately, the selection of any ITSM solution will depend on the organisation’s particular requirements, which depend on a variety of factors. These include the size and structure of the organisation, the level of IT maturity, the demand for an ESM capability, the degree to which IT services are delivered from the cloud, and the organisation’s need for things like cloud-based delivery, scalability, codeless workflow design, automation, mobile support and IT operations management (ITOM).
A structured selection process
In all cases, it is recommended that a structured selection process should be carried out before the product decision is made.
Understand your organisation’s use cases for evaluating which tools best meet your needs for optimising the design, delivery, support, usage and governance of IT services.
Identify your organisation’s top functional criteria based on the five main use cases listed above. Then assess the ability of ITSM suppliers to meet those criteria. These include incident, problem, configuration, change, release, IT knowledge, asset lifecycle and service-level agreement management, as well as self-service capabilities, service desk, workflow automation, user collaboration, predictive analytics and AI/ML capabilities.
Identify your organisation’s top non-functional selection criteria. Then assess ITSM suppliers’ ability to meet those criteria. These include things like deployment models, speed of deployment and time to value, supplier size, number of supplier customers, the strategic focus of suppliers, the breadth of ITSM capabilities, the availability and quality of technical support services, the supplier product roadmap and licensing models.
Assess the gap between the technical features desired by your operations team and those offered by the ITSM suppliers under consideration. Technical prerequisites that should be considered in your ITSM supplier evaluation process include:
Support for low-code and no-code workflow automation;
Deployments models;
IT operations management support;
Compliance with industry security standards;
Support for ITSM frameworks.
Organisations also need to assess whether they have the technical expertise required to run ITSM fully in-house and on-premise. For some organisations, ITSM as a cloud-based service or fully managed service may be the best option.
Ask potential suppliers key questions to help you identify which solution/vendor is the best fit. Top questions to ask include:
What deployment models are supported and can they be mixed?
What industry security standards are supported?
What are your key differentiators?
What licensing models do you offer and is there flexibility to switch between them?
How modern is the solution’s architecture?
How customisable is the solution?
What is on your near- and long-term roadmap?
How well does your solution integrate with other service management tools?
Can I speak to some reference customers?
Each step of this structured selection process is aimed at helping organisations to draw up a longlist of potential ITSM suppliers and then hone that down to a shortlist and finally identify the supplier that is best suited to their business needs, functional and non-functional requirements, and technical and organisational prerequisites.