1 Introduction

The growing reliance of business on information technology (IT) has led to the development of the IT service management (ITSM) solutions market aimed at delivering IT management capabilities to help organizations to continually optimize the design, delivery, support, use and governance of IT to cut costs, increase productivity and efficiency, and improve employee and customer satisfaction.

ITSM is based on the concept of IT delivered as a service to meet business needs. ITSM is essentially about improving business performance through better IT services and delivery or enabling business to get the most value from IT investments. ITSM activities are typically divided into several IT management capabilities or business processes that follow procedures directed by organizational policies.

At the outset, it would be useful to define an “IT service” in the context of ITSM. While ITIL 4 defines a service as: “A means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks,” it is more useful to think of an IT service in terms of an “IT resource” that is provided and consumed to achieve business outcomes.

In other words, an IT service is any piece of IT that enables users to find, access, view, update, report, and exchange data to achieve the outcome of meeting business needs and potentially improving the satisfaction of service users through improved ease of use, efficiency, and productivity. IT services include laptops, applications, email, managed desktop services, and shared IT resources such as printers.

In the context of ITSM, an IT service provider can be an internal IT department or a third-party supplier, while an IT service customer is any consumer of those services, such as employees and partners or anyone who interacts with an organization using IT such as consumers or customers.

The ITIL 4 definition of a service introduces the term “co-creation” to highlight that value is created through the collaboration of service provider and consumer, and that both parties benefit. The consumer gets the means to achieve a desired outcome, while the service provider gets the opportunity to improve the service through a better understanding of customer needs and even develop new services.

In the digital era, the demand for ITSM is set to grow as organizations across all industry sectors pursue digital transformation projects to achieve the goals of reduced cost and increased efficiency, productivity, and user/customer satisfaction. This drive to digital transformation and the growing need to support working from home in the post-Covid era will increase the reliance of businesses on IT services. This, in turn, increases the need to ensure those services are well-managed and secure.

ITSM solutions focus on IT service operation and improvement. ITSM aims to increase the efficiency and benefits of IT services. ITSM solutions, therefore, typically include all the tools necessary to create, deploy, manage, optimize, retire, and support an IT service throughout its lifecycle.

The most comprehensive ITSM solutions also include tools to support things like:

• Identification and management of BYOD/Shadow IT
• Real-time and predictive analytics

Measuring the right metrics is key to any successful management program. In the context of ITSM, there are five key metrics that ITSM solutions should enable organizations to measure and track. These are:

• Customer Satisfaction (CSAT)
• First-contact resolution (FCR) [% of contacts resolved on first contact]
• First-level resolution (FLR) [% of contacts resolved without escalation]
• Cost per ticket.
• Mean time to resolution (MTTR)

There are several frameworks that organizations can use to set an ITSM strategy, create a design, manage change, handle service operation and management, and make continual improvements to
ensure that the right ITSM processes, technology, and skills are in place to enable organizations to meet their business goals.

Popular frameworks that provide guidance on and best practices in delivering ITSM include:

• ITIL
• COBIT
• Microsoft Operations Framework (MOF)
• Six Sigma
• ISO 20000
• TOGAF (The Open Group Architecture Framework).

The products covered by this report range from supporting none of these frameworks to all of them, with ITIL being the most widely supported framework.

This Leadership Compass is aimed at providing insight into the ITSM market. The key capabilities that make a comprehensive ITSM solution are explained, and the different approaches that vendors take to providing a solution are evaluated. The leading vendors are identified according to Product Leadership, Innovation Leadership, and Market Leadership, each with detailed profiles and assessments.

1.1 Highlights

• The ITSM market continues to evolve and grow driven by accelerated digital transformation in the post-Covid era.
• ITSM is essential to business as a strategic approach to design, deliver, manage, and improve the way businesses use information technology.
• Businesses are looking to ITSM as a way of ensuring better alignment between IT and the business to cut costs and boost efficiencies to remain competitive.
• Many ITSM vendors are shifting to a broader Enterprise Service Management (ESM) approach to support collaboration and unified management across all service departments.
• Automation is a key trend in ITSM to improve services by automating tasks and workflows, and reduce tickets by automating actions to resolve issues before tickets are raised.
• Leading ITSM vendors are increasingly focusing on supporting interoperability with other products and services through the provision of secure APIs.
• Overall leading vendors in the ITSM market are ServiceNow and BMC Software, followed by IBM, Matrix42 and Micro Focus.
• ServiceNow and BMC Software are consistently the top scoring vendors in terms of Product Leadership, Innovation Leadership, and Market Leadership.
• ServiceNow, BMC, and IBM are Market Champions that are performing above expectations for their current position in product leadership.
• In the ITSM market, there is a strong correlation between innovation and product leadership, with ServiceNow the top Technology Leader, followed by BMC, Matrix42, Alemba, and IBM.