SERVICE STRATEGY
Step 1:Definethe market and identify customers.
INPUTS & OUTPUTS
Analyzinghow tomosteffectivelysourceanddeploy theresourcesand capabilities required to deliver outcomes to customers.
:
appliedinputsfortherequiredoutputssuchas: Vision Mission Strategies Strategicplans Service portfolio Change proposals Financial information
Deciding what to source -Substitution/change, Disruption/interference &Distinctiveness. Sourcing structures -Choosinga sourcingstructurei.e.outsourcing,insourcingetc. Multi-vendor sourcing – Multipleproviders to spread the riskand reducingthe cost.
ProcessManager – accountablefor operationalmanagementofa process Step3:Quantifythe outcomes.
best location, moving/change disruption. Step 4:Classifyand visualize theservice
Usingvalue networks – serveto communicatethe catethe modelin ac learand simple way Example to theleft
Structure - Particularservice assetsneededandthe patternsin which theyare configured
Step5:Understand the opportunities
Risks
Purpose
Step 8:Defineservice unitsand packages.
establish and maintain abusiness relationship understanding the customer and their businessneeds
Critical SuccessFactors and Key Perfomance Indicators
Objective
CSF – Ability to documentand understand customerrequirementsofservice,Ability to measurecust omersatis faction andto knowwhat action to take with the results.
Ensureshig h level ofcusto mer satisfaction makingsure that thecustomer’sneedsaremet
to the requirement
customerportfolio and customeragreem ent are updated and validated customers urveysare also put into action and the service catalogue isan important reference in communicatingc onsistently
Activities/Methods/Techniques
provider’s response to customer’s
Customer agreement portfolio – databaseorst ructured document used to manage service contractsor agreements between an IT service provider and itsc ustomers.
BusinessValue
abilityoftheservice provider to articulate and meet the businessneedsof its customers
CSF – Aprocessexist whereby servicesaredesigned to meet the patternsofthebusinessactivity andmeet businessoutcomes
KPI – Capacity plans include detailsofpatternsof business activitycorresponding to workloads.
To befully activedemand needs to beactive throughout thewhole lifecycle.
TheservicePortfolioand CustomerPortfolio
Minutesofmeetingsbetween business relationship managers andcusto mers
FINANCIAL MANAGEMENT FOR IT SERVICES
Usingtheorytosupportstrategy Strategymustenableserviceproviderstodelivervalue Abasicapproachto decidingastrategy Service management asa strategicasset Strategy synthesis opposing dynamics Strategy as ameans to outperform competitors Government and non-profit organizations
Thisfigureshowsa relationshipbetween thelevelof fulfilment of customerneeds andthe levelof satisfacti levelof satisfactionthe onthe customer customer feels.
Perspective Positions Plans
Patterns
3factors involvedincustomer satisfaction BasicFactors - ‘must -haveutility’ . Performance factors - Onedimensional utilities. Excitementfactors - ‘nice-to-have utility’. Shouldonlybe offered under3circumstances: Attraction Marketingcampaignand offered at alimited time. Customerdissatisfaction withservice
External Customers – peoplewhoarenot employedby the organization
Process
Service portfolio management
Conductbusiness in afinancially responsiblemanne r *Understand IT servicescostsa nd maintain profitability *Ability to make sound businessdecisions
Also
Service Operation
ContinualService Improvement
Understand the outcomes
Evaluate
Give support with effectiveness and efficiency
Check changes in outcomes Therelevance ofservices
CRITICAL SUCCESSFA CTORS *Thereis an enterprise framework toidentify,m anageand communicateinform ation *Fundingis available to support provision ofservices *Service provider isa bleto chargefor service
Demand management
Measure the success Improvements Meetstheobjectives
Value to business FINANCIAL MANAGEMENT FUNDING *IT service management refers to means an ITservice obtains financial resources *Typesof fundingmodels Rolling plan -> isfor afixed period (monthly) Trigger based -> Is initiated by an event Zero based -> Is allocated accordingto financial periods
Purpose& Objectives
Retired services
Policies,principles& basicconcepts
Service catelouge Configuration managementsy stem stem
FINANCIAL MANAGEMENT COSTS *Accountingis responsible foridentifyingcosts and managingvariance frombudget *An accountingcost model is a framework that determines the costof a service and ensure adequate allocation
Key performance indicators Critical success factors Projectportfolio
– Describesvisionanddirectionof organization on – Describeshow theserviceproviderintends to
competein themarket – Describeshowtheserviceproviderwill transition fromtheircurrentsituationto theirdesiredsituation – Describesongoingactions aserviceproviderwillhave to perform tocontinue meetingitsstrategic objectives
IT organizations arecomplex systems needing to interact with other components
They are interdependent
Thiscomple xity explains why someservice organizations resistchange
TypeI (InternalServiceProvider) TypeI ServiceProvider c eProvidersarededicated s arededicated to, and often embedded within,an individual businessunit.
