An Incident is an unplanned interruption to an IT Service or a reduction in the quality of an IT service. Failure of a Configuration Item that has not yet impacted service is also an Incident.
Example: Failure of one disk from a mirror set, unable to send mails using MS Outlook, slow systems, virus attack in the organization network, etc.
A Problem refers to an underlying issue that could have led to rise of multiple Incidents by different End Users related to some common errors or issues.
Example: Multiple Users having issues sending mails at the same time using MS Outlook is a Problem.
An Incident needs to be resolved immediately. This can either be through a permanent fix, a workaround, or a temporary fix.
A Problem can be handled in the following ways:
Do nothing: If the Problem does not affect the business or if the cost of fixing the Problem exceeds its benefits.
Deploy workaround: If the determination of root cause exceeds the benefits.
Determine root cause and fix the Problem: if the benefit is worth it.
Multiple Incidents of similar type lead to a Problem Record.
If a Problem is not fixed, it may trigger Incidents.
Incident Management is fire-fighting, where the aim is to bring the service back to track.
Problem Management involves deeper analysis to understand the root cause of the issues and find a permanent resolution (in most cases) or provide a workaround.