An Overview of IT Service Management

The July 2006 issue of the Communications² was dedicated to the topic of Services Science, a new approach to viewing, developing, and deploying Information and Communication Technologies (ICT). The introduction, written by Jim Spohrer and Doug Riecken, both of IBM Corporation, stated:

“To the majority of computer scientists, whether in academia or industry, the term “services” is associated with Web services and service-oriented architectures. However, there is a broader story to be told of the remarkable growth of the service sector, which has come to dominate economic activity in most advanced economies over the last 50 years…. The opportunity to innovate in services, to realize business and societal value from knowledge about service, to research, develop, and deliver new information services and business services, has never been greater.”

In this article, we focus on the subtopic of Service Science that deals with the management of ICT service operations.

The economies of the industrialized nations have transitioned, over the past 100 years, from agricultural and manufacturing based to government and business services (GBS) based. The GBS portions of the industrialized nations’ economies exceed 75%. In the U.S., vast arrays of GBS comprise nearly 80% of the country’s economic activity.⁸ As a result, the USA Bureau of Labor Statistics projects that employment growth will continue to be concentrated in the GBS sectors of the economy during the next decade.¹

During the 1930s, the U.S. Department of Commerce coined the term “service,” using three economic sectors to describe the economy: agriculture, manufacturing, and service. Service, at the time, was a catchall for all the activities that did not fit into the other two categories. The term “service” has no single definition and ranges from a change in condition or state of an entity caused by another to a set of deeds, processes, and resulting performances.¹²

Service Science builds on the term “service” in the deed, process, performance sense, by incorporating people, processes, and technologies that interact to deliver services. Chesbrough and Spohrer² suggest that there are common elements across many different types of services that might form a foundation for a field of Service Science. Types of services include, for instance, interaction of supplier and customer, the exploitation of ICT, change management, and transparency.^4,6,10,11

Service Science blends many disciplines including computer science, operations research, industrial engineering, business strategy, management sciences, social and cognitive sciences, and organizational theory.

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IT service management

Information Technology Service Management (ITSM) is a subset of Service Science that focuses on IT operations such as service delivery and service support. In contrast to the traditional technology-oriented approaches to IT, ITSM is a discipline for managing IT operations as a service that is process-oriented and accounts for 60%–90% of total cost of IT ownership.⁴ Providers of IT services can no longer afford to focus on technology and their internal organization, they now have to consider the quality of the services they provide and focus on the relationship with customers.¹¹

Because ITSM is process-focused, it shares a common theme with the process improvement movement (such as, TQM, Six Sigma, Business Process Management, and CMMI). ITSM provides a framework to align IT operations-related activities and the interactions of IT technical personnel with business customer and user processes.³ Figure 1 depicts the evolution of ITSM best practice standards starting with the Information Technology Infrastructure Library (ITIL) and most recently the December 2005 International Organization for Standards (ISO)/International Electrotechnical Commission (IEC) 20000 standard, as well as the other standards (such as, COBIT, etc.) that influenced the creation of ISO/IEC 20000.

ITSM is often associated with the British Government’s ITIL. The ITSM subsection of ITIL concentrates on service support and delivery in IT operations. Approximately 80% of the cost of an infrastructure is in these two areas.⁴ Also, as many as 90%⁶ of USA companies have one or more ITSM implementations underway and, with the 2005 ratification of ISO/IEC 20000, other companies are recognizing an opportunity to improve their organizations in ways that may translate to improved organizational competitiveness.⁶

The ITIL is a framework of best practices intended to facilitate the delivery of high quality IT services at a justifiable cost. The ITIL is built around a process-based systems perspective of controlling and managing IT operations, including continuous improvement and metrics. The British Government’s Central Computer and Telecommunications Agency developed the ITIL during the 1980s. This was in response to its growing dependence on information technology and an increasing need for greater efficiency and effectiveness. The British Government recognized that without standard practices, government agencies and private sector contractors were independently creating their own IT management practices and duplicating efforts. The ITIL v3 (available May 2007) consists of five publications and associated tools. The publications include Service Strategy, Service Design, Service Transition, Service Operations, and Continual Service Improvement.¹⁰

The National Standards Body of the United Kingdom is the British Standards Institute, operating under a Royal Charter since 1901 to act as the standards organization for the British Government. BS (British Standard) 15000, ratified in 2000, was the world’s first standard for ITSM.¹⁰ The standard specifies a set of interrelated management processes, which form a framework whereby processes and systems can be established and evaluated. BS 15000 is primarily IT operations-oriented and primarily based upon the ITIL.

ISO/IEC 20000 is the next step after BS 15000 in the process of international acceptance of a single set of best practices. ISO/IEC 20000 is the first international standard for ITSM and it consists of two publications. ISO/IEC 20000-1 (Part 1) is the formal standard and defines the ‘shall’ requirements to delivering quality services. ISO/IEC 20000-2 (Part 2) is a code of practice that describes ITSM best practices. Figure 2 depicts the best practice processes and their inter-relationships as structured in ISO/IEC 20000.

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The Global Impact of ITSM

The evolution of ITSM from the ITIL framework to the BS 15000, and then to theinternationalstandardISO/IEC20000, reflects the changing global demands placed on IT organizations to deliver IT services. ITSM, as defined in the ITIL, is both a glossary, to ensure a uniform vocabulary, and a set of conceptual processes intended to outline IT best practices. Establishing a set of uniform processes (such as Incident Management, Change Management, etc.) enables the delivery of IT services consistently within a single IT organization as well as across many IT organizations (such as multi-nationals, outsourcers, etc.).

