Processes in Service Strategy phase for ITIL

The IT service management framework for ITIL® is logically divided into five phases based on what a provider offers, and the IT service that the customer enjoys and values. The other four phases in ITIL® are service design, service transition, service operations and continual service improvement.

The first of the five phases is the service strategy. In this phase, the strategy to implement a service into an IT organization is closely tied to the management approach for that service.

Let’s say a cell phone provider wants to introduce a new service, such as high-speed internet. In the service strategy phase the stakeholders develop the strategy for what to introduce, how to launch, where to source, how to meet demands and manage operations.

Overview of the service strategy phase

In the service strategy phase, the service provider and the customer define the terms of what the service entails, how will it be of value to the customer, and what type of customers (age groups, genders, geography, etc.) are likely to opt for the service.

In this phase, the high-level strategy is laid out and the feasible services will pass to the service design phase where the conceptual services would be given definite form, figure and dimensions. A number of conceptual services get filtered through the sieve as well.

With a good strategic advisory team in place, organizations can hope to meet a number of goals. Some common ones for organizations include branding with innovative and customer-focused services, annulling the competition and showing ROI on their IT investments.

Processes in the service strategy phase

To achieve all that I have mentioned under the strategic management, ITIL® has developed a few processes to aid the aims of a service strategy.

Process 1: Service portfolio management

Service portfolio management ensures that the organization has the right set of services to offer to its customers. It also ensures that customers perceive the offered services as valuable so the organization makes a balanced return on investment.

The service portfolio management process involves researching and identifying the services that can be offered to customer. Here, the riders are the return on investment and the risk appetite. Once a list is drawn up, they track how the service performs, how it’s perceived and check whether the service fits into the overall scheme of things. The service portfolio also consists of the services that once existed but have been retired and/or replaced.

The output of the service portfolio management process is the service portfolio itself, which consists of three components:

  • Existing services
  • Services in pipeline
  • Retired services

The existing services consist of all that is being offered to customers, similar to a menu card that you find in a restaurant. Services in pipeline are those services that are under development. At times, it is important that customers are lured in with the services that they can enjoy in the future. For example, a cell phone service provider can claim that they offer 3G internet service, and within the next 6 months the customer can expect to use the 4G service that’s under testing.

Process 2: Financial Management for IT Services

As the name of the process indicates, the financial management for IT services aids in bringing in the investors, and channeling investments to services that have the most potential.

When a new service is to be introduced, or if an existing service needs an upgrade, this process starts by evaluating the financial impact. This usually involves convincing investors secure the funding for the provision of the services.

Other aspects of finances, such as budgeting for a service, accounting for how money was spent and charges for the customer’s use of services, all fall under the financial management process. Balancing income and outflow and forecasting financial requirements are some of the other activities that are performed in this process.

Process 3: Business Relationship Management

You can own top-notch services, but if you can’t keep your customers loyal to you, then the organization might start looking to close down the shop and consider alternatives. Business relationship management is a new introduction to ITIL® which deals with building customers relationships through value proposition and meeting their business needs.

Many case studies over the years have pointed to the conclusion that it costs a lot more to bring in new customers than to keep existing ones. To keep customers, organizations must hear the pulse of the customer; understand how the customer views your organization and the services you offer. The Business relationship management process looks at all these aspects of retaining customers and more.

The business relationship management process specifically focuses on the customer requirements and working within the organization to meet the customer goals. The process keeps tabs on the customer’s perception towards the IT organization and works to keep it positive.

This process does not deal with the customer at an operational level or on an incident basis, but rather on a level where the governance body is seated. There is a sister process in the service design phase called as service level management, which is responsible for interacting with the customer regularly over the performance of its services and making sure service level agreements are adhered to.

Outflow from Service Strategy

The output from service strategy provides direction to all other phases in the ITIL® framework. People in organizations who form service strategy are generally the board members, CXOs and others with a mature head on their shoulders.

The decisions taken by the board and senior management percolate to various nooks and corners of the organization and bears on how the services are run and what the customers can expect. An organization gifted with a strong strategic team is an organization that focuses on the right credentials to go the distance, and win.

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