Sunday, November 30, 2014

ITIL v3 (Foundation) - Service Strategy

The goal of Service Strategy is to determine how to think and act in a manner which provides value to the customer.  The way I like to think of it is, How does an organization determine what it will offer in the marketplace. It answers such questions as:

  • What services to offer to customers? (self-service portal, support via online chat, 1 year history of reports, etc.)
  • How to differentiate from competitors? (Will our organization seek to be best in class for a specific service such as data storage?  Or will we seek to distinguish ourselves by being a one-stop shop offering a wide portfolio of services?  Or will we pride ourselves in offering the least expensive solution among our competitors?)
  • How to create value for customers?  (Has the customer expressed a desire for a cloud computing solution?  If so, offering the customer more local physical data storage isn't necessarily offering value.)
  • How to make a case for strategic investments? (Based on the strategy, what are the most effective ways to invest capital?  Do we invest in a network upgrade this year?  Or do we open a local office in Seoul to support our growing customer base there?)  It is worth noting here that any budgetary questions/considerations will typically fall into the Service Strategy area.
  • How to define and improve service quality?  (Should the service desk answer resolve 90% of calls on the first try?  Should the network target 99.5% uptime?)
  • How to efficiently allocate resources across a portfolio of services?  Can the same service desk be cross-trained to support multiple services as opposed to having multiple service desks in different locations?)
It consists of 3 processes:
  • Financial Management - How to guarantee efficient and cost-effective service delivery.
  • Demand Management - How to preduct the purchase of products to balance demand with resources.
  • Service Portfolio Management (SPM) - How to manage all service management investments while balancing risks and costs.
Key Concepts

Value Creation: Value is determined by the customer's perception and combines the utility of the service/product and the warranty of the service/product.

Utility vs. Warranty: Utility (fitness of purpose) is what something does.  For example, the utility of the iTunes applications is to organize media (videos and music.)  Warranty (fitness for use) is a guarantee or insurance that a product/service will meet its requirements.  

ESP (External Service Provider) vs. ISP (Internal Service Provider) vs.Shared Services Unit: An ESP is a service provider that provides IT services to external customers.  An ISP is a service provider within your own company.  .  A Shared Services Unit is a service provider that provides shared IT services to more than one Business Unit within the same company.

Service Assets include:
  • Resources (hardware, software, money, people) used to deliver an IT service, and 
  • Capabilities (education, training, and knowledge learned about the customer over time that is difficult to replicate by a competitor)
Service Portfolio consists of:
  • Service catalogue: The actual and available capabilities of the service provider, which are offered to the customer.
  • Service pipeline: The future capabilities which are under consideration or in development for a specific market or customer.
  • Retired Services: Those capabilities which have been phased out or withdrawn.
Implementation of the Service Strategy ultimately leads to changes in the Service Portfolio, which introduce risk, which is an uncertain outcome which aligns pretty closely with the PMI definition of risk.

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