IT Service Management insights from across the globePart 1: Maturity level, budgets and regional differences
- Introduction: an urgent call to action for ITSM professionals
- Is there a difference in maturity level by region?
- Is there a difference in maturity level by industry?
- Is there a difference in maturity level by company size?
- Does maturity affect budget?
- Does budget differ by industry?
- Does budget differ by region?
- How frequently should you review your ITSM solution?
- Research background
- Recommended reading
- About us
Introduction: an urgent call to action for ITSM professionals
The service management market is mature, but the constant is innovation. At Axios Systems, we embrace our duty to innovate, which means giving you the guidance and tools to allow your organization to flourish and be an industry leader.
We constantly monitor best practice and seek to identify and address the real challenges faced by IT Service Management (ITSM) professionals. As such, the thought leadership we offer must translate into tangible and usable benefits to the market. We are passionate about being at the forefront of innovation, which is why we bring you this exclusive insight into the state of service management as it corresponds with Infrastructure & Operations (I&O) maturity, budget levels and regional differences.
But it’s not just about offering you statistics. We’re here to help you align your organization’s current challenges with the untapped potential of a more robust service management framework, one which is tailored exclusively to your needs, your objectives, your reputation. And ultimately, your ability to remain competitive and relevant. So, here’s the situation:
Our research shows that there are regional differences in I&O maturity levels, and even across industries. If you’re in the camp of enterprises that fall on the lower end of the maturity model, you’d better take note. The longer you wait to address the delta widening between your organization and others in your field, the harder it will become to implement a corrective course of action. This has huge implications for the status of your IT department. It also puts the competitive advantage of the wider business into jeopardy.
Let’s take a step back. Regardless of where your organization sits along the IT operations maturity scale, we’re each in a constant pursuit of better service management: refined process automation, an easy-to-use service catalog, a highly satisfied user base, etc. To identify some of the key opportunities that can help you achieve those goals, Axios Research previously scoped the top five strategic ITSM challenges for 2015. The headlines from that list included:
- Discovering how central IT can stay business-relevant
- Achieving business-IT convergence
- Improving the end user experience
- Benefiting from Enterprise Service Management
- Getting top results from the Enterprise Internet of Things
The universality of these topics cannot be understated, and is something to be embraced. Whether you’re private sector or public, whether your service desk supports an oil refinery or a global business, we’re all equally dedicated to the challenges and rewards of service management.
But what are the major challenges that you face? And are you receiving the right type and level of stakeholder support to turn those challenges into viable opportunities for improved SLAs, lower costs, etc.?
As you do this organizational soul-searching, (or better yet, turn it into a compelling IT business case), it’s worth considering some of the shared themes encountered by our larger IT family around the world – and identifying key areas in which we differ, with a view towards being inspired by progress and choices made elsewhere.
It’s not just about being inspired.Our challenge to you is to use the insights shared to help build your business case for better service management. In so doing, make your entire organization better.
If you are feeling the pressure to significantly improve your service management, what are your options? Painstaking though they may be, there are two main routes forward:.
- Upgrade your current service management solution
- Change vendors
Whichever route you choose, you’ll need to identify the most important elements of service management you can bring forward to advance your IT operations maturity.
But what if your organization associates itself mid-way, or on the higher end of the I&O maturity scale? Ask yourself: are you taking the right steps to ensure you at least maintain or, ideally, improve your competitive position? If not, what risks and vulnerabilities are you exposing your organization to?
Let’s begin the discussion by reviewing what the research tells us.
Ready to build a business case for better service management?
Here are the key takeaways of this paper. Use them to start a business conversation for better service management. Our research reveals that:
- Worldwide, approximately one in three respondents describe their organization as being on level 3 of the IT operations maturity scale. Very few organizations are represented at the extremes, levels 1 and 5.
- Maturity tends to increase with company size — 38% of respondents from very large organizations (i.e. 5,000 or more employees) associate themselves at level 4 of the maturity scale.
