Maybe I've missed something here, but am I the only one who doesn't have a fu£king clue what "Service Management" is?

Sounds like something a new head of IT spouts off as a latest "management initiative" or other "blue-sky theories"....

Business Service management (BSm) is very often spouted by executives who have just as little idea about what it really means.

On the other hand Service Management is what many IT professionals do every day. Building quality products that help their respective companies/clients do what they do better/faster/cheaper; and build products that work, are supportable and supported, and really work.

There are also plenty of IT shops which insist on building:-

- glorious, glittering well architected systems which fulfill no discernable business need;

- utter rubbish;

- fabulous stuff, but forgetting to tell anyone how to run it.

Its about doing the job properly....

You should separate your analysis by the kind of business you're referring to. Let me explain. There is one class of business that see IT technology as a fundamental lever to their growth. They take IT as strategic asset, the same as their brands, intellectual property or other long lasting thing that allow it to survive and prosper. The .com (the survivors from the crash) belong to that category, but also every bank, travel agency or small business that exploit technology to maximize benefit and explore new markets.

There is other class of business where they leaders may say things like "IT is the cornerstone of our business" but that statement has the same value as things like "people is our biggest asset" They are obsessed with financials, short term profits, and meeting some artificial targets demanded by a cavern of stock analysts looking to where they can place their huge pension funds bets. For them, IT is an overhead just like any other and anything they do to reduce it is good for their bottom line. Those are the places where the latest outsourcing, offshoring, etc trends have been happening.

I'm sure that everyone can think of examples of the latter. Of course, most business are in between those two extremes, This links nicely with your idea of measuring contribution to the business. But note the difference, there will be places where IT's contribution will be embedded in each activity or process area that is using it and others where IT will be in its own separate line, just near the total overheads line.

Even in the best cases, the big infrastructure costs will be appearing on its own, as nobody can accurately measure their direct contribution to business growth. Except by crude allocation, really nobody can effectively measure those.