ITIL Version 3 Foundation - Service Strategy

Value Creation through Services
-- What defines Vlaue?
    @ Business outcomes & customer perception

-- Business outcomes
    @ Can be measured
    @ Typically economic value

-- Perception
    @ What attributes of a service
    @ Customer's self image
    @ Expectations

* Remember customers don't buy services, they buy fulfillment of particular needs!!

The Value of Service Management
-- Transforming Service assets into Strategic assets
    @ Service assets(source of value); customer assets(recipients)
    @ Services have potential to increase performance of customer assets (value)

Goal
-- To improve strategic impact through design, development, implementation and practice of service management:
    @ As an organisational capability
    @ As a strategic asset
--  To ensure the provider can deal with the risks and costs of managing their service offerings.

Generic concepts & definitions
Value of a service : Utility & Warranty
From the customer's perspective, value has two aspects:
-- Utility - fitness for purpose
    . What the customer gets
-- Warranty - fitness for use
    . How the service is delivered

Resources(soft assets) & Capacities(tangible assets)
- Importance of developing distinctive capabilities to retain customers
   . Same resources with different capabilities give competitive advantage.
   Resources : Management, Organization, Processed, Knowledge
       . Direct inputs for production
       . Easier to acquire than capabilities
            -- Finance, Infrastructure, Application, Information
   Capacities : Financial capital, Infrastructure, Applications, Information
       . Coordinate resource
       . Control resources
       . Deploy resource - to create value
       . Capabilities cannot produce value without adequate and appropriate resources

Service Portfolio
-- Describles providers services in term of business value

    . 3 components:
         -- Service Pipeline
         -- Service Catalogue
         -- Retired Services
    . Includes service status
    . Changes to the portfolio are governed by policies
    . Includes third-party services
    . Includes Business Cases

Business Case
- A Decision support and Planning tool
  . Should present
       -- Cost
       -- Expected benefits
  . Likely consequence of action
       -- Positive and negative perspective
  . Consequence can be:
       -- Qualitative (feeling or emotion)
       -- Quantitative (financial analysis)

Business Service Catalogue
-- The customer view of Service Catalogue
    . Includes relationships to business units & business process that rely on IT services.
    . Facilitates development of a more proactive relationship with the customer.

Technical Service Catalogue
-- Underpin Business Service Catalogue - not part of customer view.
    . Relationships to supporting services, shared services, component & Cls necessary to support provision of service to the business.
    . Facilitates development of SLAs, OLAs & underpining agreements"
         -- Identify technology required to support a service
         -- Identify support froups that support componnents.

Service provision always has associated risks..

Service Catalogue
     -- Subset of Service Portfolio
     -- Menu of presently active & approved services
     -- Represents a statement of actual & present capabilities
         . Can be used to develop a solution from one or more services
     -- Acquisition portal for customers
         . Actual pricing, service-level commitment & term of service provision
     -- We see Service Catalogs every day!!

Risk
-- Uncertainty of outcome:
    . Positive opportunity or negative thread
    . Referenced with Probability
-- Risk Management should
    . Be visible, repeatable & consistent
    . Follow a framework
    . Support decision making
-- Risk applies to
    . Security
    . Project Management
    . Business Continuity

Financial Management
  .Quantifies the value of IT Services and Assets underlying the provision of services, and qualifications of operational forecasting, in financial term.
    What would be three distinct activities for Financial Management?
     1. Charging
     2. Accounting
     3. Forecasting

Financial Management - Basic Concepts
-- Service Valuation
    . Assignment of monetary value for services delivered; based on the agreed value of the services
-- Service Portfolio Management
    . Used to make decision if service should be provisioned internally or sourced
-- Service Provisioning optimization (SOP)
    . Analysis provisioning options(e.g. analyse the ROI)
-- Demand Modeling
    . Helping to establish financial mechanisms for managing demand.

Demand Management
 .  Activity Based Demand Management
    -- Business Processed create demand
    -- Patterns of  Business Activity (PBA) influence demand patterns
    -- Each Pattern of Business Activity can be coded
        . Activity level can be determined so capacity can be planned for
        . Each coded PBA is put under Change Control
    --  PBA analysis can occur at a variety of areas
        . Service Design - optimisation of design to suit (predicted) demand
        . Service Catalogue - ability to map demand to appropriate services
        . Service Portfolio - approval of investment/sell-off as pappropriate
        . Service Operation - correct level of support
        . Flnancial Management - incentives/penalties to influence demand
 .  User Profiles(UP)
    -- UP can be people, functions, processed, and applications
        . Based on roles and responsibilities in organization
    -- Associated to several coded Patterns of Business Activities
    -- Capacity usage can be easily determined per User Profile
 .  Challenges
    -- Uncertainty in demand
       . Prevents planning for capacity devivery
    -- Over excess in capacity
       . Costs Service Provider
       . Costs cannot be recovered as there is no value in excess
   -- Insufficient Capacity
       . Result in unavailability and poor performance
   -- Synchronous production and consumption
       . Just-In-Time (JIT) delivery

 .  Demand Manager Role
   -- Create and Manage incentive and penalty schemes
   -- Participate in creation of Service Level Agreements
   -- Monitor overall demand and capacity
   -- Manage capacity potential of individual resources
   -- Respond to changing Patterns of Business Activity (PBA)