ITIL
Service Strategy
The center and origin point of the ITIL
Service Lifecycle, provides guidance on clarification and
prioritization of service-provider investments in services. More generally,
Service Strategy focuses on helping IT organizations improve and develop over
the long term by building a clear service strategy, with a precise
understanding of :
- · What services should be offered.
- · To whom the services should be offered.
- · How the internal and external marketplaces for their services should be developed.
- · The existing and potential competition in these marketplaces, and the objectives that will differentiate the value of what the service provider does or how it is provided.
- · How the customer and stakeholders will perceive and measure value, and how this value will be created.
- · How service sourcing decisions can be made with respect to use of different types of service providers.
- · How visibility and control over value creation will be achieved through financial management.
- · How the allocation of available resources will be tuned to optimal effect across the portfolio of services.
- · How service performance will be measured.
Key
Concepts of Service Strategy
1) The Four P’s of Strategy
- · Perspective : Defines the distinct vision and direction.
- · Position : The basis on which the provider will compete.
- · Plan : How the provider will achieve its vision.
- · Pattern : Defines distinct patterns and actions over time.
2)
Defining Services
All service providers need to define the market that they will operate
in, identifying and understanding their customers and explore the opportunities and constraints, quantify the outcomes and classify
services. All service providers
and customers operate in one or more internal or external market spaces and
seek to align delivery within customer expectations.
3)
Service Value
Service value is defined by customer’s perception of
business outcome and it is described by combination of these two elements :
- - Service
Warranty : How the service is delivered and its fitness for use,
in terms of availability, capacity, continuity and security.
Service value also includes the associated concepts of
services as assets, value networks, value creation and value capture.
4)
Service Provider Types
There are three types of service providers which are :
- - Type
1 : Exists
within an organization exclusively to deliver service to one specific business
unit.
- - Type
2 :
Services multiple business units in the same organization.
- - Type
3 :
Operates as an external service provider serving multiple external customers.
5)
Service Management as Strategic Asset
ITIL is used to transform service management
capabilities into strategic assets, by using service management to provide the
basis for core competency, distinctive performance and durable advantage, and
to increase the service provider’s potential from its:
- - Capabilities
: The
provider’s ability to coordinate, control and deploy resources.
- - Resources
:
The direct inputs for the production of services. For example, financial,
capital, infrastructure, applications, information and people.
6)
Critical Success Factors
Critical success factors (CSFs) are identified,
measured and reviewed periodically in order to determine the service assets
required to successfully implement the desired service strategy.
7)
Service Economics
Financial management, demand management and the
service portfolio are used to understand the balance between the cost of
providing the service, the value of the outcome achieved and the return on
investment.
8)
Service Delivery Strategies
The various models that may be selected by customers
or used by service providers to source and deliver services, and the financial
management impacts of sourcing variants, are categorized and analysed:
- - Insource,
Outsource or Co-Source : Delivery of some or all of the
service lifecycle is provided by internal resources, external resources or a
combination of both.
- - Business
Process Outsource and Knowledge Process Outsource : Strategic
provisioning of business services based on process or knowledge expertise.
- - On
Demand or Cloud Based : Services are provided on the basis of
how much is required by each customer, how often, and at the times the customer
needs them.
9)
Organization and Development
The service provider’s organization needs to achieve
an ongoing shape and structure that enables the service strategy.
Considerations include:
- - Organizational
Development Stages : Delivering services through network
direction, delegation, coordination or collaboration, depending on the
evolutionary state of the organization.
- - Sourcing
Strategy : Making informed decisions on service sourcing in
terms of internal services, shared services, full service outsourcing, prime
consortium or selective outsourcing.
- - Service
Analytics : Using technology to help achieve an
understanding of the performance of a service through analysis.
- - Service
Interfaces : The mechanisms by which users and other
processes interact with each service.
- - Risk
Management : Mapping and managing the portfolio of
risks underlying a service portfolio.
Processes
of Service Strategy
1) Strategy Management
The purpose of a service strategy is to articulate how
a service provider will enable an organization to achieve its business outcomes
and the most effective and efficient way to manage these services. The purpose of
the strategy management for IT services process is to ensure that the strategy
is defined and achieves its purpose. Strategy management has three
sub-processes which are :
- - Strategic Service Assessment : Its objective is to assess the present situation of
the service provider within its current market spaces. This includes an
assessment of current service offerings, customer needs and competing offers
from other service providers.
- - Service Strategy Definition : Main goal is to define the overall goals the service provider
should pursue in its development, and to identify what services will be offered
to what customers or customer segments, based on the results of the Strategic
Service Assessment.
- - Service Strategy Execution : Defining and
planning strategic initiatives, and ensuring the implementation of those
initiatives.
