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Enterprise service management: Which metrics matter most?

Esther Shein Freelance writer

With organizations accelerating their digital transformation initiatives during the COVID-19 pandemic, metrics for enterprise service management (ESM) in 2020 were broadly focused on aligning the business and reducing downtime. In 2021, the most important ESM metrics will be those that measure more specific business results, and that do so proactively—especially as organizations extend the application of ESM to other areas beyond IT.

Inadequte success metrics are just one of the reasons why ESM initiatives fail. And for several years now, the focus has been on specialized metrics, which are mainly "proxy metrics" that measure activity, instead of results such as customer satisfaction or profit, said Charles Betz, a principal analyst at Forrester.

It's been "metrics madness," Betz said. "We need to have metrics that are much more aligned to actual business outcomes," including metrics that are more directly related to revenue, he said. 

Here's are the ESM-related metrics that matter most in 2021.

The ESM movement

ESM is a chance for organizations to learn how to measure appropriately, which has not been done in the past, said Jeff Rumburg, managing partner at MetricNet.

"ESM as an emerging discipline has the chance to do things right. One of the early things organizations have to do is think about their metrics and develop them because … those who delve into their metrics and mature them go on to achieve world-class performance."
Jeff Rumburg

Looking at ESM in the same way as you did IT service management (ITSM) is not a productive way forward, as organizations contemplate the next generation of ESM. Most organizations are mired in a "reactive vicious cycle," where they viewed ITSM as nothing more than a cost center that is "staffed to survive but not thrive," Rumburg said. "That’s the way most ITSM organizations function."

An abundance of metrics

These days, many organizations are measuring ESM from multiple perspectives, said Valerie O'Connell, research director at Enterprise Management Associates (EMA).

"One reason for the abundance of metrics is that ESM has a very high success rate in almost all instances. It is a great platform from which IT can not only align with the business, but actively serve it and measurably demonstrate the impact of that service."
Valerie O'Connell

Forrester's Betz is seeing movement toward objectives and key results (OKRs). "They're kind of a mix of programmatic priorities as well as some well-chosen operational metrics," he said, adding that "OKRs can change."

In fact, the whole context of metrics is changing, Betz said.

"It's difficult for me to have a conversation about metrics without getting into the fact that the whole IT operational model is changing."
Charles Betz

There is a clear trend away from project management and project management offices, said Betz. Now, organizations are moving toward integrated product teams that are more aligned to the business and are continuously delivering, he said.

This has been going on for the past couple of years, but 2020 saw an acceleration of these trends and "more mainstreaming of them," Betz said. Some 87% of organizations are using ESM tools in some capacity, according to a recent EMA research paper and related webinar.

From reactive to proactive

The way MetricNet's Rumburg sees it, ESM shows greater promise than ITSM.

"ITSM's greatest weakness is that most organizations don't have mature metrics and don't know how to define them. Most ITSM organizations operated reactively … from one crisis to another and were beholden to service levels."
—Jeff Rumburg

The irony of metrics is that they don't take a lot of time and expense to develop, yet too often they're an afterthought, he said.

The organizations that will be successful at measuring ESM will be the ones that move "outside the reactive chaos that envelopes IT organizations and find time to mature a metrics discipline" that has previously been weak, Rumburg said.

"Ninety percent of organizations never get to ... see if they're trending in the right direction," he said. They may be able to look at ITSM metrics, but don't use them diagnostically and prescriptively, he said.

The ESM metrics that matter most

Once organizations commit to developing a metrics discipline, they should decide which metrics matter the most to them, Rumburg said.

However, they should also figure out what they will do in certain scenarios, such as when the cost per ticket goes up or customer satisfaction scores go down. "It helps to think these things through ahead of time. Make a commitment to action; otherwise, don't waste your time," Rumburg said. "You have to have strength of conviction to act on your metrics."

ESM needs to be applied with metrics that deal with cost, cycle time (mean time to resolve), and quality (some measure of how satisfied your customers are), he said.

Here are five ESM metrics Forrester's Betz believes matter the most:

  • Service uptime
  • Release frequency
  • How quickly things move from idea to production
  • Change success
  • Internal customer satisfaction

EMA's O'Connell said metrics tend not to vary significantly across industries or company size. She recommended focusing on:

  • Decreased cost per ticket/case/request

  • Reduction in downtime

  • Fewer service desk complaints

  • Decrease in the number of trouble tickets

  • Fewer escalations (Level 2 to Level 3)

  • Better end-user experience

  • Better service level agreements (SLAs)

  • Number of requests per channel (email, text, chat, phone)

  • Percentage of processes and workflows automated

  • Ratio of ITSM or ESM support team to people supported

  • Cost savings per activity type

How to measure ESM success in 2021

The way to measure ESM success correlates to how effective IT is at supporting the business overall, said Forrester's Betz.

"I think it's absolutely about how IT is aligning digital to the business objectives rather than just specific technical metrics."
—Charles Betz

EMA's O'Connell agreed. "I would suggest that organizations share metrics that matter to their business stakeholders with those business stakeholders."

Measuring success is one of the most important aspects of implementing ESM, said Dan Shallenberger, technical sales manager at the Greenlight Group, a consulting and systems integration services firm. This means identifying what a successful project looks like so metrics can be tracked over time.

"Every department brought into the new platform will have their own SLAs and metrics they will still need to track, [but] that won't necessarily tell you about success as a whole."
Dan Shallenberger

The best way to identify success is to figure out how an ESM platform interacts with your internal customers, which should take place through a self-service portal, he suggested. Otherwise, "you are missing a key value point for ESM solutions."

Metrics should include the number of daily users in the self-service portal as well as the ratio of cases submitted through the portal to cases submitted via phone calls, Shallenberger said.

He also recommended that IT keep an eye on any SLAs that had been previously defined.

"Don't worry if your average resolution time isn't decreasing. Ideally, the easy tickets should be resolved via self-service, which means the hard-to-solve tickets are what gets escalated to the service desk."
Dan Shallenberger

The importance of buy-in

Getting agreement from key financial stakeholders on their definition of success is critical so that the project is viewed positively throughout the organization, Shallenberger said. "Bad impressions can quickly become negative feedback loops, which kill digital transformation in your organization."

First and foremost, IT needs to work on maturing ITSM metrics, which are not going away, said MetricNet's Rumburg. "2020 was a standstill year for ESM," he said. If this remains the case into 2021, organizations should use the time to improve their ITSM metrics, he said.

"Much of what is done in ITSM can be transferred to ESM."
—Jeff Rumburg

TSM metrics that will also be important for ESM include cost per ticket, ROI, mean time to respond, and mean time to resolve a request.

The single biggest metric in ESM that's different from ITSM will be self-service—whether someone could get a service request resolved without human intervention, Rumburg said.

If metrics are matured on the ITSM side of the house, that provides a template and road map for doing many of the same things in ESM, Rumburg said. "That's a really good thing, because you become a better role model center of excellence for ESM."

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