Do the people within your organization understand how value is delivered? Are your business processes clearly defined and data-driven? Can your IT organization enable and support your organization’s digital transformation? Is there clarity on the end-to-end value chains within your organization – or is your organization operating in silos? Does everyone understand who is the customer?
Digital transformation is causing business to re-think how they leverage and exploit technology, based on an outside-in, “digital first” approach. However, for many companies, digital transformation efforts are exposing gaps within the enterprise. There is little clarity about how the various business functions work together to deliver a valuable customer experience. Operational processes are not well-defined. Company culture exhibits itself in the form of siloed departments. If a company is to have success with digital transformation, these gaps must be addressed.
To address these gaps, some companies have embarked on an enterprise service management (ESM) initiative. Is ESM the way to digital transformation?
What is Digital Transformation?
Dion Hinchcliffe described digital transformation as “the rethinking, the reimagining of a business in more digital terms…It’s fundamentally looking at your delivery channels, your operations, your marketing and sales and customer care…and your very business models and rethinking how that might be packaged up as new digital products and services, all delivered using digital first as the way that we look about how the business gets done”. 1
Most importantly, “digital transformation“ is not the same as “digitization”. With digitization, technology is used to automate existing ways of doing existing activities. Digital transformation results in completely new ways of doing existing activities, as well as the discovery and use of ways to do new activities.
What is Enterprise Service Management?
ESM is the extension of IT Service Management (ITSM) processes and tools across the enterprise. “ESM” is a term generally used by IT people that know and understand ITSM.2 Unfortunately, many organizations have under-envisioned ESM as simply providing a service portal for making requests of departments across the enterprise – not just IT. I’d call this “ESM 1.0” – the digitalization of existing processes. ESM 1.0 does little to break down organizational silos or deliver end-to-end value; it simply facilitates the execution of activities. The potential of ESM is what I would call “ESM 2.0”.
ESM 2.0 is all about enabling and delivering business value chains in the form of services. This approach recognizes that to actually deliver value requires a set of coordinated efforts from across the enterprise. A simplified example might be a service to onboard a new employee. This would require HR to properly register the individual’s employment and conduct new employee orientation, Facilities to setup the individual’s workspace, and IT to enable access to systems and applications. The outcome of these efforts produce value – with all of the steps done in the proper sequence, the new employee is enabled to perform her job duties.
But ESM 2.0 is not Digital Transformation
While the use of ITSM concepts outside of IT may be innovative – perhaps even transformational within a business – ESM 2.0 is not the same as digital transformation. ESM 2.0 (done well) would result in well-defined operational processes, and better focus on delivering end-to-end value. One could even argue that ESM 2.0 would deliver clear integration of data and processes.
But ESM 2.0 is not digital transformation. The difference? ESM 2.0, like ITSM, is still internally focused. Digital transformation is externally focused. Every CEO knows this, and as a result, when most enterprises talking about digital transformation, they are looking outwards.3
As Jon Hall points out in his Medium.com article, “On Digital Transformation, ITSM, and DevOps. Oh, and Pizza”, “history provides numerous examples of organizations which got very good at optimizing what they did, only to find that the world had moved on without them. While IT organizations have great opportunities to add huge value on an ongoing basis, we cannot assume that digital transformation will be best served by ‘ITSM [or ESM] done better’”.4
Having said that, I think that ESM 2.0 can enable digital transformation.
Six ways ESM 2.0 enables Digital Transformation
Hall points out in his article that enterprise IT shops have focused inwardly on internal employees as “the customer”. As a result, most enterprise IT is built on models and processes that support this concept.5 Typical ITSM processes are a great illustration of this inward focus.
Digital transformation changes that focus, going from the ‘inside-out’ to the ‘outside-in”. ESM 2.0 must have the same focus. ESM 2.0 must be driven from the perspective that the customer is external to the organization. Here are six things that ESM 2.0 must do to enable digital transformation:
- Clarify services – ESM 2.0 will force the enterprise to get crystal clear on its internal services; not just services delivered from IT to the business, but services delivered across the business. As a result, organizations will be more effective in supporting enterprise business requirements.
- Identify improvement opportunities – As enterprise value-chains and processes are identified, inefficiencies and bottlenecks will be exposed. ESM 2.0 will promote better operational efficiencies and interactions.
- Improve control and governance – By defining enterprise services and processes, roles and responsibilities will be defined, measures will be defined and produced, and processes and procedures will be formally documented and agreed. As a result, enterprise-level – not departmental – governance and controls can be established.
- Breakdown internal silos – ESM 2.0 will force organizations to recognize and remove the silos that currently exist within their business. The fact is that no one person or group within an organization can be successful without interfacing with the others.
- Automate – Once the end-to-end business processes are identified, defined, and documented, there will be opportunities to automate the procedures supporting those processes. Automation means speed, responsiveness, consistency, and accuracy – all satisfiers to the digital customer.
- Bring focus to the customer experience – The ultimate outcome of an organization’s efforts is delivered to the customer. ESM 2.0 activities and processes must deliver an outstanding customer experience.
With a focus on enabling a great customer experience, ESM 2.0 can bring clarity to operational processes, solidify the customer value-chain, and breakdown internal silos. If ESM 2.0 accomplishes the six things I listed above, your organization will be enabled for digital transformation.
1 Hinchcliffe, Dion. “What is Digital Transformation?”. CXOTalk.com. 8/29/2015. Web. Retrieved 5/30/2017.
2 Rance, Stuart. “Enterprise Service Management is not just for Service Requests”. SysAid.com 2/7/2017. Web. Retrieved 5/30/2017.
3 Hall, Jon. “On Digital Transformation, ITSM, and Devops. Oh, and Pizza”. Medium.com 4/27/2017. Web. Retrieved 5/30/2017.
About the Author:
Institute Fellow Alumni
Doug Tedder is the principal of Tedder Consulting LLC. Doug is an accomplished and recognized leader who is equally adept in interactions from senior leadership to day-to-day practitioners. His attention to detail, industry knowledge, emotional intelligence, and the ability to “see the big picture” and make it actionable has resulted in a track record of success in helping IT organizations transform into business partners in value delivery.
Doug holds numerous industry certifications in disciplines ranging from ITIL, COBIT, Lean IT, and Organizational Change Management. An active volunteer within the IT Service Management community, Doug is a frequent speaker and contributor at local industry user group meetings, webinars, and national conventions. Doug is a member, former president, and current board member for itSMF USA as well a member of HDI.