2)
Service Portfolio Management
Before we mention managing of service portfolio, we
will define what is service portfolio. Service portfolio is the complete set of
services that is managed by a service provider. The service portfolio is used
to manage the entire lifecycle of all services, and includes three categories: service
pipeline (proposed or in development), service catalogue
(live or available for deployment), and retired
services. The purpose of service portfolio
management is to ensure that the service provider has the right mix of services
to balance the investment in IT with the ability to meet business outcomes.This
process is consisted of the following sub-processes :
- - Define
: Make
an inventory of services, ensure business cases exist, and validate portfolio
data.
- - Analyse
: Maximize
portfolio value, align and prioritize, and balance supply and demand.
- - Approve
: Finalize
proposed portfolio, and authorize services and resources.
- - Charter
: Communicate
decisions, allocate resources and charter services.
3)
Financial Management
The purpose of financial management for IT services is
to secure the appropriate level of funding to design, develop and deliver
services that meet the strategy of the organization. IT financial management
responsibilities and activities do not exist solely within the IT finance and
accounting domain.
Many parts of the organization interact to generate
and use IT financial information, by aggregating, sharing and maintaining the
financial data they need, and by enabling the dissemination of information to
feed critical decisions and activities.Financial management is composed of four
sub-processes which are :
- - Financial
Management Support : Defines the necessary structures for the
management of financial planning data and costs, as well as for the allocation
of costs to services.
- - Financial
Planning : Determines the required financial
resources over the next planning period ("IT
Budget"), and to allocate those resources for optimum
benefits.
- - Service
Invoicing : Issues invoices for the provision of services
and transmission of the invoice to the customer.
- - Financial
Analysis and Reporting : Analyzes the structure of service
provisioning cost and the profitability of services. The resulting financial
analysis allows service portfolio management to make informed decisions when
deciding about changes to the service portfolio.
4)
Demand Management
Demand management is a
critical aspect of service management. The purpose of demand
management is to understand and influence customer demand for services and the
provision of capacity to meet those demands. At a strategic level this can involve
analysis of patterns of business activity and user profiles. At a tactical
level it can involve use of differential charging to encourage customers to use
IT services at less busy times.
5)
Business Relationship Management
The purpose of the business relationship management is
to establish and maintain a business relationship between the service provider
and the customer based on understanding the customer and its business needs and
identify customer needs and ensuring that the service provider is able to meet
those needs as business needs change. Business relationship
management enables effective links between service providers and customers at
both strategic and tactical levels. Working closely with the demand management
and service portfolio management processes, it ensures the service provider
understands the business requirements and keeps a focus on customer
satisfaction. This process is consisted of six sub-processes which are :
- - Identify
Service Requirements : Understand and document the desired
outcome of a service, and decide if the customer's need can be fulfilled using
an existing service offering or if a new or changed service must be created.
- - Maintain
Customer Relationships : Ensures that the service provider
continues to understand the needs of existing customers and establishes
relationships with potential new customers. This process is also responsible
for maintaining the customer portfolio.
- Signing
up Customers to Standard Services : Capturing customer
requirements and agree service level targets with customers who request the
provision of existing standard services. (No changes should be made to
supporting services in order to fulfill the customer’s needs)
- - Customer
Satisfaction Survey : Planning, carrying out and evaluating
regular customer satisfaction surveys. The principal aim of this process is to
learn about areas where customer expectations are not being met before
customers are lost to alternative service providers.
- - Handle
Customer Complaints : Recording customer complaints and
compliments, to assess the complaints and to instigate corrective action if
required.
- - Monitor
Customer Complaints : Continuously monitoring the
processing status of outstanding customer complaints and to take corrective
action if required.
We saw how this Service Strategy operates, let’s look
at who operate this element.
Roles
of Service Strategy
- · IT Strategy Manager : Formulates and communicates the IT strategy and ensures elements are in place for successful execution.
- · IT Steering Group : Responsible for corporate governance of IT and the overall direction of the IT strategy.
- · IT Director : Responsible for all IT service management processes and for setting up the service management Office.
- · Service Portfolio Manager : Defines services and service packages; manages and maintains the service portfolio including communication to all parties.
- · Business Relationship Manager : Maintains the relationship with one or more customers, understanding the customer’s business and its customer outcomes; this role may be combined with the role of service level manager.
- · Customer : Articulates needs and ensures business outcomes are supported.
- · Financial Manager : Defines and maintains financial models with information to track the cost and value of IT services.
- · Demand Manager : Identifies and documents patterns of business activity and user profiles; ensures IT capabilities are geared to meet fluctuating demand.
- · Chief Sourcing Officer : Owns the sourcing strategy within the organization; responsible for leading and directing the sourcing office; develops the sourcing strategy in close conjunction with the Chief Information Officer (CIO).
For the last part we will
look at the Key Performance Indicators (KPIs) of these Service Strategy
processes.
KPI
for Strategy Management and Service Portfolio Management
KPI
for Financial Management
KPI
for Business Relationship Management
Sources
