1. Increasing the Service Potential
• The service assets of a service provider represent
the service potential that is available to
customers.
• Objective of service management is the
improvement of the service potential of the
capabilities and resources.
1

2. Increasing the Performance Potential
• The services of a service provider represent the
potential for improving the performance potential
for improving the performance of customer
assets.
• Visualize and define the performance potential of
services so that all decisions are focused on the
creation of value for the customer.
2

3. ITIL poses a number of questions:
• What is our market?
• What does the market want?
• Do we have something unique to offer to the market?
• Do we have the right portfolio for a specific market?
• Do we have the right catalogue for a specific
customer?
• Is every service designed so that it leads to the
desired result?
3

4. ITIL poses a number of questions:
• Do we have the right catalogue for a specific
customer?
• Is every service designed so that it leads to the
desired result?
• Is the implementation of every service such that it
leads to the desired result?
• Do we have the right models and structures to be
a service provider?
4

5. Preparation for implementation
• STRATEGIC AUDIT
– Which of our services are the most distinctive?
– Which of our services are the most distinctive?
– Which of our services are the most lucrative?
– Which of our customers and stakeholders are the most
satisfied?
– Which of our activities are the most effective?
5

6. Preparation for implementation
• SETTING GOALS
ITIL defines 3 different types of information that
determine the objectives of a service:
• TASKS – What is the task of the service that is to
be provided?
• RESULTS – What kind of results does the customer
hope to achieve?
• CONSTRAINTS – What are the limiting factors for
the customer in achieving these results?
6

7. Defining the Critical Success Factors
• They are defined in terms of capabilities and
resources.
• They seem to be the key to success for market
leaders.
• They are the basis for competition among rivals.
• They are dynamic.
7

8. Defining the Critical Success Factors
• They usually require considerable investment and
development time.
• Their value is calculated through a combination
with other factors.
8

9. Critical success factors changes or are
influenced by these factors:
• Customers
• Competition
• Suppliers
• Regulations
9

10. Customer’s portfolio with a Service Portfolio
Market Space Service Portfolio
Critical Success
Customer Portfolio
Factors
10

11. Critical Success Factors in a market
• Critical Success Factors are decisive for success in
a market. They are also useful for evaluating the
strategic position of a service provider. This means
the critical success factors must be even further
defined in specific value propositions to the
customer.
11

12. Critical Success Factors in a market
• In many markets cost effectiveness is a customary
critical success factor, while in other markets
specialized domain knowledge or reliability of the
infrastructure is much more important.
• ITIL advices that a strategic analysis be performed
for every market, major customer and Service
Portfolio in order to determine the current
strategic positions for success.
12

13. Investigation of business potential
• Services providers can be active in more than one
market. A component of strategic planning is the
analysis of the presence in various markets:
o an analysis of strong and weak points,
o opportunities and risks in every market.
• Service providers also analyze the possible
expansion of the potential market.
13

14. Providers determine which customer needs can be effectively and
efficiently satisfied by their services, while at the same time
deciding which markets will be served and which will be ignored.
• FIRST, IDENTIFY THE:
Markets can that best be served with existing
assets.
Markets that must be avoided with the existing
assets.
14

15. Providers determine which customer needs can be effectively and
efficiently satisfied by their services, while at the same time
deciding which markets will be served and which will be ignored.
• Next determine for the selected markets:
What is the service offering (Service Portfolio)
Which customers (Customer Portfolio)
Critical Success Factors
Service models and service assets
Service pipeline and Service Catalogue
15

16. Synchronizing with the customer’s needs:
It is essential to understand the relationship with the
customer and market. Customers can cover one or
more markets. Markets can include one or more
customers.
 The market of Type I providers is internal to the
organizational unit of which it is a part.
 The market of Type II providers is internal to the
enterprise, but it is distributed through business
units.
 The market of Type III providers is divided over more
than one enterprise.
16

17. Expansion and growth
GROWTH IN A SPECIFIC MARKET IS MADE
POSSIBLE THROUGH:
• Extensions of existing contracts
• Increasing requests
• Expansions with complimentary services
17

