Definition: The Service Portfolio represents a complete list of the services managed by the
service provider. Some of these services are visible to the customers (business services,
whose level of service is defined by SLAs, while others are not (infrastructure services,
whose level of service is defined by OLAs or UCs).
ITIL Process: ITIL Service Strategy - Service Portfolio Management
ITIL 4 Practice: Portfolio management
Checklist Category: ITIL Templates
Contents
 1 Structure of a Service Portfolio
 2 Service Portfolio - Contents
o 2.1 Name
o 2.2 Current lifecycle status of the service
o 2.3 Service Type
o 2.4 Service Owner
o 2.5 Customers
o 2.6 Contacts and procedures for signing up to the service
o 2.7 Description/ desired customer outcome
o 2.8 Offerings and packages, variations
o 2.9 Costs and pricing
o 2.10 Dependencies
o 2.11 Planned changes to the service
o 2.12 References to further documents
o 2.13 Glossary
 3 Notes
Structure of a Service Portfolio
The Service Portfolio contains present contractual commitments, new service development,
and retired services. It also includes third-party Infrastructure Services which are an integral
part of the service offerings to customers.
The Service Portfolio is divided into three sections: Service Pipeline, Active Services
(Service Catalogue), and Retired Services. Services should be clustered according to Lines of
Service based on common business activities they support. Only active services are visible to
customers.
Rather than maintaining one single document, it is advisable to create a hierarchical structure
of linked documents, or to use a dedicated database or application in order to manage the
Service Portfolio. Ideally, the Service Portfolio is part of the CMS.

Service Portfolio - Contents
Fig. 1: ITIL Service Portfolio: Definition and information flow (view full size)
For each service the Service Portfolio defines:
Name
Current lifecycle status of the service
(e.g., "Proposed", "Defined", "Chartered", "Designed", "Built", "Tested", "Released",
"Operational", "Retired")

Service Type
1. Customer-facing service (services delivered to the customers) or supporting/technical
service (invisible to the customers, used to underpin customer-facing services)
2. Internal/ external: Internally provided service or a service sourced from an external
service supplier
Service Owner
(responsibility for service provisioning)
Customers
(customers currently using this service)
Contacts and procedures for signing up to the service
1. e.g. contact details of the responsible Service Level Manager
2. Procedure for signing up
Description/ desired customer outcome
1. Business justification (value added from a business point of view)
2. Business processes/ activities on the customer side supported by the service
3. Desired outcome in terms of utility (example: "Field staff can access enterprise
applications xxx and yyy without being constrained by location or time")
4. Desired outcome in terms of warranty (example: "Access is facilitated worldwide in a
secure and reliable manner")
Offerings and packages, variations
1. e.g. different Service Level packages on offer
2. e.g. different coverage of time zones
3. e.g. different coverage of geographical regions
Costs and pricing
1. Available pricing schemes for the service provision
2. Rules for penalties/ charge backs
Dependencies
1. Services
1. Required Infrastructure Services (Infrastructure Services on which this service
depends)
2. Supported services (other services which depend on this service)
2. Components/ Configuration Items (major CIs like on which this service depends)
Planned changes to the service

(if any)
1. References to relevant plans (e.g. Service Strategy Plan, Strategic Action Plans,
entries in the CSI Register)
2. Business case/ cost-benefit analysis
3. Priority of the envisaged change
4. Risks associated with the envisaged change
5. Time schedule and status information
References to further documents
Glossary
Notes
Is based on: Checklist 'Service Portfolio' from the ITIL Process Map
By: Stefan Kempter , IT Process Maps.
Definition › Structure of a Service Portfolio › Contents
ITIL KPIs Strategy Management for IT Services and
Service Portfolio Management
Key Performance Indicator
(KPI)
Definition
Number of Planned New
Services
 Percentage of new services which are developed
following a strategic review
Number of Unplanned New
Services
 Percentage of new services which are developed
without being triggered by strategic reviews
Number of Strategic Initiatives
 Number of strategic initiatives launched from the
Service Portfolio Management process
Number of new Customers
 Number of newly won customers

Number of lost Customers
 Number of customers which were lost to competing
service providers
What is Service Portfolio Management: Objective & Process
By
Jacob Gillingham
-
Last Modified On: October 25, 2022
13394
Service portfolio management is the governance process of the service portfolio. The process
is one by which a service provider can manage their investments across the service lifecycle
by taking into account every service in terms of the business value provided by it.
A service provider makes use of service portfolio management to control the entry of any
service into the service portfolio by tracking any investment in services through its entire
lifecycle starting from the development to the delivery and retirement stages.
Purpose of Service Portfolio Management
 The main purpose of service portfolio management is to make sure that the service provider
has a proper mix of services to meet their overall service strategy.

 Service portfolio management ensures that the entry or exit of service from any stage is
dependent on the approval of funding. It also required an appropriate financial plan to recover
the costs or to generate a required level of profit, depending on the nature of the service
provider’s organization.
The Objective of Service Portfolio Management
The objectives of service portfolio management are:
 To enable a service provider to investigate and make decisions regarding which services need
to be provided and which of them need to be retired. This is based on risk analysis and the
potential return which can be obtained.
 To document every service planned and operated by the service provider for future reference.
 To manage a definite service portfolio that includes a clear articulation of the business needs
that are addressed by each service and the business needs it supports.
 To run every new service through a set of activities and procedures which are standardized to
ensure that the relevant information for management, service delivery, and support is
documented and provided to the appropriate management processes.
 To evaluate the degree to which each and every service of theirs enables the service provider
to achieve their service strategy.
 To control the services being offered under different conditions and investments.
 To review each service under the Continual Service Improvement Process.
 To provide an information base for a service catalog through the service portfolio.
 To track every investment in service throughout each service’s lifecycle.
Scope of Service Portfolio Management
The scope of service portfolio management encompasses the following:

For an internal service provider, their execution of service portfolio management requires them
to work closely with each business unit in the organization to assess the service investment and
returns.
For an external service provider, their execution of service portfolio management required them
to be able to evaluate each service more overtly as each service should generate profit directly
or support the services which are generating profit.
Portfolio Management Roles and Functions

Static Process Roles
 Service Portfolio Process Manager
The service portfolio process manager has to manage the entire process and is responsible for
its effectiveness and efficiency.
 Service Portfolio Process Owner
The service portfolio process owner is the process initiator and is accountable for defining the
strategic goals of the process and allocating all the resources required for the process
 Service Portfolio Management Team
The service portfolio management team is the team associated with the service portfolio
management process.
Dynamic Process Roles
 Service Agent
The Service Agent attribute of each service record consists of the role which is responsible for
the present activity within the process of Service Portfolio Management. The Service Agent
can be changed by a functional escalation if the rules permit it.
 Service Owner
The Service Owner attribute of each service record consists of the role which is presently
accountable for the service.
 Service Sponsor
The Service Sponsor is the person or board responsible for the budget and specific costs
related to the service.
 Requirements Requestor
The requirements requestor consists of a person or a group of people who are expressing the
new demands which need to be fulfilled by the IT service provider.
 Service Design Team
The service design team is the one associated with all the tasks in the context of designing a
service.
Portfolio Management Value
The following benefits are offered by Service Portfolio Management:
 It allows the business to make the right decisions with regard to investment and de-
investment in services, thus ensuring that such decisions are made on the basis of a strong
business case.
 The portfolio management provides a meaningful and cost-effective alignment between the
IT services and strategic goals for the business.
 It provides a shift in attitude toward IT, which is now viewed as a value-generating component
instead of being considered an inevitable expense.
 It leads to an increase in the ability of the company to cater to the end-users.

