What is IT Service Management?

IT Service Management or ITSM is the set of activities that can help manage the services delivered to end-users. Based on the ITIL framework of best practices, ITIL service management provides a set of best practices and techniques for selecting, planning, delivering, and maintaining IT services within a business that aligns the IT department's actions and expenses with changing business demands. It was created by the United Kingdom's Central Computer and Telecommunications Agency (CCTA) in 1989, AXELOS developed and released the most recent version, ITIL 4, in 2019.

In the realm of IT Service Management (ITSM), ITIL V4 Foundation certification stands as a cornerstone qualification, providing professionals with a solid understanding of ITIL concepts and practices.

What is ITIL?

ITIL is a list of volumes that describe a framework for the best practices to deliver IT services. These practices are drawn from the private and public sectors worldwide. ITIL has the following benefits: 

  • Reduced IT costs
  • Improved IT services
  • Improved customer satisfaction
  • Standards and guidance
  • Improved productivity
  • Improved skills and experience
  • Improved delivery of 3rd party services

ITIL has gone through several revisions and comprises five books, focusing on the various processes and stages of the IT service lifecycle. Their most recent update, ITIL 4 began to start rolling out in Q1 of 2019, focusing on a more agile, flexible, and customizable version of ITIL, modified for modern businesses.

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What is ITSM?

IT Service Management focuses on implementing, managing, and delivering IT services to ensure the organization's goals are met. ITSM uses the appropriate mix of people, processes, and technology to ensure they can provide value to the organization. 

Let's try to understand ITSM better with some of its key concepts now. 

ITSM Key Concepts

To properly understand ITIL and ITSM, it is important to understand some key terms and concepts.

  1. Value: Value is the perceived benefits, usefulness, and importance of something. It is subjective in nature with respect to stakeholders, organization, and customers  
  2. Co-creation of value: This refers to a strategy that encourages customer involvement to provide them with a greater experience 
  3. Service: It refers to a means of giving value to customers, with favorable outcomes without having to manage specific costs and risks 
  4. Service relationship: It refers to the co-operation between a service provider and a service consumer
  5. Service provider: It is the role performed by an organization that provides services to customers
  6. Service consumer: It represents the customer, user or sponsor of the service
  7. Organization: It represents a group of people that have their own functions with responsibilities, authorities, and relationships to achieve their objectives
  8. Service relationship management: It refers to the joint activities performed by service providers and service consumers to ensure co-creation of value  
  9. Output: It refers to the physical or non-physical deliverables created as a result of an activity
  10. Outcome: It refers to the result of a stakeholder, enabled by one or more outputs
  11.  Utility: It refers to the functionality offered by a product for service to meet a need of the organization
  12. Warranty: It refers to the assurance provided that a product or service will meet the agreed requirements discussed

Now, let's have a look at the ITIL Service Lifecycle.

IT Service Lifecycle

It is an approach to IT Service Management that organizations of all sizes can be used to manage the full lifecycle of IT and other services. It helps coordinate and control across processes, systems, and functions.

IT Service Lifecycle

The service lifecycle can be divided into 5 stages. Let's take a closer look at each of these stages and the processes within them. 

1. Service strategy

The service strategy stage describes the steps and objectives required to manage IT services. The stage also makes sure that these services are aligned with the goals of the organization. The processes within the stage are: 

Strategy Management for IT Service

Strategy management for IT service is a process to define and maintain the 4Ps of Strategy (i.e., perspective, position, plans, and patterns). It ensures the creation of a strategy for an IT Service & its Management throughout the service lifecycle.

Financial Management

The financial management process helps understand and manage costs and opportunities involved with the service. The different activities under it are:

  • Accounting: Tracking how service providers spend money
  • Budgeting: Planning how service providers would spend money
  • Charging: Securing payment from customers for the services provided to them

Service Portfolio Management

The service portfolio management process represents the entire set of activities that are managed by a service provider. This process organizes the process by which a process is identified, described, evaluated, selected, and chartered.

Demand Management

The demand management process helps understand and influence customer demand. It uses:

  • User profiles: Characterizes different groups of users for a given service
  • Patterns of Business Activity: Represents the way users in different user profiles interact with a service over a period of time

Business Relationship Management

Business relationship management seeks to establish a positive relationship with customers. It identifies the requirements of potential and existing customers and ensures the development of appropriate services to meet those needs.

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2. Service Design 

This stage focuses on the design of the services and all the other supporting elements that enable the service to be introduced into a live environment. Four areas need to be taken into consideration when designing a service:

  • People: HR and organizational structure to support the service
  • Processes: Service Management process required to support the service
  • Products: Technology and infrastructure support
  • Partners: Third parties that can provide additional support

Let's have a look at the processes within this stage:

Design Coordination

Design coordination is a process responsible for being the single point of contact for coordination and control of all activities related to service design. 

