Abstract
Many IT organizations overspend on tactical ITIL processes while underinvesting in strategic ones. Tactical processes handle day-to-day firefighting, but without strong strategic processes, costs stay high, service quality stagnates, and customer satisfaction suffers. Strategic ITSM investments such as Problem, Knowledge, and Service Level Management, reduce incident volumes, improve efficiency, and deliver long-term ROI.
Typical IT Service Management Processes
When we look at various clients’ implementations of IT Service Management, we find that the following ITIL service management processes are typically present. We classify them as tactical and strategic.
Tactical Processes:
| Incident | Change | Service Request |
| Release & Deployment | Configuration/CMDB | IT Security |
| Financial Management |
Strategic Processes:
| Problem Management | Knowledge Management | Capacity & Availability |
| Service Level Management | Continual Service Improvement |
Why Costs Skew Toward Tactical Process in Low-Maturity Organizations
On average across companies, tactical and strategic processes account for roughly 75% and 25% of the ITSM budget respectively. In organizations with lower ITSM maturity, the majority of spend is directed toward tactical processes, especially Incident Management. This happens because:
- Processes are manual and labor-intensive, driving up costs.
- Teams operate reactively, addressing symptoms rather than root causes.
- Poor service metrics create pressure to add headcount rather than improve efficiency.
While increasing tactical headcount may feel like the right response to customer complaints, it often traps organizations in a costly, reactive cycle where service quality never meaningfully improves.
The pie chart below provides a more detailed breakdown of the typical costs across ITSM organizations.
The ROI of Strategic ITSM Processes
Shifting a portion of spend to strategic processes pays off many-fold. Here’s why:
Problem Management:
- Identifies and removes root causes of recurring incidents.
- Targets mission-critical and disruptive issues, reducing outages and delays.
- Eliminates rework (often 20–30% of incident costs).
Knowledge Management:
- Equips agents with quick access to solutions, speeding resolution.
- Documents known errors and best practices to prevent repeat issues.
- Enables end-users and lower-level agents to resolve incidents without escalation.
Service Level Management:
- Sets clear performance expectations for ITSM processes.
- Provides measurable baselines for tracking improvements.
- Enables performance-based contracts with Managed Service Providers.
In short, every dollar shifted from tactical to strategic processes can return multiple dollars in reduced incident costs, faster resolution times, and higher customer satisfaction.
Our Recommendations
- Assess your spend for ITSM: If the spend is skewed (relative to the typical costs) towards one or more of the tactical processes, inefficiencies likely exist
- Build the Business Case: Rather than throw labor at the problem, identify which strategic processes will yield the greatest improvements in cost, service levels, or customer satisfaction. Quantify the potential ROI
- Make Improvements: Redesign processes with embedded automation to reduce manual efforts
- Use AI Strategically: With the new generation of AI tools you can make surgical strategic improvements and supercharge your tactical processes
- Measure and Refine: Measure the outcomes to sustain the changes
Closing Thoughts
Over-reliance on tactical ITSM processes leads to a never-ending cycle of high costs and firefighting. Strategic investments break this cycle, driving down costs, improving service quality, and enabling IT to be a proactive partner to the business.
As the saying goes, an ounce of prevention is worth a pound of cure. Nowhere is that truer than in IT Service Management.
How is your organization balancing tactical and strategic ITSM investment? Follow our company LinkedIn pages and Webpages. We welcome your thoughts and experiences.
Sai Balakrishna
Managing Partner & CEO
📧 info@quantumvision-ai.com
🌐 www.quantumvision-ai.com
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