unfortunately there is no option to make the sysname to be the display name, you can achive this only by name resolution...
the bestwould be to enable name resolution for the devices, i.e. add your devices to DNS or maintain a hosts file on your server.
If you have done this be sure to have the following setting for discovery marked:
Update DCR Display Name
With DFM it is a little bit different, - you have to delete them from DFM and rediscover all devices
I think it should also be possible to enter a custom display name through CS > Device and Credentials > Device Management but DFM would not take account of this setting.