Services – Meansof delivering value to customers by facilitating outcomes customers want toachievewithout ownershipof specificrisks andcosts.
Value – Value ofa service can be considered ed to be the levelat which service meetsa customer’s expectations.
a
Eliminating orreducing deviationsin performance
Maintainingope rational effectiveness and efficiency
Reducing hidden costs
Publicizinga nd substantiating hidden benefits
Useof automation,web-based functionality, supporttools
Experienced, skilled and trained staff Adequate supportfrom business(Funding)
Appropriate and effectivesupport tools
Effective Measurement
TypeII (SharedServices Unit)
Beginon the outsideof the service organization
Responsiveness to customer
Think ofproces s and service as equal
Numbers matter
Compete as anorganization
Critical SuccessFactors
Allchallengesandrisksalreadymentionedcanbe invertedtobecome criticalsuccessfactors(CSFs)
Functions asFinance, IT,Human Resources and Logisticsare notal waysat the core of n o r ga n zi a t i on s c o mp e t ti i v e ad v an t ag e .
TypeIII Service Provider isa service provider thatprovides IT servicesto external customers
RiskAssessment - Concerned with gathering information about exposure to risk so organization can makeappropriate decisions and manage risk properly RiskManagement – Involveshavingprocessesin placeto monitor risks,acces sto reliable and up-to-dateinformation about risks
Used to directand control the service managementact ivities. Should be astrategic decision for a business. Relationships between processes are implemented in differentway by different serviceproviders. Due to common elements between managementss ystems,organisati ons managethesesystemsin integrated way. Management needsto analyse requirements ofrelevant management standard in details. Compareto othersalready incorporated
GOVERNANCE
Governance Framework: Establish responsibilities Strategy to set and meet organisations objectives Acquire forvalid reasons Ensure performancewhen required Ensure conformance with rules Ensure respectfor human factors
DesignRisks
Customersexpectservicestohave abeneficialimpacton performanceof assets [Utility from their perspective]
Alwaysa risk that servicesdesigned fail to deliver the expected benefits in utility
Major cause ofpoorperformance ispoor design
Twodistinctphases indealing withRisk:
TypeIII (ExternalServiceProvider)
Types of IT Services
– Those who buy
COSTSCLASSIFICATION *Capital costs – t he costofpurchasing something that will beafinancial asset *Operational costs – costs resultingin runningthe IT service
Otherfactors critical tosuccessofa Service Managementorganization:
MeasurementPrinciples:
Customers goodsorservices, customerof an IT service provider is theperson or group who defines and agreesthe service leveltargets.
Mainvalueof demand management is to achieve a balancebetweenthecost ofa service andthevalueof thebusinessoutcomesit supports
Application Portfolio
Internal Customers – peopleordepartments who workin thesame organizationast he service provider
NewProductlaunch plans
Benefits
Should be achieved through:
Sales Forecast
*Budgeting -> Predicting andcontrollingcas h flow *Accounting-> Enables IT organization to accountfor money spent *Charging -> Billing customersfor service
PreservingValue
MarketingPlans
Business Value
Information Management
Return on investment
Financialmanagem ent forITs ervices
The KanoModel
Customer Satisfaction - Customer satisfaction ismeasured against service provider performancetaking into account,targets and previous scores Service Requirements - Thisinvolvesinvestigatingthebusinessneed or opportunity,vali tunity,vali dating it,defining a businesscase and evaluating both the warranty and utility needed.
requirements isappropriate.
Service Economics Thecost of providin Textgservices and the valueofoutcomesachieved
Relies on 4 main areas
Service attributes Arethec haracteristicsthat isticsthat provideform andfunction tothe service. Linearfactor – Thedegreeto which the customerneedsare metdeterminestheir satisfaction. Non-linearfactor – Ifonly a fractionof customerneedsare metthereis still a highlevelof customersatisfaction.
Policies/Principles/Basicconcepts Customer Portfolio – isa database or structural document used to record all customers ofthe IT service provider.
aligningobjectivesofthe businesswith the activity oftheservice provider
Represent the serviceprovider to its customers through coordinated marketing, sellinga nd deliveringa ctivities. Work with service portfolio managementand design coordination to ensurethat the service
Critical Success Factors and Key Performance Indicators
Test and validateservice
Business relationship management
Scope
Thecustomermight findit difficult to break down individual activitiesthatmake sense totheservice provider.
