What is IT Service Management (ITSM)?


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Vendr Team
Published on
November 2, 2020
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Want to organize your IT services in one place and optimize the value they bring to your company?

This means your organization needs to adopt IT service management, or ITSM.

In a nutshell, ITSM is a set of activities that help IT-related, customer-focused processes run as smoothly as possible.

In this article, you’ll learn everything you need to know about ITSM including:

  • What is IT Service Management (ITSM)?
  • Why Use ITSM – 13 IT Service Management Benefits
  • How ITSM Works – 6 Use-Cases
  • What’s an ITSM Tool?
  • How to Pick the Right ITSM Tool

Let’s start with…

What is IT Service Management (ITSM)

IT service management, or ITSM, is a set of activities that help design, implement, manage, and support the lifecycle of customer-oriented IT services.

Now, definitions aside, here’s what ITSM means in practice.

Today, just about every business, even the ones that don’t have anything to do with tech, has IT processes (and an IT team to support them).

Your organization, for example, might have a procedure in place for:

  • Requesting a new work laptop.
  • Getting help to fix some company software.
  • Setting up accounts for new hires.

Well, ITSM is a series of activities you go through to make all this happen whenever needed.

More often than not, though, when people talk about ITSM, they’re referring to IT service management software.

ITSM software is a type of software that allows you to centralize all processes in one place.

Your employees can, for example, request a new work laptop, and the IT department can fulfill it through the software (and at the same time, track ownerships of all laptops held by employees).

Without the right software, doing ITSM can be extremely hard and resource-consuming for organizations. So, from henceforth, when talking about ITSM, we’re going to mean the software part of it.

Quick note – ITSM is not exactly the same thing as ITAM. IT Asset Management, or ITAM, is a methodology for managing an organization’s assets. ITSM, on the other hand, is not just about the assets, but about ALL IT processes in an organization (incident management, change management, etc.). More on this a bit deeper into the article.


If this isn’t your first time reading about ITSM, you’ve probably also heard of ITIL.

The two terms are usually used interchangeably, but they’re not exactly the same thing:

  • ITSM is a more generic practice of managing IT processes and assets. There are a lot of ways your organization can do ITSM.
  • ITIL, on the other hand, is a very specific methodology for doing ITSM.

Just like ITIL, there are a lot of other ITSM frameworks out there too, including COBIT, eTOM, and others. ITIL, however, proves to be the most popular framework, being used by over 47% of all organizations surveyed by Forbes Insights.

Why Use ITSM – 3 IT Service Management Benefits

Having an ITSM software that centralizes and organizes all your IT services helps your IT team provide better support to the end-users (your employees and customers).

This allows you to reap the following benefits:

#1. Increasing Business Efficiency

ITSM can significantly improve efficiency for the whole company by:

  • Reducing downtime – With ITSM, your IT team is able to solve technical problems and incidents faster.
  • Preventing issues before they happen – ITSM software helps you detect potential IT problems before they even happen, allowing you to prevent them.
  • Faster disaster recovery – ITSM allows you to create efficient disaster recovery processes, so when the worst does happen, you’re not left helpless.

#2. Increasing IT Efficiency

ITSM can also help your IT department function more efficiently. Here’s how this works:

  • Process workflows – ITSM can automate significant chunks of your IT processes. Some of these include vendor approvals, hardware requests, etc.
  • Efficient use of IT human resources – Your IT team has a central platform to manage a big chunk of their work, thus reducing administrative workload.
  • Impact-based incident management – ITSM software prioritizes all ongoing problems or incidents based on business priorities, allowing your IT team to focus on the issues that really matter.
  • Time and money savings – As ITSM automates or streamlines a big chunk of IT work, you’ll end up saving on having a very large IT staff.

#3. Reducing IT Waste

With ITSM, you also minimize IT waste by:

  • Optimizing spend – With ITSM you have a top-down view of your IT asset spending. Meaning, you can see exactly what you’re spending your money on, and cut out what you don’t need.
  • Removing duplicate assets – ITSM software can automatically detect duplicate tools or software. E.g. If you’re using 2 CRM solutions for 2 different sales departments, ITSM allows you to uncover this issue, and cut wasteful spending.
  • Optimizing asset usage – You can find the IT assets you own, but aren’t really using that much, and cut them out of your IT ecosystem.

