2011

Service Strategy for the Fish and Chip Shop Owner

Patrick Keogh

UXC Consulting

patrick.keogh@uxcconsulting.com.au

ITIL 2011• The Service Strategy book has undergone

the most significant change/improvement of all of the core publications.

• This presentation has been updated based on the ITIL 2011 improvements

What is this presentation about?

• Service Strategy book may appear theoretical or abstract

• An example from day to day experience can make the ideas more concrete

• IT service strategy isn’t all that different to any service strategy

• “It all started several years ago when…”

Backstory –ITIL Foundation Certificate course

• Student taking early retirement “in a few weeks”.• What are you going to do? “We’ve got a place

down the coast.”• “Not really ready for retirement, I want to open

some sort of food business.”• “Haven’t decided what or where.”• So…

Conclusion…• This man needs a

service strategy!• ITIL Service

Strategy canprovide great guidance.

• So on with the story…

First of all, what is a service strategy?• Defining a strategy whereby a service

provider will deliver services to meet a customer’s business outcomes

• Defining a strategy for how to manage those services.

ITIL 2011 Service Strategy

4 P’s of Service Strategy• Perspective Describes the vision and direction of the organization. A

strategic perspective articulates what the business of the organization is, how it interacts with the customer and how its services or products will be provided

• Positions Describe how the service provider intends to compete against other service providers in the market. The position refers to the attributes and capabilities that the service provider has that set them apart from their competitors.

• Plans Describe how the service provider will transition from their current situation to their desired situation.

• Patterns Describe the ongoing, repeatable actions that a service provider will have to perform in order to continue to meet its strategic objectives.

ITIL 2011 Service Strategy

Strategy Management for IT Services

1. Define the market

2. Develop the offerings

3. Develop strategic assets

4. Prepare for execution

Key Concepts

How do these apply to the food service business?

2011

1. Define the market

The geography

BawleyPoint

BatemansBay

Narooma

The Market SpaceLocation Bawley Point Bateman’s Bay Narooma

Population 565 10,845 3,100

Demographics Quiet beach holiday town.

Popular retiree haven. Tourism. Central service town for 50Km radius.

Tourism, beach resort, rural service town.

Existing food service businesses

Butcher, baker, bottle shop, take away and an IGA.

> 40 restaurantse.g. at least 10 pizza shops.

< 20 restaurants and take aways,e.g. 1 pizza shop

Passing traffic Almost none. Route 1 goes through Bateman’s Bay outskirts.

Route 1 goes down the main street.

Industries Tourism. Retirement, tourism, fishing, forestry.

Fishing, tourism.

The Customer Portfolio

• What clientele would I be trying to attract?• What food services would this clientele

use?• What would the competition be?

2011

2. Develop the offerings

Potential customers• Service preferences driven by age,

income, background etc.• What customer assets do they have?

– Their own kitchen / crockery / fridge?– Somewhere to eat?

• “Locals”• Weekenders/holiday residents• Passing trade

What customer outcomes?

Somewhere quick to stop for lunch

What customer outcomes?

Day to day staple foods

What customer outcomes?

Somewhere fancy to go out for dinner

What customer outcomes?

Somewhere to get family takeaway dinnerquickly and at low cost.

What customer outcomes?

Morning coffee

or breakfast

or brunch.

Different services for different customer outcomes• Each of these will require its own specific

service model.• A customer will have multiple outcomes.• May draw on multiple services with their

unique service models in order to achieve their outcomes.

Competitors

Indicate demand forspecific services

Reduce our marketshare

How many pubs can survive in a town of 3000

people?

Where is the under-served market space?

2011

3. Develop Strategic Assets

Can you see Strategic Assets?

Can you see Strategic Assets?

2011

4. Prepare for Execution

Key Activities• Strategic Assessment

– SWOT– Critical success factors– Business strategy and plan

• Setting Objectives– Management strategy to ensure that objectives are met

• Aligning Service Assets with Customer Outcomes• Explore business potential, expansion and growth

2011

Service Economics

Demand Management

Patterns of business activity– Summer boom, winter bust– What hours of the day (do people eat later or

earlier when on holiday?)– Easter?– Long weekends?– What effect does weather have?– For peaky demand, how to manage resources?

Demand Management

User profiles– Commonly acquired baskets of services– If we have a table of 4 how much do they spend and how

long do they occupy the table? How about for a group of 8?– Do customers spend more at lunch than at dinner or vice

versa?– On average how many customers with special dietary

requirements will we get? Is it worth catering to vegans/special allergies etc.?

– What about small children?

Financial Management for IT Services

Market Price

Cost of Service Assets

RisksPrice and Profit

Market Share

Strategy and Organisation

• Our organizational structure must align with our strategy:– Hours of service– Can we appoint managers that we can rely

on?– Balance skills and resources between “front of

house” and the kitchen.

Service Management as a Strategic Asset• What is it that McDonalds sells?

– Is it the best hamburger?– Or is it predictable, timely service delivered at a good

price?

For McDonalds, Service Management is the business.

So my allegory comes to an end: what can we learn?

• Ideas and advice in ITIL Service Strategy are not new, and apply to all service organisations.

• Business intuitively apply these practices to some extent anyway.

• Make it real, make it concrete. It is about the customer and business viability.

Recommendations

• Take your service strategy seriously.• Strategy is not theoretical – it is real and

practical. If our fish and chip shop owner can do it then so can you!

• Remember the power of saying “No, we don’t do that”.

• Treasure your service assets. It isn’t heroics that deliver service, it is service assets.

2011

Questions?

Patrick Keogh

UXC Consulting

patrick.keogh@uxcconsulting.com.au