Service Level Management

The service level management process secures and manages agreements between customers and service providers relating to utility and warranty of specific services. These lead to the creation of Service Level Agreements (SLA) between customers and the provider.

Availability Management

The availability management process handles the management and achievement of the agreed-upon availability requirements that were established in the Service Level Agreements (SLA)

Capacity Management

The capacity management process ensures that the cost-effective capacity meets or exceeds the needs of the business, as established in the SLAs. It is divided into three categories:

  • Business Capacity Management
  • Service Capacity Management
  • Component Capacity Management

IT Service Continuity Management

The process of IT service continuity management ensures that the service provider can provide the minimum agreed-upon levels of service. It uses techniques like Business Impact Analysis and Management of Risk to produce an IT Service Continuity Plan.

Information Security Management

The process of IT security management aims to protect five basic qualities of information assets:

  • Confidentiality
  • Integrity
  • Availability
  • Nonrepudiation
  • Authenticity

Service Catalog Management

The service catalog management process contains all services available to customers and users. It is usually the only portion of the service portfolio accessible to users.

Supplier Management

The process of supplier management deals with obtaining value for money from third party suppliers. It works more with external suppliers than with internal suppliers and consumers.

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3. Service Transition

The service transition stage of service transition enables the building and deploying of IT services while ensuring the changes to the services and service management processes are taking place in a coordinated manner. Let's have a look at the processes within this stage: 

Transition Planning and Support

The transition planning and support process plans and coordinates the use of resources to deploy a major release within the time, time and quality predicted

Service Asset and Configuration Management

The process of asset and configuration management maintains information about the configuration items required to deliver an IT service, including their relationships.

Release and Deployment Management

The release and deployment management process plans, schedules, and controls the movement of releases to testing and live environments while maintaining the integrity of the live environment. It also makes sure the appropriate components are released.

Change Management

The process of change management controls the lifecycle of all changes with minimal disruption to IT services.

Change Evaluation and Testing

The process of change evaluation assesses major changes before they can proceed to their next phase in their lifecycle

Service Evaluation and Testing

The process of service validation and testing ensures the deployed releases and resulting services meet the customer's needs and verifies the IT operations can support the new services 

Knowledge Management

The knowledge management process gathers, analyzes, stores, and shares knowledge and information within an organization. This increases efficiency by reducing the need to rediscover knowledge.

4. Service Operations

In the service operations stage, the aim is to meet the end user's expectations while balancing costs and looking for potential problems. This stage has a combination of processes and functions: 

Incident Management

The incident management process manages the lifecycle of all incidents, ensuring IT service returns to users as soon as possible.

Problem Management

The problem management process attempts to optimize the lifecycle of all problems, making sure incidents are prevented, or have minimal impact in case they can't be prevented.

Access Management

The access management process grants authorized users the right to use a service while ensuring unauthorized users don't access it.

Event Management

The event management process makes sure configuration items and services are continuously monitored, and to filter out and categorize events to decide appropriate actions.

Request Management

The request management process fulfills service requests (which are usually minor in nature)

Service Desk

The service desk function is the point of contact between users and service providers. It also handles communication with users and manages incidents and service requests.

Technical Management

The technical management function provides technical expertise and support for the management of the IT infrastructure.

Application Management

The application management function manages applications throughout their lifecycle 

IT Operations Management

The IT operations management function that monitors and controls IT services and their underlying infrastructure. It involves activities like job scheduling, backing up and restoring, print and output management, and regular maintenance. 

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5. Continual Service Improvement

The continual service improvement stage of the lifecycle uses methods from quality management to learn from past successes and failures. It focuses on improving the effectiveness and efficiency of IT processes and services, keeping in line with ISO 20000. Let's take a look at the 7 step process for continual service improvement: 

  • Identifying improvement strategies
  • Defining what will be measured
  • Gathering data
  • Processing data
  • Analyzing data
  • Presenting and using information obtained from the data
  • Using the information for improvement


ITIL is a framework that is being used by several organizations around the world. This also means that certified and skilled professionals are in high demand! Take your first step to becoming an ITIL certified professional by enrolling in Simplilearn's ITIL 4 Foundation Certification Training today!

About the Author

Rahul ArunRahul Arun

Rahul is a Senior Research Analyst at Simplilearn. Blockchain, Cloud Computing, and Machine Learning are some of his favorite topics of discussion. Rahul can be found listening to music, doodling, and gaming.

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