- A significant percentage of level 1 organizations report expected budget growth. This is likely to be driven by the business need for ad hoc processes to be made repeatable, and for process automation to be supported by increasingly scalable systems.
- When selecting an ITSM tool, added value is considered to be a primary consideration for more than 50% of respondents. This is followed by cost, for nearly 25% of respondents, and finally ROI (13% of respondents) and vendor support (12% of respondents).
For more background on how the research was conducted, skip ahead to Research background.
Is there a difference in maturity level by region?
Let’s start by reviewing IT operations maturity levels, henceforth referred to as I&O maturity. To recap, the I&O maturity level scale used by Gartner consists of five levels - with level 5 being most mature:
- Level 1 is associated with awareness: tools define processes, tool metrics are used, process documentation does not exist.
- Level 2 is associated with commitment: incident management exists, project management is in place, process integration is minimal, etc.
- Level 3 is associated with being proactive: trends are analyzed, automation is in place, problems can be predicted, etc.
- Level 4 is associated with service alignment: IT is regarded as a service provider, costs are understood, SLAs are guaranteed, etc.
- Level 5 is associated with being a business partner: IT collaborates with the business to improve business processes, real-time infrastructure is in place, business innovation becomes the focus, etc.
Across the industry, the average Infrastructure and Operations (I&O) maturity level is 2.33, based on Gartner's I&O maturity assessments. Fewer than 5% of Gartner's clients have reached level 5.1
By comparison, our research, which reflects a stratified sample of large enterprises (i.e. as we are focused on large organizations, so is our research sample), shows that approximately one in three respondents describe their organization as being at a slightly higher level of maturity, level 3. This was most apparent in the US and UK, where level 3 association dominated the responses.
But what about Europe? In Germany, Austria and Switzerland (DACH), nearly one in two respondents identified their organization as being on a higher level than the Gartner average. Conversely, more than 50% of respondents in Belgium, the Netherlands and Luxembourg (BENELUX) described their organization’s maturity as being on a lower level.
Worldwide, very few organizations were represented at the extremes, levels 1 and 5.
Observation: Our research reveals that I&O maturity levels are slightly higher than those reported by Gartner. The highest levels are reported in DACH, while BENELUX appears least mature.
Implication: If you’re a large organization at the further end of the market, you’re getting left behind. Organizations with higher maturity are likely to enjoy greater efficiency, with fewer in-bound calls and a lower cost per handling. As a result, they can more readily allocate resources towards business innovation and marketplace competitiveness.
Action: Is it time to review your organization’s service management solution? You may need to upgrade or change solutions altogether. Review your organization’s I&O maturity to help prioritize which components of your service management framework can most benefit from maturation. Feed this into your IT business case to reduce the number of problems, and the cost of issue resolution. You should regard the advanced capabilities as something to blend into your organization over time – maturity is a journey, not a big bang.
What I&O maturity means for service management
Gartner recognizes that I&O maturity and delivery improve as IT departments move their focus from assets, to processes, services and value. At asset level, your configuration repository and ITSM tools feed into the IT service view of your Configuration Management Database (CMDB), as well as ITSM processes. These inform the process-to-service map, which, at service level, is also influenced by the service catalog. Across these layers of interactions, a service portfolio emerges, adding greater value at the highest levels of I&O maturity.2
To offer some examples, organizations on the lower end of the maturity scale may be focused on implementing an ITIL®-based CMDB, or a Service Desk. As you progress upwards, your organization will likely be exploring things like password reset functionality, and beyond this, Enterprise Service Management (ESM) opportunities.
Maturity levels will influence the way you pursue and implement a service management solution. If you’re looking to position your organization at level 4 or higher, you should likely be considering opportunities to develop intrinsic knowledge-sharing capabilities, or to implement service management across the enterprise – a topic we’ll discuss further in the second research instalment.
Is there a difference in maturity level by industry?
The market appears largely homogenous across industries, with exceptions being granted to the education and healthcare sectors, which show a significant number of respondents aligning with a lower I&O maturity level.
