ITIL v3 (Foundation) - Service Design

THE GOAL OF SERVICE DESIGN IS TO PROVIDE the design and development of services and their related processes.   If you work in IT project management, this typically encompasses everything from after the signing of the contract thru the just before deployment into production.  In SDLC terms, this encompasses Analysis, Design, and Build.  (Testing and deployment activities would generally fall in Service Transition.)

Whereas Service Strategy typically dealt with what would go into the portfolio of offerings to a customer, Design begins with the demand for new or changed requirements for the customer which would typically fall within the pre-defined portfolio of service offerings.  The Four (4) P's of People, Products, Process, and Partners define how the what gets delivered, including:

• Design of Service Solutions
• Design of the Service Portfolio
• Design of the Architecture
• Design of Processes
• Design of Measurement Systems and Metrics

Service Design also concerns itself with:

• Development approaches - waterfall versus Agile (incremental and iterative)
• Service Delivery Model (insourcing vs. outsourcing vs. co-sourcing, etc.)

As with PMBOK, the ITIL Body of Knowledge structures itself around processes.  In the Service Design phase, the corresponding processes are:

• Service Catalogue Management
• Service Level Management
• Capacity Management
• Availability Management
• IT Service Continuity Management
• Information security management
• Supplier Management

For in-depth explanations on the processes, I suggest this link.