In this post I want to describe the fhase Service Strategy at the core of the ITIL v3 lifecycle.
The service strategy of any service provider must be grounded upon a fundamental acknowledgement that its customers do not buy products, they buy the satisfaction of particular needs. Therefore, to be successful, the services provided must be perceived by the customer to deliver sufficient value in the form of outcomes that the customer wants to achieve.
A service strategy can not be created or exist in isolation of the over-arching strategy and culture of the organization that the service provider belongs to. The service provider may exist within an organization solely to deliver service to one specific business unit, to service multiple business units, or may operate as an external service provider serving multiple external businesses. The strategy adopted must provide sufficient value to the customers and all of the service provider’s stakeholders – it must fulfill the service provider’s strategic purpose.
To enable service providers to think and act in a strategic manner to achieve strategic goals or objetives through the use of strategic assets.
Service strategy focuses on how to transform service management into a strategic asset.
SS should be able to answer questions such as:
- what services should be offered ?
- who the services should be offered to ?
- how the internal and external market places for their services should be developed ?
- the existing and potential competition in these marketplaces, and the objectives that will differentiate the value of what you do or how you do it ?
- how the customer(s) and stakeholders will perceive and measure value, and how this value will be created ?
- how customers will make service sourcing decisions with respect to use of different types of service providers ?
- how visibility and control over value creation will be achieved through financial management ?
- how robust business cases will be created to secure strategic investment in service assets and service management capabilities ?
- how the allocation of available resources will be tuned to optimal effect across the portfolio of services ?
- how service performance will be measured ?
The Service strategy publication defines some key ITIL concepts
Service Value: defined in terms of the customer’s perceived business outcomes, and described in terms of the combination of two components.
- Service Utility: what the customer gets in terms of outcomes supported and/or constraints removed
- Service Warranty: how the service is delivered and its fitness for use, in terms of availability, capacity, continuity and security.
Financial Management covers the function and processes responsible for managing an IT service provider’s budgeting, accounting and charging requirements. It provides the business and IT with the quantification, in financial terms, of the value of IT services, the value of the assets underlying the provisioning of those services, and the qualification of operational forecasting.
Service Portfolio Management (SPM)
SPM involves proactive management of the investment across the service lifecycle, including those services in the concept, design and transition pipeline, as well as live services defined in the various service catalogues and retired services.
Demand management is a critical aspect of service management. Poorly managed demand is a source of risk for service providers because of uncertainty in demand. Excess capacity generates cost without creating value that provides a basis for cost recovery.