How ITSM Works – 6 Use-Cases

ITSM software can be used for a lot of things, including:

  • Incident management
  • Problem management
  • Asset management
  • Change management
  • Knowledge management
  • Project management

Here’s what each of these mean:

#1. Incident Management

Incident management is the process of identifying, analyzing, and correcting IT incidents and problems, and ensuring that they never happen again.

Some examples of incident management include:

  • Several work laptops start lagging and not working properly. The IT department takes them apart, finds the issue, and fixes it for all company computers.
  • An unauthorized third-party gets access to the work network by stealing an employee’s user credentials. The IT department sees that this was because the antivirus on the employee’s OS was outdated, so they make it mandatory to keep your OS up to day company-wide.

The way ITSM software helps with incident management is by allowing the IT team to track all open incidents through one dashboard, and prioritize them by importance.

#2. Problem Management

While incident management is about fixing a specific incident that just happened, problem management is a process for finding why this problem happened in the first places, and ensuring that it never happens again.

#3. Asset Management

Asset management is the process of proactively managing your organization’s IT assets, including hardware, software, and networks.

By tracking and analyzing your IT assets, as well as their usage, you can ensure that you:

  • Are not paying for software/hardware that you’re not using.
  • Don’t have any duplicate software or tools.
  • Are getting the most out of the tools that you are using.

Looking for software just for managing your company’s software assets? In that case, you need Software Asset Management (or, SAM) and not ITSM.

#4. Change Management

ITSM software also helps with change management in your organization.

Let’s say, for example, you want to issue a recall for most company hardware assets (e.g. laptops) so you can upgrade some specific software, or completely replace it with newer hardware.

You can use ITSM software to track who’s in possession of which hardware, and reach out to them for the recall.

#5. Knowledge Management

Knowledge management is the process of analyzing, storing, and sharing the internal know-how of an organization.

It helps ensure that company knowledge isn’t lost, even when employees quit.

#6. Project Management

Chances are, your IT department is juggling a ton of projects at all times.

Project management in ITSM helps plan, track, and execute all project-related tasks.

You can also oversee the lifecycle of any given project through the ITSM software, and ensure it’s completion.

How to Pick the Right ITSM Tool

There are a lot of ITSM tools on the market, so how do you know which one’s going to fit your organization’s needs best?

After all, an ITSM tool will serve not only your IT department, but the whole organization.

So, when evaluating different ITSM tools, you need to ensure that it’s suitable for most of your business processes, not just the IT ones.

That said, you can also ask yourself the following questions to find the right ITSM tool:

#1. What problem do you want to solve with the ITSM tool?

Try to analyze what your company needs to improve in terms of IT service management and how an ITSM can make that happen.

#2. What do you expect from the tool?

Are you going to take full advantage of the ITSM tool and its use-cases?

In some cases, you might find that you just need some parts of an ITSM tool.

For example, if your main issue is that you’re overspending on software, you’d need a software asset management tool.

Or, if you just need a platform for incident management, you could just get away with ticketing software.

#3. Pick a tool that’s user-friendly.

Your IT team won’t be the only department using your ITSM software.

So, you’ll need the software to be very use-friendly and easy to understand for just about any employee in any department.

Key Takeaways

Now that we covered the most important things you need to know about IT service management, let’s recap the most important bits:

  • IT service management includes the activities related to the creation, maintenance, and support of all your IT services.
  • ITSM can increase your business and IT efficiency and reduce your IT waste.
  • The main ITSM use-cases include: incident, problem, asset, change, knowledge, and project management.
  • When picking an ITSM tool, understand what are the requirements and features you want it to possess.
Vendr Team
Vendr's team of SaaS and negotiation experts provide their curated insights into the latest trends in software, tool capabilities, and modern procurement strategies.

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