 The organization is provided with an insight into the difference that the IT service would create
and the impact it would have on the business.
 It helps to give increased attention and focus to the services which are the most valuable and
profitable, thereby increasing the productivity of employees.
Portfolio Management Principles
The main principle of service portfolio management is to enable a service provider to
understand the following:
 The services provided by service portfolio management
 The investments made in those services
 The strategy and objectives of each service in terms of business value.
With this understanding, the service provider can control and management decisions about its
service throughout the service lifecycle.
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hidden; line-height: 0;" class="mce_SELRES_start">?</span>
Service Portfolio Management Process Activities
There are 4 major phases of activity in service portfolio management:
 Define
This phase involves the collection and validation of the entire inventory consisting of all the
existing and proposed services, including their business cases.
 Analyze
During the analyzing phase, the services which are required for the service provider to achieve
its strategy are identified. In addition to that, identification of how well the existing service
portfolio meets these and how to prioritize and balance supply and demand is also made.
 Approve
Each service in the service portfolio along with the level of investment associated with it needs
to be approved. All changes made to services in the service portfolio also need approval. Even
when services are being retired, approval is required.
 Charter
In order to authorize each project to build, enhance or retire a service, a charter is required.
The purpose of the charter is to document the scope of the project and the terms of reference
in addition to the approval decisions related to agreed changes to the service portfolio.
Service Portfolio Management Risks & Challenges
The following challenges can be encountered by service portfolio management:
 A lack of access to information is required for business.
 Absence of formal project management or change management.
 A service portfolio that is focused only on the service provider’s aspect of its services.
 Absence of a project or customer portfolio.

Some of the risks faced are as follows:
 Customer pressure can lead to ill-informed decisions regarding which services to offer and
invest in.
 The services being offered cannot be measured adequately.
Conclusion
Overall the service portfolio management ensures enterprises take correct decisions in the form
of investment, justifying the business case, and having a clear understanding of expected ROI.
Service portfolio management analyzes all the critical aspects required to provide high-quality
IT services to the customers and the investments required to build, operate and deliver the
same. Give yourself a chance to grow in your Service Management career with the ITIL 4
Foundation certification training, and gain useful skills and best practices.
Know more about Service Management best practices through Invensis Learning’s IT Service
Management certification training on ITIL 4 Foundation Online, SIAM Foundation, SIAM
professional, VeriSM, etc.
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ITIL 4 Managing Professional Transition
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Jacob Gillingham
Jacob Gillingham is an Incident Manager with 10+ years of experience in the ITSM domain. He
possesses varied experience in managing large IT projects globally. With his expertise in the IT
service management domain, currently, he is helping an SMB in their transition from ITIL v3 to ITIL 4.
Jacob is a voracious reader and an excellent writer, where he covers topics that revolve around ITIL,
VeriSM, SIAM, and other vital frameworks in IT Service Management. His blogs will help you to gain
knowledge and enhance your career growth in the IT service management industry.
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ITIL 4 Foundation Certification Guidelines
Service Catalogs vs Service Portfolios: What’s The Difference?
April 17, 2020
4 minute read
Joe Hertvik

Are you setting up or redesigning your organization’s ITSM strategy? If so, you might have
run across the terms service catalog and service portfolio. Maybe you’re wondering what
they mean, and whether you need one or both for your IT service management (ITSM)
strategy. Here’s our handy guide for defining service catalogs and service portfolios,
including how to choose and use them in your ITSM environment.
To keep it simple, we’ll limit ourselves to IT services. Newer ITSM frameworks include
other types of portfolios and services, such as customer and project portfolios.
Service catalog shows services you currently offer
A service catalog is a listing of all the products and services your IT department currently
offers its users. The defining characteristic of a service catalog is that it lists only items
that are currently available, not products and services that have been removed (retired
services) or will become available in the future.
Service catalogs are accessible as software packages, portals, or websites. Users submit
requests for any hardware, software, applications, or other items they want to add or install.
The service catalog allows users to log in, select the items they need, and make a request for
those items. It streamlines the way users interact with the service desk. It also serves as a
tracking system, showing updates for user requests and the progress of the service desk in
processing user requests.
If the service desk has a wide variety of services to offer, the service catalog can be divided
into categories with a comprehensive list of products and services under each category. This
helps users find what they need in a large catalog. One break point in your catalog could be
separating the technical catalog and the business catalog.
In the ITIL v3 framework, the Service Catalog is covered under the Service Strategy
practices. In ITIL v4, Service Catalog management is one of the Service Management
practices.
Service portfolio shows all services: past, present, and
future
A service portfolio is a complete listing of all of IT’s products and services. It includes the
following three components:
1. The Service Catalog. A listing of all the products and services offered under an ITSM
strategy.
2. The Service Pipeline. The status of proposed services and services that are in development.
Pipeline services haven’t gone live yet, and they aren’t available to users or customers. The
pipeline also details future growth and when these services may be available.
3. The Retired Services Catalog. All services that are being or have been phased out (retired),
along with historical information for each service.
The service portfolio serves as an historical archive for organizational products and services,
covering the past, present, and future items offered by your organization.

In ITIL v3, the service portfolio is covered under the Service Strategy practices, which covers
all three service portfolio components. ITIL 4 covers the service portfolio in two different
practices:
 Service catalogs are covered in the Service Catalog Management practices under Service
Management practices.
 Service Portfolios are covered inside the Portfolio Management activity under General
Management practices. Given ITIL v4’s stronger focus on value creation, Portfolio
Management includes not just the service portfolio but other portfolio types, such as
customer and project portfolios.
Service catalog or service portfolio: how to choose
Choosing between a service catalog and a service portfolio isn’t an either/or situation: you
can use both. There are great reasons to offer only a service catalog, and there are also good
reasons to offer a complete service portfolio. You aren’t limited to offering one or the other,
as long as your organization can support and maintain both.
So, how do you choose?
A service catalog is a must when implementing ITSM. Customers must be able to browse,
access, and procure your current IT products and services. Most organizations choose to
implement service catalogs using software packages like BMC Helix.
Once your service catalog is established, you can expand your ITSM strategy to include both
a service catalog and a service portfolio. In fact, this setup provides a number of benefits.
Here are just some of the benefits adding a service portfolio provides.
1. Providing support for retired products. Some organizations don’t want to list retired
products and services in their service catalog, but still need support for functions that use
retired items. For example, users might still be using retired products, such as using Nokia
and other non-Samsung phones, when the official supported standard is to use only
Samsung phones. These users may need service desk support, even though it’s not a
company standard. The same applies to users and applications that must use outdated
Windows products, such as Windows 2008 server or Windows 7, due to compatibility issues
with the latest versions. Your organization may not want to offer new non-Samsung phones
or Windows 2008 servers, but they still have to support existing users and the apps they use.
2. Giving historical perspective on where the company’s IT has been, where it is now, and
where it’s heading. A service portfolio can help with a variety of must-do activities, like
budgeting, judging user interest in new technologies and platforms, and generating
excitement for upcoming projects. Your organization’s historical service record can be
accessed and used for many valuable benefits, including what’s worked well—and what
hasn’t.
3. Tracking and testing upcoming projects. While the service pipeline may not be considered a
full project management system, it can be used to track upcoming projects and test them
within ITSM.
It is perfectly acceptable to manage both a service catalog and a service portfolio in an ITSM
environment—just realize that this takes time and effort. Neither type of service portal is
much good to either IT or to the users if it isn’t well maintained.

