BSM – Business Service Management

What does BSM stand for ?

Business service management (BSM) is a way to bridge between your organization’s view of applications and services with the IT operations’ view of infrastructure; it maps business services to the components used to deliver them. The promise is that this insight will provide visibility into IT from a business service standpoint and gives IT the ability to resolve issues faster, focus on key business services, and better align IT management processes with business needs.  In other words BSM is simply the package of whatever it takes to deliver the desired/required technology to the business community,   in a way that the business entities can understand, appreciate, absorb and benefit from that delivery.

Why do I care about BSM ?

IT organization are called to prioritize efforts and resources by working on what’s most important to the business, deliver more business services — better and faster — while reducing costs and risks.IT operations must enable their companies to work more efficiently and also drive revenue, even with flat or declining budgets. IT entities need a “business” approach to maximize effectiveness of IT activities.

BSM simplifies, standardizes, and automates IT processes so one can manage business services efficiently across their lifecycles, whether using self-owned infrastructure or leveraging cloud services. With BSM, the organization has the trusted information it needs, can prioritize work according to business-critical services, and can orchestrate workflows across core IT management functions.

BSM Benefits

Business views IT as a source of productivity and competitiveness. Business processes, from purchasing products to customer service to employee payroll, are accelerated through automation that IT services provide. Coupled with the right quality of service, well-managed business processes improve productivity and make the enterprise more competitive.

BSM in action

BSM needs a roadmap; BSM’s discipline comes in the forms of IT activities, technologies, metrics, processes and best practices creating meaningful context for the business user of technology. Maturity models define service management in terms of IT tasks, tools or processes, and the opportunity of correlating IT deliverables to business values.

“Business Maturity” model

IT operations should Know their companies’ business needs and align IT management processes with these needs. This is a prerequisite in determining how to get there The BSM Maturity Model’s objective is to help you identify both where you are and where you want to be, and then provide some clues as to how to close the gap.

The BSM “level” reflects the business objectives and how it aligned with IT activities. IT is aligned with the business when there is a match between business’s objectives and IT’s efforts to meet business needs.

BSM Maturity refers to the extent of the match between business operating needs/desires and IT’s understanding and efforts to meet those needs.

The appropriate level is completely dependent upon what constitutes the company’s business GOALS (see Figure 2). These are not IT goals, but business goals. From the business perspective, a midrange manufacturing company might optimally perform at the “Predictive” BSM level (see Figure 1), while an on-line retailer might require performance at the “Optimized” BSM level. However, it is also important to understand that enterprise cannot proceed to “Secure/Reliable Operations” (Predictive) until the basic technologies and people required for “Business Fundamentals” (Essential) are in place.

* Level 1 – Essential for Business Fundamentals

The primary business objective of Level 1 is to keep the business afloat by doing whatever is necessary (essentials) to stay alive. Companies in this level are usually high in energy from recognizing future business possibilities …or are in low gear as the business scales back to fundamentals for survival, recognizing that the opportunity for desirable revenue growth is in decline. Business operations are focused on the basics in finance, demand creation, sales incentives, product development, and customer service.

Statements that characterize alignment between IT and Business for Level 1 Companies include:

1. Senior management accepts IT’s view of operational requirements and approves minimal IT budget.
2. Business feels IT is responsive to reasonable technology requests, not expecting IT miracles.
3.  IT is organizationally under the domain of the finance executive who has a cost containment perspective.
4. Corporate culture dictates that business units relate to IT in a cordial, respective manner.

