Consider the following strategies for your service management practice: Work with a generic ITSM provider for frontline staff. While organizations should discontinue widespread ITIL training, many service management concepts are relevant and can help improve focus on core delivery practices such as incident management, change management, asset management, and request management.

ITSM, service management, configuration management, asset management, and service mapping platforms AI for IT operations (AIOps), observability, monitoring, analytics, reporting, and business intelligence tools AI-enabled virtual agent, intelligent search, knowledge management, and agent-assist capabilities Service automation, orchestration, self-service, workflow, and portfolio management tools Digital employee experience, endpoint experience, collaboration, and communication platforms Governance

No longer experimental, both genAI and agentic AI capabilities are embedded into the core IT service management (ITSM) practices. With this increasing focus on service management across the business, IT, and development, vendors are also offering endpoint management, digital experience management, and enhanced analytics focused on business outcomes. Improved chat resolution, unified employee portals, and proactive endpoint diagnostics and recovery even affect end users.

Clear communication, increased understanding of the environment, and risk management help you navigate the transition period with minimal negative impact on operations. Coordinate between the old and the new service providers. If you’re transitioning to a new IT service provider rather than bringing services in-house, effective coordination between all parties is essential for a seamless handover due to increased complexity.

ESM is considered an integral part of managing IT and business operations (see Figure 2). ESM has evolved into a mature market that: Supports core IT service management processes. Vendors in the ESM market address core ITIL processes and have strong orchestration capabilities to support core IT services. The main process capabilities include incident management, change management, and service request management as well as featuring a CMDB, service catalog, and service portal.

“Had the sunsetting of the tool not happened, we would still be on it today. We would never have switched.” (IT service management [ITSM] manager, a large metropolitan IT services organization) High cost of ownership. Cost remains a persistent concern for IT leaders, especially when existing service management tools require significant investment without delivering proportional value.

Engineering Services Will Define IT Service Providers’ Next Growth Curve

Hitachi finds growth in core digital and green transformation initiatives; its green energy and mobility businesses saw revenues grow 29% in 2024. IT Service Firm Profitability Grows Slowly In 2024; GenAI Has Yet To Impact Margins A line chart displays a timeline from 2015 to 2025 and the profitability growth of IT services firms, as well as the lack of an impact from genAI on margins for these firms. This graphic has an associated spreadsheet that includes all data presented.

Make decisions with change management and offboarding in mind. 1) Inventory Your Service Provider Portfolio Large firms often underestimate how many IT, consulting, and professional service vendors they’re juggling. Fragmented approaches, a rampant need for service provider help, and siloed procurement can leave organizations with an unwieldy service provider roster that few have fully mapped.

Knowledge management is critical to IT outsourcing agreements and for sustainable service delivery: It mitigates risks, optimizes performance, and maintains service delivery consistency. Enterprises are responsible for bringing the service provider up to speed on their tools, systems, and processes.