BMC for service support solutions
Whether your organization chooses to manage a service catalog, service portfolio, or both is
merely a matter of what your user base has come to expect from the IT organization. There
are many options to consider when it’s time to develop your ITSM solution. Feel free to
contact BMC for help in service catalog and service portfolio selections or for any other
ITSM help.
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The Gartner Magic Quadrant for ITSM is the gold-standard resource helping you understand
the strengths of major ITSM software vendors, insights into platform capabilities, integration
opportunities, and many other factors to determine which solution best fits your needs.
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These postings are my own and do not necessarily represent BMC's position, strategies, or opinion.
See an error or have a suggestion? Please let us know by emailing blogs@bmc.com.
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Service Portfolio Management
Description/Summary
Service Portfolio Management is the process responsible for the assembly of an initial
Service Design Package (SDP) for each service and its maintenance through the service life
cycle. This also involves cooperating with the Continual Service Improvement Process.
The SDP may be altered and extended by other Service Management processes. However,
Service Portfolio Management is the process retaining ownership and overall responsibility
for all Shops, in particular for all service descriptions and documentation. The entirety of all
available Saps will form the Service Portfolio. Since customers should be provided with a
customer-specific view on this portfolio – the Service Catalog – Service Catalog
Administration is an important administrative sub process related to Service Portfolio
Management.
Although Continual Service Improvement Process is gaining more and more importance in
recent discussions, in our understanding is is part of the Service Portfolio Management. This
understanding helps to:
 reduce the complexity of IT service methods and processes
 increase the understanding for the correlation of IT service management
Objectives
The purpose of Service Portfolio Management is to create, manage and improve a
service portfolio containing a detailed design package for each IT service.
Service Portfolio Management contributes to an integrated Service Management approach by
achieving the following goals:
 Every service planned and operated by the provider is documented.
 Every new service runs through a set of standardized activities and procedures to ensure
that essential management-relevant information, for service delivery and support, are
documented and provided to the relevant management processes.
 Every service and their design packages are reviewed at regular intervals.
 Every service is reviewed within the Continual Service Improvement Process
 Through the service portfolio, an information base for a service catalog is provided.
Roles & Functions
Service Portfolio Management Specific Roles
Static Process Roles
Service Portfolio Process Manager (Service Portfolio Manager)
Manager of the entire process, responsible for its effectiveness and efficiency.
Service Portfolio Process Owner

Initiator of the process, accountable for defining the process strategic goals and allocating all
required process resources
Service Portfolio Management Team
Team associated to the Service Portfolio Management Process
Dynamic Process Roles
The following roles are assigned for each new instance of the Service Portfolio Management
process and usually outlast for the entire lifetime of one process instance. Changes in the
assignments of roles are possible, but apply only to a regarded process instance, and not to
the process in general.
Service Agent
This attribute of each service record contains the role/function responsible for the current
activity or task within the process of Service Portfolio Management. The Service agent can
be changed with the help of a functional escalation, if permitted by the rules.
Service Owner
This attribute of each service record contains the role/function currently accountable for the
service (but not for the Service Portfolio Management process). See IT Service Management
principles Ticket, Ticket Owner and Ticket Agent for details.
Service Sponsor
This is the person or board responsible for budgets and costs related to a specific service.
Requirements Requester
The person or group of persons expressing new demands/requirements to be fulfilled by the
IT service provider.
Service Design Team
Team associated to all tasks in the context of designing a service (creating a Service Design
Package)
Information Artifacts
The following chart provides an overview of the main information artifacts in the process of
Service Portfolio Management. It illustrates how the service records build the Service
Portfolio and how the Service Catalog can be regarded as a restricted view on the service
records by covering parts of the information contained in the service records (and thus the
Service Portfolio).

Service Record
The service record is the record holding any management-relevant information on a specific
service. As depicted above, it is the basic record covering the information that builds the
service portfolio, the service catalog and the service design packages. Service record also
contains information on documentation requirements and documentation verification needs.
For a list of possible attributes to be considered for the service record, please refer to the
exemplary service description.
Service Design Package (SDP)
The Service Design Package is regarded as the entirety of information required to effectively
plan, deliver and support an IT service – in other words: to manage an IT service through all
stages of its life cycle. The information of a service’s design package is a subset of the
information stored in the respective service record. Thus, the SDP is realized as a specific
view on the service record, hiding that information which is out of scope for the SDP.
Information that is part of the SDP of a specific service must include the following
mandatory information, which at the very least contains:
 Unique identifier of the service

 Description of the service
 Service design plan
 Service transition plan
 Service operation and support plan
 Service improvement information
Service Portfolio
The totality of all service records for all services. Thus, the Service Portfolio may be realized
by a database serving as a:
 container for all service records,
 container for all service design packages (with restricted views of service records),
 basis for the service catalog (with a restricted view of the portfolio).
Service Catalog
A customer-specific view on the service portfolio, comprising of that information out of the
service design packages which is of interest for the respective customer. Either a single
service catalog is deployed, valid for all customers, or different service catalogs are defined
for different customers.
Key Concepts
Continual Service Improvement
An activated and operated service should be continuously reviewed and improved, thus
adapting:
 the service to changing customer requirements
 the service to rapid changes in business and technological environments
 the service to changes in own strategy, organization and service portfolio
but most of all, the following question should be permanently asked of the service:
 Does this service, using agreed SLAs, fulfill our offering to the customer in the most effective
and economical way, by providing best value/ service proposition to the customer?
The Service Owner is responsible for the periodical review of relevant Service Reports from
the Reporting Management during the Service Operation activity. They can trigger a new
Service Design Activity every time it is necessary.
Process

High Level Process Flow Chart
This chart illustrates the Service Portfolio Management process and its activities as well as
the status model reflected by the service record evolution.
Critical Success Factors
Performance Indicators (KPI)
For Continual Service Improvement Process:
 Frequency of service reviews
 Number of improvements of services
Process Triggers
Event Triggers

 Every time a customer needs a new or updated service the Service Portfolio Management is
triggered
Time Triggers
 The Service Portfolio Management can be activated periodically to revise the Service
Portfolio
Process-specific Rules
 Every new service requirement that can not be fulfilled by existing services triggers the
creation of a new service record.
 The service design agent is responsible for documenting each activity in service record.
 The service owner controls the service design agent.
Note: For the different types of rules see Rules.
Process Activities
Service Requirements Definition
The main sources of service requirements are customer demands. Identifying concrete
requirements on a service builds the vital foundation for designing and describing the service
within the service (design) record.
Requirements definition includes the detailed definition of service documentation and a plan
for documentation audits which will verify that the documentation always represents the
current status of the service and processes. Moreover that it is distributed, communicated,
used and under review.
Activity-specific rules:
 All customer requirements on a service have to be identified, recorded and weighted due to
their relative importance for the respective customer.
 Requirements requester is set to the customer asking for service (re-)design.
 Service sponsor is set to the person who triggered the service (re-)design, if no other
sponsor is known.
 Service agent is set to „Service Portfolio Management staff“ by default.

