ITIL Foundation Course 7 - Service Strategy - c.ymcdn.com · PDF fileSlide 1 Service Strategy Introduction Topics Discussed Service Strategy in the Service Lifecycle Purpose, Goals

ITIL Foundation

Course 7 - Service Strategy

Slide 1

Service Strategy Introduction

Topics Discussed

Service Strategy in the Service Lifecycle

Purpose, Goals & Objectives

Scope

Value

Principles

Lesson

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Slide 2

Service Strategy in the Service Lifecycle

• Service Strategy (SS)– Design, development & implementation

• Service Design– Design & development

• Service Transition– Development & improvement

• Service Operation– Delivery & support

• Service Improvement– Create & maintain value

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Slide 3

Managing Across the Lifecycle

Improve

Strategy Design

Operation Transition

• Strategy Management • Service Portfolio Management• Financial Management• Demand Management• Business Relationship Management

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Slide 4

Purpose, Goals & Objectives of Service Strategy

• Purpose– To transfer service management into a strategic asset

• Goals– Definition of services & recipient(s)

– Differentiation from competing alternatives

– Value creation for customers & value capture for stakeholders

– Case creation for strategic investments

– Financial visibility & control

– Definition of service quality & evaluation of options

– Efficient allocation of resources across portfolio of services

– Resolution of conflicting demands for shared resources

• Objectives– Provide consistent decision-making & minimize later conflicts

– Set priorities & standards

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Slide 5

Scope of Service Strategy

• Business services

– Defined by business

– Comprises business activities

• Service Portfolio across the lifecycle

– New services

– Changed services

– Continual Service Improvement

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Slide 6

Value of Service Strategy

• Value definitions

– Customer’s business outcomes

– Customer’s perceptions

• Expectations influence perceptions

• Shifting emphasis from efficient utilization of resources to

effective realization of outcomes

• Customers buy fulfillment of needs – not services

Transition+ Operation

+ Improve

Operation+ ImproveImprove

Design+ Transition

+ Operation

+ Improve

Strategy+ Design

+ Transition

+ Operation

+ Improve

Value and the ITSM Lifecycle

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Slide 7

Principles of Service Strategy

• Value creation

• Service assets

• Marketing mindset

• Service provider types

• Service structures

• Service strategy fundamentals

• Service portfolio

• Service Automation

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Slide 8

Value Creation

• Perception gap

• Marketing mindset

• The value of services

• Communicating utility– Supported outcomes

– Ownership costs & risks avoided

• Communicating warranty– Availability

– Capacity

– Continuity

– Security

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Slide 9

Utility & Warranty Combined

Low Impact

w/Warranty

Low Value

w/o Warranty

Low Value

w/o Utility

High Impact

w/o Warranty

High Value

w/Warranty

High Value

w/Utility

Utility

War

ran

ty

High

HighLow

Utility & Warranty Combined

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Slide 10

Service Assets

• Capabilities & Resources

• Business Units

• Service Units

Capability is the ability of an organization, person, process, application, configuration item or IT service to carry out an activity.

Resource is a generic term that includes IT infrastructure, people, money or anything else that might help to deliver an IT service.

Management Capital

Organization Infrastructure

Processes Applications

Knowledge Information

People

Capabilities ResourcesService Assets

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Slide 11

Marketing Mindset

• Outcomes matter!!

• Marketing mindset asks

– What is our business?

– Who is our customer?

– What does the customer value?

– Who depends on our service?

– How do they use our service?

– Why is the service of value?

• Engineering & operations mindset

– Inward focus on production of services

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Slide 12

Service Provider Types

• Type I

– Internal Service Provider

• Type II

– Shared Services Unit

• Type III

– External Service Provider

Who are the stakeholders in Service Management?

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Slide 13

Service Structures

• Value chain

– Simple vertical integration of dedicated assets

– Often inadequate for describing service management value

• Value network

– Relationships that generate value

• Dynamic exchange

• Two or more organizations

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Copyright © AXELOS Limited 2014All rights reserved. Material is reproduced under license from AXELOS Limited.

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Slide 14

Service Strategy Fundamentals

• Deal with complexity, uncertainty & conflict

• Discern patterns & project trends

• Consider all factors & their relationships

• Understand underlying principles & basic theory

“Everything in strategy is very simple, but that does not mean that everything is very

easy.” - Carl von Clausewitz

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Slide 15

Service Portfolio

Service Portfolio

Service Catalogue

Service Pipeline

Continual Service

Improvement

Market

spaces

Service

concepts

Customers

Service

designs

Service

transition Service

operation

Third-party

catalogue

Retired

services

Resources

engaged

Return on assets

earned from

Service operation

Resources

released

Common pool of resources

Service Portfolio

Service Catalogue

Service Pipeline

Continual Service

Improvement

Market

spaces

Service

concepts

Customers

Service

designs

Service

transition Service

operation

Third-party

catalogue

Retired

services

Resources

engaged

Return on assets

earned from

Service operation

Resources

released

Common pool of resources

Copyright © AXELOS Limited 2014All rights reserved. Material is reproduced under license from AXELOS Limited.

