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Purpose and Scope of Service Strategy

The purpose of Service Strategy is to define the strategic approach for service
management across the whole lifecycle through understanding the business objectives and
needs
Scope of ITILs guide on Service Strategy covers:
defining a strategy with guidance and recommendations for the service provider
to deliver services to meet business outcomes
defining a strategy for managing these services

Objectives of Service Strategy


Objectives of Service Strategy:
provide an understanding of what strategy is
identify the services, their users and the level of demand
understand the organizational capability and funding requirements, and coordinate
and document the use and optimization of service assets
understand the definition of value according to the customers
provide the means to identify opportunities to provide the best services
deliver a service provision model, including the funding, delivery and the purposes
of the services
define the processes and services that will deliver the strategic plans

Why Service Strategy is Important?


Allow the organization to understand the values of the IT services to the business outcome
Consistently provide valuable services to the customers / users by understanding the intrinsic
values
Can respond to business change and give competitive capability to the organization
Know how to prioritize the services requests to bring about maximum ROI
Deliver services that are seen by the customers to be valuable (delivering business outcome
and achieving business objectives)

Key Concepts and Definition


Value Consideration
Value is defined by customers based on how far the objectives can be matched, the value
will change over time
the customers will determine the mix of features according to their budget
IT service values are usually intangible
business outcomes, preferences and perceptions of the customers are used to evaluate the
services

if generated value (what the services achieved) > cost input (what the service cost), the
service IT provided is perceived to be valuable

Utility and Warranty


Utility is the functionality offered by a product or a service to meet a specific customer need
/ required outcome (what the service does / fit for purpose)
Warranty provides the assurance that a product or service will meet the agreed
requirements (e.g. service level agreement or contract), be reliable in terms of both security
and continuity (how the service is delivered / fit for use)

Assets, Resources and Capability


[definition] Asset is any resource or capability
Customer asset: asset used by a customer to achieve a business outcome
Service asset: asset used by a service provider to deliver services to a customer
[definition] Resources are the direct inputs for the production of services e.g. money,
infrastructure items, applications, information, people (capital expenditure as a physical
asset).
[definition] Capabilities are the assets that represent the organizations ability / knowledge
to do something to achieve value, e.g. management, organization, processes, ability to
coordinate, control, peoples experience and skills.
Capabilities requires resources to deliver value.

Governance
[definition] Governance ensures that policies and strategy are actually implemented, and
that required processes are correctly followed. Governance includes defining roles and
responsibilities, measuring and reporting, and taking actions to resolve any issues
identified.
Where IT and business meet -> operate together according to direction and policies to
achieve objectives
Governance Structure: Corporate Governance > Corporate Compliance > IT Governance >
IT Compliance > IT Service Management
Corporate governance is about promoting corporate fairness, transparency and
accountability
IT governance is the responsibility of the board of directors and executive management. It is
an integral part of enterprise governance and consists of the leadership, organizational
structures and processes that ensure that the organizations IT sustains and extends the
organizations strategies and objectives
Compliance ensures that a standard or set of guidelines is followed, or that proper, consistent
accounting or other practices are being employed
Service management must include corporate governance standards and policies
Corporate governance provides the control for the Service Strategy
ISO / IEC 38500 is the international standard for corporate government in IT

The strategic policy also plays a significant role in continual service improvement (CSI)

Risk Management in Service Management


only covers the basic risk management approach
must be complementary to the corporate approach to corporate risk management
steps in risk management (a repetitive activity)
identifying risks document all potential risks in risk register, to be managed
through continual service improvement lifecycle stage
analysis of risks quantitative and qualitative analysis
managing risks action plans should be tailored for all the risks in the risk register

Patterns of Business Activity


Pattern of Business Activity (PBA), i.e. activities that are repeated within the organization
with a pattern (e.g. daily server load, weekly utilization of space or annual pattern of peak
seasons), needs to be identified and documented in the form:
Classification: type of PBA and its origins, type and impact of outcomes, the
workload
Attributes: frequency, volume, location and duration
Requirements: performance, security, privacy, tolerance for delays, warranty
Service Asset Requirements: the demand for resource and capability

Service Portfolio Management Process


Purpose of SPM: ensure the appropriate mix of services to meet customer
requirements, the information (e.g. investment, interaction with other services) in the
service portfolio clearly define the services and link them to business outcome providing the
capability for alignment across the whole lifecycle to deliver value
Objectives of SPM
a process to allow management of overall service provision to review, control (how
and when to provide the service), improve or retire a service
maintain the definitive portfolio of all services provided including the business needs
and achieved outcomes
assist in judging the value of new service requests and review of investment
allows the organization to understand the value of IT services to business goals
Scope of SPM

all the services in current use, in planning or having been retired


track investment and expenditure on all services and determine whether they are
delivering value throughout the whole lifecycle
Output of SPM: Service Portfolio
the complete set of services managed by a service provider (representing all the
commitments and investments)
three sections:
pipeline section pre-operational services, conceptual services (will be
provided if resource is unlimited)
service catalogue section customer-facing, live operational services
retired section retired services
to ensure correct funding for all IT services across pipeline (development) and
service catalogue (maintenance) sections

Financial Management for IT Services Process


Purpose: to secure enough funding for all the IT services (design, develop and deliver) and
to control IT expenditures by balancing quality and cost, thus avoiding commitment to
services that are not financially viable
Objectives
define the financial framework to manage cost, apply financial control, report
expenditure and recover cost from customers (if applicable)
study the financial impact of new / changed organizational strategy
secure enough funding for IT services (need to align with the overall financial
management of the organization) and provide financial forecasts in respond to needs
and changes
work with service assets and configuration management process to ensure all assets
are maintained and all costs recorded
Scope
ensure the financial practices within IT is consistent with organizational standards so
that other business units will have an understanding of how IT is funded
three main processes with two cycles (planning / annual vs operational):
Budgeting predicting and managing exceptions of income and expenditure
Accounting establishing unit costs and recoding the expenditure with cost
breakdown
Charging establishing pricing policy and billing the customers (if any)

Business Relationship Management Process


Purpose of BRM: to establish relationship between the service provider and customers and
to ensure customers satisfaction by responding to changing requirements and managing
customer expectation

Objectives of BRM
understand customers needs and prioritize services accordingly to meet user
requirements
maintain good communication
handle conflicts and complaints effectively
identify changes in business environment and technology that could impact services
ensure customer satisfaction
Scope of BRM
focus on high level perspective of whether the service meets business needs
seek to understand customer requirements and business objectives
keep track of changes in technology and environment and advise users on these
understand the use of services on offer
measure level of customer satisfaction and respond to complaints
work with other service management processes and functions for information
gathering, etc.
BRM strategic, to drive overall customer satisfaction vs Service Level
Management tactical, meeting agreed levels of service in operation

Business Case
[definition] A business case is the justification for a significant item of expenditure. The
business case includes information about costs, benefits, options, issues, risks and possible
problems.
A business case is a tool for decision planning and support for understanding the likely
consequences of a business decision in quantitive or qualitative terms
Information can be captured from the Service Portfolio with sound financial management
Business cases are built in Business Relationship Management process and evaluated in
Service Portfolio Management process
Structure of a business case
1. Introduction business objectives
2. Methods and assumptions define the boundaries (e.g. time, context)
3. Business impacts financial and non-financial (image, satisfaction, etc.)
consequences
4. Risk and contingencies
5. Recommendations
Business objectives and business impacts are closely linked and may have one-to-many /
many-to-one relationship.

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