Service Strategy

Service
Service Strategy
Strategy

• Key Concepts:
- Utility and Warranty
- Value Creation
- Service Provider
- Delivery Model Options
- Service Model

• Processes:
- Service Portfolio Management (SPM)
- Demand Management
- Financial Management
 Service Strategy – Utility and Warranty

• Utility and Warranty define services and work together to create value for the
customer

Utility:
- What does the service do?
- Functional requirements
- Features, inputs, outputs…
- “fit for purpose”

Warranty:
- How well does the service do it?
- Non-functional requirements
- Capacity, performance, availability…
- “fit for use”
 Service Strategy

Value Creation

Increase in
possible gains
Return on
from the
assets
performance of
customer assets.

Service

Performance
average Utility

Performance of
customer assets

Performance
Variation Warranty
 Service Strategy – Service Provider

• An organization supplying services to one or more internal customers or external

customers

Type 1:
- Internal
- Embedded in the business unit it serves
Type 2:
- Shared
- Provide services to multiple business units
Type 3:
- External
- Provide services to many customers
 Service Strategy – Delivery Model options

Delivery
Description
Strategy

In-sourcing Utilizing internal organizational resources for all stages in the lifecycle

Outsourcing Utilizing the resources of an external organization (s)

The combination of In-sourcing and Outsourcing to co-source key elements

Co-sourcing
within the lifecycle

Partnership or Formal arrangement between 2 or more organizations to work together.

Multi-sourcing Focus on strategic partnerships to leverage expertise or market opportunities

Business Process Formal arrangement between two organizations to relocate and manage on
Outsourcing (BPO) entire business function (payroll or call-center) from a low-cost location

Formal agreement with an Application Service Provider (ASP) to provide

Application Service
shared computer based services over a network (Sometimes called ‘on-
Provision
demand’ software/application)

Knowledge Process Provision of domain based processes and business expertise requiring
Outsourcing (KPO) advanced analytical and specialist skills from the outsourcer
 Service Strategy – Service Model

• Graphical representation of the

components that make up a service

• Documents workflow and dependencies

• Used to support design, analysis and

communication
 Service Strategy – Main Activities

• Define the market

- Evaluate the services you could potentially offer, and who you may be able to
offer them to!

• Develop the offerings

-Continue to formulate the services you think it will be worthwhile pursuing

- Utility and Warranty are considered at this stage

• Develop strategic assets

-Look for opportunities to exploit your services and capabilities (to allow more
services to more customers)

-Develop Service Management to that it becomes a strategic asset

• Prepare for execution

- Take all the necessary steps to ensure that we are ready to go ahead and it is
worthwhile doing so
 Service Strategy

Service Portfolio
Management
 Service Strategy – Service Portfolio Management

Objectives

• Decide what services to offer

• Understand
- Why should a customer buy these services?
- Why should they buy these services from us?
• Provide direction to Service Design
- So they can manage and fully exploit the services into the
future
 Service Strategy – Service Portfolio Management
Basic Concepts
• Business Service

- A service that directly supports a business process

• IT Service

- A service that the business does not think of in business context or semantics

• Business Service Management

- Consider service management in terms of business processes and business

value

- A strategy and an approach for linking key IT components to the goals of the
business. It enables you to understand and predict how technology impacts the
business and how business impacts the IT infrastructure.

 Project Charter

 Is a statement of the scope, objectives and participants in a project. It provides a

preliminary delineation of roles and responsibilities, outlines the project
objectives, identifies the main stakeholders, and defines the authority of the
project manager.
 Service Strategy – Service Portfolio Management

Activities Service
Strategy

• Inventories
Define
• Business Case

• Value proposition
Analyze
• Prioritization (Supply and
Demand)

• Finalize Service Portfolio

Approve
• Authorize Services and
Resources

• Communication Decisions
Charter
• Resource allocation
• Charter Services
 Service Strategy – Service Portfolio Management

Roles

• Product Manager

- Own and manage a set of related services

- Evaluate market opportunities and customer needs

- Create business cases

- Plan new service development programs

• Business Relationship Manager

- Identify and document customer needs

- Sources on Demand

- Input to Service Catalogue

 Service Strategy

Demand Management
 Service Strategy – Demand Management

Objectives and business value

• Understand customer requirements for services and how these vary

over the business cycle
• Ensure the provision of appropriate levels of service
- By varying provision or influencing customer demand
• Ensure that the Warranty and Utility we offer matches the customer
needs
 Service Strategy – Demand Management

Basic Concepts (1 of 3)

• Core Service
- An IT service that delivers outcomes
desired by one or more customers
• Supporting Service
- A service that enables or enhances a core
service. For example
- A directory service or a backup service
 Service Strategy – Demand Management

Basic Concepts (2 of 3)

• Pattern of Business Activity (PBA)

-Workload profile of one or more business activities
-Varies over time
-Represents changing business demands
• User Profile
- Pattern of user demand for IT Services
- Each user profile includes one or more PBAs
 Service Strategy – Demand Management

Basic Concepts (3 of 3)

• Service Package

-Detailed description of a service

-Includes a service level package and one or more

core services and supporting services

• Supporting Level Package

- Defined level of utility and warranty for a particular

service package

- Designed to meet the needs of a PBA. For example

- Gold, Silver or Bronze service

 Service Strategy – Demand Management

Roles

• Business Relationship Manager

- Document PBAs and user profiles
- Identify correct service level packages for their customers
- Identify unmet customer need
- Negotiate with Product Managers for creation of new
services
 Service Strategy

Financial Management
 Service Strategy – Financial Management

Objectives and business value

• Financial visibility and accountability

• Financial compliance and control
• Enhanced decision making
• Operational control
• Value capture and creation
• Understand the value of IT Services
 Service Strategy – Financial Management

Basic Concepts (1 of 2)

• Service Valuation
- Cost of providing the service
- Value to the customers receiving the service
• Business Impact Analysis
- Understand the total lifecycle value and costs of
proposed new services or projects
• Accounting
- Keeping track of what has been spent, assigned to
appropriate categories
 Service Strategy – Financial Management

Basic Concepts (2 of 2)

• Business Case
- A decision support and planning tool that predicts
outcomes of a proposed action
- Used to justify investments
• Business Impact Analysis
- Understanding the financial cost of service
outages
 Service Strategy – Financial Management

Roles

• All managers have some financial responsibility

• Senior IT Management own budgets and are ultimately

responsible for decisions

• Many organizations appoint a financial controller to oversee

day-to-day finances

• Accounting department provides governance framework and

support