IT MANAGEMENT RESEARCH,

INDUSTRY ANALYSIS AND CONSULTING

Executive Summary

So, “What is Business Service Management?” The question has come up with increasing frequency over

the last five-to-six years, with differing answers depending upon who you ask. While Business Service

Management (BSM) has been somewhere in the IT management vernacular for at least five or six years,

its ascendance as a distinct and significant term in its own right has come about much more recently.

By obvious word association, BSM combines “business” and “service” – and so most literally sug-

gests some measure of alignment between business requirements and the Information Technology

Organization. But is BSM the management of business services strictly speaking or the management of IT

services as they enable business priorities? The overall consensus would skew towards the latter mean-

ing, and ENTERPRISE MANAGEMENT ASSOCIATES® (EMA™) research data and industry dia-

log support this. Still, it should be stressed that IT and business services are converging. Moreover, the

notion of business alignment, already perhaps a cliché, can in itself have many meanings and nuances

from financial optimization, to optimizing the direct business impact of service performance, to living

up to SLA commitments; and the truth is, the term BSM contains all three of the above ideas.

One might argue that BSM’s roots go back to Service Level Management (SLM). EMA research data

(BSM and SLM: Concepts in Transition, EMA, September 2005), confirms that for most IT managers

and professionals at that time, SLM and BSM were easily confused terms, and there was no clear

separation of the two. What has happened since is that the term SLM has become more specific in

meaning with its core in the management and optimization of services based on prior Service Level

Agreements (SLAs) and/or other less formal commitments. Whereas BSM has grown in meaning to

suggest a model for managing IT services and IT performance overall – including related processes

– for optimized business impact.

The BSM Model

This report will look at these relationships and EMA research data, as they have contributed to the

EMA BSM Model. The goal is to establish an industry-relevant basis for evaluating core capabilities,

architectural and functional, relevant to actualizing successful BSM implementations. This model can

help IT to evaluate solutions that typically span more than one conventional market, and it will also

be used by EMA in later reports, such as the BSM Radar Reports that will help IT adopters rank and

weigh the best solution set to fit their needs. The two BSM Radar Reports due out in 2010 are BSM:

Service Impact, looking at the service-management center of the BSM constellation, and BSM: Financial

Optimization, which will examine the intersection of business-aligned service management with finan-

cial and asset optimization.

ITIL v3 and BSM

In version three of the IT Infrastructure Library, specific attention is given to “Business Service

Management” in “Service Design.” ITIL’s focus is very much around metrics and mindset. As per

ITIL: “Business Service Management (BSM) is a strategy and an approach to enable IT components

to be linked to the goals of the business. This way the impact of technology on the business and how

business change may impact technology can both be predicted.” To do this ITIL stresses the value

of a “totally integrated service catalogue – including business units, processes and services, and their

relationships, and dependencies on IT services, technology and components…”

Business Service Management: A Model for Business-Aligned Service Management in the 21st Century

©2009 Enterprise Management Associates, Inc. All Rights Reserved.

Page 1

IT MANAGEMENT RESEARCH,

INDUSTRY ANALYSIS AND CONSULTING

For ITIL, BSM enables an organization to:

• Align IT service provisioning with business goals and objectives

• Prioritize all IT activities on business impact and urgency, ensuring critical business processes and

services receive the most attention

• Increase business productivity and profitability through the increased efficiency and effectiveness

of IT

• Support the requirements for corporate governance…

• Create competitive advantage…

• Improve service quality, customer satisfaction and end usr perception

• Ensure regulatory and legislative compliance

• Ensure appropriate levels of protection for all IT and information assets

• Ensure that IT services are aligned and continue to be aligned with changing business needs…

This is an excellent departure point for looking at BSM in market context, but, as is classic with ITIL,

it is of course a “departure point.” ITIL is fundamentally not about architecture, software or markets

– but about process and cultural readiness. To even have a detailed discussion about software re BSM

would be un-ITIL-like. But the fact is that many vendors and IT adopters have made linkages that pre-

date ITIL v3 and will continue to do so. Moreover, ITIL’s roots are still weak in the area of operations,

and in particular in areas of automation. For example, real-world business and IT interdependencies

are becoming so complex and dynamic that adjustments to support all of the above bullets could be

viewed in terms of real-time automated actions just as they could be viewed in terms of carefully

planned strategies, effective ongoing dialogs, documented metrics, and cultural change.

However, ITIL’s “Service Design” focus does expose one area of critical interest to EMA that is

relevant to BSM. Within BSM overall, and in particular within that sub-market, the question of value

needs to be addressed, and this is indeed a discussion requiring some radical changes in the way

traditional IT and business executives think. As IT services increasingly become business shaping,

business redefining, and even business creating, casual assumptions about assigning value simply based

on presumed need are no longer acceptable. But how to even begin to have a conversation about value

has less to do with traditional metrics for quality and cost, or traditional service usage monitoring, but

with active qualitative and quantitative contributions in terms of business transformation. It is a far

more creative and visionary discussion than most in IT or the business world are prepared to have, and

one for which, even given the attention given to “Service Design” in ITIL v3, the vocabulary is still

not yet largely in place. As it evolves, it will most likely take on a heavily verticalized flavor – as entire

industry sectors leverage IT services to redefine themselves for competitive advantage.

Business Service Management: A Model for Business-Aligned Service Management in the 21st Century

©2009 Enterprise Management Associates, Inc. All Rights Reserved.

Page 2