ITIL – Service Strategy
The service strategy of any service provider must be grounded upon a fundamental acknowledgement that its customers do not buy products, they buy the satisfaction of particular needs. Therefore, to be successful, the services provided must be perceived by the customer to deliver sufficient value in the form of outcomes that the customer wants to achieve. Achieving a deep understanding of customer needs, in terms of what these needs are, and when and why they occur, also requires a clear understanding of exactly who is an existing or potential customer of that service provider. This, in turn, requires the service provider to understand the wider context of the current and potential market places that the service provider operates in, or may wish to operate in.
A service strategy can not be created or exist in isolation of the over-arching strategy and culture of the organization that the service provider belongs to. The service provider may exist within an organization solely to deliver service to one specific business unit, to service multiple business units, or may operate as an external service provider serving multiple external businesses. The strategy adopted must provide sufficient value to the customers and all of the service provider’s stakeholders – it must fulfill the service provider’s strategic purpose.
Irrespective of the context in which the service provider operates, its service strategy must also be based upon a clear recognition of the existence of competition, an awareness that each side has choices, and a view of how that service provider will differentiate itself from the competition. All providers need a service strategy. Hence, the Service Strategy publication sits at the core of the ITIL V3 lifecycle. It sets out guidance to all IT service providers and their customers, to help them operate and thrive in the long term by building a clear service strategy, i.e. a precise understanding of:
- what services should be offered
- who the services should be offered to Service Strategy
- how the internal and external market places for their services should be developed
- the existing and potential competition in these marketplaces, and the objectives that will differentiate the value of what you do or how you do it
- how the customer(s) and stakeholders will perceive and measure value, and how this value will be created
- how customers will make service sourcing decisions with respect to use of different types of service providers
- how visibility and control over value creation will be achieved through
- how robust business cases will be created to secure strategic investment in service assets and service management capabilities
- how the allocation of available resources will be tuned to optimal effect across the portfolio of services
- how service performance will be measured.
The Service Strategy publication defines some key ITIL concepts.
The four Ps of Strategy:
- perspective: the distinctive vision and direction
- position: the basis on which the provider will compete
- plan: how the provider will achieve their vision
- pattern: the fundamental way of doing things – distinctive patterns in decisions and actions over time.
Competition and Market Space:
- Every service provider is subject to competitive forces
- All service providers and customers operate in one or more internal or external market spaces. The service provider must strive to achieve a better understanding than its competitors of the dynamics of the market space, its customers within it, and the combination of critical success factors that are unique to that market space.
Service Value: defined in terms of the customer’s perceived business outcomes, and described in terms of the combination of two components:
- Service Utility: what the customer gets in terms of outcomes supported and/or constraints removed
- Service Warranty: how the service is delivered and its fitness for use, in terms of availability, capacity, continuity and security.
Service Value also includes the associated concepts of services as Assets, Value Networks, Value Creation and Value Capture.
Service Provider Types:
Type I: exists within an organization solely to deliver service to one specific business unit
Type II: services multiple business units in the same organization
Type III: operates as an external service provider serving multiple external customers.
Service Management as a Strategic Asset: the use of ITIL to transform service management capabilities into strategic assets, by using Service Management to provide the basis for core competency, distinctive performance and durable advantage, and increase the service provider’s potential from their:
- capabilities: the provider’s ability (in terms of management, organization, processes, knowledge and people) to coordinate, control and deploy resources
- resources: the direct inputs for the production of services, e.g. financial, capital, infrastructure, applications, information and people.
Critical Success Factors (CSFs): the identification, measurement and periodic review of CSFs to determine the service assets required to successfully implement the desired service strategy.
Key Processes and Activities
In addition to Strategy Generation, Service Strategy also includes the following key processes.
Key Roles and Responsibilities
The Service Strategy publication defines some specific roles and responsibilities associated with the execution of a successful service strategy, including:
- Business Relationship Manager (BRM): BRMs establish a strong business relationship with the customer by understanding the customer’s business and their customer outcomes. BRMs work closely with the Product Managers to negotiate productive capacity on behalf of customers.
- Product Manager (PM): PMs take responsibility for developing and managing services across the life-cycle, and have responsibilities for productive capacity, service pipeline, and the services, solutions and packages that are presented in the service catalogues.
- Chief Sourcing Officer (CSO): the CSO is the champion of the sourcing strategy within the organization, responsible for leading and directing the sourcing office and development of the sourcing strategy in close conjunction with the CIO.