 Service owner is set to „Service Portfolio Manager“ by default. This assignment can be
overridden as soon as another service owner (e.g. a specific IT team) has been committed
for this role.
 Requirements description The RFC must contain a meaningful description of the desired
change as well as a comprehensible rationale stating the reasons for that change.
 Requirements priority reflects the relative importance of the new requirement(s) compared
to other requirements on different services. It is set to „1 (Middle)“ by default.
 Design documentation requirments and verification process
 The service record is shifted into the status „requirements-defined“.
Service Decision
A decision has to be made on whether the requirements demanding a new service, or the
modification of an existing one, shall be realized/fulfilled (possibly in parts). This may, or
may not, involve designing a new service or modifying an existing service.
Activity-specific rules:
 The service (design) record is shifted into the status „decided-accepted“.
Service Design
Based on the customer requirements, the service is designed or improved depending on
whether a new service is introduced or an existing service shall be modified. The required
information for the SDP is recorded by filling/updating the SDP record.

Activity-specific rules:
 A service deployment/transition plan is created, addressing the following aspects:
o (To be completed)
 A service support plan is created, addressing the following aspects:
o (To be completed)
 The SDP record is shifted into the status „designed“.
Once the service design is reflected in the SDP, the following occurs. In case of a new
service, actions have to be taken to implement this service in accordance to the SDP. In case
of an existing service, adaptations have to be realized in order to align the actual service with
its descriptive SDP. In either case, at this stage of the process Service Portfolio Management
interfaces with Change Management.
Service Transition
Activating a service means that it is made available to at least one customer with the help of
Change and Release Management. A review of the new or changed service is performed after
the change, in the context of the Post Implementation Review (PIR) of the Change
Management process. The PIR therefore has to approve conformance of the actual
change/service with its descriptive SDP, reflected by one or more RFCs. While activity
Service Decision paves the way for the Service Design; Service Transition is focused on
getting the new or changed service into the live environment.
It is important to understand that Service Transition is a process overspanning and interfacing
with Change and Release Management. For each service that has been designed, a Request
for Change (RFC) is created to trigger the Change Management Process. However, Service
Portfolio Management is just one possible source for RFCs, and an RFC is used as a means to
realize the proposed service design reflected by the SDP.

Activity-specific rules:
 Service agent is set to „Service Portfolio Management Team“, if no other specific person is
available for this role.
 If the RFC is not accepted then something was (formally) wrong with the content of the RFC.
Perhaps, information provided to the Change Management process via the RFC is not
complete, or another formal error has occurred. Rejection of the RFC does not imply
rejection (in terms of failed authorization) of the change.
 If the change is not authorized, or if the rollout of an authorized change is not successful, the
transition of the service has failed and the service record is shifted into the status
„transferred-failed“.
 The service record is shifted into the status „transferred-successful“ if the Transition activity
is passed through without any problems.
Service Operation
Designed, tested and activated service is operated in this sub-process. This means the service
is up and running within agreed service levels and providing agreed results. Operational
processes:
 are running the defined service (through planning, operating and monitoring of IT service,
infrastructure and related resources)
 are monitoring the service performance (e.g. Event & Alter Management Process)
 keeping the service within the defined service levels (e.g. Incident Management Process,
Problem Management Process, Change Management Process)

 provide counter actions in case of acute or possible malfunctions of the service (e.g. Incident
Management Process, Problem Management Process, Change Management Process,
Availability Management Process, Continuity Management Process)
 improving the service continuously, which means improved costs/ result for both company
and customer (Continual Service Improvement Sub-Process)
 collecting inputs on service changes and forwarding these to the Service Design within the
Service Portfolio Management Process
 up-dating the service documentation and verifying that the documentation is accurate
Service Operation is performed in a well balanced environment, bringing different
components into a harmonic total composition:
internal vs. external orientation of the IT
both need to be brought in a balance – IT driven only by the internal view of the department
is not business aligned, an IT only business focus can not deliver the agreed results
stability vs responsiveness OR reactive vs. proactive behaviour patterns
Responsive and fast IT reaction is always one of the main customer requirements but only a
balance with stability allows it to perform IT operations on an agreed level of SLAs
Service quality vs. cost of service focus
„IT always costs too much“ is a standard quotation in business operations – but the delivery
of service quality needs resources, thus the main focus of IT service operations should be a
balance of service quality and costs (with active discussion with the business partners).
Main success factors for service operations:
 pro-active communication with business and external partners
 information receiver oriented communication – on right level of detail, cost and frequency
 a desire for communication and understanding on both sides (IT and business) through
understanding of a „one team“ approach – internal and external with the business partners
 documentation of deliverables, procedures and operations
 definition and permanent optimization of rules and daily running according to theses rules
without exceptions
It is important to understand that Service Operation is a sub-process over spanning and
interfacing with Incident, Change and Release Management. For each service that is designed
and transferred into production; the right number, right capacity and right planning of
resources needs to be operated to provide the service on an agreed quality level.
Activity-specific rules:
 Service owner is the control function
 Service owner is:
o responsible for recording and monitoring the Service KPIs
o monitoring the service docuemntation
o in case of necessary service improvements requesting those by:
 requesting a new service design phase (in case of major changes to the
service) OR

 initiating a RFC at Change Management Process (in case of minor changes to
the service)
 If the RFC is not accepted then something was wrong with the
content of the RFC. Perhaps, information provided to the Change
Management process via the RFC was not complete, or another
formal error has occurred. Rejection of the RFC does not imply
rejection of the change (in terms of failed authorization).
 If the change is not authorized, or if the roll out of an authorized
change is not successful, the transition of the service has failed and
the service record is shifted into the status „transferred-failed“.
o in case of interaction with Incident Management Process and Major Incidents the
coordinating role
o in case of interaction with Change Management Process and Category 01 Changes
 the authorization role AND
 is part of Change Advisory Board
 Service agent is set to Service Operation Team
 The service record is shifted into the status „in operation“ if the Operations activity is in
progress.
Service Deactivation
If a service is no longer required, which may be due to various different reasons like changed
customer requirements or substitution of the service, then it is deactivated. This particularly
implies the removal of a service out of the service catalog in order to make it not
available/subscribable anymore by any customer. A backup of the service record and service
design package may be stored in the service portfolio.
Activity-specific rules:
 The SDP record is shifted into the status „retired“.
Service Portfolio Management
Definition - What is ITIL Service Portfolio Management
ITIL Service Portfolio Management is the governance processes of the service portfolio.
The process is one by which a service provider can manage their investments across the
service lifecycle by taking into account every service in terms of the business value provided
by it. A service provider makes use of service portfolio management to control the entry of
any service into the service portfolio by tracking any investment in services through its entire
lifecycle starting from the development till the delivery and retired stages.[1]
Service Portfolio Management (SPM) enables Managers to assess the quality requirements
and associated costs. The primary goal of Service Portfolio Management is to realize
maximum value whilst managing accompanying risks and costs. Five basic questions that
need to be answered for Service Portfolio Management to help decide what services clients
require:

