BSM Defined: What It Is and Should Never Be

By Hank Marquis

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Business service management (BSM) is a relatively new term in the IT management community. Over the last few years it has become a sort of buzzword – many vendors are adopting the term and using it to market their products and services. The average executive is now inundated with vendors and products all claiming to deliver BSM, whatever that means.

The purpose of this article is to explain what BSM is and what it isn’t. This article describes BSM benefits, where the term comes from, why you need to know about it, which types of IT organization can benefit from using it and how to get started.

What BSM Is and Isn’t

First of all, BSM is not a product or a technology. You cannot buy BSM, and it does not come out of any box. One of the original developers of the term likes to say that BSM is a “mindset, not a product set.” Of course, that hasn’t stopped many vendors from jumping on the BSM product bandwagon. One vendor proudly proclaims, “BSM is software that essentially forms a dynamic link between business-oriented IT services and the IT infrastructure components that support those services.” Really?

It also hasn’t stopped lots of analyst firms from weighing in either. In fact, one notable firm thinks BSM is IT management “understanding the metrics their business users employ to decide if IT is providing value, and linking these metrics and associated business services to IT infrastructure components.”

There we have it then. BSM isn’t software after all – it’s metrics and components. But wait doesn’t that require software? CMDB software right?

BSM has even found its way into the new ITIL (IT Infrastructure Library version 3), which defines BSM as “An approach to the management of IT Services that considers the business processes supported and the business value provided.” Note the focus on understanding the reason for business needs, meaning BSM is how to properly and effectively implement ITIL.

So, which is it?

If you are confused, you are not alone. Since arising a number of years ago at BMC Software the term has taken on life of its own. So much so in fact that BSM is quickly approaching the term CMDB in terms of uselessness, ambiguity and confusion. It’s unfortunate too, since BSM is something that is absolutely critical to the success of IT.

In the book Frankenstein by Mary Shelley, the Monster addresses his creator Dr. Frankenstein and says, “You are my creator, but I am your master.” – indicating that sometimes the creations of smart people turn into things outside of their control. Such is exactly what happened with CMDB over the last five years or so, and also precisely what is happening to BSM.

BSM has today reached a point where vendors can no longer make claims about what it “really means” or why their software implementation is “better BSM” than a competitor’s. As described in ITIL v3, BSM refers to managing IT based on end-to-end services. It means understanding the marketing place for enterprise products, considering the work employees carry out in support of those enterprise products and managing IT resources in ways that best support that work.

Note the absence of mumbo-jumbo about products, software, automated dashboards, configuration management databases and all the rest. BSM is not a software product, it is indeed a mindset. It is a way of thinking about IT resource allocations. BSM is a strategy described by the ITIL as an exercise in strategic thinking. So, how do you attain the enlightenment that is BSM if it is an intangible? As with many skills, BSM must be learned before it may be practiced.

Why BSM Matters to You

The reasons for BSM are many but the primary driver is IT commoditization. IT commoditization refers to the fact that businesses today are more and more dependent upon IT services. As the cost for hardware and software falls, the ease with which it may be inter-connected is increasing dramatically. This presents business with many alternatives to the traditional IT organization, because many businesses can simply acquire and install systems on their own that were traditionally the purview of an IT organization. In many organizations, such ad hoc business IT systems are then connected to traditional business IT systems. The result is an incredibly complicated environment that shows no signs of decreasing in complexity.

While the business not only assumes the mantle of IT provider in many cases, the requirements that businesses place upon their IT organization and technology, in general, are also increasing. Referred to as variability, the issue is that as a business becomes more entwined with information technology services, it can sustain less and less variation in the quality and delivery of those services.

For the IT organization, this combination of factors represents an “IT perfect storm.” Simply put, today’s IT organization faces ever-growing complexity with diminishing tolerance for poor quality. This, combined with economic realities such as decreasing IT budgets and head counts, represent a no-win situation—not just for the business but also for the IT organization.

From this vantage point, BSM is used to steer IT service management (ITSM), application and technology management and operations within IT. BSM describes how the well-functioning IT service provider aligns with its business, understands its marketplace, and balances its resources in ways to best benefit the business.

BSM provides the guidance an IT executive requires to align with business, control the costs of IT, improve IT service quality, and balance resource allocations. Since the business does not operate independently of the IT systems or organization, it is equally important for technical and non-technical executives to understand how they must work together. BSM provides such a roadmap.