Generally, lower IT maturity levels are prevalent among respondents from:
- Professional services
- The public sector
Higher maturity is reported largely in the manufacturing sector, with nearly 60% of manufacturing respondents identifying with level 4. It’s likely that the manufacturing sector, with its longstanding bias towards process automation and production-systems refinement, will have a greater tendency towards adopting more agile methods of working, including comprehensive strategies for more robust service management.
Interestingly, level 5 alignment is present for at least 10% of respondents from IT and professional services.
Observation: By industry, I&O maturity levels are largely homogenous. The majority of respondents from the manufacturing sector, and a large number from IT and financial services, align with higher I&O maturity.
Implication: Respondents from industries that are more closely aligned with lower I&O maturity may be challenged to secure the necessary support to transition from a basic IT department into a fully resourced business partner. If there’s not been significant change in maturity over a period of time, you’ll probably find it difficult to get budget redirected for IT.
Action: If you’re a CIO, you’ll need to adopt a certain level of financial and business acumen to engage stakeholders in understanding how boosting the IT budget can create business efficiencies that benefit the wider organization.
Is there a difference in maturity level by company size?
As expected, the research reveals that maturity tends to increase with company size — 38% of respondents from very large organizations (i.e. 5,000 or more employees) associate themselves at level 4 of the maturity scale. The size of such organizations indicates a sustained ability to scale a relatively sophisticated service management solution.
Perhaps somewhat surprisingly, however, the respondents who describe themselves as being at the most mature end of the scale (level 5) come from organizations with either fewer than 500, or more than 5,000 employees.
Observation: From our research, the respondents who describe themselves as being at the most mature end of the scale, level 5, came from opposite ends of organizational size (i.e. fewer than 500 employees, or more than 5,000 employees).
Implication: Nimble start-ups and established giants may equally have a greater propensity to invest in sophisticated and advanced IT resources and implementation models than organizations in the middle.
Action: If you’re concerned about managing headcount, focus on process automation as a key part of your IT business plan. And, as you review and develop your ongoing service management strategy, consider how key business decisions may influence your organization’s market position, particularly with respect to analyst views and research. For example, targeted improvements are likely to be recognized more positively in the market. By 2017, Gartner says, I&O organizations that focus maturity improvement efforts on process definition, implementation and refinement, will gain a full ITScore for I&O (ITSIO) maturity level advantage over their peers.3
Does maturity affect budget?
Having reviewed your own organization’s maturity level, in line with similar-sized organizations and other respondents from your industry and region, the next logical comparison to explore is the issue of budgets.
Nearly 40% of respondents from organizations with an I&O maturity level of 4 or 5 say their organizations expect to increase their IT budget.
A significant percentage of level 1 organizations also report expected budget growth. This is likely to be driven by the business need for ad hoc processes to be made repeatable, and for process automation to be supported by increasingly scalable systems. The need for metrics-based reporting, and the systems that enable detailed reporting, can also fuel investment in IT budgets.
Observation: Budgets are expected to remain constant for most industries and regions, but nearly 40% of respondents at maturity levels 4 and 5 say they expect a budget increase.
Implication: Organizations with higher I&O maturity are enjoying the benefits of a more streamlined service management model, with IT being recognized as a positive contributor of business efficiencies. In such organizations, therefore, the IT department is getting the support and resources it needs to drive business innovation further.
Action: If you’re squeezed for resources, allocate your existing support to opportunities that will demonstrate value to the business, while freeing time and talent for innovation. Explore different options that will allow you to provision services more efficiently, such as a SaaS deployment. Acquiring technology via the SaaS model is an effective workaround to the “no CAPEX budget” problem, while also enabling a solution faster to help deliver greater business benefits. Of course, building a strong business case for IT investment is integral to getting more budget.
Does budget differ by industry?
On average, most IT budgets are expected to remain constant in the next 12 months, our research shows. But are you lucky enough to work in telecommunications or financial services? These industries appear most likely to enjoy budget increases, according to our research.