 Why should a client buy these services?
 Why should a client buy these services from our organization?
 What are the price and charge back models?
 What are our strengths and weakness, priorities and risks?
 How should our resources and capabilities be allocated?
Product Managers play a key role in Service Portfolio Management. Their main
responsibility is to manage services as products during their entire lifecycle. Other roles
include the co-ordination and focus of the organization as well as owning the Service
Catalogue.[2]
Contents
 1 Definition - What is ITIL Service Portfolio Management
 2 Process Overview of Service Portfolio Management [3]
o 2.1 Sub Processes of Service Portfolio Management
 3 Objective of Service Portfolio Management[5]
 4 Project Portfolio Management Vs. Service Portfolio Management[6]
 5 See Also
 6 References
Process Overview of Service Portfolio Management [3]
ITIL V3 introduces the process for managing the Service Portfolio at the strategic level.
Following the introduction of the Strategy Management for IT Services process in ITIL 2011,
Service Portfolio Management has been re-focused to cover activities more closely associated
with managing the Service Portfolio. The process overview of Service Portfolio Management
shows the key information flows (see figure below). ITIL 4 refers to Service Portfolio
Management as a general management practice, and has renamed the practice to "Portfolio
management".

source: IT-Processmaps
Sub Processes of Service Portfolio Management
Think of Service Portfolio Management as a dynamic and ongoing process set which includes
4 work methods:
 Define: inventory services, ensure business cases and validated portfolio data.
 Analyze: maximize portfolio value, align and prioritize and balance supply and demand
 Approve: finalize proposed portfolio, authorize services and resources.
 Charter: communicate decisions, allocate resources and charter services.[4]
These four methods or sub processes of service portfolio management are shown in the
following diagram:

source: Tutorials Point
Objective of Service Portfolio Management[5]
The purpose of Service Portfolio Management is to create, manage and improve a service
portfolio containing a detailed design package for each IT service. Service Portfolio
Management contributes to an integrated Service Management approach by achieving the
following goals:
 Every service planned and operated by the provider is documented.
 Every new service runs through a set of standardized activities and procedures to ensure
that essential management-relevant information, for service delivery and support, are
documented and provided to the relevant management processes.
 Every service and their design packages are reviewed at regular intervals.
 Every service is reviewed within the Continual Service Improvement Process
 Through the service portfolio, an information base for a service catalog is provided.
Project Portfolio Management Vs. Service Portfolio
Management[6]
It can be argued that while Project Portfolio Management is still the key IT Governance
player in most IT organizations, it is absolutely important to extend this by a predominant
Service Portfolio Management in order to be a successful IT Service Provider, delivering
value to the business.

If we compare Project and Service Portfolio Management, they have obviously many things
in common. First of all they both share the same technique and same goal of general Portfolio
Management: Making right decisions about investments (by the way, interestingly enough
this is not different from classical Financial Portfolio Management, which is completely non-
IT):
Project and Service Portfolio Management compared
source: ITIL.ORG
 For Service Portfolio Management this means that each new service or change to an existing
service needs to have a clear business case, showing the value to the business (part of the
service pipeline). This portfolio technique is continued by tracking the investment of services
throughout their lifecyle (service design, transition and operation), thus enabling the
company to evaluate its strategy, as well as its ability to execute according to their strategy.
 On the other hand, Project Portfolio Management does the same for the lifecycle of
projects. It ensures you do the right projects the right way. Since new services or changes to
existing services are typically managed as projects, the Project Portfolio Management is
obviously very much part of the Service Portfolio Management (and not the other way
around).
The Benefits of Service Portfolio Management[7]
Employing service portfolio management
may involve a radical re-do for all business units involved, but its benefits are measurable:
 Customers understand exactly what you, as a service provider, will deliver
 There’s cradle-to-grave transparency into value, costs, and risks
 Services in the pipeline can be monitored as well as operational services
 It helps to justify proposed services and major changes to existing services

Ultimately, tracking the value, cost, and risk of every service your service organization
provides also helps to position it as indispensable to your customers, because you know –
quickly – how valuable a service is.
See Also
ITIL (Information Technology Infrastructure Library)
ITIL Availability Management
ITIL Continual Service Improvement (CSI)
ITIL Event Management
ITIL Facilities Management
ITIL Problem Management
ITIL Service Delivery
ITIL Service Design
ITIL Service Lifecycle
ITIL Service Strategy
ITIL Service Transition
ITIL Service Value Chain (SVC)
ITIL Service Value System (SVS)
ITIL Service Operation
Service Portfolio
Service Catalog
Service Catalog Management
IT Governance
IT Infrastructure
IT Operations (Information Technology Operations)
Control Objectives for Information and Related Technology (COBIT)
Balanced Scorecard
Enterprise Risk Management (ERM)
Risk Management
IT Strategy (Information Technology Strategy)
Business Strategy
Corporate Governance
Corporate Strategy
Enterprise Architecture
COSO Internal Control- Integrated Framework
Compliance
References
1.
 What Does Service Portfolio Management Mean? Invensis
  What is the primary goal of Service Portfolio Management? ITIL news

  The Process Overview of Service Portfolio Management IT-Processmaps Wiki
  The four work methods of Service Portfolio Management Sunview Software
  What is the Objective of Service Portfolio Management? mITSM
  Comparing Project Portfolio Management to Service Portfolio Management ITIL Blog
7.  What are the Benefits of Service Portfolio Management? ITSM tools
Service Strategy - Service Portfolio Management
The Service Portfolio details the commitments and investments made by a Service Provider
to its customers and within the markets they service. It contains current contractual
obligations, services under development and continuing service improvement programs.
The Portfolio represents all engaged resources and resources being released during the
different phases of the Service Lifecycle. It includes the Service Pipeline that consists of
services under development and the Service Catalog, which includes customer visible active
services that have the potential to recover costs or earn profits for the Services provided.
Service Portfolio Management is a dynamic and ongoing process that covers the following
stages in work practices:
 Define - list services, confirm business cases and verify portfolio data
 Analyze - maximize portfolio value, set priorities
 Approve - finalize portfolio proposal, authorize services and resources
 Charter - communicate decision and allocate resources.
Service Portfolio Management in the system allows organizations to create Service
Categories that include business-related attributes, such as business processes supported,
business owners and business users. This ensures that organizations record all relevant
information against the Service.
Organizations can further optimize their Service Portfolio Management by tracking and
reporting on Service Offering and Service Component usage, Service Level performance and
costs. This includes the functionality to calculate break-even points (B.E.P.) for offering a
service, which allows support organizations to charge the appropriate cost for offering the
service to their internal or external customers. This is achieved by recording of financial
attributes against services, including service cost, service charges and service revenue.
Service Design – Service Catalogue
The Service Catalogue provides the ability to contain critical information in a central
repository accessible by both the IT department and the Business.
The information contained within the Service Catalogue relates to all Services provided by
the IT department to the Business. The Service Catalogue is generic and can be applied
across all platforms, environments or geographical locations of any organization.

