BSM-Optimizing IT Services to Drive Business Success

By Fred Engel

Over the last few decades, business processes have become more and more automated, requiring additional value-added IT services. This automation has resulted in tremendous increases in productivity and profitability, tightening the link between the business and the IT services that support it.

As any IT manager will tell you, availability and performance features of business services have become more critical. Business Service Management (BSM) is the ideal link between IT services and business needs, improving service by proactively managing the technology that the services depend upon and by detecting problems before they impact end users.

What happens when poor performance affects business? The results are often increased costs or lost revenue. Consider a few real-life examples:

• A bank that has come to depend on its customer self-service options experiences response degradation in its Internet banking application, causing customers to revert to the call center for fulfillment. A call center inquiry costs the company $2.50, while an online inquiry costs the business $.25. With 1.5 million users, and 1% requiring call center support, this bank sees an annual cost increase of $1.1M.⁽¹⁾
• An auto dealer requires a 30-second response on loan approvals or loses 40% of the business to competitors. At $125 average earnings per loan and 17,000 lost loan accounts a year, the company loses $2.1M annualized earnings.⁽²⁾
• A medium to large-size call center estimates that every 6-second increase in call handling time costs them $330,000 in revenue.⁽³⁾

BSM directly monitors the health of the services that drive your business and generate revenue. Every business has a few key services that drive the majority of revenue. If these services are running well, then employees can do their job and customers are happy.

These services may be comprised of several applications that run on distributed servers and databases, which, in turn, are connected by numerous network devices. When these services are not running well, the complex underpinnings are exposed and finding the source of the problem can become "hit or miss." Having all the pieces operate effectively is important because it affects the most important aspect of all - the user experience - and the user experience drives revenue.

¹Source: TowerGroup, 2003
² Source: TowerGroup, 2003
³ Source: Concord Communications customer