18. Processes
ITIL version 3 distinguishes three processes at the
strategic level:
Financial Management
Demand Management
Service Portfolio Management
18

19. Financial management
• is an integral component of service management.
• Service valuation ensures that the business
understands precisely what is being delivered
through IT.
• ITIL defines two essential value concepts for service
valuation:
1. the provisioning value (the production costs)
2. the service value potential (the value-adding
component)
19

20. ITIL divides planning into 3 primary areas:
• Operating & capital planning
• Demand planning
• Regulatory & environmental
20

21. Investment Analysis (Service Investment
Analysis)
• is to derive a value-indication of a specific service
from the attained value and incurred costs of the
total lifecycle.
21

22. Accounting
• results from a service oriented bookkeeping
function is that far more details and
understanding are obtained in regard to the
delivery and consumption of services and the
production of data that are directly relevant to
the planning process.
22

23. Variables Cost Dynamic (VCD)
• focuses on analyzing and understanding the many
variables that influence service costs.
• can be used as an analysis of the anticipated
impact of events such as
o acquisitions
o disinvestments
o changes to the Service Portfolio or service alternatives
23

24. Fundamental decisions for financial
management:
ITIL concepts for an organization to decide which
options are best for their service strategies:
Cost recovery, Value center or Accounting center?
Chargeback: to charge or not to charge
Financial management implementation checklist
24

25. Demand Management (DM)
• Is an essential aspect of service management in
which the offer is harmonized with the demand.
25

26. Service packages
• consists of a Core Service Package and one or
more Service Level Packages. These combine to
provide a Differentiated Offering. Service Level
Packages are ways of differentiating the offering
by providing specific units of Utility and/or
Warranty for a given service.
26

27. Service Portfolio Management (SPM)
• is a method to manage all service management
investments.
• The objective of SPM is to achieve maximum
value creation while at the same time managing
the risks and costs.
27

28. Service Portfolio Management (SPM)
SPM is dynamic and ongoing process and comprises the
following work methods:
• Define – inventory the services and business cases and
validate the portfolio data
• Analyze – maximize the value of portfolio; synchronize and
set priorities and balance from request to offer
• Approve – completion of the proposed
portfolio, authorization of services and resources; decision
for the future
• Charter – communication of decisions, allocation of
resources and charter services
28

29. Organization
• IT organizations are complex system within a
greater complex system of the
business, customers and industry.
29

30. Organizational value creation cycle
Ability to obtain resources
Allows an
organization to
create
An organizational strategy
Which and invest resources
increases it to develop
Capabilities
enabling the
organizational
to create
Distinctiveness
30

31. ITIL describes five phases in organizational
development:
Phase 1: NETWORK
- An organization focuses on fat, informal and provision
of services. Innovation and entrepreneurship are
important organizational values.
ADVANTAGES OF NETWORK STRUCTURE:
• Avoid high bureaucratic costs associated withy
complex organizations
• A flat organization in which fewer managers are
necessary
• Flexibility allows for quick modifications or changes
to the structure
31

32. ITIL describes five phases in organizational
development:
DISADVANTAGES OF A NETWORK STRUCTURE:
• Managers must oversee the integration of
activities
• Co-ordination problems
• Opportunities for outsourcing functional activities
ADVICE: a change in leadership style is necessary to
grow beyond these challenges.
32

33. ITIL describes five phases in organizational
development:
Phase 2: DIRECTIVE
- Can be resolved with a strong management team
ADVICE: to grow beyond this challenge, more
delegation is necessary.
33

34. ITIL describes five phases in organizational
development:
Phase 3: DELEGATION
- Efforts are made to enhance technical efficiency
and provide space for innovation in and improve
services.
ADVICE: improve the co-ordination within the
organization by initiating systems and programs.
34

35. ITIL describes five phases in organizational
development:
Phase 4: CO-ORDINATION
- is directed the towards the use of formal systems
as a means of achieving better co-ordination.
ADVICE: if everything is in order internally, the net
order of business is to improve co-operation with
the customer.
35

36. ITIL describes five phases in organizational
development:
Phase 5: COLLABORATION
- the focus is on the improvement of co-operation
with the business. A commonly used structure is the
matrix structure with the flow of functional
responsibilities.
36

