Pain Points in IT Service Management

How Efficient Are Current ITSM Implementations?

Abstract

IT Service Management (ITSM) emerged as a response to the increasing complexity of IT and the growing reliance on technology to solve business problems. While ITSM aims to bring structure and discipline to IT operations, it has also introduced its own set of challenges. Various attempts have been made to improve ITSM’s efficiency and effectiveness, but the results have been inconsistent. Before we can optimize ITSM, we must first understand its core issues. This blog outlines and prioritizes the major pain points in ITSM.

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The Rise of ITSM

As demand for technology-driven business solutions surged following the advent of personal computing and structured software development, organizations began investing heavily in IT. The rapid growth in the 1980s brought with it a host of challenges—managing scale, ensuring reliability, controlling costs, and more.

ITSM was developed as a way to manage this growth and complexity. Over time, there was a push for greater structure and standardization, leading to the adoption of the IT Infrastructure Library (ITIL) framework in the 1990s. Now in its fourth version, ITIL has evolved to incorporate modern practices such as Agile, DevOps, and cloud-native operations.

The Cost of Structure

Despite the value ITSM brings, it is often seen by business leaders as a significant expense—sometimes accounting for up to 25% of the total IT budget. Within this, labor costs can comprise 50–70% of the ITSM function. As a result, ITSM is under constant pressure to become more “efficient”—which, in corporate terms, often translates to “cheaper.”

However, seasoned IT leaders know that cutting costs indiscriminately can lead to degraded service quality and unhappy end users. The challenge is to make ITSM both efficient and effective.

Tried (and Tired) Solutions

To manage costs, organizations have turned to:

• Offshoring, which reduces labor costs through geographic arbitrage but often compromises quality and user satisfaction.
• Outsourcing and BPOs, which aim to leverage third-party economies of scale. While these solutions offer potential savings, they often come with:
  • Hidden or poorly defined costs,
  • Ambiguous and unenforceable SLAs,
  • Limited flexibility to adapt to business-specific needs.

These measures may reduce visible expenses, but they frequently create new problems that undermine service effectiveness.

The Top ITSM Pain Points

Before making improvements, it is critical to understand the most common pain points that hinder ITSM performance. Here’s a prioritized list based on impact and frequency:

1. High labor costs: Labor is the single largest expense in ITSM, making this the top area of concern.
2. Low productivity and slow resolution times: Underperforming ITSM teams delay service recovery and harm user satisfaction.
3. Inadequate toolsets: Many teams lack modern dashboards, analytics, and automation to work efficiently.
4. Organizational silos: Siloed teams and data inhibit cross-functional visibility and collaboration.
5. Disjointed automation: Poor integration across ITSM tools creates friction between processes.
6. Hidden costs in outsourcing: Vendors often bury costs in complex contracts and fail to meet SLA commitments.
7. Weak knowledge management: Outdated or inaccessible knowledge bases lead to longer resolution times and redundant work.
8. Lack of end-to-end workflow visibility: Without a holistic view of workflows, bottlenecks and inefficiencies persist.
9. Low ITSM maturity: Many organizations fail to invest in the continual development of their ITSM capabilities.

What’s Next?

Do you agree with this list and its priorities? I’d love to hear your thoughts or experiences.

In future posts, we’ll explore practical strategies to improve ITSM performance while managing costs—including intelligent automation, KPI-based governance, and data-driven decision-making.

Sai Balakrishna
Managing Partner & CEO
📧 info@quantumvision-ai.com
🌐 www.quantumvision-ai.com