Category Archives: IT service management

Separating Hype from Reality: Exploring AI in IT Service Management

IT service teams have been under continuous pressure about two matters for quite some time now. On the one hand, they must to do more with less. On the other, they need to deliver superior customer service and reduce downtime. We have seen that the complexity of these issues has also increased to a significant extent.

Artificial intelligence and machine learning are a helpful solution to all these issues. AI offers many opportunities to address these challenges. Besides, it helps improve the overall IT service management. It is worth observing how IT managers and directors can implement AI to improve their operations.

ITSM is improving but still needs work

We are continually witnessing the evolution of IT operations, how they adopt new technologies as they progress. We see organizations using more and more IT management systems and automation. IT management systems help to realize their strategies better. ITSM can not only develop and implement but also, manage and optimize IT domains.

ITSM can help to optimize both IT services and the end-user experience. There is an ever-growing business dependence on IT services. This is a testament to the fact that there is a need for constant improvement and innovation in IT operations. Above all, IT customers have imposed an irresistible necessity in the department.

We believe that the IT team still faces a great deal of pressure from its stakeholders. This is due to the fact that we face “delivering more with less” mentality. This has an underlying implication of the concept of “faster, cheaper, better – pick any two.” Fast-paced improvements in IT services or operations attract users along with greater flexibility.

Again, doing things cheaper is not about reducing operational costs and realizing efficiencies. Instead, it is necessary that we focus on value over cost and add business value wherever possible. The concept of being better can mean many things. It can mean improving IT service quality and including availability. It can also be about meeting the end-users’ high expectations of IT services. At the same time, it also means that we have to have a continuous drive to offer better support and customer service.

As faster, cheaper, and better are all equally important, we recommend a solution for ITSM that doesn’t force organizations to pick two of the three. Lucky for us, AI and automation in the present day make it possible for IT departments to prove all three qualities.

AI and automation will change the game.

When it comes to IT management, AI, machine reasoning, and automation are gaining rapid momentum. It’s not merely hype. We understand that AI’s well-deserved popularity is on the rise for many reasons. AI is already helping different business functions across many industries in several ways. AI can replace or augment existing manual processes. Moreover, automation adds “heavy thinking and lifting” capabilities to various assets.

We have observed a movement toward digital agents that use Natural Language Processing (NLP). They use machine reasoning to add intelligence to IT management tasks. This is possible due to the early application of machine learning, which includes concepts like pattern matching. Automation libraries, adding to this, will provide end-to-end automation. This will help to resolve up to 50 percent of repetitive manual tasks in an instant. Applying these innovations in the correct manner can help us in large ways. They allow IT, service employees, to focus instead on bigger and more important issues.

This will help employees to provide a 24/7 “consumer-like” IT services. This, in turn, helps to increase employee engagement and productivity. AI and automation increase the speed of execution and task or process adaptability. They are useful in reducing costs. AI provides efficient alternatives to human intervention and cuts errors caused by humans. Thus, we can see how AI provides better customer experience to the end-users. This then helps to increase customer satisfaction scores (CSAT).

Examining specific use cases of AI and automation

We have put forward some of the cases that provide demonstrations of how AI and automation will transform the field of ITSM below:

  • A digital agent with auto-resolution. Here, end-users interact with a digital agent through chat and voice conversations. The digital agent understands the intent of the conversation. The agent deciphers what the problem is. The agent, in this way, proceeds to auto-resolve up to 50 percent of end-user requests.
  • Self-serve resolution. It is now possible to put in place an automation solution that increases optimal end-user productivity. Moreover, AI enables us to do this in a cost-efficient way. It enables us to find pertinent information. This supplies the solution to our problems instead of filing tickets. These articles may also be served by digital agents on request.
  • Catch and auto-dispatch. We understand that we lose too much time waiting for the ticket to be assigned to an agent. There is an extra issue of fixing a mischaracterized ticket. AI enables intelligent ticket routing that optimizes ticket assignment. It considers factors like the priority of the request. It also considers the knowledge, availability, and past performance of IT agents. These factors are based on past data and continuous learning.
  • Advanced agent assist. A lot of “tribal knowledge” is generated in the operations team that is not formally captured. A knowledgebase should incorporate tribal customer knowledge. That makes available the right knowledge articles and information about similar past incidents to IT operations staff (L1, L2, L3). This goes a long way to reduce mean time to resolution (MTTR) while troubleshooting.

The time is now

Finally, it is high time for IT service teams to strive to meet the needs of demanding users on the rise. This is a time of increasing complexity. Fortunately for us, AI and automation are finding their way into the IT department to help save the day. AI is already helping organizations across industries with external customer support. Thus, IT teams should expect to be valuable for both customers and the IT teams themselves. AI will soon become a necessity for IT departments shouldering heavy loads. Organizations that want to stay ahead of the pack should begin their AI journey now.


