SERVICE STRATEGY WEBINAR
V3 and Organisations?• V2 – provides core processes
• V3 – moves IT from a position of supplier to partner
• Levels of maturity – V2/V3– V2 – helps organisations move to a minimum
of level 3– V3 – increase maturity toward levels 4 and 5
Purpose and Principles of Service Strategy
• Purpose – Develop the ability to think and act strategically.– Use strategic assets to achieve goals– Define the dependencies between Strategy and
SM processes
• Principles– Outcome - Fulfilment of need/s– Create value
Objectives
To be able to answer questions such as:
• What services should we offer and to whom?
• How do we differentiate ourselves from competing
alternatives?
• How do we truly create value for our customers?
• How do we capture value for our stakeholders?
• How can we make a case for strategic investments?
Goals
• Show how to transform service management into a strategic asset
• See the relationships between various services, systems or processes that are managed and the business models, strategies, or objectives they support
Basics
• A Strategy is not a Plan• Building blocks of high performance
– Market– Performance – Capabilities
• Value Capture – what the provider keeps• Market Space – desired customer outcomes
supported by one or more service/s– Opportunity to deliver value through one or more
services
Value = Utility and Warranty
From the customer’s perspective, the business value of a
service is created by the combination of two elements:
• Utility is the functionality offered by a product or service from the customer’s perspective (Fitness for Purpose)
• Warranty is a promise or guarantee that a product or service will meet its agreed requirements. This may be a formal agreement such as a Service Level Agreement or Contract, or may be a marketing message or brand image (Fitness for Use)
UTILITY
WARRANTY
T/F
T/F
T/F
Fit for purpose?
Fit for use?
OR
AND
Performance supported?
Constraints removed?
Available enough?
Capacity enough?
Continuous enough?
Secure enough?
T: TrueF: False
Value-createdAND
Value Creation
© Crown Copyright 2007. Reproduced with permission from OGC
Scope
• Service Strategy main activities- Define the market
- Develop the offerings
- Develop strategic assets
- Prepare for execution
• Financial Management
• Service Portfolio Management
• Demand Management
SM as a Strategic Asset• Capabilities to control and coordinate
resources to support a catalogue of services
• Virtuous cycle demonstrates– Value + Perceived benefits– On-going relationship/partnership– Return on investment/assets
• Improvements – closed-loop system
• Increase potential – Service/Performance
Forming Strategy
Needs fig 4-19!!!!
The four Ps
• Plans• Patterns• Perspective• Positions
Entry points to Service Lifecycle
Service Strategy forms
Perspective
Patterns Plans
Positions
Strategy
Service Assets
• Service assets are used to create value in the form of goods and services
• Resource is a generic term that includes IT Infrastructure, people, money or anything else that might help to deliver an IT service. – Resources
• Information/Applications/ Infrastructure/Finance
• Capability is the ability of a service organisation, person, process, application, configuration item or IT service to carry out an activity. Capabilities are intangible assets of an organisation.– Capabilities
• Management/Organisation/People/Knowledge
Service Packages
• A Service Package is a detailed description of an IT Service that is available to be delivered to customers. A Service Package includes one or more core services and supporting services as well as a Service Level Package
• Core services deliver the basic outcomes desired by the customer
• Supporting services either enable or enhance the value of a service
Service Providers
• Type I– Internal Service Provider (ISP)
• Type II– Shared Services Unit (SSU)
• Type III– External Service Provider (ESP)
Service Providers
Build lasting relationships based on -
Strategic planning and control
Common Objectives
Shared Knowledge
Experience influences planning
• How to decide…?
• Transaction costs – overall costs of conducting business with a provider. Purchase cost + + + + + + +?
• Internal (aggregate)/External (disaggregate)• “Incumbency”
Service Structures
• Value Chain or Value network (Value net)?
• Chain – linear/production line
• Net – collaborative exchanges
• Service Systems
Service Knowledge Management System
Service Portfolio
Service Lifecycle
Service Status:RequirementsDefinedAnalysedApprovedCharteredDesignedDevelopedBuiltTestReleasedOperationalRetired
Service Portfolio
Service Pipeline
Service Catalogue
Retired Services
Customer/support team viewable section of the Service Portfolio (the Service Catalogue, with selected fields viewable)
Services under development, build or test
Services no longer live
© Crown Copyright 2007. Reproduced with permission from OGC
Demand Management - Objectives
• To avoid excess capacity generating costs without creating value
• To prevent insufficient capacity impacting the quality of services provided
• Business Relationship Manager
• Product Manager/Service Owner
Demand Management - Roles
Concepts
• Activity-based demand management
• Patterns of business activity
• User profiles
• Differentiated offerings
• Differentiated service levels
FM - Objectives
• To provide operational visibility, insight and superior decision making
• To provide the business and IT with the quantification, in financial terms of the value of IT services, the value of the assets underlying the provisioning of those services, and the qualification of operational forecasting
FM - Concepts
• Service valuation- Provisioning value
- Service value potential
• Demand modelling
• Service portfolio management
• Service provisioning optimisation
Return on Investment (RoI)
• Quantify the value of an investment (cost/benefit)
• Measure ability to use assets to generate value
• Issues– Simplistic approach
• Net profit of investment divided by net worth of assets
– Hard to identify financial return for specific aspects of SM
– Understand the business imperative
– Short term
– What’s the cost of not doing it?