ITIL only provides minim definition for a Service within the Service Catalogue. We'd
suggest that the following make a good place to start:
 Service Description: The Service Description should be written in easy to understand,
simple, non technical terms that almost any person within the organization could
understand.
 Service Owner: The Service Owner is the person within the organization is
responsible for the Service although this may not include the actual delivery.
 Criticality: The criticality of the Service is determined by the Business.
 Relationships: A Service is linked to the actual items within the I.T infrastructure that
deliver it. This enables analysis across the chain to determine impacts of outages,
upgrades etc.
Service Desk - Service Level Management
The goal of Service Level Management is to maintain and improve the alignment between
business activities and IT service quality. This is achieved through the cycle of:
 Agree on service level expectations and record them in Service Level Agreements
(SLAs)
 Monitor the service provided
 Report actual service delivery results
 Review IT service delivery results in relation to the SLA, and adjust accordingly
A Service Level Agreement (SLA) is a formal, negotiated contract that outlines service level
expectations and clarifies responsibilities between the Service Desk and its Customers. When
unacceptable levels of service are noted throughout the service cycle, action can be taken to
re-align expectations with actual service delivery results.
http://www.novell.com/documentation/servicedesk-
73/service_desk_bestpractices/data/b1399lkf.html

Service Portfolio Management – Optimizing IT Business Values
By Simplilearn
Last updated on Feb 15, 20227526
Table of Contents
Service Portfolio Management
Purpose:
Scope
Value to business
Service Portfolio Management
Service portfolio explains the business needs and the response from providers to those needs.
The service portfolio is a combination, or we can say set of services managed by a service
provider. The service portfolio is there to manage the entire lifecycle of all the services.
Three categories of services which are there in Service portfolio are:
 First one is service pipeline: services which are proposed or which are in development
phase.
 Second is service catalogue: services which are live or ready for deployment.
 Third one is retired services: Services which are no longer functional.
In IT service management, the service portfolio shows the investment, which are made in an
organization’s services, it also represents the value that services in return provide.
Purpose:
Purpose of service portfolio management is to make sure that the service provider has got the
perfect set of services so that it can balance the investment in IT with the capacity to get the
desired business outcomes. It keeps a track of the investments in services throughout their
lifecycle.

Service portfolio also makes sure that services are defined clearly and linked to the
achievement of business outcomes, thus ensuring that all design, transition and operation
activities are in line with the value of services.
The objectives
 Based on analysis of the potential returns and the acceptable risk levels, it provides a
process and mechanisms which makes it possible for an organization to take decisions
accordingly on which service to provide
 Provides a mechanism to the organization in order to evaluate how the services makes it to
meet the strategy, and responding to the internal or external changes in its environments
 Controlling the services which are offered, keeping a check on their conditions and levels of
investment.
 Keep a track of investments in services throughout their lifecycle, so that an organization can
evaluate its strategy.
 Evaluate the services which are no longer in use and take decisions accordingly for their
retirement.
Scope
The main point of concern for service portfolio management is; if at all the service provider is
having the ability to generate the value which is expected from the services. Service portfolio
management keeps a track of investments in services and then compares them to the desired
business outcomes.
Service portfolio management assesses the value of services throughout their lifecycles; it
should also be able to compare what benefits have new services brought which were replaced
in place of retired services.
Value to business
Service portfolio management helps out the business to make appropriate and good decisions
about investments. We cannot implement services just because they are good ideas or
because they are an industry standard. Services are implemented only if they demonstrate a
good business case and clear returns on investment. Service portfolio management analyzes
this by comparing the results that are expected from the customers and the capital required to
build and deliver service.
Service portfolio management also acts as a tool for innovation for an organization.
Service Portfolio Management
Jan 13, 2022by Kishan Tambralli
What is Service Portfolio Management?
Service portfolio management is a system for managing and optimizing services. It involves
the planning of all service activities and the analysis and evaluation of those services to

ensure that they are meeting customer needs. The goal is to provide an efficient way of
delivering service offerings to customers by creating a plan which will cover all aspects of
their requirements. Service providers can use this information to make strategic decisions on
deploying resources and maximizing profitability.
The first step in developing a profitable service portfolio management strategy is
understanding your current performance - what's working, what isn't, etc. This will help you
create accurate benchmarks against which future progress can be measured (See "The
Importance of Performance Measurement").
Once you understand your current state, the next step is to define your business goals and
objectives. For example, what do you want your service portfolio to achieve? How will it
help improve customer satisfaction or increase revenue (See "Defining Your Business Goals
and Objectives")?
A service Portfolio is a collection of services offered by an organization that can deliver
value to customers. There are three types in the Service portfolio; each style has its
characteristics and suitability.
 Core Services: These are the products or services that help the organizations generate
revenue and profit. They form a significant part of the Service portfolio.
 Supportive Services: These are additional services that provide support to core services like
strategy development, business process outsourcing, etc.; these also form a significant part
of the Service portfolio; however, they don't generate much revenue as compared to core
services.
 Embedded Services: These are those services that have been developed with a particular
end-user need in mind. They are usually not revenue-generating services, but they can add
value to the organization's overall offering.
Purpose:
Service portfolio management is a strategic approach to managing services. It encompasses
the entire service lifecycle, from strategy and design through implementation and delivery.
Service portfolio managers are responsible for developing strategies that meet customer
needs and align with business goals, identifying potential threats or market opportunities,
selecting appropriate solutions, negotiating contracts, defining requirements for successful
implementation of those solutions, engaging project teams to deliver on these requirements;
monitoring ongoing performance of services; advising leaders about emerging trends; making
adjustments as necessary to maintain alignment between customers' expectations and
organizational priorities.
Service portfolio management aims to create an environment where different types of
services can be managed effectively by using various models such as outsourcing or
internalization for specific areas like IT Infrastructure Management. The goal is to provide an

overall governance framework that helps the organization make informed decisions about
which services to offer, how best to deliver them, and when necessary to make changes.
Service portfolio management also enables the organization to track performance against
defined service levels and customer expectations, thereby ensuring that they are providing
value for money.
Objectives
The objectives of service portfolio management can be classified into seven different
categories. These objectives are:
 Identifying the services.
 Prioritizing the services.
 Developing a cost model for each service provided.
 Determining how to allocate resources across services and processes.
 Assessing performance against customer expectations and business needs.
 Implementing corrective actions as needed to ensure desired outcomes are achieved.
 Evaluate the overall performance of service delivery.
By achieving these objectives, an organization can ensure that its service portfolio is aligned
with business goals and needs.
Before beginning service portfolio management activities, organizations need to understand
their services. This includes understanding what services are being offered, who is offering
them, how much it will cost to deliver each service, and what benefits.

