Enterprise Service Management (ESM): How to Build High-Value Services on Existing ITSM Investments

IT & DATA MANAGEMENT RESEARCH,
INDUSTRY ANALYSIS & CONSULTING
Enterprise Service Management (ESM):
How to build high-value services on existing ITSM investments
Rolf Frydenberg
CEO
Manag-e
Valerie O’Connell
Research Director, IT Service and Business Management
Enterprise Management Associates

INDUSTRY ANALYSIS & CONSULTING© 2019 Enterprise Management Associates, Inc.
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Featured Speakers
Slide 3 © 2019 Enterprise Management Associates, Inc.
Valerie O’Connell, Research Director, EMA
Valerie came to EMA with decades of senior-level experience in the effective marketing
of technology. From strategic positioning with practical go-to-market planning and
compelling messaging, Valerie works with her clients to drive business. She excels at
making the value proposition of complex products clear in crowded markets, and at
equipping sales forces to strike with precision.
Rolf Frydenberg, CEO, Manag-E
Rolf has worked in the IT industry for over 30 years, with roles in management, sales,
marketing, consulting and technical (software). He is currently CEO and chairman of
Manag-E, in addition to his role as Partner and responsible for sales and deliveries to a
part of Manag-E’s customer portfolio.

INDUSTRY ANALYSIS & CONSULTINGSlide 4 © 2019 Enterprise Management Associates, Inc.
ESM and ITSM: EMA Research Findings

Enterprise service management (ESM) –
the use of IT service delivery approaches and platforms for
delivery of non-IT services.
From simple request/response through complex process automations and workflows…
Self-service catalog to the services equivalent of ERP

If ESM is the use of IT service delivery approaches and platforms for delivery
of non-IT services…
then it begins with ITSM
ITSM is growing in importance, budget, and reach

400 IT leaders 50% North America 25% Asia 25% EMEA
 34% C-level (CEO, CFO, CIO, CISO, Chief Data Officer)
 34% IT VP, director, or manager
 25% IT staff
 7% non-IT (but each had to qualify as ITSM stakeholders to participate)
Balanced mix of company sizes as defined by number of employees
 32% large enterprise (above 10,000 employees)
 34% mid-tier (2,500-10,000 employees)
 34% small (500-2,500 employees)
Note: # of help desk analysts was a more consistent predictor of behavior than company size
Distribution of ages
 iGen 7.5% Millennials 46% GenX 36.5% Boomers 10.25%
Note: screening for a response pool with advanced AI and automation
“Automation, AI, and Analytics: Reinventing ITSM” Q2 2019

ITSM is a vital function: 81% see some level of growth (only 2% decline)
How do you view the future of ITSM in your organization over the next three years? "I see ITSM as…"
55%
31%
12%
2%
0%
0% 10% 20% 30% 40% 50% 60%
Substantially growing in importance
Somewhat growing in importance
Staying at the same level of importance
Declining in importance
Potentially going away as a separate organization
Column %Note: This finding is consistent with ongoing EMA research
Responses were even across company size
74% of IT executives answered ‘substantially’
Most organizations report ITSM budget increases between
10% and as much as 75%
*majority between 10% and 50%
*10% staying the same
* a handful reported a small decrease
Increasing diversity of stakeholders
Sample Size = 400

87% have ESM at some level of deployment; only 5% have no plans
How long have ESM or business process workflows been deployed
from your ITSM platform or team?
46%
41%
8%
5%
0% 10% 20% 30% 40% 50%
We have been fully deployed for more
than one year
ESM is relatively new to our ITSM team
(in deployment now or deployed less
than one year)
We are not currently doing ESM, but plan
to in the near future
We have no plans for ESM
Column %
Sample Size = 400

ESM maturity is a differentiator across most topics covered
 Significant divide between mature deployments (a year+) and new (in deployment – a year)
 Mature were more advanced in all aspects covered including automation, AI/analytics, use cases,
ITSM technologies, and success in those initiatives
Respondent count by maturity
o 182 deployed for a year or more (mature)
o 164 relatively new (new)
o 34 those with plans or no plans
 Industries leading in ESM maturity: Finance 64% Tech software 54%
© 2019 Enterprise Management Associates, Inc.10