On the other hand, respondents from the following industries say their IT budgets would likely decrease in the next year:
- Government/public sector
Observation: Most IT budgets are not expected to change in the next 12 months.
Implication: To maintain and improve upon your department’s image as a value-adding partner, you’ll need to find ways to ‘do more with less’. This is where modern service management technology comes in: it helps you to automate processes, creating a seamless business user experience while freeing up IT resources to focus on activities that will add real business value to the organization.
Action: Review the way your existing budget is spent. Invest in an out-of-the-box solution that integrates all ITIL® processes in one application. Offer your end users self-service options, in order to divert traffic from the service desk to a more cost-effective and efficient automated digital channel. This way you will be able to reduce costs significantly and focus on how to improve customer satisfaction.
Does budget differ by region?
Worldwide, more than 38% of respondents said they expected their IT budget to remain constant. The research revealed an even split of 31% of global respondents reporting that their IT budgets were likely to increase, and 31% of respondents reporting an expected decrease.
Bemoaning your own budget situation? Perhaps you can take comfort in camaraderie: within the US, only 7% of respondents said they anticipated a budget increase, while 38% of UK respondents said they expected an increase.
Observation: Worldwide, the majority of budgets are unlikely to change, according to our research. Strikingly, 38% of UK respondents say they look forward to bigger IT budgets, compared to just 7% in the US.
Implication: While it’s important to monitor your geography, it’s equally important to be cognizant of the global economy in which you operate, particularly depending on the kinds of products or services you offer. The outsourcing of IT is a constant possibility across the market.
Action: If you’re not ready to switch service management solutions, help your IT department remain relevant and competitive by focusing on upgrades that will deliver recognized value to the wider business. In line with the findings in Deloitte’s latest CIO research, IT leaders’ No. 1 priority by some margin remains to support new business needs. In short, IT needs to engage and deliver true service. The days of ‘break-fix’ thinking are over.
How frequently should you review your ITSM solution?
The majority of organizations in all regions review their ITSM solutions every three years or more, especially in BENELUX and DACH, the research shows. However, the research identifies that information gathering about what’s new is more frequent in the UK and US, as IT leaders are focused on innovation rather than business as usual.
Do you think it’s worth the time and effort to undertake such a frequent review? The answer will depend on how you define your service management priorities, and, tying back to the research findings on maturity levels and budget, the level of executive support and investment made available to IT.
Perhaps it is even more important to ask yourself: what do you need and what do you expect from a service management solution? And is this what you’re getting with your current solution?
Our research shows that when selecting an ITSM tool, added value (i.e. how can this tool enhance our service?) is a primary consideration for more than 50% of respondents. This mirrors the shift in ITSM for IT to engage and deliver service to all elements of the business and break away from a reactive/fix mind-set. The considerations that follow when selecting an ITSM solution are cost, for nearly 25% of respondents, ROI (13% of respondents) and, finally, vendor support (12% of respondents).
Observation: It’s interesting to note that compared to ROI and vendor support, added value takes center stage. Why might this be? Perhaps, at least with respect to vendor support being a secondary consideration, it links into the self-sustaining ethos of service management practitioners.
Implication: While cost and ROI will always be important considerations in any business decision, service management professionals are likely to be focused on the practical delivery of service management, where added value dominates the decision-making process.
Action: When engaging with stakeholders to gain consensus about an IT investment, be clear about the added value that you’re seeking; not just for IT, but for the wider business. Create business value by enabling non-IT departments, such as HR, Finance, Facilities and Legal, to adopt service automation and innovations which are directly aligned to their business needs.
Where to start: engage with your business users, measure their satisfaction with IT and then ensure your IT activity fits with your business’s strategy. Make sure your current vendor has the ability to take you on a journey through service maturity and advise how to adopt and when.
We’ve now looked at a variety of insights related to maturity, budget and regional differences. The point of sharing this research is not to suggest that there should be a singular prototype on which to base your service management approach. Instead, it’s to give you big-picture points of reference to consider as you go about building, sustaining and maturing your own service management solution.
