Enterprise Service Management For Medium and Small Enterprises

In PART 1, we’ve explored challenges from tech adoption, platform complexity, compliance, and hybrid working to rising customer expectations, cost-quality balance, data integration, and scalable service delivery. In this article, let’s have a look at the challenges more likely experienced by medium and small enterprises. 

Medium-sized company 

While medium-sized businesses face challenges like those of the large enterprises described above, a few are worth pointing out due to their significant impact on service delivery. 

Outsource vs Insource 

A typical ratio of IT staff to employees is generally around 1:70 to 1:100 (Oceantele, 2023), leaving an organisation of 2,500 employees with approximately 30 technology specialists split between strategic leadership, network, infrastructure, security, application support and development, project management, leaving only a fraction of those to be allocated to Service Delivery and Technical Support. This limit in human resources poses a challenge for the leadership to decide whether to keep the service delivery in-house or outsource it to a third party. Whilst outsourcing may seem cheaper, more scalable, compliant, easier and faster to implement, and provides access to specialised skills (Talentelgia, 2023), it only works well if the SLAs and XLAs, in-scope and out-of-scope services, are well-defined and dynamic. What has worked well for your business in 2022 will likely change in 2025 due to changes in market conditions, technology available, and your growth and company direction. However, such dynamic agreements are rarely seen, primarily due to the complexity it would impose on the pricing structure, uncertainty of resourcing requirements, and the metrics of what good looks like.  

Another challenge is the access to intimate knowledge of the technological landscape, user profiles, and the organisation's culture supported, as the agents often support multiple businesses simultaneously. The knowledge silo between the enterprise and the outsourcer leads to a degraded level of service, and difficulties in applying continual service improvement, often resulting in the outsources sticking strictly to SLAs and what has been agreed as “in-scope” at the beginning of the contract, irrespective of the current organisational demands. In addition to the lack of dynamic XLAs (see an article by Jaro Tomik, CDW, 2023) and the prevalence of the pay-per-ticket model that discourages outsources from any focus Problem Management, the repetitive nature of the job also leads to stress, burnout, and a high staff turnover rate of upwards of 30% (Medallia, 2022), further complicating any improvement initiatives agreed between the outsourcer and the enterprise.  

The service management outsourcing industry needs to rethink how it structures its services and what good looks like. However, its not just up to the outsources to innovate. We often see innovative outsourcing approaches held back by outdated tender requirements and scoring mechanisms, frequently copied and pasted at the last minute from when they were written two renewals ago. This leads to both the tender and the subsequent Master Service Agreement (MSA) driving the same inadequate service delivery levels. This will become a significant challenge, especially if Gartner’s prediction that “by 2027, 50% of organizations will support supplier contract negotiations through the use of Artificial Intelligence (AI)-enabled contract risk analysis and editing tools” (Gartner, 2024) is correct. 

Even though it’s easier to point a finger at an outsourcer than internal staff and thus hide the organisation's process and governance immaturity and inefficiencies, running your Service Delivery in-house comes with its challenges. Despite the obvious benefits stemming from their focus on supporting a single organisation, such as knowledge and cultural alignment, the key challenge is scalability. 

Scalability 

There are good reasons why organisations decide to keep internal Service Delivery teams. How big does it need to be? What are the costs? Where do they need to focus? What are the risks and probabilities of losing the agents? What is your plan for scaling the team alongside the organisation's growth curve? 

Currently, most of these questions are answered “on the go” through experience, “who shouts the loudest” and “finger in the air” mechanisms rather than data-driven strategy. Unlike large enterprises, medium-sized organisations have not yet had the reason to invest in employee experience monitoring platforms, increasing the difficulty in evidence-based prioritisation of improvement initiatives. With AI-powered platforms becoming increasingly accessible, delivering a clear return on investment (ROI), and businesses more aware of needing a Digital Experience (DEX) strategy, “by 2025, 50% of IT organizations will have established a DEX strategy, team, and management tool, up from 20% in 2023” (Gartner/Nexthink, 2023). 

(Hyper) Automation vs. human resources 

In 2023, the news was flooded with reports on layoffs, downsizing, and hiring freezes worldwide, including Amazon, Microsoft, or Alphabet, driven by cost-cutting initiatives and market uncertainty. While this enabled other large and mid-sized enterprises to access more talent, it has also raised the importance of Hyperautomation—how to unlock productivity gains through technology rather than growing employee numbers. Leaders and hiring managers are expected to present stronger business cases if they want to justify the staff expansion or even replace people leaving their roles, often in comparison to investing in automation and process improvement initiatives.  

Small business 

Small businesses of under 500 employees face their own set of challenges. Younger organisations are typically not held back by technical debt and are enjoying fully cloud-based infrastructure, reducing their dependency on managing anything on-premise.  

Limited human resources vs. growth ambitions 

Supporting dozens or hundreds of employees is often more accessible in a small team, able to cater to individual needs and deliver a personalised service experience whilst facing minimal fires to be put out across their infrastructure. After all, it’s easy to just walk up to Amy’s desk or IM her about your service query; she can respond there and then. However, improvement initiatives become even more difficult than in large and medium-sized enterprises due to the lack of human resources to drive and contribute to the projects. This may hinder the organisation’s growth and its process and governance maturity initiatives, creating technical debt that complicates service delivery quality, especially if the organisation has a steep growth trajectory.  

Maturity – process, governance, technology 

In the early stages of an organisation’s existence, processes are typically driven by the core focus of their mission and company values, often organic, undefined, or driven by following dedicated software workflow processes, including best practices out-of-the-box. For many tasks, the most efficient way appears to be for knowledge to be held in people’s brains or personal data storage, as only a limited number of individuals are required to use the knowledge, and the chance of alien abduction is comparatively low. For others, collaborative tools must be purchased to accelerate product creation, delivery, and support and reduce employee and customer frustration.  

Small organisations typically invest in many point solutions, a subset of which is often purchased on employee’s credit cards and expensed rather than through their procurement or finance department. Whilst this lack of purchasing process is helpful initially, organisations may quickly outgrow their tools and process maturity as their size and complexity increase, requiring them to review their technological stack continuously as well as their need for process and governance improvement initiatives, balancing short-, mid-, and long-term objectives with their budgetary and staff limitations.  

The juggling of the initiatives forces organisations to seek trusted advisors with a deep understanding of their business who can support their growth journey by bringing outside knowledge of the latest trends and experience of other similar organisations with relevant software. This helps to protect the scarce resources from having to conduct extensive market research and run large procurement exercises, enabling them to focus more of their time on “what makes their beer taste better” (see Jeff Bezos’ famous talk at Startup School, 2008). 

In ITSM, the first solutions are purchased when the organisation reaches about 100-150 employees and invests in technology to help provide audibility and increase process, governance, and best practices instead of hiring more staff members. Should you have grown beyond 100 employees, it may be time for you to experience the value of the market’s resellers, such as CDW. Reach out to us here to learn how we can help you overcome your most pressing challenges.