Itil Service Strategy Poster.pdf 1e3bi

SOURCING STRATEGY:

HOW TO DEFINE SERVICES

SERVICE STRATEGY INPUTS & OUTPUTS

Analyzing how to most effectively source and deploy the resources and capabilities required to deliver outcomes to customers.

applied inputs for the required outputs such as: Vision Mission Strategies Strategic plans Service portfolio Change proposals Financial information

Deciding what to source - Substitution/change, Disruption/interference & Distinctiveness. Sourcing structures - Choosing a sourcing structure i.e. outsourcing, insourcing etc. Multi-vendor sourcing – Multiple providers to spread the risk and reducing the cost.

ORGANISING FOR SERVICE STRATEGY - ROLES

Step 1 : Define the market and identify customers.

Service Owner – Ensuring that the on-going service delivery and meet the agreed customer requirements

Process Manager – able for operational management of a process Step3 : Quantify the outcomes.

Sourcing governance – refers to the rules, policies and processes by which businesses operate. Critical success factors – cost, best location, moving/change disruption. Step 4 : Classify and visualize the service

Step 6 : Define service based on outcomes.

Step5 : Understand the opportunities

Service conditions should have clarity and have context on how resources are useful to justify the expense of a service.

Using value networks – serve to communicate the model in a clear and simple way Example to the left

Understand Market space – A set of business outcomes which can be facilitated by a service. Customers normally prefer those with lower costs and risks

Structure - Particular service assets needed and the patterns in which they are configured

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Purpose

BUSINESS RELATIONSHIP MANAGEMENT

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aligning objectives of the business with the activity of the service provider

Service Economics The cost of providing Text services and the value of outcomes achieved

Defining the changes needed

Critical Success Factors and Key Performance Indicators

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To be fully active demand needs to be active throughout the whole lifecycle.

CSF – A process exist whereby services are designed to meet the patterns of the business activity and meet business outcomes KPI – Capacity plans include details of patterns of business activity corresponding to workloads.

The service Portfolio and Customer Portfolio

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Minutes of meetings between business relationship managers and customers

FINANCIAL MANAGEMENT FOR IT SERVICES

Customer agreement portfolio – database or structured document used to manage service contracts or agreements between an IT service provider and its customers.

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Business Value ability of the service provider to articulate and meet the business needs of its customers

Relies on 4 main areas

This figure shows a relationship between the level of fulfilment of customer needs and the level of satisfaction the customer feels.

Service Requirements - This involves investigating the business need or opportunity, validating it, defining a business case and evaluating both the warranty and utility needed.

3 factors involved in customer satisfaction Basic Factors - ‘must-have utility’. Performance factors - Onedimensional utilities. Excitement factors - ‘nice-to-have utility’. Should only be offered under 3 circumstances: Attraction Marketing campaign and offered at a limited time. Customer dissatisfaction with service

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Internal Customers – people or departments who work in the same organization as the service provider

External Customers – people who are not employed by the organization

Patterns

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– Describes vision and direction of organization – Describes how the service provider intends to compete in the market – Describes how the service provider will transition from their current situation to their desired situation – Describes ongoing actions a service provider will have to perform to continue meeting its strategic objectives

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CUSTOMER & SERVICES

Services – Means of delivering value to customers by facilitating outcomes customers want to achieve without ownership of specific risks and costs.

 Value – Value of a service can be considered to be the level at which service meets a customer’s expectations.

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IT organizations are complex systems needing to interact with other components They are interdependent This complexity explains why some service organizations resist change

Continual Service Improvement

Understand the outcomes

Evaluate

Give with effectiveness and efficiency

Check changes in outcomes

Business Value Main value of demand management is to achieve a balance between the cost of a service and the value of the business outcomes it s

Process

Conduct business in a financially responsible manner *Understand IT services costs and maintain profitability *Ability to make sound business decisions

The relevance of services

CRITICAL SUCCESS FACTORS *There is an enterprise framework to identify, manage and communicate information *Funding is available to provision of services *Service provider is able to charge for service

Demand management

Measure the success

SERVICE PORTFOLIO MANAGEMENT

Improvements Meets the objectives

Value to business Purpose & Objectives

Retired services

FINANCIAL MANAGEMENT FUNDING *IT service management refers to means an IT service obtains financial resources *Types of funding models Rolling plan -> is for a fixed period (monthly) Trigger based -> Is initiated by an event Zero based -> Is allocated according to financial periods

Policies, principles & basic concepts

Service catelouge Configuration management system

FINANCIAL MANAGEMENT COSTS *ing is responsible for identifying costs and managing variance from budget *An ing cost model is a framework that determines the cost of a service and ensure adequate allocation

Key performance indicators

Critical success factors

Type I (Internal Service Provider) Type I Service Providers are dedicated to, and often embedded within, an individual business unit.