Policies/Principles/Basic Concepts
Business impact analysis
Information Management
Mouldingthe strategy Definingthe changes needed
Business impact analysis
KPI – Customer satisfactory levelsare consistently high and areused asfeedback into portfolio management.
BusinessPlans
Effects ofservice on Transition
Patterns and business activity
Servicepackages Acollection oftwo ormore servicescombined to offer a solutionto aspecifickind of customermeet specific business outcomes. It can bea combination of core, enabling and enhancing services
Activities/Methods/ Techniques
When aservice movesfrom design and build into operation
Service models
Poor integration between service provider and customer facing processeswil l resultin bad business relationship management
DEMAND MANAGEMENT
Service Transition
Strategytoolsand procedures es Outcomesand restraints
History ofpoor servicemay make itdifficult forbusiness relationship management to function effectively
Scope
UnderstandMarketspace – Aset ofbusinessoutcomes whichcan befacilitated by a service. Customers normally prefer thosewith lowercosts and risks
Dynamics – Theactivities, flowof resources, coordinationand interactions.
Challenges
Lack of, or inaccurate configuration management information,whichresults on theimpactof changingdemand onthe serviceprovider’s infrastructure and applications.
Identify and analyse patternsofbusiness activity to understand the levelof demand that will beplaced onaservice
Identify and analyse how differentt ypesofuser influencethedemandfor service
Risks
Step 6:Defineservice basedon outcomes.
Service conditionsshouldhave clarity andhavecontext on how resources are usefulto justify the expenseof aservice.
Challenges Step 7:service models.
Objective
To understand, anticipate and influencecustomerdemandfor servicesand to workwith capacity management to ensure theserviceproviderhas capacity to meet this demand
ProcessPractitioner – responsible forcarryingout one ormore process activities.
Outcomesforreview: ServiceCatalogue Servicesshouldbe clearly linkedto defined andquantif ied outcomes Servicepipeline Used forthesuccess ofservice designand validation Servicelevel agreement Specifying the service and outcomes it is designed to support.
Sourcing governance – refers to therules, polici es and processes by which businesses operate.
Value chains tovalue networks – creatingandmaintaining valuechains.Strategiesinclude: o Marshal externaltalent. o Reducecosts o Change focal point of distinctiv eness. o Increasedemand forcomplementary services. o Collaborate
Processowner – ensuringthat a process is fit forpurpose
Markets canbe definedbyoneor n edbyoneor morecriteria Industry, Geographical, Demographic, Corporaterelations aterelations (group of companies)
Service provider interfaces – usedtoensuremultiplepartiesin abusinessrelationship have thesamepoint of referencefor defining, deliveringandreportingservices. ngandreportingservices.
Critical success factors – cost,
Purpose
Roles Service Owner – Ensuringt hattheon-goingservicedeliveryand supportmeetthe agreedcustomerrequirements
5Operational Risks
Whatis the difference fference between governancea nd management? Governanceperformed by governors.Insures organisation adheres to rules and policies. Management performed by executives and people whp reportto them. Job is toexecute rules,processe sand operations. A service strategyis a subset ofthe overall strategy fortheorganisation.
TYPESOF COST MODELS *Cost by it- accountsfor cost and reports to management *Cost by service – costis reported accordingto service *Cosy by customer –s erviceis paidforbyserviceproviderand allocated to customers *Cost by location - service ispaid forby serviceprovider and allocated to location *Hybrid costmode l – acombinationofdifferentmodels
Governanceis the single overarchingareathat c hingareathat tiesITand businesstogether.Servicesare on way ofensuringthatthe organisation isable to execute governance
WhatisITgovernance? It doesnotexistasseparateare. Governedby samerulesas organisation.CIO enforces corporategovernance through setofapplied strategies,policies and plans
How isCorporate governance ofIT defined, fulfilled andenforced? CIO ensures thatcorporate strategies, policies,rul es and plans includea high-level overview ofhow IT will begoverned. Management consultants provide assistance to governors. Final decision stays with governor as the are accountable for governance
Whatisgovernance? Therules ,policies and processes by which abusiness are operated,regulated + controlled. Defined by board ofdirectors, stakeholdersor constitution.
Who Governs? A person or group ofpeople who areresponsible for the governanceof the organisation. Appointed by shareholderso eholderso r membersof organisation.
How doesservice strategy relate to governance? Governors areresponsible for the strategy ofthe organisation,and ensuringall partsoforganisation are aligned to strategy. CIO and IT steering committee will oversee strategy management.
