Service Strategy Introduction in ITIL – ITIL Course

Service Strategy

A strategy outlines the future potentialof investment and defines the outcomes. It is made to answer the Who, Why, What, Where, When and How questions. A strategy is deemed successful when the IT organization understands how to provide value to their customer and how to differentiate themselves from competitors.
Core, enablingand enhancing services
Core services deliver the basic outcomesdesired by one or more customers.
They represent the value that the customer wants and for which they are willing to pay. Core services  anchor the value proposition  for the customer  and provide  the basis for their continued utilization and satisfaction.
Enabling  services  are services  that are needed  in order  for a core  service  to be delivered.
Enabling services may or may not be visible to the customer, but the customer does not  perceive  them  as  services  in  their  own  right.  They  are  basic  factors’  which enable the customerto receive the ‘real (core) service.
Enhancing  services are servicesthat are added to a core service to make it more exciting or enticing to the customer.
Enhancing services are not essential to the delivery of a core service, and are added to a core service as excitement factors, which will encourage customers to use the core service  more (or to choose  the core service  provided  by one company  over those of its competitors).
Value to the Business
Service Strategyprovides the following Value to the business:
•              Support  the  ability  to  link  activities  performed  by  the  service  provider  to outcomes that are critical to internal or externalcustomers.
•              Enable the service provider to have a clear understanding of what types and levels of service will make its customers successful.
•              Enable the service providerto respond quickly and effectively to changes in the  business  environment,  ensuring  increased  competitive  advantage  over time.

•              Support the creation and maintenanceof a portfolio of quantified services that will  enable  the  business  to  achieve  positive  return  on  its  investment  in services.
•              Facilitate  functional  and  transparent  communication  between  the customer and the service provider.
•              Provide  the means  for the service  provider  to organize  itself so that it can provide services in an efficient and effective manner.
Why Have aService Strategy?
Strategy, in the context of Service Management, is used by the Service Providers to:
•   Attain market focus: Deciding where and how to compete
•   Distinguish capabilities: Develop service assets that the business appreciates
Service  Strategy  is a set  of strategies  designed  to provide  direction  for growth, investment and define outcomes that can be measured.
The purpose  of the service  strategy  stage of the service  lifecycle  is to define  the perspective, position, plans and patterns that a service provider needs to be able to execute to meet an organizations business outcomes.
In  order  to  implement   the  best  Service  Strategy every  IT  organization   must understand how:
•   To provide value to their customers
•   To differentiate themselves from other providers
The objectives of Service Strategyinclude:
•   An understanding of what strategy is
•              A clear identification of the definition of services and the customers who use them
•   The ability to define how value is created and delivered
•   A means to identifyopportunities to provide services and how to exploit them

•              A clear service provision model, that articulates how services will be delivered and funded, and to whom they will be delivered and for what purpose
•              The means < /span>to understand the organizational capability required to deliver the strategy
•              Documentation  and coordination  of how service  assets  are used to deliver services, and how to optimize their performance
•              Processes  that define  the strategy  of the organization,  which  services  will achieve the strategy,what level of investment will be required, at what levels of demand, and the means to ensure a working relationship  exists between the customer and service provider.
Service Strategy should be revised on a regular basis to ensure its alignment with the direction and needs of the business.
The deliverables of Service Strategy include:
•   Service Portfolio
•   Service Catalog
•              Requirements  for  Service  Design,  Service  Transition  and  Service  Operation cycles
Service  Strategy  starts  by  defining  and  discussing   the  generic  principles  and processes  of service  management,  and  these  generic  principles  are then  applied consistently to the management of IT services.
Two aspects are covered in Service Strategy:
•              Defining a strategywhereby a service provider will deliver services to meet a customers business outcomes
•   Defining a strategyfor how to manage those services

Service Value Definition
Customers  are often wary of the quality and integrity  of services  offered  by an IT company. In this perspective, the service value comprise of service utility as well as service warranty.
Service Value = Service Utility+ Service Warranty
Service  Utility  defines  the  functionality   of  an  IT  service  from  the  customer’s perspective. Utility, as perceived by the customer, is the service attributes that have a positive  effect  on  the  performanc of  tasks  associated   with  desired  business outcomes. This is often referred to as Fit for Purpose.
For   example:   Hardwar technicians   in   the   field   securel access   enterprise applications   (increase   gain)   without   being   constraine by   location   (decrease constraints).
Service  Warranty for a service provides the customerwith a level of reassurance and guarantee  to meet agreedupon requirements.  Warranty will minimize possible losses for the customer due to variations in performance. This is often referred to as
‘Fit for Use.
For  example:  The  technicians  are  able  to  contact  Service  Desk  when  they encounter incidents pertaining to their equipment, and the Service Desk Agent is able to resolve the incident or provide a work around solution (increaseservice availability to the technicians).
Value Creation throughServices  (Customer  Assets)
The customer of IT (the business) uses its assets to create value for their customers
(end-customer). These assets are called Customer assets.
IT organi
ationscan create value for their customers by enhancing the performance of these customer  assets. Hence, value creation of a servicecan be increased  by increasing the utility or warranty attributes.
Some examples of outcomes are described as:
•   Increase in throughputof business process
•   Increase in customer satisfaction
•   Decrease in fixed costs of business process

Value Creation throughServices  (Service  Value)
Value is defined not only stric
tly in terms of the customer’s business outcomes. It is highly dependent on customer’s perceptions.
Perceptions are influenced by:
•   Attributes of a service
•   Present or prior experiences with similar attributes
•   Relative endowment of competitors and peers
•   Customer’s self-image or actual positionon the market

It is the  provider’s  responsibility  to demonstrate  value,  influence  perceptions  and respond   to  preferences.   Perceptions   of  value  are  influenced   by
 expectations. Customers do not buy services; they buy the fulfillment of particular needs. What the customer  values  is  frequently  different  from  what  the  IT  organization  believes  it provides.

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