An “essential” IT organization frequently emphasizes “good enough” deliverables where a belief exists that success can be achieved with the 80% deliverables that come at 20% of the total cost …a required behavior within a cost adverse corporate culture. When the “essential” IT shop is not in alignment with their business counterparts, it is frequently struggling to survive in today’s fast-paced technology environment. New technologies, new assets, new applications, new data content, new compliance procedures are brought into the organization primarily at the demand of some individual or group outside of IT

* Level 2 – Predictive for Secure/Reliable Operations

The primary business objective of Level 2 companies is cost-effective, secure operations that ensure long term value to stockholders and employees. Companies in this level are frequently focused on financial and operational metrics driven by chief financial officers (CFO’s) and chief operating officers (COO’s) and are focused on maximizing stock value for purposes of corporate expansion, investment in R&D, quality of service to customers and profitable business practices with minimization of costs. IT contribution to regulatory compliance, system availability, fail safe operations, network continuity are well received.

Statements that characterize alignment between IT and Business for Level 2 Companies include:

1. IT contributes to significant reduction in production costs of existing products or services.
2. Two to three operating initiatives are appropriately funded so that the anticipated impact will be achieved.
3. Management requires regular updates regarding the operating results and economic impact of IT investment decisions to determine if targets have been met
4. Management creates tight performance feedback loops around a few "KPIs" that determine overall operational performance of the business.
5. Management uses IT effectively to track exception handling in key operating processes and to mobilize stakeholders to resolve exceptions in the near-term and to reduce exceptions longer-term.

A “predictive” BSM organization creates an emphasis on stable technologies that are consistently available and monitored to minimize the number of IT operational surprises. Technology review boards, standards, information protective policies and controlled access are in place to ensure changes to the computing environment will not negatively impact current business operations. Success has been achieved with IT management technologies associated with network management: event monitoring; governance, compliance and regulation (GRC); scheduled maintenance; ongoing, consistent asset management for infrastructure components; and change management processes integrated with release and incident management.

* Level 3 – Aligned for Business Value

The primary business objective of Level 3 companies is to maximize the profitability and security of Level 2,

but expand the company’s business value to ensure alignment with the customer’s needs by the company’s unique value proposition. Customer focused metrics are consistently linked to business value and financial performance. Due to the internal emphasis on acquiring and retaining profitable customers, companies in Level 3 are frequently featured in media articles and case studies that highlight the unique relationship of the company with the customer and the uniqueness of their product or service in creating superior customer satisfaction.

Statements that characterize alignment between IT and Business for Level 3 Companies include:

1. Senior management (IT and Business) have struck an appropriate balance to
2. provide adequate clarity for effective decision-making regarding future direction.
3. IT adds value creating services around existing product and services.
4. Core operating processes are appropriately balanced between the use of IT to reduce operating cost, to increase asset leverage and to generate additional growth.
5. The company requires clear and compelling business cases for major IT investment initiatives.
6. Management insists upon measurable operating results from IT investment initiatives within six to twelve months of the investment decision.

An “aligned” BSM organization has a history of success in automating business

process improvements, with achievement of near real-time visibility into business metrics. Particular emphasis is given to business applications that govern customer and channel relationships. Expertise in applications enablement is significant, and knowledge gained through performance monitoring of business applications (…be they supply chain, HR, cost management, customer relationships, revenue tracking, etc.) is used to align business expectations with IT deliverables. Agile development is leveraged to deliver, test and implement to customer requirements in shorter time frames. Aligned IT shops are close to a nirvana for most IT professionals who have labored with the massive change of the last 10-20 years in technology trends. Discussion is initiated by the IT managers with the business owners to ensure business satisfaction with existing technology solutions and to ferret out technology options that would further revenue, profit and customer satisfaction goals.

* Level 4 – Optimized for Competitive Differentiation

The primary business objective of Level 4 companies is product and service leadership through “nimble” competitive differentiation. Such businesses demand the ability to charge premium pricing through unique brand awareness in order to maximize market penetration. The critical importance of intuitive, compelling market positioning is universally understood by all business entities, with IT being elevated to the status of a legitimate business entity. Risks are assessed based on potential returns on investments …be they sales/channel investments, product investments or technology investments.

