Strategic Integration of IT and Business Service Management

Abstract

INTRODUCTION IT Industry Background The computer software development industry is comprised of businesses that design, develop, and market support systems and application software used in personal computers, servers, embedded systems, and mobile devices. The software industry started during the personal computer revolution in the mid 1970s and includes software services such as training and consulting. Proprietary or commercial software and open source software are the predominant types of businesses in the software industry. The software industry segment includes IT giants such as Microsoft, IBM, Hewlett-Packard (HP), Oracle, and SAP. The domestic software market is expected to grow at an annual rate of 5.7% from 2007 to 2012 with combined revenue of about $180 billion involving approximately 50,000 companies (Hoovers.com, 2009). The IT management industry consists of information technology and management which focuses on the management of a collection of systems, infrastructure and information that originated from the practice of IT Portfolio Management. IT management focuses on the management of information technologies as a business function that originated from the formation of the IT Infrastructure Library (ITIL) (http://www.itil.co.uk/). ITIL is a customizable framework of best practices for managing IT infrastructure, development, and operations. ITIL is an industry best practice for Business Service Management (Lindquist, Madduri, Paul, & Rajaraman, 2007). Business Service Management (BSM) (http://www.best-management-practice.com/) is a method created to automate and simplify the management of the various business processes, based on a service-oriented architecture. The IT management technology vendors who dominate the market are BMC Software, CA, IBM, and HP whose combined market share grew from 34 % in 2005 to 40% in 2006 and will reach approximately 45% in 2007 (Garbani & Mendal, 2007). There is little academic research in BSM (and ITIL) in the information systems, as well as the management and marketing literature (Cater-Steel & Toleman, 2007). Only a handful of journal articles (e.g. Davern & Wilkin, 2008; Fisher, 2006; Lindquist, Madduri, Paul, & Rajaraman, 2007) have researched the implications of BSM (and ITIL). Moreover, the literature does little to investigate the strategic and marketing-related impacts, reflecting the unique contribution of this current research case study. This paper is also written from an applied research viewpoint to emphasize the pragmatic aspects of the technologies. Therefore, the study adds the practitioner's perspective, since one of the co-authors is a Lead Software Quality Assurance Engineer at BMC Software. Not to mention, there is an increasing interest in the adoption of these technologies and solutions (e.g. ITIL) in corporate America today to enhance service delivery, support, and overall business efficiency (Cannon & Raisinghani, 2007; Fisher, 2006). Consequently, college business programs should train students in these emerging new technologies to stay competitive in the job market and apply classroom concepts in a hands-on approach (Beachboard & Beard, 2005; Cater-Steel & Toleman, 2007). Description of the Company's Business Pioneering the concept of Business Service Management, BMC Software, Inc. is a leading global provider of enterprise management solutions (systems, applications, databases, and service management) that empower companies to automate Information Technology (IT) and align it to the needs of the business. BMC Software is the 8th largest independent software vendor with 26 years of leadership and holds 94 software technology patents. BMC Software has international headquarters located in Amsterdam, The Netherlands and Singapore, Singapore. It also operates international offices in countries such as the Australia, England, Germany, China, France, India, Israel, Japan, and the Philippines. …