1. IT Service Management Module 3: Service Strategy Phase

2. Course roadmap Module Study duration
Module 1: Introduction to service and business process management
2 weeks
Module 2: IT service management lifecycle, frameworks and standards
Module 3: Service strategy phase
1 week
Module 4: Service design phase
Module 5: Service transition phase
Module 6: Service operation phase
Module 7: Service operation functions
Module 8: Continual service improvement phase
Module 9: IT service acceleration and optimisation
Module 10: IT Governance

3. Module 3 objectives
explain the basic concepts of Service Strategy in the Service Lifecycle
describe the processes and activities of Service Strategy
Understand the roles & responsibilities of service strategy in an organisation
apply your understanding of Service Strategy and Service Design in analysing real life cases.

4. Video
Watch the following video clip. In this video the concept of ‘IT service catalogue’ has been introduced by comparing it to a restaurant menu.
Title: Service Catalogue Explained Simply (3:05)

5. ITIL Service Lifecycle
Office of Government Commerce, The ITIL Service Lifecycle used under

6. Service strategy goals
to operate and grow successfully in the long term
to think and act in a strategic manner
to transform their Service Management capabilities into a strategic asset
to see and act on the relationships between the IT services, processes and systems, and the business objectives that they support
to handle the costs and risks associated with their Service Portfolios

7. Service strategy objectives
The objectives address the concepts:
delivering customer “outcomes”
understanding the market place
serving the stakeholders
acknowledging competition and choice

8. Building blocks for service providers
Performance anatomy
Distinguishing capabilities
Market focus
View service as a strategic asset
Distinctive and profitable assets
Knowing where and how to compete

9. The four Ps of Strategy
Strategy
Perspective
Position
Pattern
Plan
Perspective – the values and goals that govern the behaviour of the entire organisation
Position – the distinguishing characteristics of the service provider in the eyes of the customer
Plan – organisations action plan in a competitive market
Pattern – organisations procedures resulting from the perspective, position and plan.

10. Utility and warranty creates value
Utility is what the customer wants – The Service is “Fit for Purpose”
Performance supported?
Constraints removed?
Utility
Warranty
Value
Warranty is how what the customer wants is delivered – The Service is “Fit for Use”
Available when needed?
In sufficient capacity or magnitude?
Dependable in terms of continuity and security?

11. Key terms Business case Availability Capacity Continuity Security
the justification for a significant item of expenditure.
Availability
offers the customer the guarantee that the services are available according to the agreed conditions
Capacity
Impacts on utility of services
Continuity
ensures that the services supports the business even during times of great difficulty or other disasters
Security
guarantees to customers that they can make use of the service safely and securely.

12. Service assets Services Customer Capabilities Resources Management
Capital
Organisation
Infrastructure
Processes
Applications
Knowledge
information
People
Service assets
Services
Value
Customer

13. Types of service providers
I – internal service provider
II – shared services unit
III – external service provider
Type I – USQ ICT services
Type II – government centralised IT unit for all or a number of government departments
Type III – external / managed service provider

14. Service strategy processes
Strategy management for IT services
Demand Management
Service Portfolio Management
Business relationship management
Financial management for IT services
Adapted Office of Government Commerce, The ITIL Service Lifecycle
used under 14
© 2001 Pink Elephant Inc. All rights reserved. 14

15. Service strategy activities
Define the market
Develop the offer
Develop strategic assets
Prepare for execution

16. Experiences of an ITIL Implementation
WinMedia.usq.edu.au/FoB/CIS3008/session8.wmv

17. #1 Financial Management
Financial Management provides vital information that management needs to guarantee efficient and cost-effective service delivery.
Efficient financial management enables the organisation to provide a full justification of expenditures and allocate them directly to services.
In ISO/IEC 20000, financial management is covered under budgeting and accounting for IT services.

18. Basic concepts Service valuation Demand modelling Return on investment
Provisioning value
The cost to the IT service provider to deliver the service
Service value potential
Perceived added value
Demand modelling
Total cost to customer and forecast of cost of future demands
Return on investment

19. Fundamental decisions
Cost Recovery, Value Centre or Accounting Centre?
Chargeback: to charge or not to charge?

20. #2 Service portfolio management (SPM)
a dynamic method to govern investments in Service Management across the enterprise, in terms of financial values.
A service portfolio describes the services of a provider in terms of business value.
SPM starts with documenting the standardised services of the organisation and then those of the Service Catalogue. In essence SPM is a Governance method.

21. Video Watch the following video clip.
Title: Introducing Service Portfolio Management (5:38)

22. SPM key activities Define Analyse
collection of a validated inventory of all existing and proposed services including their business cases
Analyse
identification of what services are required to enable the organisation to achieve its service goals,
how well the existing Service Portfolio meets these needs,
what service assets are required to enable the Service Strategy and how to align and prioritise to meet demand

23. SPM key activities Approve Charter
finalisation of the desired future state of the Service Portfolio and authorisation of retention of appropriate existing services, and required investment in the replacement, rationalisation, refactoring, renewal or retirement of existing services
Charter
Communicate approved decisions about desired changes to the Service Portfolio and execute actions to promote newly chartered services into Service Design;
refresh selected existing services in the Service Catalogue;
initiate Service Transition activities.

24. #3 Demand management
used by service providers to achieve the most effective utilisation of their service assets by aligning supply capacity and supply demand.
Services cannot be produced in advance of when they are consumed and service management must deal with the problem of synchronous production and consumption.

25. Basic concepts Activity-based Demand Management Core services
service provider studies a customer’s business to identify, analyse and codify the Patterns of Business Activity (PBAs) which generate demand for service.
Core services
deliver the basic results to the customer - the value that customers require and for which they are willing to pay.
Supporting services
Enable the value proposition from core services.
Developing a differentiated offering
Bundling core services and supporting services are a vital aspect of a market strategy.

26. Basic concepts Service packages A Service Level Package (SLP)
a detailed description of an IT service that can be delivered to customers. A service package consists of a Service Level Package (SLP) and one more core services and supporting services.
A Service Level Package (SLP)
is a defined level of utility and warranty for a particular Service Package. Each SLP is designed to meet the needs of a particular PBA. SLPs are associated with a set of services levels, a pricing policy, and a Core Service Package (CSP).

27. Basic concepts A Core Service Package (CSP) A Line of Service (LOS)
a detailed description of a core service that may be shared by two or more SLPs.
A Line of Service (LOS)
a core service or supporting service that has multiple Service Level Packages. A LOS is managed by a Product Manager and each SLP is designed to support a particular market segment.

28. #4 Business relationship management
is concerned with the various interactions between provider and customer.
The objective of BRM is to establish and maintain a good relationship between the service provider and the customer based on understanding the customer and their business drivers.
BRM is not explained in ITIL but is included in the ISO/IEC Standard.

29. Interview
Watch the following interview available on the Study Desk. Then answer the review questions and post your answers to the module discussion forum.
Interview with Principal Manager - Performance Measurement & Investment Management - Michael Thompson (26:51 minutes)
Q 3.1 Budgeting is a planning activity in ICT Financial Management. How is this activity conducted at USQ?
Q 3.2 How does the concept of chargeback (charging) apply in providing ICT services at USQ?
Q 3.3 List some of the major financial management issues at USQ discussed during this interview.

30. BRM in practice at USQ
Go to USQ website and find examples of USQ service strategy, e.g. Service catalogue. Why does USQ have more than one service catalogue?
Acceptable use of ICT Resources Policy: link
Service Catalogue to staff: link
Service catalogue to students: link
Service Desk: link