INFORMATION TECHNOLOGY

INFRASTRUCTURE
LIBRARY(ITIL)

SERVICE STRATEGY

Khalique Zafar
Sr. Customer Services Engineer
 Agenda

 What I say ; what you hear “jab we met”.

 Service Strategy Definition
 Goals and Objectives
 Principles and Concepts
 Strategy Generation
 Service Strategy Processes
 Financial Management
 Service Portfolio Management
 Demand Management
 Q&A
ITIL Service Management (v3)
 Core ITIL v3 Library
Service Strategy (SS)
Service Design (SD)
Service Transition (ST)
Service Operations (SO)
Continual Service Improvement (CSI)
Key links, inputs & outputs of the
service lifecycle stages
Service Strategy
 A process to enable Service Providers
 Act and think in a strategic manner and achieve
their goals and objectives by using Service
Assets
 To support the organization in transforming service
management into strategic asset
 To see relationship between systems, processes,
functions, services and business models.
 …… and the organization’s vision


 Cost Effectiveness
 Value to the customer
 Standardized Process
 Value Creation
Service Strategy
Objectives
 How can Financial Management provide visibility
and control over value creation?
 How should we define service quality?
 How do we efficiently allocate resources?
 How do we resolve conflicting demands for shared
resources?
 What services should we offer and to whom?
 How do we differentiate ourselves from competing
alternatives?
 How do we capture value for our stakeholders?
 How can we make a case for strategic investments?

Service Assets

 Resources--direct input parameter for the
service delivery
○ People
○ Information
○ Applications
○ Infrastructure
○ Finances
 Capabilities-- skills and help the organization to
develop and control the resources in order to
generate added value
○ Management
○ Organization
○ Processes
○ Knowledge
○ Skills

Resources and Capabilities are strategic assets
of each service provider to enable goods or


services to be produced

Service Provider
 Deliver services to one or more
external or internal customers


 Types:
Type-I: Internal Service Provider
Type-II: Shared Service Provider
Type-III: External Service Provider

Service Provisioning
Model
 Managed Service: where a business unit
requiring a service fully funds the
provision of that service for itself
 Shared Service: the provisioning of multiple
services to one or more business units
through shared infrastructure and
resources
 Utility: services are provided on the basis of
how much is required by each customer,
how often, and at what times the
customer needs them.

Principles of Service
Strategy
 Value Creation
Utility
Warranty
 4 P’s of SS
Perspective
Position
Plan
Pattern
 Service Structure
Value Chain
Value Network

Value Creation
Utility
○ Functionality of service or product
○ Satisfy specific need
○ What is does?
○ What a customer gets?
○ Increases performance
Warranty
○ A promise or commitment
○ Meets agreed requirements
○ Concerns availability, capacity,
continuity and security
○ Reduces fluctuation in service
delivery
○
Value Creation
4 P’s of Service Strategy
 Perspective: the distinctive vision and
direction
 Position: the basis on which the provider
will compete
 Plan: how the provider will achieve their
vision
 Pattern: the fundamental way of doing
things – distinctive patterns in
decisions and actions over time.


Service Structure
 Value Chain
 The service provider acquires goods and services
from its suppliers and assembles them to produce new
services to meet the needs of the business


 Value Network
 Web of relationships that generates tangible and
intangible value through complex dynamic exchanges
through two or more organizations



Value Chain and Value
Network
Strategy Generation
 Define Market
Understand Customer
Understand Opportunity
Clarify and Visualize
 Develop Offerings
Understand Market Space
Develop Outcomes
Classify and Visualize
Strategy
Generation(cont)
 Develop Strategic Assets
 Develop and Maintain Service
Assets
 Understand Customer’s Assets
 Map Assets
 Design, Develop, Operate
Services
 Controls Costs
 Prepare for Execution
 Set Objectives
 Define Critical Success Factors
 Prioritize Investments
 Explore Business Potential
 Align to Customer needs
Service Strategy
Processes
 Financial Management
 Service Portfolio Management
 Demand Management
Financial Management


 Covers the functions and process responsible

for managing IT Service Provider’s
budgeting, accounting and charging
requirements
 To provide quantification of value of Assets
and IT Services and qualification of
operational forecasting
 To help identify, document and agree value of
current and future services
Financial Management
Concepts
 “As a Strategic Tool”
 Improves decision making capabilities
 Supports financial change assessment
 Substantiate the value of various services
as contained in Service Portfolio
 Ensure Financial Compliance and Control
 Visualize costs of operational control
 Track “Value Capture and Creation”
Business Case
 Supports Decision Making–- Where do we need to
spend?
 Business Impact— Where are we spending?
Improved Reliability
Improved Maintainability
Improved Services
 Business Objectives— Insight into cost of services
Lower Cost
Increased Customer Satisfaction
Improved Marketing Image
Service Valuation
 Service provisioning value (Pain)
The cost to IT related to provisioning a service
How much is IT spending on IT???
“Relatively easy to calculate”


 Service value potential (Gain)

Value addition based on customer’s
perception
How much customer earning from IT use????
“More Challenging to calculate”
Financial Management Key
Process Activities
 Budgeting
How much “money” is needed to deliver
and support IT services against demand
 Accounting
Keeping track of where, when, how, when
and why and by whom “money” is being
spent
 Charging
Optionally recovering some of the “money”
incurred with the provisioning of IT
services
Service Portfolio
Management
 Dynamic method for controlling service
management investments throughout the
enterprise and actively managing their value.

 The aim of this is to turn service management
into strategic assets

 Define: inventory services, ensure business cases and validate portfolio data
 Analyze: maximize portfolio value, align and prioritize and balance supply and
demand
 Approve: finalize proposed portfolio, authorize services and resources
 Charter: communicate decisions, allocate resources and charter services.



Service Portfolio
Management
 Why should customers buy this service?
 Why should they buy it from us?
 What form does the pricing structure take
– or how does the refund system
work?
 What are our strengths and weaknesses,
priorities and risks?
 How should we apply our resources and
capabilities?

Service Portfolio
 The complete set of services that are
managed by a service provider
 The service portfolio is used to manage
entire lifecycle of all services, and
includes three categories
Service pipeline
○ Proposed or in development
Service catalogue
○ Live or available for development
Retired Services
○ Services no longer offered
Service Portfolio

Services Proposed Services actively Retired Services

or in development delivered

“Planning and Managing Services from Cradle to Grave”

Service Portfolio and
Service Catalogue
Demand Management
 To understand and influence customer
demand for services
 To provide the capacity to meet these
demands
 What if ….
You have too much capacity (over-
capacity)
You don’t have enough capacity (under-
capacity)
 ….to meet customer
demands????
Demand Management +
Supply
 Supply and demand is and economic model
based on price, quality and quantity in a
market
 In a competitive market, price will function to
equalize
The quality and quantity demanded by
customer
The quality and quantity supplied by service
provider
 ….resulting in an equilibrium of price, quality and
quantity…
 p ly
p
Su
Price

D
em
an
d

Quantity
 Demand Management
Challenges
 Poorlymanaged “demand and supply” is
a source of risk
 Over-capacity
Planned
Unplanned
 Insufficientcapacity
 Simultaneous demand and delivery
 Influencing demand “yes”
 Completely controlling demands “no”
Demand Management
Challenges(Cont)
 Consumption and production of services
Tightly coupled
 Productive capacity of resources
adjusted to:
Demand Forecasts
Demand Patterns
 Some types of capacity can be quickly
increased
Increased
Decreased