Service Strategy: Delivering Value
David Cannon
Chairman ItSMF International Executive Board
Director ITSM Strategy – Hewl...
Agenda
© OGC / TSOitSMF, 20102
 Why is IT managed as a service?
 Why does IT have a credibility problem?
 Customers and...
Why is IT Managed as a Service?
© OGC / TSOitSMF, 20103
Why not Production Management?
© OGC / TSO4
 Fixed output
 Unvarying route through the factory
 Repeatable, predictable...
Why Service Management?
© OGC / TSO5
• Dynamic, real-time demand
• Variable output
• Changeable routing
• Dynamic componen...
IT’s Credibility Problem
© OGC / TSO6 itSMF, 2010
Customers and Value
© OGC / TSOitSMF, 20107
Are all Customers the Same?
© OGC / TSO8
External
Customer
External
Customer
External
Customer
External
Customer
External
...
What is Value?
 Value is in the eye of the beholder
 Value is variable
 Value has to be negotiated
 Value changes over...
Is all Value the Same?
© OGC / TSO10
Money Spent
Value Added
Value Realized
itSMF, 2010
Value in Supply Chains
 Lessons Learned
1. If value is not realised, ‘value added’ is equal
to ‘money spent’
2. Value Rea...
What does this mean for IT?
 If IT wants to demonstrate value it has to
link its services to where value is realized,
not...
Is all Value the Same?
© OGC / TSO13
External
Customer
External
Customer
External
Customer
External
Customer
External
Cust...
Do Vendors Add Value?
© OGC / TSO14
External
Customer
External
Customer
External
Customer
External
Customer
External
Custo...
Do Vendors Add Value?
© OGC / TSOitSMF, 201015
External
Customer
External
Customer
External
Customer
External
Customer
Ext...
How Should Value be Measured?
© OGC / TSO16
Service Owner Business Relationship Manager
Service Catalogue
BusinessOutcomes...
© OGC / TSO17
Can a Customer Ever be Wrong?
itSMF, 2010
© OGC / TSOitSMF, 201018
Question for IT…
© OGC / TSO19
Who is your Customer?
itSMF, 2010
© OGC / TSO20
Service Strategy gets Real
itSMF, 2010
5 Processes
© OGC / TSO21
 Strategy Management
 Service Portfolio Management
 Financial Management for Services
 Deman...
Strategy Management
© OGC / TSO22
 Purpose: To articulate how a service provider will
enable an organization to achieve i...
Strategy Management
© OGC / TSO23
 Major components:
 Strategy Assessment
 Strategy Generation
 Strategy Execution
 S...
Service Portfolio Management
© OGC / TSO24
 Purpose: Service portfolio management is
responsible for managing the service...
Service Portfolio Management
© OGC / TSO25 itSMF, 2010
Financial Management
© OGC / TSO26
 Purpose: Financial Management ensures that
appropriate funding is allocated to design...
© OGC / TSO27 itSMF, 2010
Demand Management
© OGC / TSO28
 Purpose: To understand, anticipate and influence
customer demand for services, and the c...
Business Relationship Management
© OGC / TSO29
 Purpose: To enable business relationship managers
to provide links betwee...
© OGC / TSO30
Questions?
Answer
known?
Answer
Thank
Audience
Comment on Great
Question Quality
State that time has
run out...
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It Smf Service Strategy Managed Value[1]

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David Cannon\'s presentation at the 05Oct10 itSMF WNY LIG meeting.

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It Smf Service Strategy Managed Value[1]

