The rise of Enterprise Service Management (ESM) has redefined the future role of IT, placing it at the heart of business transformation and service innovation. Over the coming weeks we’ll be looking at the rise of ESM, the opportunities for IT and the tactical steps to adopt ESM in your organization. This week, we start with ‘What is Enterprise Service Management?’
Enterprise Service Management is about applying a service-oriented business model to the way your organization works internally. It is an operational architecture where each functional area of the business is defined as a service domain that offers services. These services deliver outcomes for other business functions and help to support them in their ability to deliver results for external customers. Thus, the productivity and profitability of the company will be improved by improving the efficiency of internal operations.
As John Seddon of Vanguard (an advocate of the application of systems thinking to service domains) says, “cost is in flow; value is in activity”, i.e. costs are incurred through poor flow of work between organizational functions. The fundamental idea of ESM is to:
Reduce the overheads commonly associated with department-to-department interaction.
Increase predictability in terms of both the quality and timescale of output (e.g. ensuring the desired outcome is delivered right and delivered fast).
Increase process efficiency within service domains to keep the cost of execution as low as possible without compromising the quality or delivery timescale
Efficiency levels vary across departments, so there are usually at least one or two weak links in the chain that create bottlenecks. Every organization has its own “black hole” department that has a reputation for slow responses. ESM is a model by which you can transform your organization from a clunky collection of departments into a well-oiled machine. By integrating departments more effectively around the many touch points that business processes flow across, you can facilitate better, faster and cheaper operations – and better alignment between what one department needs and another delivers.
So what does ESM look like? There are three perspectives that must be considered:
The end user perspective – Delivering an easy-to-use enterprise services portal that puts all business-facing services in one accessible location.
The service domain perspective – Creating a catalog of business-facing services, supported by automated service execution processes.
The IT perspective – Facilitating the construction of the enterprise service portal and working closely with business functions to define and automate their service execution processes.
What are the benefits of Enterprise Service Management?
Achieve operational visibility: ESM lets you see the value that each department adds to the business. When you define what a department is to the rest of the business you are also defining the edges. You can see where one department ends and another begins. Once you know where the boundaries are, you can make them more fluid and responsive to changing patterns of demand. Essentially, ESM gives you a map of where value is created in your organization – and the processes that support it, allowing you to find and eliminate bottlenecks and inefficiencies.
Support better governance: When you have better visibility of operations, it’s easier to govern what departments are doing to ensure they are in line with overarching strategic objectives (e.g. are they providing the right set of services?).
Institute functional excellence: ESM streamlines the process of managing and executing internal business service requests, creating greater efficacy and efficiency across all service domains – achieving higher quality of output at a lower cost.
Support value transformation: By streamlining the execution of internal business services, departments can reduce their day-to-day operational overheads and devote more time and resources to change and improvement projects that enhance value creation. The companies that will succeed in the next decade are those that realize that they must break out of “firefighting mode” and become more pro-active and agile.
Manage interaction: By bringing the interactions that happen between departments into a system or record, these interactions can be measured, managed and optimized. Deployment of a digital interface reduces operational overheads by reducing inbound phone calls and emails – with requests being automatically routed to the right teams. ESM is a good strategy for reducing “inbox overload” and weaning staff away from using the email system as a work queue.
Reduce technology costs: Enterprise-wide technology programs are an opportunity to take advantage of economies of scale. The implementation of a single enterprise-wide digital portal and back-end process management, supported by one software solution, ensures that the cost of the supporting technology is minimized (versus having a number of different ‘point’ solutions catering for each domain).
Break down silos: ESM is, by nature, an antidote to the siloed nature of many large organizations. It embodies a more transparent, integrated and cooperative mentality where business functions think more deeply about how they work with other departments to increase business productivity. By turning barriers into interfaces, the walls between business functions become windows, and departments become more tuned-in to the wider business ecosystem.
Ensure internal business alignment: By providing clarity on which internal services business functions provide for each other it is easier to align services provided with demand from other departments.
Increase end user satisfaction and productivity: The availability of a one-stop-shop for all internal services and information sources means faster access to the tools that your people need to be the most productive.