Scope:
Service portfolio management is defining, measuring, and managing services planned for
service delivery to customers or other stakeholders. It provides a comprehensive framework
for understanding how all business activities contribute to desired outcomes.
The Scope of Service Portfolio Management Services include:
 Meeting customer needs through effective service design, development, implementation,
and operation.
 Managing supplier relationships, including contract negotiation, contracting management,
performance measurement, and evaluation.
 Optimizing processes by identifying opportunities for improvement and implementing new
ways of working.
 Maximizing value through improved financial and non-financial performance measurement
and management.
 Understanding how to protect the organization's reputation by demonstrating ethical
behavior, upholding legal compliance, and considering environmental impact.
The Scope of service portfolio management: Ensuring that all services are delivered to
meet customer expectations is essential for business.
Who Uses Service Portfolio Management?
Service portfolio management is a process for analyzing, improving, and documenting an
organization's services. It helps to improve customer service levels by defining what services
are available, how they will be delivered, and which ones are more important than others. It
can also help pinpoint where organizations may need improvement in their service delivery.
The process ensures that all the services are consistent with business strategy, are organized
efficiently to deliver value, and have a clear funding plan. It can also help reduce costs by
reducing duplication of effort or providing similar services in different ways throughout an
organization's service offerings.
Service Portfolio Management t helps you manage your service offerings. It lets you create,
track, and maintain all of your company's services.

 Portfolio Owner: A portfolio owner is responsible for a set of portfolios, programs, or
projects. This person typically reports to the portfolio manager and may have responsibilities
in project management, risk management, governance, and compliance. The role of the
portfolio owner varies depending on the organization's needs, but it can include:
1. Monitoring performance against plan.
2. Evaluating strategy options.
3. Managing risks.
4. Recommending changes to strategy.
5. Evaluating project proposals.
6. Assessing portability of projects and programs across different business areas.
 Portfolio manager: A Portfolio manager in Service Portfolio Management plays an integral
role in managing and optimizing service portfolios. The portfolio manager oversees all
aspects of the service portfolio management, including but not limited to project planning,
resource allocation, risk identification, and mitigation strategies.
 Service Owner: A Service Owner is a member of the service portfolio team responsible for
managing and tracking the underlying services within their area. They are responsible for
ensuring that all services they own meet defined quality, cost, and performance
expectations. The role also includes developing business cases to ensure appropriate funding
exists to meet requirements.
 Service Manager: A Service Manager in service portfolio management manages and
oversees the process of creating, delivering, and maintaining services. The role has many
responsibilities that include:
1. Designing and managing service portfolios.

2. Ensuring compliance with standards and regulations.
3. Assessing risks associated with providing a service to customers.
4. Managing customer expectations.
5. Managing supplier relationships.
6. Ensuring compliance with service level agreements and service desk procedures.
 Process owner: Process owners are responsible for the processes in Service Portfolio
Management. They have responsibility for planning, designing, and implementing these
processes. A process owner is usually a business analyst or project manager who knows how
to run a specific group's business process.
A Process Owner is responsible for ensuring that a processor stage in a process remains on
schedule and within budget.
 Process Manager: A process manager is an individual who manages the day-to-day
operations. They are part of the management team and help oversee and organize
everything in their department or group. Process managers work with couples, projects,
products, and customers to meet goals on time and under budget.
Benefits of Service Portfolio Management
Service portfolio management is a process that can help your company make better decisions
about where to allocate resources. As a result, it will improve the quality of services and
reduce costs in the long run. The following are three benefits you'll see when you implement
service portfolio management:
 Better Decision-making: With an efficient way to manage your company's services,
managers will be able to identify which ones need more attention or investment quickly.
 Increased resource allocation: Service portfolios allow for increased focus on critical areas
while eliminating low value-added activities due to their lower profitability. This will lead to
decreased costs and increased revenue streams when it comes time for renewal
negotiations with suppliers.
 Improved quality: When allocating resources, it's essential to understand how services are
interconnected. This will allow for identifying and mitigating any quality risks that may arise
ITIL - Service Strategy Overview
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Service Strategy helps to design, develop and implement service management as
organizational capabilities and strategic assets as well. It enables a service provider to
consistently outperform competitive alternatives over time, across business cycles, industry
disruptions and changes in leadership.

Service strategy comprises the following key concepts −
 Value creation
 Service Assets
 Service Provider types
 Service structures
 Defining the service market
 Developing service offerings
 Financial management
 Service portfolios
 Demand management
 Return on investment
Strategic Assessment
Before crafting service strategy, a provider should first take a careful look at what it does
already. The following questions can help expose a service provider’s distinctive capabilities
−
 Which of our services or service varieties are the most distinctive?
 Which of our services or service varieties are the most profitable?
 Which of our activities in our value chain or value network are the most different and
effective?
AD
Factors in Strategic Assessment
The key factors that play an important role in strategic assessment are given below −
Sr.No. Factors & Description
1
Strengths and weaknesses
The attributes of the organization. For example resources and capabilities, service
quality, skills, cost structures, product knowledge, customer relationship etc.
2 Business Strategy

The perspective, position, plans and patterns are received from a business strategy.
3
Critical Success factors
How will the service provider know when it is successful?
4
Threats and opportunities
Includes competitive thinking. For example, is the service provider vulnerable to
substitution or is there a means to outperform competing alternatives?
Value Creation
Service strategy defines a unique approach for delivering better value. According to
customers’ needs, service should consist of two elements −
 Utility
 Warranty
Utility
Utility is perceived by the customer from the attributes of the service that have positive effect
on the performance of task associated with the desired business outcomes. This is fir for
purpose.
Utility is generally stated in terms of −
 Outcomes supported
 Ownership costs and risks avoided
Warranty
Warranty ensures the utility of the service is available as needed with sufficient capacity,
continuity, and security. Value of warranty is communicated in terms of level of certainty.
Warranty is usually defined in terms of availability, capacity, continuity, and security of the
utilization of the services.
Availability
It assures the customer that the services will be available for use under agreed terms and
conditions.
Capacity
It assures that the service will support a specified level of business activity or demand at a
specified level.
Continuity

It assures that the service will continue to support the business through major failures.
Security
It assures that the service provided by the service provider will be secure.
AD
Service Assets
There are two types of service assets as listed below −
 Resources
 Capabilities
Resources
Resources are the inputs for production. The resources are transformed by management,
organization, people and knowledge.
Capabilities
Capabilities refer to skills to develop and control the resources for production. The skills are
based on knowledge, experience and information.
Service Provider Types
Service Provider can be broadly classified into three types as discussed below −
Type I - Internal Service Provider
Internal Service provider refers to the business functions within an organization.
Administration, finance, human resources, and IT service providers all comes under internal
service providers.

Type II - Shared Service Provider
In this, business functions such as IT, human resources, and logistics are consolidated into an
autonomous special unit called a Shared Service Unit (SSU).
Type III - External Service Provider
External service provider refers to the third party service providers. It can offer competitive
prices and drive down unit cost by consolidating demand.
The Four Ps of strategy
The below mentioned Four Ps identify the different forms of a service strategy and are
considered as entry points to service strategy.
Perspective
It describes a vision and direction, and articulates the business philosophy of interacting with
customer.
Positions
It describes the decision to adopt a well-defined stance. It is expressed as distinctiveness in
minds of customers. This means competing in the same space as others but with
differentiated value proposition that is attractive to the customer. Whether it is about offering
a wide range of services to a particular type of customer or being the lowest cost option, it is
a strategic position.
Plan
A plan describes "How do we offer high value or low cost services?" or "How do we achieve
and offer our specialized services?"