  1. 1. Service Strategy: Delivering Value David Cannon Chairman ItSMF International Executive Board Director ITSM Strategy – Hewlett-Packard © OGC / TSOitSMF, 20101
  2. 2. Agenda © OGC / TSOitSMF, 20102  Why is IT managed as a service?  Why does IT have a credibility problem?  Customers and Value  Are all customers the same?  Is all value the same?  How should value be measured?  Can a customer ever be wrong?  How does Service Strategy help IT to answer these questions?
  3. 3. Why is IT Managed as a Service? © OGC / TSOitSMF, 20103
  4. 4. Why not Production Management? © OGC / TSO4  Fixed output  Unvarying route through the factory  Repeatable, predictable actions  Raw materials converted to physical products  Value is created and realized whenever the product changes hands  Value is carried in the product itSMF, 2010
  5. 5. Why Service Management? © OGC / TSO5 • Dynamic, real-time demand • Variable output • Changeable routing • Dynamic components • Output less important than outcome • Value only exists when used by the consumer • Value is carried in the relationship itSMF, 2010
  6. 6. IT’s Credibility Problem © OGC / TSO6 itSMF, 2010
  7. 7. Customers and Value © OGC / TSOitSMF, 20107
  8. 8. Are all Customers the Same? © OGC / TSO8 External Customer External Customer External Customer External Customer External Customer Business Unit Business Unit IT Unit IT Unit IT UnitIT Unit itSMF, 2010
  9. 9. What is Value?  Value is in the eye of the beholder  Value is variable  Value has to be negotiated  Value changes over time and context  Value can be managed  Value is not always financial © OGC / TSO9 itSMF, 2010
  10. 10. Is all Value the Same? © OGC / TSO10 Money Spent Value Added Value Realized itSMF, 2010
  11. 11. Value in Supply Chains  Lessons Learned 1. If value is not realised, ‘value added’ is equal to ‘money spent’ 2. Value Realized must be greater than money spent 3. Value added internally is not value until it is realized © OGC / TSO11 itSMF, 2010
  12. 12. What does this mean for IT?  If IT wants to demonstrate value it has to link its services to where value is realized, not where value is added  If IT can not do this it will always be viewed as ‘money spent’ not ‘value added’ © OGC / TSOitSMF, 201012
  13. 13. Is all Value the Same? © OGC / TSO13 External Customer External Customer External Customer External Customer External Customer Business Unit Business Unit IT Unit IT Unit IT UnitIT Unit Value Added? Value Realized Money Spent itSMF, 2010
  14. 14. Do Vendors Add Value? © OGC / TSO14 External Customer External Customer External Customer External Customer External Customer Value Added Value Realized Money Spent Vendor Vendor Vendor ?? ? itSMF, 2010
  15. 15. Do Vendors Add Value? © OGC / TSOitSMF, 201015 External Customer External Customer External Customer External Customer External Customer Value Added Value Realized Money Spent Vendor Vendor Vendor !! !
  16. 16. How Should Value be Measured? © OGC / TSO16 Service Owner Business Relationship Manager Service Catalogue BusinessOutcomes ServiceAssets itSMF, 2010
  17. 17. © OGC / TSO17 Can a Customer Ever be Wrong? itSMF, 2010
  18. 18. © OGC / TSOitSMF, 201018
  19. 19. Question for IT… © OGC / TSO19 Who is your Customer? itSMF, 2010
  20. 20. © OGC / TSO20 Service Strategy gets Real itSMF, 2010
  21. 21. 5 Processes © OGC / TSO21  Strategy Management  Service Portfolio Management  Financial Management for Services  Demand Management  Business Relationship Management itSMF, 2010
  22. 22. Strategy Management © OGC / TSO22  Purpose: To articulate how a service provider will enable an organization to achieve its business outcomes through defining and executing:  Perspective – vision, mission and objectives  Positioning – our services vis-a-vis our customers, the market and our competitors  Planning – strategic and tactical plans  Patterns – approaches and methods to achieve the strategy itSMF, 2010
  23. 23. Strategy Management © OGC / TSO23  Major components:  Strategy Assessment  Strategy Generation  Strategy Execution  Strategy Measurement and Evaluation itSMF, 2010
  24. 24. Service Portfolio Management © OGC / TSO24  Purpose: Service portfolio management is responsible for managing the service portfolio. It is therefore also the process that is responsible for defining which services will be entered into the service portfolio and how those services are tracked and progressed through their lifecycle. Service portfolio management acts as a gatekeeper for the service provider, ensuring that it only provides services that contribute to strategic objectives and meets the agreed business outcomes itSMF, 2010
  25. 25. Service Portfolio Management © OGC / TSO25 itSMF, 2010
  26. 26. Financial Management © OGC / TSO26  Purpose: Financial Management ensures that appropriate funding is allocated to design, develop and deliver services. At the same time it works with Service Portfolio Management to act as a gatekeeper that ensures that the service provider does not commit to services that they are not able to provide. Financial management identifies the balance between the cost and quality of service and maintains the balance of supply and demand between the service provider and their customers. itSMF, 2010
  27. 27. © OGC / TSO27 itSMF, 2010
  28. 28. Demand Management © OGC / TSO28  Purpose: To understand, anticipate and influence customer demand for services, and the capacity to meet this demand. Demand management works at every stage of the lifecycle to ensure that services are designed, tested and delivered to support the achievement of business outcomes at the appropriate levels of activity itSMF, 2010
  29. 29. Business Relationship Management © OGC / TSO29  Purpose: To enable business relationship managers to provide links between the service provider and customers at the strategic and tactical levels. The purpose of these links is to ensure that the service provider understands the business requirements of the customer and is able to provide services that meet these needs. The primary measure of whether this purpose is being achieved is the level of customer satisfaction. itSMF, 2010
  30. 30. © OGC / TSO30 Questions? Answer known? Answer Thank Audience Comment on Great Question Quality State that time has run out Thank Audience State that you are available after the session Leave RUNLeave End Fast! Y Y N N itSMF, 2010

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