Continuing our discussion about ITIL Service Strategy, lets start talking about Sourcing.  Sourcing is about analysing how to most effectively source and deploy the resources and capabilities required to deliver outcomes to customers. A sourcing decision is key in determining the best combination of suppliers (internal vs. external) to provide the most cost effective and efficient delivery of services.


I’ve spoken about outsourcing at some length in the past (here, here and here), but those posts were focused more on whether or not you should outsource.  Lets talk here about what outsourcing is and why some businesses utilize it.
In a nutshell Outsourcing is using another company/organization to perform services on your behalf for your customers.  Now you could outsource lots of different things – HR Functions for your own internal team, IT Support for your customers etc… – what makes the decision on whether or not you should outsource is the question of value.  Are you able to provide more value to your customers and shareholders by outsourcing vs. doing the activity in house?  Generally speaking this question of value has been driven by financial considerations, unfortunately, most financial analyses do not include all the costs related to sourcing options, leading to difficult relationships with service providers, involving unexpected costs and service issues.  

What should you outsource?

Generally speaking you should outsource anything that is non-critical to your business.  By focusing on your core strengths you can be more successful and removing tasks that are only peripherally related (if that) to your business will allow your organization to focus even more on the things that make you successful.
Once candidates for sourcing are identified, the following questions can be used to clarify matters: 
  • Do the candidate services improve the business’s resources and capabilities? 
  • How closely are the candidate services connected to the business’s competitive and strategic resources and capabilities?
  • Do the candidate services require extensive interactions between the service providers and the business’s competitive and strategic resources and capabilities?

Dependent upon the answers to those questions a decision needs to be made on whether or not to outsource some or all of a service.  If the responses uncover minimal dependencies and infrequent interactions between the sourced services and the business’s competitive and strategic positioning, then the candidates are strong contenders – conversely however if the answers show a strong relationship with the business’ competitive or strategic position, then care must be taken.

Sourcing vulnerabilities

When outsourcing – especially in the instances where outsourcing a key service, care must be taken to ensure that businesses do not get impacted negatively.  Some of the key vulnerabilities that might be experienced are:
  • Substitution:  ‘Why do I need the service provider when its supplier can offer the same services?’ The sourced vendor develops competing capabilities and replaces the sourcing organization
  • Disruption:  The sourced vendor has a direct impact on quality or reputation of the sourcing organization.  This is of significant concern for those organizations that have outsourced their support or engineering and design organizations.
  • Distinctiveness:  The sourced vendor is the source of distinctiveness for the sourcing organization. The sourcing organization then becomes particularly dependent on the continued development and success of the second organization  

One key concern/issue with outsourcing is responsibility.  Outsourcing does not mean that a service or its performance are no longer important. In most cases, it often means that the service is so important that it should be provided by a service provider that can do a better (or more cost-effective) job. Just because a service has been outsourced does not remove the responsibility from the vendor. While a 3rd party could be providing technical support on a product or service, the customer always has recourse to organization that they purchased the original product/service from..

Other types of Sourcing

While most people consider Outsourcing (& Insourcing) as the only two options, there are in actuality a variety of different ways that services can be sourced.
  • Insourcing – internal parts of the organization do the work.  Clearly defined departments with specific responsibilities.
  • Outsourcing – a 3rd party that specializes in a specific role, provides that service to an organization through a well defined plan with specific deliverable’s, KPIs and SLAs.
  • Partnership – a formal arrangement between 2 or more parties to work together on a specific role or responsibility.  The focus here tends to be on strategic partnerships that leverage critical expertise or market opportunities.
  • Co-sourcing or multi-sourcing – a mix of insourcing and outsourcing where a number of external organizations work together to design, develop, transition, maintain, operate and/or support a portion of a service.
  • Business process outsourcing (BPO) – a growing trend (especially among the larger multinationals) where an entire business function (customer service, technical support, accounting, HR etc…) is provided by a 3rd party.
There are a host of other common (Application Services, Knowledge Process Outsourcing (KPO), Cloud etc…) and uncommon ways of sourcing services, in fact the only real distinction is that businesses will do what makes sense for the business!


The Service Portfolio describes the commitments and investments made by a service provider to its customers across all market spaces.  In a nutshell, it states what the company is able to do and how it will do it while also accounting for previously agreed upon commitments.  The Service Portfolio also talks about new products and services as well as ongoing service improvement projects and other third-party services which are utilized by the business in providing their service.  The Service Portfolio is the defacto guide to what the business can and cannot do.

Ensuring that the Service Portfolio is accurate is one of the important roles of Service Portfolio Management (SPM).  This role ensures that new services are added only after funding has been approved an appropriate financial plan is in place for recovering costs and/or showing a profit.  This is sometimes called a rally point process or other similar names but in essence its a way of ensuring that the business always has a pipeline of new products and services available to meet current and future demand.  The service portfolio should have the right mix of services in the pipeline and catalog to secure the financial viability of the service provider since the service catalog is the only part of the portfolio that lists services that recover costs or earn profits.  You can find a lot more detail on Service Catalogs at either of the links provided below.

