A Beginner’s Guide to IT Service Management (ITSM)

The ITSM principles establish a framework for IT organizations to succeed. Use this guide to learn ITSM basics.

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Technology drives business success. Small businesses that adopt cloud computing achieve 21% higher gross profits according to research from Deloitte and Google. But if you’re not a tech expert, you need to depend on your IT team to incorporate technology into your business.

Implementing cloud computing is an example of how an IT team delivers tangible business benefits. Others include business scalability as your company grows, using software and other technical tools to achieve operational efficiencies and better business insights through data collection and analysis.

To deliver these benefits, IT teams require an approach that sets the organization up for success. That’s why many teams employ IT service management (ITSM).

Overview: What is IT service management (ITSM)?

Some degree of ITSM exists in every IT organization. IT service management refers to how teams manage a company’s technical solutions and deliver that technology to meet the needs of internal and external customers.

ITSM encompasses all aspects of technology delivery including planning and design, building, deploying, and ongoing support.

A key ITSM tenet is its emphasis on servicing customer needs through technology. It focuses on fulfilling customer requirements using both technical solutions and the IT processes developed to deliver that technology.

Another key ITSM concept is continual improvement. The IT team learns from experience to strengthen and evolve its service to customers.

ITSM vs. ITIL: What's the difference?

The IT community interchangeably uses ITSM and ITIL, which stands for Information Technology Infrastructure Library. ITIL involves a popular set of processes for ITSM execution, which leads to confusion between the two, but there’s a subtle difference.

ITSM represents the broader IT service delivery concept. ITIL outlines the details of how to execute ITSM. For instance, ITSM identifies that every IT team confronts system issues, called incidents.

ITIL sets out processes for how to address incidents, including steps for categorizing them and escalation procedures to resolve them.

The ITIL framework was developed in the 1980s by the UK government in response to the growing importance of Information Technology. Since then, ITIL evolved from a literal library of 30 books into best practices detailing ITSM delivery.

Benefits of ITSM for your IT team

ITSM is more than an abstract idea. It delivers several tangible business benefits.

1. Streamlined operations

ITSM helps the IT organization determine what’s needed to deliver effective technical services and systems to customers.

ITSM concentrates on technology implementations that streamline operations such as efficient resolution of incidents, reducing the number of incidents and their underlying problems, and continuously improving system performance.

2. Lower costs

As an IT team streamlines operations through ITSM, a business experiences cost savings. Lower costs manifest in ways beyond improving organizational efficiency.

A few examples include the removal of duplicative or obsolete technology, redeployment of under-utilized IT assets, ensuring smooth transitions to new software, and quickly addressing system issues or downtime to minimize the impact to staff, keeping the organization productive.

3. Improved customer satisfaction

ITSM’s focus on the customer experience leads to improved customer satisfaction. The greater operational efficiency achieved through ITSM translates to faster and more effective customer service, increasing the positive experience they have with your organization.

The ITSM processes enable reduction of the technical challenges that cause customer frustration. If an unavoidable technical problem arises, ITSM allows a business to recover quickly, maintaining a positive customer experience.

ITSM processes

ITSM employs several key processes in every IT organization. These processes are the foundation for executing ITSM-based IT management.

Your implementation depends on your company’s needs and the ITSM framework you adopt. ITIL outlines dozens of best practices, for example. The following six processes cover ITSM’s basic elements.

Process 1: Service request management

A core ITSM responsibility involves servicing internal and external customers. The service request management process revolves around execution of this area.

IT teams require repeatable procedures to manage the wide array of requests firing at them from all areas of the business.

IT teams are often hit with customer asks for technical help or new features, business needs for new or upgraded hardware and software, and employees and partners asking for IT service access or other support requirements.

Predefined workflows, tools, and automation organized through the service request management process enables an IT team to efficiently address and resolve these incoming requests.

A popular method of managing service requests is to establish a team responsible for addressing incoming requests, routing them to the appropriate staff or resolving them directly. This team is often called a help desk, and relies on IT help desk software to execute their job.

This IT ticketing system documents requests, which allows tracking and communication to occur as the request moves towards resolution.

Process 2: Incident management

Technology teams must prepare for inevitable IT service disruptions. When an unplanned interruption or degradation of IT services occurs, it’s described as an incident. Incident management addresses these occurrences to restore IT services quickly and with minimal impact to customers of those services.

Process 3: Problem management

Incident management is coupled with problem management. The latter seeks to identify systemic issues. If the same incident repeatedly occurs, it’s a deeper system problem.

A common example, and one I’ve witnessed at different IT organizations, is the team routinely deleting files or other data taking up server space when storage capacity is reached.

Rather than periodically running into capacity issues then spending time deleting, the team can find an alternative, long-term solution, such as leveraging cloud storage or installing a bigger hard drive. Problem management resolves such occurrences.

Process 4: Asset management

Asset management is a huge piece of an IT organization’s responsibilities. The proper maintenance and management of IT systems necessitates close oversight of a company’s hardware, software, and other components that deliver technology solutions.

These assets require deployment procedures, maintenance, upgrades, and disposal processes. All these tasks fall under asset management.

Process 5: Change management

Some IT assets require regular changes as systems upgrade or new technology is introduced.

Assets that involve changes are called configurable items in ITIL change management, and are tracked in a Configuration Management Database (CMDB) so details of every modification are recorded for reference and analysis during situations such as incident management.

Introducing changes to IT systems involves a heightened business risk. A small mistake in configuration changes can lead to downtime. That’s why ITSM’s change management process is needed.

Well-documented release management procedures for the rollout of changes reduces risks and provides greater confidence in the IT team’s execution abilities.

Process 6: Knowledge management

Knowledge management collects and manages the knowledge across your organization, and puts it to use.

IT systems are complex, and increasingly so as companies leverage cloud computing and other third party technology solutions. How a company’s systems and tools operate, the changes in an upgrade, learnings from past incidents, and other IT information is captured as part of knowledge management.

When you access self help in a software system, you’re tapping into a knowledge base created from the efforts of knowledge management processes.

Final advice about implementing ITSM

ITSM supports continuous improvement. Define metrics to measure and analyze your IT organization’s performance and areas for improvement. These metrics can include customer satisfaction scores, system uptime, and response time for resolving incidents.

ITSM principles and processes are just the start. To incorporate ITSM into your daily IT activities, decide on an approach, such as the ITIL framework, and your IT team will be set up to excel.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares). The Motley Fool has a disclosure policy.