Pattern
It describes the organization’s fundamental way of doing things.
Services Strategy Processes
The following diagram expresses the different processes and their relationship in service
strategy −
Strategy Management
This process involves four activities − definition of market, development of offering,
development of strategic assets, and preparation for the implementation of the strategy.
Service Portfolio Management
Service portfolio defines all services that a service provider can provide. It helps to control
service management investments throughout an enterprise and actively managing their value.
Business Relationship Management
This process deals with establishing good relationship between service provider and
customers by ensuring that appropriate services are developed to meet customer’s needs.

Demand Management
This process maintains balance between consumption of services and their delivery.
Financial Management
Financial management helps to determine all the costs of IT organization. It can serve as a
strategic tool for all three kinds on service provider types − internal, external and shared
service provider.
here are several roles that are responsible for managing different key aspects of Service
Strategy. This chapter discusses the roles of each in detail.
Sr.No Role & Responsibility
1
Business Relationship Manager
 Maintains good relationship with customers
 Identifies customer’s needs
 Ensures service provider meet customer’s need
 Works closely with Service Level Manager
2
Demand Manager
 Responsible for understanding, anticipating, and influencing customer
demand for services
 Works with capacity manager to ensure that service provider has sufficient
capacity to meet the required demand
3
Financial Manager
 Responsible for accounting, budgeting, and charging requirements
4
IT Steering Group (ISG)
 Sets direction and strategy for IT services
 Reviews the business and IT strategies in order to make sure that they are
aligned
 Sets priorities of service development programs
5
Service Portfolio Manager
 Decides on a strategy to serve customers in cooperation with ISG
 Develops service provider’s offering and capabilities
6
Service Strategy Manager
 Works with ISG in producing and maintaining the service provider’s strategy

 Responsible for communicating and implementing service strategy
For positive results, service provider needs to plan his services strategically. A good service
strategy defines a unique approach for delivering better value.
Service Strategy Manager is the process owner of this process.
Service Generation Sub processes
Strategy Management comprises of four activities as discussed below −
Defining the market
It is necessary to take survey of services available in the market. It gives a clear perspective
of cost and quality of services already present and what new service can be offered in
competitive environment.
Developing offerings
In this service provider develops a portfolio which contain all the services that are visible and
available for the customer. Service portfolio is developed in order to represent all binding
service investments towards the market.
Developing strategic assets
It deals with purchasing new technologies, resources and capabilities to offer low-cost and
high-value service to the customer.
Measuring and preparation for implementation of strategy
In order to measure success or failure of the strategy, all critical success factors are measured.
Also the completion in the market is observed and priorities are adjusted accordingly.
Service Portfolios
Service portfolio contains description of all the services engaged throughout the service
lifecycle. It also represents the commitment and investment made by service provider across
all customers and market spaces.
Service catalogue is a subset of service portfolio and contains presently active services in
service operation phase. We will discuss service catalogue in detail as part of service design
process.
Service Portfolio Management

Service portfolio management ensures that the service provider is offering right combination
of services to meet the customer’s need.
Service Portfolio Manager is the process owner of this process.
The purpose of service portfolio management is to provide answer to the following questions
−
 Why should customer buy this service?
 Why should they buy from us?
 What form does the pricing structure take?
 What are our strengths and weaknesses, priorities and risks?
 How should we apply our resources and capabilities?
Sub Processes
Service portfolio management includes sub processes as shown in the following diagram −
Define
The purpose of this process is to define desired results of a service.
Analyze
The purpose of this process is to analyze the impact of a proposed new service or changed
service on existing services in service portfolio.
Approve
The purpose of this process is to submit change proposal to change management and to
initiate the design stage for the new or changed service if change proposal is authorized.
Charter
The purpose of this process is to communicate decisions, allocate resources and charter
services.
Relationship
A relationship is a connection between two people or things. In case of Business Relationship
Management, it is the connection between IT service provider and the business while in
Configuration Management it is a connection between two configured items that are
dependent on each other.

Business Relationship Management process ensures good relationship between service
provider and the customer. It is generally achieved by identifying, understanding, and
supporting customer’s need and appropriate services are developed to meet those needs.
Business Relationship Management generally includes −
 Managing personal relationships with managers
 Providing input to Service Portfolio Management
 Ensuring that IT service provider is satisfying the customer’s need
Business Relationship Manager is the process owner of this process.
Sub-Processes
Business Relationship Management includes following sub-processes −
Maintain Customer Relationship
This process ensures that service provider understands customer’s need and set up
relationships with new potential customers.
Identify Service Requirements
This process ensures that service provider have complete understanding of output of a service
and to decide if the customer’s need can be fulfilled using an existing service offering or if a
new service needs to be created.
Sign up customers to Standard Services
This process deals with customer requirements and service level agreements.
Handle Customer Complaints
The objective of this process is to record customer’s complaints and take corrective action if
required.
Monitor Customer Complaints
The objective of this process is to monitor the processing status of customer’s complaints.
Customer Satisfaction Survey
The objective of this process is to identify the scopes where customer expectations are not
being met.

Demand Management is a very important and critical process in service strategy. It helps to
understand customer demand for services so that appropriate capacity can be provisioned to
meet those demands.
Improper demand management leads to improper use of services and resources. Hence it’s
worth to analyze customer’s demand.
Demand Manager is the owner of this process.
Strategical Level Demand Management
Strategical Demand Management focuses on two important things as discussed below −
Pattern of Business Analysis (PBA)
PBA is an extremely important activity achieved by knowing customer how they operate and
future requirement they might need.
User Profiles
It is the demand pattern shown by users. It can be processes, people or functions.
Tactical Level Demand Management
Under tactical level demand management, we focus on Differential Charging. It is a
technique to support Demand Management by charging different amounts for same IT
Service Function at different times.
Challenges in Demand Management
Demand Management is critical process of service strategy. The challenges that occur in this
process are as shown below −
 Improper analysis of customer’s demands lead to improper use of capacity. Excess
capacity generates cost without creating value.
 Sometimes certain amount of unused capacity is necessary to deliver service levels.
Such capacity is creating value through the higher level of assurance made possible
with the higher capacity.
 It is required to have service level agreements, forecasting, planning, and tight
coordination with the customer to reduce uncertainty in demand.
 Service production cannot occur without concurrence presence of demand that
consumes the output.
 Arrival of demand is also influenced by demand management techniques such as off-
peak pricing, volume discounts, and differentiated service levels

Service Packages
It has two components as discussed below −
Core services, that are the basic services for which customer is willing to pay. They bring
actual value to the customer.
Support services enhance value proposition of core services i.e. added feature to key
services.
Developing differentiated offerings
Packaging of core services and supporting services has implications for design and operation
services. It is required to decide whether to standardize on the core or supporting services.
One can arrive with same level of differentiation of in service offering taking different
approaches to packaging as shown in the following figure.
Service Level packages
Service packages come up with one or more Service Level Packages (SLP). Each of the
service level packages provides a definite level of utility and warranty from the perspective of
outcomes, assets, and PBA of customers.
Business outcomes are the ultimate basis for service level packages.
https://www.tutorialspoint.com/itil/itil_demand_management.htm
https://www.opentrim.org/service-portfolio-management/