Statements that characterize alignment between IT and Business for Level 4 Companies include:

1. IT and Business leaders have clear view of how business needs to operate to create value in relevant markets.
2. IT enhances product or service economics to improve competitive differentiation.
3. Management effectively deploys IT to support operational initiatives both within the organization and across key business partners.
4. Senior leadership has effectively leveraged the capabilities of IT to fundamentally rethink the alignment of core operating processes of the company - supply chain management, customer relationship management and product innovation and commercialization.
5. Management effectively uses IT to access world-class capabilities from other companies and to focus its own organizational resources on the areas where it can achieve significant differentiation.

An “optimized” BSM organization” uses leading edge technologies to empower interactive behaviors between customers, partners and employees. The comprehensive yet agile approach to business growth enables early adoption of newer technologies that might advance aggressive financial goals or enable unique products and services, sometimes through use of proprietary IT solutions.

* Level 5 – Pervasive for Market Leadership

The primary business objective of Level 5 companies is to create a competitive advantage that can be sustained over a long period of time, and is usually driven by one-of-a-kind differentiator that cannot be reproduced by competitors and delivers a pervasive presence within the target market. Investment in technology research and development is focused on creating business differentiation and the use of leading edge, innovative technology to influence future business direction is consistently applied. Shareholder value significantly exceeds any method of assessing market value of the company.

Statements that characterize alignment between IT and Business for Level 5 Companies include:

1. Senior management agrees on the two to three near-term (six to twelve month) IT enabled operating initiatives that will be most important in accelerating movement toward the longer-term strategic direction of the company.
2. IT will reshape the company’s relevant markets in the next 5 to 10 years there is a constant emphasis on continuous improvement in all business functions, particularly IT.
3. There isn’t a need to define and justify BSM processes and products as IT is trusted to do the “right thing”.

Level 5 companies that are examples of market leadership are frequently identified through their potential to dominate core markets, and to use dominance in one area to compete more effectively in other market segments. Examples include Google’s use of search technology to dominate web content and enter new areas like email; Wal-Mart’s use of customized supply chain execution software; Microsoft’s integrated desktop functions; or Salesforce’s use of Software-as-a-Service delivery model to dominate the CRM market and enter new segments like Force.com for cloud computing. Each of these companies is enjoying a sustained competitive advantage and significant market expansion in which their market competitors have difficulty competing with in the long term. A “strategic” BSM organization has moved their IT organization from being a desirable resource to the business community to being an integrated, active part of the corporate business process. The IT executive is highly valued for their unique combination of business and technology prowess in upper management meetings. Strategic business discussions are held where IT is trusted to identify technology options that can expedite delivery of desirable business achievements. Normal business processes are correlated into IT services.

Principle for achieving effective BSM

BSM isn’t just about IT management software. It’s also about the practices and culture you instill in the IT organization. Culture is based on principles that guide the thinking and actions of organizations. Principles are not projects or one-off activities. Rather, they describe the habits that IT organizations should practice week in and week out. While many good IT organizations will practice these principles until they get them right, the best IT organizations will practice these principles until they never get them wrong.

A key principle will help you successfully achieve your IT objectives:

·         Understand what your organization needs from IT (line of business, priorities, SLA)

·         Deploy a platform to manage IT and break down silos

·         Manage the entire service lifecycle (plan, change, request, implement, manage)

·         Use automation to improve control, agility, and efficiency of change

·         Build a process-oriented culture (IT Infrastructure Library® -ITIL®)

·         Become a service advisor to the business

·         Make IT governance an outcome of culture and process

·         Be transparent & proactive

Business Service Management (BSM) plays a critical role in helping CIOs and their teams to meet these objectives. BSM is a comprehensive approach and unified platform for running IT that takes a lifecycle approach to managing business services. With BSM, you can address IT management challenges by simplifying, standardizing, automating, and integrating IT processes and functions. This approach uses a common data model with a shared definition of IT services, assets, and IT configurations.