From Good to Great

BSM is the highest point on the continuum ranging from managing IT resources, through managing applications, to managing work flow to managing towards business outcomes. IT organizations pass through each of the following points as they mature:

Technology Management - Technology management is usually the first phase of a maturing IT organization. Managing technology typically involves technology silos and organizational autonomy and bias based around the resources required to manage a particular type of technology (for example, networking or software development).


Technology management is focused on technology and is generally represented with fragmented management views due to its disconnected and technologist nature. This produces an emphasis on resolving IT technical issues. It can also result in redundant investments. The value of investments made in information technology at this technology management stage is generally minimally visible to the business and mostly visible to the IT organization.

Application Management - Application management is the natural evolution of the IT organization from a technology-centric to an application-centric point of view. Application management subsumes technology management and gives it direction and focus.

From this perspective, the maturing IT provider begins to consider that it provides applications to its business customers and users. These applications, in turn, provide value to the enterprise. Application silos begin to replace technology silos. Generally, these application silos span several technology silos and even some IT organizational boundaries. Management design focuses on the requirements of the application. This produces a limited integration of management views, and the IT emphasis is on resolving application issues. The primary value of IT investments at this phase is visible to the business customers and users of the applications.

IT Service Management - ITSM is the term used to describe managing the work flow and activities within an IT organization. ITSM considers not only the application, but also the entire organization and work flow required to deliver applications and other services to the business. ITSM expands beyond applications to encompass all manner of support required of the IT organization by a business.

ITIL is the de facto best practice framework describing ITSM. ITSM presents an evolving and integrated approach to managing IT services. The concept of managing by service is relatively simple: in order for the IT service provider to add value to its enterprise and consumers, the IT provider must focus on end-to-end service delivery. This requires the provider to understand the marketplace, within which the consumers of its services operate.

From a normal corporate or enterprise perspective, this means the IT department must understand not only its business customers and users, but also the marketplace where the enterprise offers its products. IT value arises at the boundaries between the enterprise and its marketplace. IT services provide an indirect value—the IT service facilitates the interaction of business customers and users with enterprise end-customers and end-users.

Business Service Management - BSM is the term used to describe the strategic direction required for ITSM to be successful. BSM, simply stated, aims to manage IT investments in ways that matter most to the success of the enterprise and its marketplace. BSM also means making decisions in IT based on what is best for the enterprise. It spans all technologies and all organizational boundaries. BSM, focusing on process integration and automation, leads ITSM and design. The primary emphasis of the IT organization is on addressing service issues faced by the business. The value of IT investments at this point becomes clear to the marketplace and is seen by the enterprise as competitive advantage.

BSM as a Guide

It is important to remember that BSM exists only to guide ITSM. This is a critical point. BSM provides the guidance required to help business and IT executives overcome substantial obstacles. Also remember that BSM is not a product-set but rather a mind-set. BSM is managing IT strategy in order to lead IT operations. As such, BSM has little direct cost, and a significant investment in tools is often not required for success with BSM. However, improvement projects uncovered by BSM techniques often point out the need for training, consulting, improved management controls, software, hardware, etc. In short, the major investment in BSM comes at the end of its process and will be justified in business terms by that time.

Every organization has important business processes underpinned by IT services, and every IT service has constraints that limit performance relative to goals. In order to manage the performance of the entire system, constraints must be identified and managed correctly. BSM provides a staged and disciplined approach embracing both technical and non-technical aspects of ITSM.

ITSM implementation can be difficult and is often prone to failure. BSM makes it more successful and causes it to occur within the context of what is most important to the business. This dramatically improves the odds of success. BSM’s true value is the long-term adoption of best practices. BSM builds a stronger organization that matches the service provided to the present and future needs of the business and provides services in the most cost-effective manner. Both of these actions will improve the standing of IT within the business and improve both the competitive advantage and bottom line of the business.

Hank Marquis leads the Business Service Management practice area for Global Knowledge. He is responsible for BSM strategy worldwide - integrating ITIL, ISO-20000, COBIT, Six Sigma and Project Management into seamless solutions for clients. Hank has over 25 years of experience in IT operations, product development, and sales. Hank also holds advanced IT management, audit, governance and quality certifications.