Type II (Shared Services Unit)

Type III Service Provider is a service provider that provides IT services to external customers

processes that creates a product or service that is value to a customer.

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Adequate from business (Funding)

Appropriate and effective tools

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Begin on the outside of the service organization

Critical Success Factors

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Responsiveness to customer

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Think of process and service as equal

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Numbers matter

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Compete as an organization

All challenges and risks already mentioned can be inverted to become critical success factors (CSFs)

Design Risks

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Customers expect services to have a beneficial impact on performance of assets [Utility from their perspective]

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Always a risk that services designed fail to deliver the expected benefits in utility

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Major cause of poor performance is poor design

Two distinct phases in dealing with Risk:

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Types of IT Services ing Service – Not directly used by the business, is required by the IT Service Provider to provide other IT Services Internal Customer Facing Service – IT Service that s a business process managed by another business unit External Customer Facing Service – IT Service that is provided by IT to an external customer

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Experienced, skilled and trained staff

CRITICAL SUCCESS FACTORS

Functions as Finance, IT, Human Resources and Logistics are not always at the core of n organizations competitive advantage.

Value Chain – A sequence of

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Eliminating or reducing deviations in performance Maintaining operational effectiveness and efficiency Reducing hidden costs Publicizing and substantiating hidden benefits Use of automation, web-based functionality, tools

Effective Measurement

Type III (External Service Provider)

COSTS CLASSIFICATION *Capital costs – the cost of purchasing something that will be a financial asset *Operational costs – costs resulting in running the IT service

Other factors critical to success of a Service Management organization:

Measurement Principles:

SERVICE PROVIDERS

Customers – Those who buy goods or services, customer of an IT service provider is the person or group who defines and agrees the service level targets.

New Product launch plans

Also

Service Operation

Should be achieved through:

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Plans

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Application Portfolio

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Sales Forecast

Project portfolio

STRATEGY

Perspective Positions

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Service portfolio management

Return on investment

Financial management for IT services

CHALLENGES

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Marketing Plans

Benefits

IMPACT OF SERVICE STRATEGY

The Kano Model

Customer Satisfaction - Customer satisfaction is measured against service provider performance taking into , targets and previous scores

Using theory to strategy Strategy must enable service providers to deliver value A basic approach to deciding a strategy Service management as a strategic asset Strategy synthesis opposing dynamics Strategy as a means to outperform competitors Government and non-profit organizations

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*Budgeting -> Predicting and controlling cash flow *ing -> Enables IT organization to for money spent *Charging -> Billing customers for service

Preserving Value

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Information Management

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Test and validate service

Business relationship management

Service attributes Are the characteristics that provide form and function to the service. Linear factor – The degree to which the customer needs are met determines their satisfaction. Non-linear factor – If only a fraction of customer needs are met there is still a high level of customer satisfaction.

Policies/Principles/Basic concepts Customer Portfolio – is a database or structural document used to record all customers of the IT service provider.

Represent the service provider to its customers through coordinated marketing, selling and delivering activities. Work with service portfolio management and design coordination to ensure that the service provider’s response to customer’s requirements is appropriate.

Moulding the strategy

Business impact analysis

SERVICE STRATEGIES FOR CUSTOMER SATISFACTION

Scope

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Activities/Methods/Techniques

Objective Ensures high level of customer satisfaction making sure that the customer’s needs are met to the requirement

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Policies/Principles/Basic Concepts

Business Plans

Effects of service on Transition

Patterns and business activity

Service packages A collection of two or more services combined to offer a solution to a specific kind of customer meet specific business outcomes. It can be a combination of core, enabling and enhancing services

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Activities/Methods/ Techniques

Business impact analysis

Information Management customer portfolio and customer agreement are updated and validated customer surveys are also put into action and the service catalogue is an important reference in communicating consistently

Step 8 : Define service units and packages.

establish and maintain a business relationship understanding the customer and their business needs

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KPI – Customer satisfactory levels are consistently high and are used as into portfolio management.

