Need of ITSM

Overall complexity of IT is evolving with increased global scope and competition. Business is demanding more value even from their internal IT organizations. Besides, dependency of business on IT is increasing everyday which has made IT critical for success of the business. This has resulted in a shift of focus. In a number of organizations, IT is now being considered as a ‘Profit Centre’ instead of ‘Cost Centre’.

Thus, to ensure that IT is constantly able to deliver value effectively and efficiently, ITSM is the key. Today, every organization is investing in ITSM, trying to develop it as their capability and as a strategic asset.

IT Service Management

IT Service Management or ITSM is the ‘subject’ of ITIL.  Before focusing on ITSM, it is important for us to understand the meaning of Service.

Service: Service is the mean of delivering value to the customer. It assists in achieving the results that customer* wants. It takes away the associated costs and risks from the customer, i.e. ownership of the cost and risks is transferred from customer to service provider**.

Key characteristics of a service are:

• It enhances performance of the task it assists in delivering
• It facilitates achievement of the outcomes desired by the customer
• It reduces the effect of constraints that exists in service delivery

ITSM is the discipline responsible for management of IT services and systems. It includes set of processes and functions that are used to provide these services. It can be said to be the set of capabilities that an organization has which provides value to the customers in the form of services.

Let us consider the following example:

Couple of years back one of the banking institutions in India outsourced its entire IT infrastructure to one of the leading IT Service Providers. Charging was based on number of transactions that the bank performs. Cost of the entire IT infrastructure and its day-to-day maintenance was to be borne by the service provider.

Service provided by the service provider was ‘IT infrastructure provisioning’. This service facilitated the transactional requirements of the bank. The bank did not own the IT infrastructure or any risk associated with it. Thus, by availing the service, bank transferred the ownership of both cost and risk to the service provider.

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* Customer is the one who pays for a service.

** Service provider is the organization or unit that provides the service. They can be internal (internal service provider) or external (external service provider) to the customer’s organization.