Martin Sarnovský

Department of Cybernetics and Artificial IntelligenceFaculty of Electrical Engineering and Informatics

Technical University of Košice

Service StrategyService Strategy

ContentsContents

Introduction / ITIL v.3

Fundamentals of service strategy

Basic concepts of service strategy

Processes and roles established by service strategy

Example of a workflow during design of a service strategy

Conclusion

Service Service SStrategytrategy

Not products, but services!!! Publication Service Strategy – targeted towards higher level

management Key differences from ITIL v.2 Main content - description of the processes, roles, but also ideas,

methods... Basic objectives

What services? To whom? ...

Service StrategyService Strategy

Helps make IT organizations/departments a part of the entire business

The idea of functioning of business based on service management is kept here as a guiding principle, part of the strategy

Helps clarify the relationships between different services, used systems, processes, business model, strategies and objectives

Basic objectives of Service StrategyBasic objectives of Service Strategy

Objectives that the service provider sets for himself What services would be provided by a business?

(Portfolio/Catalogue) To whom should they be provided? (Request management) How is the business going to distinguish itself from the

competition? How do we really create “value” for the customer with the help of

services? (Value creation) How do we define the quality of service? (Evaluation) How do we effectively and efficiently assign resources to

services in the portfolio? (Assets/Resources/Capabilities) How do we resolve resource sharing conflicts?

Key ConceptsKey Concepts

BasicsBasics

• Publication describes:

• Planning, service strategy – tying business plans with IT strategy, service

portfolio and catalog service, or various forms of sourcing

• Categorizes service providers

• Categorizes alternatives of service delivery models

• It is based on

• The concept of service management and planning according to the “added

value“ of the service

• This type of planning uses an oriented pair Functionality - Warranty

Most important conceptsMost important concepts

• Assets/Resources/Capabilities

• Utility/Warranty

• Value Creation

• Type of service provision

• Service Portfolio

• Sourcing

4P Concept4P Concept

• Service Strategy defines key concept 4P

• Perspective – characteristic vision, direction

• Position – platform on which the provider will build upon and compete

• Plan – how provider will achieve his visions

• Profile – fundamental way of implementing things – characteristics, e.g. in

decision-making

PackagesPackages

• Service Level Package – SLP

• Measure of value of a certain Service Package

• Designed to meet the needs of a particular Pattern of Business Activity

• Always linked with...

• Core Service Package – CSP

• Service packages providing a platform for 2 or more SLPs

• Supporting Services

• Service that enables or enhances a CSP

• Service Package

• Detailed description of an IT Service that is available to be delivered to

Customers. A Service Package includes a Service Level Package and one

or more Core Services and Supporting Services.

ExampleExample

Evaluation of ServicesEvaluation of Services

Value – defined in business terms Service Utility / Functionality

What customer receives (outputs) Service Warranty

How service is delivered/suitability for use (availability, capacity, continuity, security)

Service

Service Utility

Functionality

“Meets a particular need“

Increases performance

Defined by

1. Supported outputs

2. Avoiding costs and risks

Service Warranty

Quality

“suitable for use“

Reduces variation in performance

Defined by1. Availability2. Capacity3. Continuity4. Security

Value CreationValue Creation

Value – depends also on customer’s own assets Value creation – transformation of service management offer into strategic assets =>

practical use (of capabilities and assets)

AssetsAssets, , ResourcesResources and Capabilitiesand Capabilities

Assets Any resource or capability Anything that could contribute to the delivery of a Service

Resources A generic term that includes IT Infrastructure, people, money or

anything else that might help to deliver an IT Service. Capability

The ability of an Organization, person, Process, Application, Configuration Item or IT Service to carry out an Activity

Service Management – strategic asset (service value)

Service ProviderService Provider

Type I Internal Embedded within a Business Unit within an Organization

Type II Shared Provides shared IT Services to more than one Business Unit

Type III External Provides services to multiple (external) customers

Sourcing – Sourcing – Structure for Resource AllocationStructure for Resource Allocation Internal (Type I)