37. Advantages of a matrix structure:
• Minimizes and overcomes functional barriers
• Increases speed of response to changing product or
customer needs
• Opening up communication among the functional
specialists
• Creation of opportunities for team members of
diverse functions to learn from each other
• Use of the skills of specialist staff who can move from
product to product and from customer to customer
37

38. Disadvantages of a matrix structure:
• Lack of a monitoring structure that the staff can
use to build a stable pattern of expectations
• Conflicting roles can demoralize staff
• Possible conflict situation between functions and
product or customer teams
38

39. From work group to department:
BASIC STRUCTURE DESCRIPTION STRATEGIC CONSIDERATIONS
Function Organizing by function is the best • Specialization
way of specializing. Pooling of • Development of standards
resources and minimizing • Small-scale
duplication.
Product Organizing by product is preferred by • Focus on product
organizations that are focused on • Strong product knowledge
new and diverse products. This
organization is found primarily in
processing industries.
Market or customer Organizing by market or customer • Services is unique for each
offers differentiation in the form of segment
increased knowledge and response • Customer service
to the wishes of the customer. • Powerful consumer
• Quick service
39

40. From work group to department:
BASIC STRUCTURE DESCRIPTION STRATEGIC CONSIDERATION
Geography Organizing by geography is • On-site services
preferred when providing • Close to customers for
services in close proximity. delivery and support
Minimizes travel and distribution • Organization is viewed as
costs while benefiting from a local enterprise
knowledge of local area.
Process Organizing by process is • Need to shortened
preferred in executing processes process cycle time
from start to finish. • Process excellence
40

41. Organization design
The key to organizational design is strategy.
Strategic Organizational
Process Focus
Forces Structure
Partnership High Collaboration
Control and
Harmonization Co-ordination
Process and Delegation
Decentralization
Directive
Structure and
Centralization Network
Speed and
Creativity
Low
41

42. Organizational culture
- is a set of values an norms that determine the course
of both internal and external interactions.
There are two types of values:
 END VALUES – the desired results in terms of
quality, excellence, reliability, innovation and
profitability.
 INSTRUMENTAL VALUES – the desired behavior in
terms of standards, respect for tradition and
authority, careful and conservative treatment and
moderation.
42

43. Sourcing strategy
• is to improve the core competencies.
• A risk in outsourcing of services is outsourcing
them to a competitor:
Substitution – the vendor can replace the
sourcing organization
Disruption – the vendor can damage your
reputation
Distinctiveness – you can develop a dependence
on another organization
43

44. Outsourcing structures
The dynamic of the outsourcing of services requires
that organizations formally determine the provisions of
an outsourcing strategy. The following generic forms of
outsourcing can be delineated:
• Internal outsourcing
o Type 1 Internal – provision and delivery of services by
internal staff; this offers the most control, but is
limited in scale.
o Type 2 Shared services – working with internal Bus;
offer lower costs than Type 1 and more
standardization, but is still limited in scale.
44

45. Outsourcing structures
• Traditional outsourcing
o Complete sourcing of a service – a single contract with one service provider;
better in terms of scaling opportunities, but limited in best-in-class capabilities.
• Multi-vendor outsourcing
o Prime – a single contract with one service provider who works with multiple
providers; improved capabilities and risk, but increased complexity.
o Consortium – a selection of multiple service provides; the advantage is best-in-
class with more oversight; the disadvantage is the risk of necessity of working
withy the competition.
o Selective outsourcing – a pool of services providers selected and managed
through the service receiver; this is the most difficult structure to manage.
o Co-sourcing – a variation of selective outsourcing in which the service receiver
combines a structure of internal or shared services with external providers, in
this case; the service receiver is the service integrator.
45

46. Outsourcing with multiple providers
• Is a good method because the organization can maintain
strong relationships with each provider.
Checklist for the selection of providers:
o Demonstrated competencies – staff, use of
technology, innovation, experience and certification where
applicable
o Track record – quality, financial value, dedication
o Relationship dynamics – do the vision and strategy fit with
those of the organization
o Quality of solutions – have the services been delivered as
requested
o Overall capabilities – financial
stability, resources, management systems, scope and range
of services 46