Automation adoption and ESM maturity
To what degree is combining AI/analytics and automation a priority for 2019?
ESM mature ESM new ESM plan
Extremely high 61% 24% 12%
High 33% 63% 44%
2nd-tier priority 7% 13% 38%
Not a priority 0% 0.61% 6%
mature new plan
High 70% 37% 3%
Medium 28% 60% 76%
Low 2% 3% 21%
Degree of automation allowed in organization

Training, data center utilities, and HR lead a close pack of ESM initiatives
Which of the following ESM areas does your company's ITSM team currently support or have plans for?
31%
30%
29%
28%
27%
27%
27%
24%
23%
22%
22%
20%
20%
17%
15%
1%
0% 5% 10% 15% 20% 25% 30% 35%
Training
Data center utilities and power
Human resources
Business continuity
Financial services
Supply chain management
Sales/manufacturing
Marketing
Physical security
Employee safety
Building and facilities
Enterprise procurement/purchasing
Transportation/fleet management
Other vertically-specific infrastructure…
Legal
None - we do not currently support…
Sample Size = 380, Valid Cases = 380, Total Mentions = 1,577
The areas selected differed in
predictable ways by industry. For
example, manufacturing chose
sales/manufacturing 44% (vs. 27%
average), 33% physical security, 54%
supply chain, and 44% procurement
1 area 10%
2-3 areas 43%
4+ areas 45%
Company size independent

ESM is both transformational and evolutional
Evolutionary next step
• Existing ITSM platforms
• Existing processes, people, policies
• ITSM teams’ expertise
• ITSM’s widening breadth
• Non-IT functions are a demanding,
tech-savvy base of stakeholders
Transformational initiative
• Drive innovative non-IT services
• Doing new things
• Doing old things in new ways
• Cutting-edge ideas/technologies
• Visible alignment of IT and business
• Positive impact on IT/business relationship

38% viewed the impact of ESM as “transformational”
To date, what has the impact of supporting ESM been on ITSM and IT in terms of IT's relationship to the business?
38%
57%
48%
31%
14%
1%
0% 10% 20% 30% 40% 50% 60%
Transformational in enhancing IT's
position within the business
Significant in enhancing IT's position
within the business
Meaningful in enhancing IT's position
within the business
Modest in enhancing IT's position within
the business
Nonexistent: We have seen no impact on
IT's standing within the business from
ESM
Negative: It has created friction between
IT and the business
% Valid Cases (Mentions/Valid Cases)
Sample Size = 380, Valid Cases = 380, Total Mentions = 718

Top two ESM drivers were employee/customer satisfaction and digital
transformation – but evolution is the leader when combined
What were the drivers for your ITSM team's move to support ESM?
39%
38%
37%
36%
36%
34%
33%
31%
30%
0%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Employee/customer satisfaction
Digital transformation
Natural progression from existing capabilities
Strong preexisting IT investments in AI and analytics
Cost savings
Strong preexisting IT investments in automation
Improved transparency and accountability
Reduced exposure to downtime and risk
Demand from business leaders
Other
Sample Size = 380, Valid Cases = 380, Total Mentions = 1,195

Employee/customer satisfaction led as the primary driver by 1%, followed by
an apparent three-way tie – evolution is still the winner
What was the single most important driver for your ITSM team's move to support ESM?
14%
13%
13%
13%
12%
11%
10%
7%
6%
0%
0% 2% 4% 6% 8% 10% 12% 14% 16%
Employee/customer satisfaction
Natural progression from existing…
Strong preexisting IT investments in AI…
Digital transformation
Cost savings
Strong preexisting IT investments in…
Improved transparency and…
Demand from business leaders
Reduced exposure to downtime and risk
Other
Column %
Sample Size = 380

The executive suite leads the drive to ESM, followed by the ITSM team
What was the most dominant organizational driver for your ITSM team's move to support
ESM?
40%
31%
25%
4%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Our ITSM team drove ESM
We had executive-level pressure in IT to
move to ESM
We had strong enterprise executive
pressure to move to ESM
We had strong enterprise grassroots
pressure to move to ESM
Column %
Sample Size = 380

• More than half of the IT executives chose “transformational” as the impact of ESM
on the business/IT relationship
• ESM is a direct boost to operational and cost effectiveness
• Blurred boundaries of cross-functional workflows require higher levels of
organizational oversight and budgetary authority
• Game-changing potential of combining AI, analytics, and automation in ESM has
executive-level business implications
18 © 2019 Enterprise Management Associates, Inc.
Why ESM is an executive play (and it is)