Delivery of and payment for the service by internal employees Does not take into account the standardization of services across departments Greatest control / limited scalability

Shared Services (Type II) Set mechanism for payment for services, lower costs than Type I Similar level of control, less limited scalability

Full Service Outsourcing Single contract with single service provider Higher risks of delivery of services, difficult to change provider

Prime Single contract with single service provider Provider controls only service delivery, involves a number of providers Risk decreases / Complexity of supply increases

Consortium A set of service providers (recipient selects) Providers – required to meet a single interface for managing services Fulfills more requirements (than sourcing using single provider) Risks are increasing (providers = competitors must cooperate)

Selective Outsourcing Selection based on experience (1989, Kodak)

Co - sourcing

Sourcing Sourcing and Service Provision Modelsand Service Provision Models

Categorization and analysis of models that providers will use to secure resources and service delivery

Managed Service Business unit requesting the service funds the use of this service

for itself Shared Service

More services for one or more business units Shared infrastructure and resources

Utility Services provided based on how much and how often each

customer needs them

Service PortfolioService Portfolio and and Service Catalogue Service Catalogue

Portfolio contains all the resources that are used / created at different stages of service life cycle

Service Catalogue Subset of Service Portfolio The only part of portfolio visible to

the customer Part of the portfolio, which provides

for the payment of costs or profit generation

Services in catalogue – set and tuned to the needs of the customer

Catalogue – important outward indicator -> represents provider’s capabilities

ProcessesProcesses

Strategy GenerationStrategy Generation

Market Definition Evaluations, analyses What services can the organization offer

Offer Development A more detailed description of services that are worth moving

further Development of Strategic Assets

Examination of the possibility of reusing existing services Our capabilities of reusing them

Implementation Preparation Objective – to ensure that we are ready to deliver, what we

decided to pursue

Financial ManagementFinancial Management

Purpose – To provide business and IT departments financial statement of provided IT services, value of assets and qualification

Includes – management of budget, accounting and charging Process is highly interconnected with entire organization => financial information is

created / used by many parts of the business – aggregate, share financial data FM process includes

Quantifying the value of services Quantifying the value of components of services Determination of costs (various types), assignment of costs to services Classification of costs

Capital/Operational Fixed/Variable Direct/Indirect

Dynamics of variable costs understanding that some factors can affect a service and therefore also its

costs

Demand ManagementDemand Management

Purpose Understanding customer’s service requirements Influence and ensure capacity to fulfill these requirements

Strategic level Analysis of character of business activity Analysis of user profiles

Tactical level How can we motivate customers to use our IT services?

E.g. differential charging for use of IT service in less important periods

Service Portfolio ManagementService Portfolio Management

Continuous process - From Cradle to the Grave

Describes all services that are/will be/were

Definition – of catalogue services,

Ensuring of business cases,

Data in portfolio Analysis – maximizing portfolio value,

prioritization, balance between

demand and supply Approval – finalization of portfolio,

Confirmation of services/resources

Determination – allocation of resources

and services

Roles and responsibilitiesRoles and responsibilities

Business Relationship Manager BRM (sometimes referred to as Account Manager) Understands the business of the organization, creates a

relationship with the customer

Product manager Responsibility for the development and management of services

during the life cycle Responsibility for capacity management and service/solutions/

packages that are in the service catalogue Chief Sourcing Officer

Resource strategy in business Management and direction of departments, resources, and

development of resource strategy

ConclusionsConclusions

Service Strategy – difficult to read for IT workers, often incomprehensible Overlap with other ITIL publications, notably Service Design (Continuity,

Capacity management) Uses different terminology Requires background in finance Vaguely defines processes / functions / concepts

Questions?Questions?

More info – Subject Wiki page: https://chimera.fei.tuke.sk/rip

Info also at http://www.itsmf.sk

Applications ofApplications of ITIL ITIL inin SR SR

Knowledge of the ITIL approach in SR (207 respondents)

12,1 % - Organizations with more than 250 employees, mostly from the vicinity of BA

- those organizations that know of ITIL but do not use it

Applications ofApplications of ITIL ITIL