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10 Min Read

What’s the Difference Between ITSM, ESM, and DSM? Do You Need All Three?

November 10, 2020 / Tony Parsons

As technology continues to revolutionize how organizations operate, the need for more effective service management frameworks is growing. Every new IT and business service adds an extra layer of complexity — and new points of failure — that can complicate an already crowded management workload. To take full advantage of cloud transformation, data analytics, automation, and other innovations, organizations must carefully consider how on-demand services fit into their broader IT management strategies.

Published research makes it clear that senior business leaders believe digitalization is a top priority but have yet to reach scale for their digital initiatives. This gap between ambition and achievement can cause significant disruption for employees, business partners, and even customers. To prevent digital transformation projects from stalling or growing out of control, business leaders must incorporate proven IT and service management principles into their decision-making.

Of course, finding the right set of processes can be challenging, as each organization has its own unique needs, operational limitations and budgetary constraints. What’s more, more than 90% of companies use technology to modernize their existing business model vs. transforming it, notes Nigel Fenwick, vice president and principal analyst for Forrester. To remain competitive, enterprises must scale up their management capabilities in ways that enable end-to-end visibility and control over key IT assets, whether they’re running in the cloud or on private networks. That’s where ITSM, ESM and DSM come into play.

Distinguishing between service management frameworks

Although IT Service Management (ITSM), Enterprise Service Management (ESM) and Digital Service Management (DSM) are focused on improving organizations’ management capabilities — and are often used in tandem — they each serve different functions with digital enterprises. Here’s how to differentiate between them – and why you should employ them to help future-proof your IT services, so you gain a competitive advantage:

IT Service Management

IT Service Management (ITSM) refers to the activities organizations perform to develop, coordinate, deliver and control IT services that their employees and customers use. This includes all the processes needed to deploy these services and manage them long-term, enabling end-to-end oversight of key applications and data stores.

At their core, ITSM principles are built on the belief that business IT should be delivered as a service. However, unlike other management frameworks, ITSM has historically been concerned with IT-oriented departments and the technology itself. ITSM teams ensure an organization’s IT services and workplace technologies are efficient, cost-effective and performing reliably, helping reduce waste and enable new innovations. While many employees may see these professionals as standard tech support, modern ITSM goes well beyond resolving day-to-day IT issues.

When it comes to ITSM integration, ITIL (Information Technology Infrastructure Library) stands as the most widely accepted approach to aligning IT services with business needs. ITIL uses a systematic framework for IT service management that makes it easier to manage risk, cultivate strong customer relationships and build a stable, scalable IT environment. It also allows organizations to establish a baseline that can be used to plan, implement and track new digital transformation initiatives and their impact on other business technologies and workflows.

What’s the Difference Between ITSM, ESM, and DSM?

Enterprise Service Management

Enterprise Service Management (ESM) takes the core principles, processes and tools of ITSM and applies them to other departments within an organization, including HR, marketing and customer service. The growing presence of ESM strategies speak to the evolution of IT’s role in modern workplaces, and how technology is reshaping how employees across business units deliver value to customers.

The idea is that by applying ITSM principles to non-technical domains and workflows, organizations can quickly adapt to the needs and demands of stakeholders outside the IT department. By incorporating ESM into both front- and back-end processes, enterprises can drive change at the organizational level that will help improve performance, efficiency and service delivery.

Here are a few examples of how ESM can be applied in modern businesses:

  • Streamlining HR teams’ onboarding processes
  • Managing access permissions for facilities
  • Automating customer support tickets
  • Sending and tracking sales invoices

Automation also plays a key role in ESM environments, especially when non-IT departments receive a deluge of similar requests from customers and other stakeholders. By creating clear processes and policies for managing these requests through specific IT services, organizations can create more personalized customer experiences without sacrificing productivity. This can take the form of new service desks, change management processes and self-service features that would typically be helmed by IT staff. Under ESM, experienced professionals from every department can play a more active role in solving customer problems, optimizing workflows and ensuring IT services are effectively delivered.

Digital Service Management

Digital Service Management (DSM), a relatively new concept in the service management world, expands upon ITSM and ESM by moving organizations from a reactive posture to a predictive one. The needs of employees and customers are always changing, making it difficult to align IT services with an enterprise’s shifting business goals and strategies.

For example, COVID-19 restrictions forced more than 70% of polled employees to work from home on a temporary basis, according to research from PricewaterhouseCoopers. Under a standard ITSM framework, this rapid transition would have caused significant operational challenges and productivity issues. However, by incorporating DSM principles, organizations may have been able to stay one step ahead of the lockdown.

One way to conceptualize DSM is to treat it as the connective tissue that holds an organization’s IT services together, ensuring business technologies and customer-facing applications can be adapted to real-world conditions. It helps fill in the gaps between different IT solutions, bringing together siloed data stores into a seamless, big-picture view. When implemented successfully, DSM can allow for more accurate outage forecasting, efficient process automation and the ability to scale resources on demand by leveraging predictive analytics and anomaly detection capabilities.

DSM includes all the principles and strategies inherent in ITSM and ESM environments but adds an extra layer of visibility and control that digital enterprises need to remain competitive. This new framework aligns with the latest iteration of ITIL, ITIL 4, which emphasizes continuous improvement through IT service planning, implementation, benchmarking and Service Value System (SVS) alignment. By bringing DSM to the forefront, organizations can enhance the customer experience, leverage new value streams and incorporate the latest advancements into their management workflows — DevOps, cloud computing, machine learning and AIOPS to name a few.

No matter where you are on your digital transformation journey, the end result will only be as effective as the path you took and the choices that lie ahead. Modern IT services aren’t plug-and-play solutions, they require careful planning and oversight to deliver the capabilities you need to bring your business model into the 21st century, and beyond.