The document outlines the transition from a service provider to a strategic partner through service strategy, emphasizing the development of core processes to enhance organizational maturity. It discusses the principles and objectives of service strategy, including creating value and managing service offerings, utilizing strategic assets, and enhancing customer relationships. Key concepts include service packages, demand management, and financial management for quantifying the value of IT services and optimizing service delivery.

1. SERVICE STRATEGY WEBINAR

2. V3 and Organisations? V2 – provides core processes V3 – moves IT from a position of supplier to partner Levels of maturity – V2/V3 V2 – helps organisations move to a minimum of level 3 V3 – increase maturity toward levels 4 and 5

4. Purpose and Principles of Service Strategy Purpose Develop the ability to think and act strategically. Use strategic assets to achieve goals Define the dependencies between Strategy and SM processes Principles Outcome - Fulfilment of need/s Create value

5. Objectives To be able to answer questions such as: What services should we offer and to whom? How do we differentiate ourselves from competing alternatives? How do we truly create value for our customers? How do we capture value for our stakeholders? How can we make a case for strategic investments?

6. Goals Show how to transform service management into a strategic asset See the relationships between various services, systems or processes that are managed and the business models, strategies, or objectives they support

7. Basics A Strategy is not a Plan Building blocks of high performance Market Performance Capabilities Value Capture – what the provider keeps Market Space – desired customer outcomes supported by one or more service/s Opportunity to deliver value through one or more services

8. Value = Utility and Warranty From the customer’s perspective, the business value of a service is created by the combination of two elements: Utility is the functionality offered by a product or service from the customer’s perspective (Fitness for Purpose) Warranty is a promise or guarantee that a product or service will meet its agreed requirements. This may be a formal agreement such as a Service Level Agreement or Contract, or may be a marketing message or brand image (Fitness for Use)

9. UTILITY WARRANTY T/F T/F T/F Fit for purpose? Fit for use? OR AND Performance supported? Constraints removed? Available enough? Capacity enough? Continuous enough? Secure enough? T: True F: False Value-created AND Value Creation © Crown Copyright 2007. Reproduced with permission from OGC

10. Scope Service Strategy main activities - Define the market - Develop the offerings - Develop strategic assets - Prepare for execution Financial Management Service Portfolio Management Demand Management

11. SM as a Strategic Asset Capabilities to control and coordinate resources to support a catalogue of services Virtuous cycle demonstrates Value + Perceived benefits On-going relationship/partnership Return on investment/assets Improvements – closed-loop system Increase potential – Service/Performance

12. Forming Strategy Needs fig 4-19!!!!

13. The four Ps Plans Patterns Perspective Positions Entry points to Service Lifecycle Service Strategy forms Strategy Perspective Patterns Plans Positions

14. Service Assets Service assets are used to create value in the form of goods and services Resource is a generic term that includes IT Infrastructure, people, money or anything else that might help to deliver an IT service. Resources Information/Applications/ Infrastructure/Finance Capability is the ability of a service organisation, person, process, application, configuration item or IT service to carry out an activity. Capabilities are intangible assets of an organisation. Capabilities Management/Organisation/People/Knowledge

15. Service Packages A Service Package is a detailed description of an IT Service that is available to be delivered to customers. A Service Package includes one or more core services and supporting services as well as a Service Level Package Core services deliver the basic outcomes desired by the customer Supporting services either enable or enhance the value of a service

16. Service Providers Type I Internal Service Provider (ISP) Type II Shared Services Unit (SSU) Type III External Service Provider (ESP)

17. Service Providers How to decide…? Transaction costs – overall costs of conducting business with a provider . Purchase cost + + + + + + +? Internal (aggregate)/External (disaggregate) “ Incumbency” Build lasting relationships based on - Strategic planning and control Common Objectives Shared Knowledge Experience influences planning

18. Service Structures Value Chain or Value network (Value net)? Chain – linear/production line Net – collaborative exchanges Service Systems

19. Service Knowledge Management System Service Portfolio © Crown Copyright 2007. Reproduced with permission from OGC Service Portfolio Service Lifecycle Service Status: Requirements Defined Analysed Approved Chartered Designed Developed Built Test Released Operational Retired Service Pipeline Service Catalogue Retired Services Customer/support team viewable section of the Service Portfolio (the Service Catalogue, with selected fields viewable) Services under development, build or test Services no longer live

20. Demand Management - Objectives To avoid excess capacity generating costs without creating value To prevent insufficient capacity impacting the quality of services provided Business Relationship Manager Product Manager/Service Owner Demand Management - Roles

21. Concepts Activity-based demand management Patterns of business activity User profiles Differentiated offerings Differentiated service levels

22. FM - Objectives To provide operational visibility, insight and superior decision making To provide the business and IT with the quantification, in financial terms of the value of IT services, the value of the assets underlying the provisioning of those services, and the qualification of operational forecasting

23. FM - Concepts Service valuation - Provisioning value - Service value potential Demand modelling Service portfolio management Service provisioning optimisation

24. Return on Investment (RoI) Quantify the value of an investment (cost/benefit) Measure ability to use assets to generate value Issues Simplistic approach Net profit of investment divided by net worth of assets Hard to identify financial return for specific aspects of SM Understand the business imperative Short term What’s the cost of not doing it?