Businesses around the world are adopting ITSM. As stated at Microsoft’s 2004 IT Forum Conference, “Recent studies are showing that an IT service organization could achieve up to a 48 percent cost reduction by applying ITSM principles.” According to Forrester, ITIL adoption by large companies with revenue in excess 1 billion dollars increased from 13% to 20% during 2006. About 90%⁶ of USA companies have one or more ITSM implementations underway. There are many case examples that testify to the value of incorporating a standardized approach to IT services. Three often-cited cases in the trade publications, such as InfoWorld and Computerworld, are:

• In 2000, target response time for resolving Web incidents at Caterpillar IT was 30 minutes—but it hit that goal only 30 percent of the time. After Caterpillar implemented ITIL, its IT providers hit the benchmark more than 90 percent of the time. In addition, Caterpillar has been able to grow its business exponentially in the past five years with only 1 percent increase in its IT budget.
• Proctor & Gamble implemented service management processes outlined by ITIL and saved $125 million, according to company officials.
• In March 2006, Affiliated Computer Services (ACS) became the first company in the USA to be ISO/IEC 20000 certified for standardizing and implementing ITSM processes across six data centers. In addition to re-certifying the initial locations, six other data centers were certified in 2007. While there have been improvements in financial aspects of IT operations management from these deployments, the main benefits have been consistency of outsourced customer handling across data centers, improved quality of delivered service, and improved functional visibility across data centers.

These businesses encourage and support their employees in becoming ITIL certified. EXIN, the Examination Institute for Information Science, is a global independent IT examination provider that administers roughly 65% of the ITIL examinations (e.g. Foundation, IT Service Manager, etc.) worldwide. Figure 3 shows the number of ITIL examinations administered by EXIN through 2006. The number of examinations in 2006 was more than 5 times the number of examinations in 2003; the number of examinations in 2006 was more than 20 times the number of examinations in 1998!

Another indicator of the adoption of ITSM is the growth of its professional organization, the international IT Service Management Forum (itSMF). The itSMF works in partnership with a wide range of governmental and standards bodies to foster the development and widespread use of ITSM practices, and is a major influence on, and contributor to, industry best practices and standards worldwide (e.g., ISO/IEC 20000). Membership in itSMF is diverse and includes large multi-nationals, small and medium local enterprises, individual consultants, and academics that span both the public and private sectors. As of December 2006, there were 40 country chapters, serving over 11,000 members.¹⁰ The U.S. country chapter (itSMF-USA) has more than doubled its membership from roughly 1,600 in 2004 to over 6,000 today and contains 42 local interest groups. Attendees at the itSMF-USA conferences have increased from 300 in 2001 (with 13 exhibitors) to 1,875 in 2005 (with 110 exhibitors).

ISO 9000 is a widely adopted quality management standard. According to ISO, there are currently 800,000 ISO 9000 certified organizations worldwide. In January 1996, there were approximately 8,500 registered sites in the USA. Today, there are more than 50,000 ISO 9000 USA certified organizations due in part to an IRS ruling in January 2000 that many costs associated with ISO 9000 certification would be tax deductible. In addition, the USA Government already unofficially filters IT service contracts, favoring those with ISO certification. If we use ISO 9000 as a surrogate for the future adoption of the ISO/IEC 20000 standard, the forecast is for exponential growth in the adoption of ISO/IEC 20000.

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Current Initiatives

In the vendor community, several frameworks use the ITIL as their foundation: IBM’s Process Reference Model for IT (PRM-IT), Hewlett Packard’s ITSM Reference Model, and Microsoft’s Operating Framework (MOF). Each of these frameworks provides their own approach to the use and implementation of ITSM, supported by the proprietary software of the organization.

Several initiatives are underway to transition ITSM into university pedagogy. The first is IBM’s Service Sciences, Management, and Engineering (SSME) initiative. The SSME initiative emphasizes undergraduate and graduate programs that focus on the development and support of services. Over 70 universities from around the world have been involved with the SSME initiative. Recently, IBM has joined with Oracle, the Technology Professional Services Association (TPSA), the Service and Support Professionals Association (SSPA), and other IT companies and universities to launch the Service Research and Innovation (SRI) Initiative. The goals of this initiative are to increase the amount of money spent on service research and development in the IT industry and promote service science as an emerging academic discipline of study.⁷

The second initiative is promoted through the itSMF. In October 2006, itSMF-USA held its first academic forum in Dallas, Texas to promote the development of ITSM academic programs. Forty universities from around the country met to discuss curricula and research opportunities.

A third initiative is also underway. A group of faculty from 25 universities has petitioned the Association of Information Systems (AIS) to form a special interest group on services management. This special interest group would facilitate new research streams and develop services related academic programs hoping that ITSM would become a new curriculum area that may bolster current sagging undergraduate and graduate ICT enrollments.

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Conclusion

ICT plays a critical role in supporting business functions and satisfying business requirements. As all industries and disciplines move toward a service orientation, ITSM provides direction in that move for IT operations. Industry as a whole can apply ITSM best practices to optimize IT services. The focus of ITSM is to provide specific processes, metrics, and guidance to enable and manage assessment, planning, and implementation of IT service processes to optimize tactical and strategic IT asset use. This research raises the awareness of ITSM because of the obvious importance of this new emerging discipline.

ITSM is an emerging discipline focusing on a set of well-established processes. These processes conform to standards such as ISO/IEC 20000 and best practices such as ITIL. The goal of ITSM is to optimize IT services in order to satisfy business requirements and manage the IT infrastructure while better aligning IT with organizational objectives.

Acknowledgement: An earlier version of this article was presented at the ACM SIGMIS Computer Personnel Doctoral Consortium & Research Conference in St. Louis, Missouri, U.S., April 19–21, 2007.

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