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Slide 16

Service Automation

• Service automation

– Analysis & instrumentation

• Service interfaces

• Service Strategy tools

– Simulation

– Modeling

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Slide 17

Lesson Service Strategy Processes

Topics Discussed

Service Portfolio Management

Financial Management

Business Relationship Management

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Slide 18

Introduction to Service Portfolio Management

Improve

Strategy Design

Operation Transition

• Strategy Management • Service Portfolio Management• Financial Management• Demand Management• Business Relationship Management

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Slide 19

Service Portfolio Overview

Service

Catalog

CMDB(s)

Service Pipeline Retired Services

Configuration

Management System

Project

Portfolio

Customer

Agreement

Portfolio

Customer

Portfolio

Application

Portfolio

Supplier &

Contract

Information

System

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Slide 20

Purpose Goals & Objectives

• Provide Framework for Future Strategic Decisions

• Enable New or Changed Services

– Definition

– Analysis

– Approval

– Chartering

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Slide 21

Scope

• Services

– Present & Future

• Business Case

• Value Proposition

• Priority

• Authorization

• Communication

• Resource Allocation

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Slide 22

Value to the Business

• Framework for Decision Making

• Continual Review of

– Services

– Investments

– Resource Consumption

• Transparency of Investment Decisions

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Slide 23

Introduction to Financial Management

Improve

Strategy Design

Operation Transition

• Strategy Management • Service Portfolio Management• Financial Management• Demand Management• Business Relationship Management

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Slide 24

Purpose, Goals & Objectives of Financial Management

• Purpose

– To enhance decision making

• Goals

– Enablement of rapid change

– Enablement of Service Portfolio Management

• Objectives

– Employ business case as decision support & planning tool

– Enable compliance & control

– Support operational controls

– Enable value capture & creation

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Slide 25

Scope of Financial Management

• Similar to market-facing companies

– Analyze, package & deliver services

– Understand & control demand & supply

– Cost-effectively provision services

– Maximize visibility into cost structures

• Provides operational decision-making data

• Common language with business

The case for a Business Case

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Slide 26

Value of Financial Management

• Quantification in financial terms

• Value of IT services

• Value of assets underlying services

• Operational forecasting

Transition+ Operation

+ Improve

Operation+ ImproveImprove

Design+ Transition

+ Operation

+ Improve

Strategy+ Design

+ Transition

+ Operation

+ Improve

Value and the ITSM Lifecycle

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Slide 27

Introduction Business Relationships Management

Improve

Strategy Design

Operation Transition

• Strategy Management • Service Portfolio Management• Financial Management• Demand Management• Business Relationship Management

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Slide 28

Purpose Goals & Objectives

• Purpose– Establish & maintain a business relationship

• Goals– Understand customer & needs

– Meet customer IT Service needs

– Establish boundaries for expectations, capabilities & costs

• Objectives– Understand customer perspective

– Ensure customer satisfaction

– Establish & maintain useful relationship with the customer

– Identify changes in customer’s environment & their impact

– Monitor technology trends and potential impact

– Ensure Service Provider is meeting customer’s needs

– Ensure services and service levels deliver value

– Mediate conflicting requirements

– Establish formal feedback mechanisms

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Slide 29

Scope

• All business outcomes

• Use & usage of current IT Services

• Quality of service of delivered IT Services

• Technology trends

• Future service optimization

• Service Provider representation

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Slide 30

Business Value

• Ensure the Service Provider

– Understands customer needs

– Meets business needs

• Facilitate business & Service Provider communication

• Provide conflict resolution

• Focus on customer satisfaction

• Improve the probability that service levels & targets are

met

Meet

Service

Targets

Understand

Needs

Customer

SatisfactionCommunicate

Conflict

Resolution

Service Provider

BusinessCustomer

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Slide 31

Service Strategy Summary

Topics Discussed

Service Strategy Summary

Checkpoint Quiz

Checkpoint Answers

Lesson

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Slide 32

Service Strategy Summary

•

• Value creation• Service assets• Marketing mindset• Service provider types• Service structures• Service strategy fundamentals• Service portfolio

•

• Business services–Defined by business–Comprises business activities

• Service Portfolio across the lifecycle–New services–Changed services–Continual Service

Improvement

• Service Strategy• Service Portfolio Management• Financial Management• Demand Management• Business Relationship

Management

Purpose – To transfer service management into a strategic asset.Goals – Definition of services & recipient(s), differentiation from competing alternatives, customer value creation & stakeholder value capture, strategic investment case creation, financial visibility & control, service quality definition & evaluation of options, efficient allocation of resources, resolution of conflicting demands for shared resources.Objectives – Provide consistent decision-making & minimization of later conflicts and set priorities & standards.