Increased ITSM budget, followed by improved customer satisfaction (CSAT), led
as measurable impacts from ESM initiatives
What were the measurable impacts resulting from your ESM initiative?
44%
41%
38%
37%
37%
32%
29%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Increased budget for ITSM
Improved customer satisfaction (CSAT)
Improved employee satisfaction (ESAT)
Reduced downtime for enterprise services
Improved SLA performance for enterprise services
Improved customer loyalty (net promoter score)
Increased headcount for ITSM
Sample Size = 380, Valid Cases = 380, Total Mentions = 980

• Platform: ITSM processes tickets/requests, but functional areas respond/fulfill
• Communication between IT and stakeholders
• User self-service through a portal
• Chargeback: ITSM support is done on a chargeback basis
• Unique SLAs and workflows tracked in ITSM, but reported separately
• ITSM solution provider (vendor) leveraged outside of IT
How ITSM organizations facilitate ESM

Organizational
 Difficulty of enterprise/IT dialogue
 Had to reorganize to meet enterprise demands
 Needed more executive involvement
Product
 Workflow technology didn’t map to enterprise needs
 Needed more customization than anticipated
Resources
 Lack of resources to keep up with enterprise demand
 Technology costs
Implementation
 We’re perceived as a cure-all
 Inconsistent, incomplete, inaccurate data
 Lack of clear implementation path, lack of metrics
Obstacles for ITSM team’s move to ESM

Most frequent recommendations can be grouped into three categories
• Organization
• Make sure that the executive suite is on board
• Work closely with stakeholders on workflows, outcomes, and expectations, and socialize your investments and directions
 Be prepared for changes in how your team works; understand how process-related initiatives impact organizational structure
• Use case
• Assess what’s needed: plan on use case priorities first, then go ahead with your investments
 Evaluate technologies and base your due diligence on your unique environment and needs
• Put metrics in place to measure your team’s effectiveness in using new solutions
• Implementation
• Make sure that you have adequate skillsets before going forward
• Ensure that your vendor/supplier is available to provide you with expert guidance
• Put metrics in place to measure and quantify your progress
© 2019 Enterprise Management Associates,
Inc.22

EMA recommendations
• Build ESM on a stable and mature basis of ITSM platforms and processes.
• Make certain that IT has its house in order.
 Let stakeholders own their processes, including all user-facing content.
 Customization should be the court of last resort.
• Configuration is necessary, but customization is a complication that should be avoided where possible.
• Take small, reasonable, and measurable steps to begin.
• Start with a few functions, adding on capabilities and groups as quickly as users can advance.
• Measure and publicize results.
• Always be on the lookout for ways to expand value and improve services.
• Leverage the business service partnership into an elevated place for IT at the corporate “table.”
• Natural result – leverage it
Success breeds success.

24
Micro Focus Service Management Automation X
(SMAX)
Analytics and machine
learning
• Built from the ground up to take
advantage
• Automation is a natural ESM strength
Entirely codeless
configuration
• Key to ESM viability and flexibility
ITSM, ITAM, and ESM in one
solution
• Flexible implementations
Rolf Frydenberg, CEO of Manag-e

Reusing ITSM Solutions for
ESM processes
Rolf Frydenberg
CEO, Manag-E Nordic AS

Request Management: All «request handling is
almost identical…
Whether the request relates to purchasing, IT-issues, application for
leave, or «anything» else, most requests have the same overall
workflow:ANEEDARISES
SEARCH:
SOLUTION /
INFORMATION
REQUEST
REQUEST
MANAGEMENT
NEEDIS
FULFILLED
• A lot of time is spent in the search phase, your own time as well as
the time of others (ask a colleague!)
• When search does not provide a solution, only then is a request
made to the (relevant) internal service provider – often by email

ESM Platform Capabilities
 Enables many-to-many relationships between Consumers and (internal) Service Providers
 Self service with personalized Knowledge Management
 “Codeless" support for “on-the-fly” configuration of new digital services, processes and
integrations
 Integration to automation capabilities including RPA
 Trend toward user-centricity will only intensify
 Consumer-like digital experience that end users expect today, including machine learning, AI,
analytics, intelligent automation, and personalization
 A good balance of best-in-class, out-of-the-box functionality and the capability to further
configure and develop features as needed.