The service pipeline, similar to a sales pipeline, list perspective, and future projects and services – i.e. those products that are currently being considered or thought about, but are not yet available to the consumer.  The service pipeline is a future looking document that provides guidance to senior leaders and while elements of this might be made available to the customer (for future prospects generally), it is not normally published as that tends to give the competition too much of an insight into the organization’s future plans and strategies.

The service catalog, however, is different … this document is generally published (& publicized) quite widely as it is the single place where all information about products, prices, ordering and request processes are documented.  It defines and communicates the policies, guidelines, and accountability required for the service provider to deliver and support services to its customers. The service catalog details each service and shows the service components that make up each one. It also provides an overview of the assets, processes, and systems involved in each service.

While you might consider the service catalog to be just that … a catalog of services, it can also be used to identify gaps in services and linkages between services.  This information can be used to realize new services and products for future exploration and exploitation by the business.

Retiring Services

While the common thought is that the latest and greatest is always the best (look at the mobile phone market if you don’t believe me or understand what I’m saying) the service catalog should maintain a place for retired services also.  These are services that while no longer as “popular” (in call center and tech support worlds that would translate to “getting fewer calls”) still have value to the business for a variety of different reasons including:
  • The replacement service might not meet all requirements, and it is important to be able to fall back to the previous service 
  • There is a significant portion of the market made up of the planned to retire service which will still need future support and/or maintenance
  • When defining a new service, service portfolio management might discover that some functionality is available from a retired service. This might result in the service being reinstated as part of a new service 
  • There might be regulatory requirements to maintain archived data that can only be accessed using the previous service, in which case information is exported to a read-only database for future use
It is the job of Service Portfolio management to determine how long a service should remain in the Service portfolio – and while this is often determined based on time, in many cases other reasons are utilized to make this decision.

Service Portfolio Launch

Service portfolio management is guided from strategy management for IT services via strategic plans which provide details of new business opportunities and which services are required to fulfill those opportunities.  SPM is responsible for reviewing each opportunity and determining the required investment level and also whether or not the opportunity is achievable (regardless of the potential profit that “might” be realized).

The role of Improvement in determining a Portfolio

Continual Service Improvement (CSI) has some input into SPM also, specifically:

  • Opportunities to improve the performance or service level achievements of services in the portfolio
  • New opportunities within the current strategy, or gaps in the current portfolio of services
  • Opportunities for overall improvements in cost, mitigation of risks etc.  
By taking into account perceived deficiencies in the Service Portfolio, CSI is able to make recommendations for improvement, however, it is still the responsibility of SPM to evaluate these suggestions and determine whether or not the potential improvement warrants the investment.


The creation of a Service Portfolio follows several clearly defined (no pun intended) steps as shown in the diagram to the right.  The Define step talks about desired business outcomes and opportunities as well as what services are needed to realize these opportunities and the investment required.

Any new strategy or change to an existing strategy should be submitted to Service Portfolio Management. This will be in the form of strategic plans, identified market spaces and outcomes, priorities and policies. These will be used to identify specific service opportunities and the stakeholders that will be consulted in defining the services.

The role of SPM at this stage is to define the service based on the information provided:

  • The purpose of the service (what it must achieve)
  • The customers and consumers of the service
  • The major inputs and outputs of the service
  • High-level performance requirements (for example, when it needs to be available)
  • What business activity will it support, and is that activity stable or dynamic?
  • Does the service need to comply with (or enable the business to comply with) any regulatory or legal requirements?
  • Are there any standards that need to be applied to the service?
  • What are the actual business outcomes that the service will be supporting, and who is responsible for these outcomes?  
  • Are there any other stakeholders that need to be involved in defining and evaluating this service? 
  • The anticipated level of investments and returns. Although these will not be known, the customer will know what type of return they need, and how much they are prepared to spend to achieve it 
  • Are there any constraints that need to be considered (e.g. budget, resources)?
The role of SPM is to understand how all of the different components fit together and complement each other and also to define the boundaries of the service as well as the technical stakeholders.  Based on this analysis, the impact on the Service Portfolio can be determined and this will provide information on the following areas:

  • The current business outcomes 
  • Investment levels 
  • Service Level Agreements and contractual obligations 
  • Warranty levels 
  • Existing required Utility (for example, changing an existing service may benefit one customer, but it might negatively impact another) 
  • Is there another existing service that can be combined with this service to deliver the required Utility or Warranty? 
  • Patterns of business activity, and levels of demand on the service


The analysis of each service moving through the Service Portfolio Management process is performed by linking each one to the Service Strategy. For external service providers, this will be a linkage to the organization’s overall strategy. For internal service providers, it will mean linking to the IT strategy and the strategies of the other business units.