Service Strategy provides value to be business by recognizing how the business defines value in the context of the business’ desired outcomes and perceptions, with perceptions being influenced by the customer’s expectations. It shifts IT’s emphasis from efficient utilization of resources to effective realization of outcomes in recognition that customers buy fulfillment of needs – not services.

Principles Scope Processes

Value

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Slide 33

Service Strategy Checkpoint

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Review Questions:

1. True or False: Service Strategy starts by presenting IT’s strategic plan to

executive management.

A. True

B. False

2. Which of the below best indicates a capability?

A. A 10-person internal networking group

B. The ability to provision a new employee within 3 days

C. A Service Desk that operates 24 hours a day, 7 days a week

D. A 24-terabyte network storage device

3. Which process provides critical input to the development of a Business Case?

A. Demand Management

B. Financial Management

C. Supplier Management

D. Service Level Management

4. True or False: Service Management can transform IT into a strategic asset.

A. True

B. False

5. Match the Service Provider types to their descriptions.

A. External Service Provider

B. Shared Services Unit

C. Internal Service Provider

1. Part of the enterprise and provides services to more than one

business unit

2. Not part of the enterprise and often provides specialized services

3. Part of the enterprise and has an in-depth understanding of the

business’ needs

A. A-1, B-2, C-3

B. A-1, B-3, C-2

C. A-2, B-1, C-3

D. A-3, B-1, C-2

6. Which of the following statements best describe the relationship between

Business Relationship and Service Level Management?

A. BRM is responsible for establishing and managing the customer’s

consumption of IT Services and SLM is responsible for ensuring service

performance and reporting.

B. BRM establishes formal feedback mechanisms and SLM ensures

accurate customer expectations.

C. BRM is responsible for establishing and maintaining a business

relationship and SLM is responsible for ensuring service performance and

reporting.

D. BRM ensures that services are defined, documented, agreed, monitored,

reported and reviewed and SLM ensures proactive measures to improve

service levels.

E. A & B

F. B & C

G. C & D

7. True or False: The Service Portfolio can include third-party services.

A. True

B. False

8. Which of the following statements is CORRECT?

A. BRM is executed at the strategic, tactical and operational levels because it

involves customers as well as users.

B. BRM is executed at the strategic level only because the relationship is

established between senior business and Service Provider management.

C. BRM is executed at the tactical level only because the relationship is

established between senior business and functional Service Provider

managers.

D. BRM is executed at the strategic and tactical levels because it involves

both business and Service Provider senior and middle management.

9. What decision-support and planning tool is a key output of Financial

Management?

A. Pattern of Business Activity

B. Business Case

C. Service Level Agreement

D. Service Improvement Plan

10. What strategic element can have a significant impact on the performance of

service assets?

A. Service Automation

B. Capacity Management

C. Event Management

D. Demand Management

Answer Key:

1. B

Service Strategy starts by defining what services IT should offer and to whom.

2. B

The ability to provision a new employee within 3 days represents a capability

asset. The other responses represent resource assets.

3. B

Financial Management provides financial analyses that play a central role in

decision-making.

4. A

Managing IT as a key strategic asset enables the business organization to

realize value from one of its most costly investments.

5. C

An internal service provider is part of the organization it supports and generally

has a greater understanding of the needs of the business; a shared services unit

is also part of the organization, but many departments share its services; an

external service provider often supplies specialized services.

6. F

BRM manages the overall relationship with the customer across all services

offered, while SLM addresses specific services and their service levels. While

there may seem to be significant overlapping purposes, goals and objectives, the

differences are in scope. BRM establishes an overall mechanism for the

customer to provide feedback and establish a business relationship with the

customer. SLM ensures that the customer’s expectations are accurate for each

service under agreement and its agreed service levels and the reporting on those

service levels.

7. A

The Service Portfolio may include third-party services.

8. D

BRM establishes the relationship between the business and Service Provider

management at the senior level, but deals with both strategic and tactical issues

involving IT Service.

9. B

A key output of Financial Management is the business case.

10. A

Service Automation can have a significant impact on the performance of service

assets, such as management, organization, people, process, knowledge and

information.