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IT Service Management - An Overview of Service Strategy

Today, Information Technology is a driving factor in delivering Business Services. Due to this, new avenues have opened up in the field of conventional IT landscape. Thus, a guidance and support about how to manage the IT infrastructure is required to improve functionality and quality in a cost effective manner. IT Service Management (ITSM) forms the core of Information Technology Infrastructure Library (ITIL) concepts.
ITSM acts as an enabler for IT governance. In a broader sense, ITSM concurs with the principles of BSM (Business Service Management) and IT portfolio management. However, the guidelines & principles for project management are not covered under ITIL terminologies. Some process oriented ITSM methodologies include ITIL, TQM, COBIT, CMMI etc.

IT Infrastructure Library
ITIL is a widely accepted ITSM framework that provides much-needed guidance on how to manage IT infrastructure so as to streamline IT services in line with business expectations. To know more about ITIL history, refer to our previous blog:
The 5 core volumes of ITIL are Service Strategy, Service Design, Service Transition, Service Operations and Continual Service Improvement (CSI).

Service Strategy
In ITIL, Service Strategy provides a guidance related to service-provider's investment in services. This helps the organization with the clarity and prioritizing of the services to be delivered. These principles are helpful for developing service management processes, policies and guidelines across Service Life-cycle.
Activities covered in Service Strategy volume include the development of customer markets, service assets and request catalog, and implementation of business strategy. Other key topics include Service Portfolio Management, Financial Management, and Strategic Risks Management.
The key benefit of formulating a Service Strategy is that it helps IT organizations improvise their service delivery. Service Strategy relies to a large extent on a customer satisfaction approach wherein it focuses on business-case development, service value definition, service assets, service provider types and market analysis.

When defining a service, the strategist should think of the service on the following lines:
Value creation: Creation of value to the business
Asset service: Assets required to build, deliver and operate the service.
Service provider types: Whether the Service Provider will be an Internal Service Provider, External Service Provider or a Shared Unit.
Service structure: Defining governance structure to ensure smooth operation of service

The key stakeholders & processes involved in Service Strategy are:
Service Portfolio Manager
• Strategic service assessment: Assessing need of new service
• Service strategy definition: Definition of goals, customers & customer segmentation
• Service portfolio update: Aligning service offered with the strategy definition
• Strategic planning: Controlling and Definition of projects required to execute the service
• Demand Management: Understand how to best meet the needs and expectations of customers, clients, partners& enablers and deliver a proper forecast and sizing of demand.

Financial Manager
• Financial management support: Define structure for managing costs and financial planning data
• Financial planning: Estimate financial resources over next cycle of the service
• Financial analysis and reporting: Analyse financial costs and service profitability.
• Service invoicing: Raising invoices for the provisioned service.

Service Strategist
• IT portfolio management: Applications and tools to manage the activities, projects and investments in a systematic manner.
• Business relationship management: It is an approach to understand, define, and support a plethora of inter-business activities related to knowledge and service management in a multi-vendor scenario.

Key takeaways from Service Strategy Phase:
Service strategy enables the transformation of service management from an organizational capability to an asset that can be leveraged for strategic decision making. It helps an organisation to objectify the relationship between services, systems. This helps in alignment of processes, business models and their objectives.
A strong service strategy enables strategic decision making for investment in services sets; this, in turn leads to a better performance towards customer satisfaction.

Check out this space for our next blog on ITIL - Service Design.


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