If you’re part of an organization currently positioned on the lower end of the I&O maturity scale, chances are your service department is getting left behind, negatively impacting on service levels and the IT perception across the wider organization. The longer you wait to address these issues, the more difficult, time-consuming and cost-laden the resolution will become. Painstaking though they may be, there are two routes forward:
- Upgrade your current service management solution
- Change vendors
Organizations with lower I&O maturity will be weighed down by less efficiency, more in-bound calls and a higher cost per handling calls, incidents, etc. If your budget is limited, you can begin to remedy this by building a business case for extensible software. Integrate self-service modules, such as password reset. Explore SaaS options and other opportunities to provision services more efficiently.
Beyond your contractual cadence with any given vendor, there’s probably never going to be an ideal opportunity to review solutions. But should you be giving this more urgency and priority? That depends on the strength of your enterprise as compared alongside others in your industry and region. It’s a global market, of course, and this only compounds the urgency for each of us to help ensure the IT department remains a central and pivotal part of the wider organization. This translates into an ongoing growth plan for your I&O maturity.
What do you think? Do these insights resonate with the challenges and opportunities you see in your organization? Or have you got an entirely different story to tell? Tweet us @Axios_Systems or email IM@axiossystems.com, mentioning ‘research’ in the subject line. No feedback will be published without your permission.
Use the big-picture insights presented here to help your organization build, sustain and mature the right service management solution.
We make a continual investment in research. This paper showcases research undertaken in partnership with one of Europe’s leading business schools. The research spanned across the US, UK, DACH (Germany, Austria and Switzerland) and BENELUX (Belgium, the Netherlands and Luxembourg).
The research methodology enabled statistically robust insights across verticals and I&O maturity levels. The sampling strategy focused on ITSM professionals from large enterprises with a range of 500 to 5,000 employees. Directly in line with research guidelines, respondent confidentiality has been maintained and results aggregated.
Fundamentally, the research objectives were to:
- Provide meaningful insights which resonate with senior ITSM professionals
- Reveal trends in service management
- Identify key differences between regions, segments, industry, company size and maturity level
- Stimulate a blue-sky discussion within your organization about developing better service management, based on observations around your industry, region and organizational size
The insights from these on-the-ground perspectives have also helped identify relevant and timely topics of interest to the service management community. Many of the themes have been converted into additional C-level briefing papers, which we continue to make available free of charge via our service management resources. From how to leverage user feedback, to implementing a successful service catalog, these resources are designed to address the challenges you face and opportunities you seek for better service management.
If you’re looking for third-party analyst guidance on selecting a service management solution, we recommend you review Info-Tech’s Service Desk Software Vendor Landscape and the 2015 Gartner Magic Quadrant for ITSSM Tools.
If you’d like to discover how an organization made service management work not just for their IT department, but for multiple departments including Finance, HR, Facilities and even Accommodation and Agriculture, check out our service management case study featuring The Scottish Government.
View more whitepapers, videos, presentations and case studies in our service management resources section.
For more than 25 years, Axios Systems has been committed to innovation by providing rapid deployment of Service Management software. With an exclusive focus on Service Management, Axios is recognized as a world leader, by the leading analysts and their global client base.
Axios’s enterprise software, assyst, is purpose-built, designed to transform IT departments from technology-focused cost centers into profitable business-focused customer service teams. assyst adds tangible value to each client’s organization by building on the ITIL® framework to help solve their business challenges.
Axios is headquartered in the UK, with offices across Europe, the Americas, Middle East and Asia Pacific. For more information about Axios Systems, please visit us:
1IT Operations Leaders Must Use a Structured Approach When Deploying Server Monitoring Tools, Gartner, June 2015.
2The IT Service Management Unified Framework: Linking ITSM to Business Value and Maturity, Gartner, March 2014.
3Focus on Process to Maximize I&O Maturity, Gartner, October 2013.