Syed M Quadri

Paper 3

Service Strategy Governance and Decision Making A Core of Practice of ITIL

By Syed M Quadri

Syed M Quadri

Paper 3

Service Strategy
Service Strategy is the center and origin point of the ITIL Service Lifecycle. It provides guidance on clarification and prioritization of service-provider investments in services. Service strategy relies mainly on a market-driven approach. Service strategy focuses on helping IT organizations improve and develop over a long term. Service strategy is responsible for defining a service value. It provides the design, frame, develop and implement the service management, in a way that is capable by the organization to provide guidance on how to move forward. The best way to start a strategy is to define the objective first, next develop the offerings, develop the strategic assets and last is strategic execution. The strategy also contains the guidance and knowledge, from many activities such as marketing, finance management, organizational design and development, engineering and operations. Service strategy is about ensuring that organizations are in position to handle the costs and risks associated with their service portfolios, and are set up not just for operational effectiveness but also for distinctive performance. Decisions made with respect to service strategy have farreaching consequences including those with delayed effect. The diagram below illustrates the whole concept of Service Strategy, which is situated right in the center of the diagram and is surrounded all around by Service Transition, Service Operation and Service Design. On the outside is surrounded by continual service improvement which helps on the overall development of an organization by creating and maintaining value of customers through better design, introduction and operation of services.

Syed M Quadri

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Service strategy aims to prepare a seamless service operation in an IT organization. A service strategy defines which services are to be required to support the goals and meet the objectives of the goal. The availability of resources should be enough for the commitment made to deliver the content. A successful strategy would have the following: a. The goals in IT are business aligned. b. The initiative that supports the business should be identified. c. The opportunities that lead, to the improvement should be identified. d. Strategy should be assessed as it is against the outcomes. Activities That Develop Service Strategy:

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i. ii. iii. iv.

Aligning the goals of a business Defining the initiatives. Managing the performance. Agreeing with the finalized annul strategy.

Strategic Assessment: In this the provider should see the service what has been done already. It is likely there already exists a core of differentiation. The factors of strategic assessment are strengths and weakness of the organization, distinctive competencies, Business strategy, critical success factors, threats and opportunities. To serve the market the investments are prioritized based on the potential and the capability to with stand the market. Developing Strategic Capabilities: To be in the long run and successful the service providers must have the ability to act and think in a strategic manner. The main purpose of Service strategy is to help the organizations to develop such abilities. The strategic asset transformed into service strategy. Technical knowledge of IT is necessary but not sufficient. Service Provider Types: To make use much of the available resources that are useful to the customer increase the level of quality costs and risks. There are three types of service providers. They are Internal Service Provider, Shared Service provider, External service provider. Today it is common to see all types of service providers use all three to satisfy the customer need. Services as Assets: An organization objective is to fulfill the means to prove to be a good business model. Service assets have two main characteristics: Utility and Warranty. The customer perceives utility from the attributes of the service that has a positive effect on performance of tasks. Warranty is derived from positive effect being available when needed in sufficient quantity or magnitude. Utility is what customer gets and warranty is how it is

Syed M Quadri

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delivered. Customers may receive benefits in a continued relationship and trust the provider with the business. The performance is rewarded with new services, or contract level, and new customers. Successful learning and growth enables commitments of higher service level as service management till there is a need to handle big challenges. Defining the Market Space:It is defined as the set of business outcomes that can be facilitated by a service. The opportunity to do that defines market space. Business outcome examples: Sales teams are reproductive with sales management system on wireless computers. E-commerce website is linked to the warehouse management system. Key business applications are monitored and secure. Business continuity is assured. Online bill payment offers more options for shoppers to pay. Service Portfolios: The commitments provided by the service provider across the customer and market spaces. It is a contracted one, new service development, and ongoing improvement programs initiated by the continual service improvement. The service portfolio represents all the resources that are presently in the various phases of the life cycle. Each phase must require the completion of project and initiatives and contract. Entry, progress and exit are approved with approved funding and financial plan for recovering costs. The service catalog is the only part the portfolio that recovers the cost and American benefits. A service catalogue is the subset of the service portfolio visible to the customers. The services of this are very active in service operation phase. The service catalogue is useful for developing suitable solutions to customers with one or more services. It is a very important tool for service strategy because it is the virtual projection of the service provider actual and preset capabilities.

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Service Outsourcing Practical Decision Making: A service strategy should enhance an organizational special strength and core competencies. Each component should reinforce the other. Outsourcing is the moving of a value-creating activity that was performed inside the organization to outside the organization where it is performed to another company. Types of sourcing structures: type I and type II, full service outsourcing, prime, consortium, selective outsourcing. Increasing Service Potential: The capabilities and resources of the service provider represent service potential. The capacity of his services available for the customers is the potential he has. Examples of increased service potential are data center rationalization, training and certification, implement incident management process, develop service design process, Thin-client computing. The key objectives of service management are to improve the service potential. Return on Investment: Return on Investment is a concept for quantifying the value of investment. The use and the meaning of these are not always precise. Return on Invested Capital is a measure of business performance. Financial Management: It is a strategic service tool applicable in all three-service provider types. IT organizations are increasingly incorporating Enhanced decision making, speed of change, service portfolio management, financial compliance and control, operational control, value capture and creation. One goal of financial management is to properly fund the delivery and the consumption of services. Thus the service strategy governance and decision making takes place. This is the very first stage so it takes good amount of time to plan and manage things around.

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References: 1. http://www.best-management-practice.com/gempdf/Service_Strategy_Contents.pdf>.com 2. http://www.itilservicestrategy.blogspot.com/search/label/ITIL%20Service%20Strategy>. com 3. http://en.wikibooks.org/wiki/ITIL_v3_%28Information_Technology_Infrastructure_Libr ary%29/Service_Strategy>.com 4. http://technet.microsoft.com/en-us/library/cc543316.aspx>.com