47. Service Provider interfaces (SPI)
Offer theses reference points:
During contract discussions the responsibilities and
service levels should be negotiated:
Identification of integration points of various
management processes.
Identification of specific roles and responsibilities.
Identification of management information that is
relative to the customer.
47

48. Sourcing governance
is the framework of decision rights that encourage
the desired behavior in outsourcing.
With a few simple interventions, the first inroad
towards governance can be made:
• Establish a governance body
• Differentiate between governance domains
• Establish a fixed decision rights matrix
48

49. Critical success factors
• Desired results
• Optimum model for delivering services
• Best location from which to deliver services
49

50. Two types of metrics:
• Business metrics – financial savings, service level
improvements, business process efficiency
• Customer metrics – availability and consistency of
services, more supply, service quality
50

51. Roles and responsibilities
• Director of service management – supervises the
provider on behalf of the business
• Contract manager – manages the services contract
from the perspective of the service provider
• Product manager - manages the services in the
service provider's organization
• Process owner – manages the process models that
have been developed on behalf of the users
• Business representative – represent the customers’
interests and manage the sourcing relationship from
the perspective.
51

52. Service automation
impact on the performance of service assets such as
management, organization, people, processes, kno
wledge and information.
52

53. Service analysis and instrumentation
Service analysis is the placing of information in a
context of patterns. Through understanding of
patterns of information we can answer the following
questions:
• How does this incident influence the service?
• How does this incident impact the business?
• How should we respond?
53

54. Service interferences
Characteristics of good service interfaces:
 The interface must be easy to find, and simple to use.
 The interfaces must be available and in a form that
ensures opportunities for choice and flexibility for
users.
 The interfaces must have sufficient capacity so that
there is no waiting period if a large number of users
try to make of the interface simultaneously.
 The interfaces must accommodate users with varying
skills, competencies, backgrounds and handicaps.
54

55. Combination of service and technology:
Advances in communication technology influence the interaction between service
providers and their customers.
Five ways in which technology contributes to communication with the customer:
1. Communication without technology – such as with consulting services.
2. Communication assisted by technology - only the service provider has access
to the technology; for example, an airport representative uses a terminal to
check-in customers.
3. Communication facilitated by technology - both the customer and the
provider have access to the same technology.
4. Communication accomplished through technology – service provider and
customer are not in close proximity; for example, a customer who receives
information via a help desk.
5. Communication generated by technology – the customer sees the service
provider only in the form of technology, via a self service interface;
appropriate for routine activities, such as automated teller machines (ATMs).
55

56. Self-service channels
Automation is of added value to a capacity. The
capacity of channels for self service has a low
marginal cost, is infinitely scalable, does not get
tired, offers unlimited consistent performances, and
is available 24/7 for a relatively low cost.
56

57. Simulation
System dynamics is a methodology for understanding
and managing the complex problems of IT
organizations.
System dynamics can provide insights in the following
situations:
Capability trap – in order to pressure the staff work
harder, the organization unconsciously sets the stage
in which an increasingly higher level of tension is
needed to arrive at the same level of performance.
57

58. Simulation
Tool trap – although tools are often very useful, they
also required the development of knowledge and
experience; organizations overlook the impacts of the
increase short-term work pressure through training
and learning and practical activities, and end up
running additional unintended risks.
Fire-fighter trap – when an organization rewards
managers for putting out fires quickly, the
performance can suffer over the long-term; in this
case it might be better not to reward extinguishing
the small fires.
58

59. Analytical modeling
There is a lot depth and diversity in analytical
modeling. The Service Strategy as well as other
functions and processes in the Service Lifecycle can
benefit from the knowledge that comes from
analytical modeling for improving performance in
light of technical, financial and time constraints.
59

60. Return on investment
• Business case – a way of identifying business
objectives that are dependent on service
management.
• Pre-Program ROI - techniques for quantitatively
analyzing investments in service management.
• Post-Program ROI – techniques for retroactively
analyzing investments in service management.
60