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When a service moves from design and build into operation

Service models

Poor integration between service provider and customer facing processes will result in bad business relationship management

CSF – Ability to document and understand customer requirements of service, Ability to measure customer satisfaction and to know what action to take with the results.

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Strategy tools and procedures

Risks

The customer might find it difficult to break down individual activities that make sense to the service provider.

Identify and analyse patterns of business activity to understand the level of demand that will be placed on a service

Identify and analyse how different types of influence the demand for service

DEMAND MANAGEMENT

Challenges

SERVICE ECONOMICS

Service Transition

Outcomes and restraints

Critical Success Factors and Key Perfomance Indicators

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flow of resources, coordination and interactions.

Risks Lack of, or inaccurate configuration management information, which results on the impact of changing demand on the service provider’s infrastructure and applications.

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Dynamics – The activities,

Challenges History of poor service may make it difficult for business relationship management to function effectively

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Objective

Scope

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 Step 7 : service models.

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To understand, anticipate and influence customer demand for services and to work with capacity management to ensure the service provider has capacity to meet this demand

Process Practitioner – responsible for carrying out one or more process activities.

Outcomes for review: Service Catalogue Services should be clearly linked to defined and quantified outcomes Service pipeline Used for the success of service design and validation Service level agreement Specifying the service and outcomes it is designed to .

have the same point of reference for defining, delivering and reporting services.

SERVICE STRUCTURE IN THE IN THE VALUE NETWORK:

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Process owner – ensuring that a process is fit for purpose

Markets can be defined by one or more criteria Industry, Geographical, Demographic, Corporate relations (group of companies)

Service provider interfaces – used to ensure multiple parties in a business relationship

Value chains to value networks – creating and maintaining value chains. Strategies include: o Marshal external talent. o Reduce costs o Change focal point of distinctiveness. o Increase demand for complementary services. o Collaborate

Purpose

Roles

Risk Assessment - Concerned with gathering information about exposure to risk so organization can make appropriate decisions and manage risk properly Risk Management – Involves having processes in place to monitor risks, access to reliable and up-to-date information about risks

5 Operational Risks Two levels of Risk must be considered from a Service Management perspective:

RISKS Definition of Risk – A possible event that could cause harm or loss

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Risks faced by the business, and the business services it uses

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Risks to the IT services that underpin the business and its processes

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Used to direct and control the service management activities. Should be a strategic decision for a business. Relationships between processes are implemented in different way by different service providers. Due to common elements between managements systems, organisations manage these systems in integrated way. Management needs to analyse requirements of relevant management standard in details. Compare to others already incorporated

STRATEGY MANAGEMENT FOR IT SERVICES

A service strategy is a subset of the overall strategy for the organisation. In the case of an IT org, the IT strategy will encom the IT service strategy

GOVERNANCE

Governance Framework: Establish responsibilities Strategy to set and meet organisations objectives Acquire for valid reasons Ensure performance when required Ensure conformance with rules Ensure respect for human factors

What is the difference between governance and management? Governance performed by governors. Insures organisation adheres to rules and policies. Management performed by executives and people whp report to them. Job is to execute rules, processes and operations.

TYPES OF COST MODELS *Cost by it - s for cost and reports to management *Cost by service – cost is reported according to service *Cosy by customer – service is paid for by service provider and allocated to customers *Cost by location - service is paid for by service provider and allocated to location *Hybrid cost model – a combination of different models

Governance is the single overarching area that ties IT and business together. Services are on way of ensuring that the organisation is able to execute governance

What is IT governance? It does not exist as separate are. Governed by same rules as organisation. CIO enforces corporate governance through set of applied strategies, policies and plans

How is Corporate governance of IT defined, fulfilled and enforced? CIO ensures that corporate strategies, policies, rules and plans include a high-level overview of how IT will be governed. Management consultants provide assistance to governors. Final decision stays with governor as the are able for governance

What is governance? The rules, policies and processes by which a business are operated, regulated + controlled. Defined by board of directors, stakeholders or constitution.

Who Governs? A person or group of people who are responsible for the governance of the organisation. Appointed by shareholders or of organisation.

How does service strategy relate to governance? Governors are responsible for the strategy of the organisation, and ensuring all parts of organisation are aligned to strategy. CIO and IT steering committee will oversee strategy management.

ITIL Service Strategy Processes Benedito, Christian, Kara, Abrahams, Peters, Smith, Nombewu