Automating Request to Fulfill (R2F – IT4IT)
Requires a shared services architecture comprising:
 Rapid application development (RAD) and configuration features often referred to as “codeless”
or "low-code" support
 Business rules engine, approvals, reporting and auditing
 Task and process automation, flow orchestration, auto fulfillment
 Smart self-service, Knowledge Management, social collaboration, virtual agents, bots and
ChatOps
 Embedded intelligence: Big Data Analytics (structured and unstructured data, internal and
external), Machine Learning, Natural Language Processing, Artificial Intelligence
 Automatic discovery, configuration management, asset management
 Reporting, business value dashboards.

Reusing ITSM (Service Desk) Solutions
ITSM Solution Layers
 Portal (or App)
 People who handle requests
 Processes that are followed
 Application software
 Infrastructure
Reusability for ESM
 The same Portal/App
 Other people – especially with
sensitive data!
 A subset of the same processes
 The same software
 The same infrastructure

What is needed: Multi «everything», in one digital
customer portal
 Multichannel (social media, email, web, …)
 Multisupplier (internal and external services)
 Multiprocess (fra procurement and accounting to HR and IT)
 Multidata (customers, suppliers, assets, product catalogs)
Digital customer portal
Smart Service Desk

Whatever the department, we all have requests
that must be managed

Wouldn’t it be easier if one system could handle all
requests?

Automation – because you need to do the same
again and again
 In many jobs you perform the same function – the exact same set of
tasks – many times a day
 You look something up in one system, find more data in another
system, complete a form in a third place and finally send an email to
tell somebody what you’ve done
 These frquent tasks, that always consist of the same steps (but where
the data varies!), are typical candidates for automatic action by a
«robot»
 RPA – Robotic Process Automation – is the software that actually
executes such tasks, in place of a human operator

RPA «flows» can be started by a user, or
automatically by a request or a task
 In ordeer to implement RPA you must define a sequence of
operations that are triggered using specific «input data» about a
request/case, an order or something else
 RPA executes in the background (unseen), even though it accesse
GUIs as well as APIs in order to do its job
 Any function that a person can perform using an application (be it
Windows, web, or some other GUI) can be a part of an RPA flow, the
same applies to communication between programs (API calls),
database queries etc.

Predefined forms and service definitions are
created in a service catalog
 Most non-IT departments have numerous types of requests and
services that they handle on behalf og the business – for employees
and management
 By defining an offering (the form that defines the necessary data
elements) with an attached workflow in the service catalog,
efficiency and automation is possible
 It’s easy to separate out the data and services for different
departments through «data domains» so that personal or
confidential data is protected
 By simply searching in the user portal, the user can easily find service
definitions or konwledge to speed up the request process

ESM Examples
 Customer service – handling high volume of requests, some that are quick and easy to
reply to while others require research
 HR – handling requests for leave, changes to health plans, training and staffing, salary
enquiries, and on-boarding new employees
 Accounting and finance – approving expenses, sending invoices, tracking payments
 Legal – reviewing and approving documents, requests for standard contracts/forms, and
certifying documents
 Purchasing – processing purchase orders, building quotes, and authorizing discounts and
price adjustments
 Security – on-boarding new employees and performing security checks and audits
 Administration – requesting office supplies, managing printing and courier services,
tracking meeting rooms
 Facilities/building services – managing requests for repairs, office relocations, furniture
needs

Self-service for everybody!
 Using one common portal as the first level of user access, with
Search as the standard, getting started is very easy
 Direct access to a comprehensive knowledge base (including
handbooks and other regulations and guidelines) makes it easy to
find information
 You can quickly fill out the relevant form and initiate a request; the
system ensures the correct routeing, and that no requests are
«forgotten» or left with employees who are on holiday, leave of
absence, or simply have too many tasks on their plate!

SMAX is available globally
 SMAX can be installed on-premise, on public cloud or private cloud
 There are SMAX partners in many geographies who offer «SMAX as a
Service»
 SMAX is very simply licensed:
 End users do not require a license (nor do approvers)
 Agents need either a «named license» or a «concurrent license»
 In our experience, 3+ agents can share a concurrent license; up to 6 if
operating 24x7 or in multiple time zones

INDUSTRY ANALYSIS & CONSULTING39 © 2019 Enterprise Management Associates
Learn More About Service Management Automation X
Read the analyst report at
www.microfocus.com/smax

Enterprise Service Management (ESM): How to Build High-Value Services on Existing ITSM Investments

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