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Interface with business
users and
functions to
review, define and authorise current and future process
models. Aim to identify and standardize
best practices
Capability and process definition
Process mapping
Service monitoring
Managing user forums e.g. Joint Application Development, Conference Room Pilot
Best practice identification, capture and rollout
Business representatives
Primary service recipient on behalf of each business unit who define business requirements, monitor service, raise service requests and own budgets
Knowledge of specific business functions
Requirements gathering, definition and prioritization
Service monitoring
Managing user forums
Table 6.3 Sourcing roles and responsibilities
7 Strategy, tactics and operations
7.1 Implementation through the lifecycle
Strategic positions are converted into plans with goals and objectives for execution through the Service Lifecycle. The positions are driven by the need to serve specific customers and market spaces and influenced by strategic perspectives as a service provider (Figure 7.1). Plans are a means of achieving those positions. They include the Service Catalogue, Service Pipeline, Contract Portfolio, financial budgets, delivery schedules, and improvement programmes.
Figure 7.1 Strategic planning and control process21
Plans ensure that each phase in the Service Lifecycle has the capabilities and resources necessary to reach strategic positions. The Service Lifecycle provides clarity and context for the development of the necessary capabilities and resources.
Plans translate the intent of strategy into action through Service Design, Service Transition, Service Operation and Service Improvement. Service Strategy provides input to each phase of the Service Lifecycle (Figure 7.2). Continual Service Improvement provides the feedback and learning mechanism by which the execution of strategy is controlled throughout the Lifecycle.
Figure 7.2 Strategy executed through the Service Lifecycle
7.1.1 Top-down
For any given market space, service strategy defines the portfolio of services to be offered and the customers to be supported (Figure 7.3). This in turn determines the Contract Portfolio that needs to be supported with design, transition and operation capabilities. Lifecycle capabilities are defined in terms of the systems, processes, knowledge, skills and experience required at each phase to effectively support the Contract Portfolios. Interactions between service management capabilities are clearly defined and managed for an integrated and systematic approach to service management. Service design and operation capabilities determine the type of transition capabilities required. They determine the portfolio of service designs and the operating range of the service provider in terms of models and capacities.
Figure 7.3 Service management capabilities driven by strategy
Transition capabilities determine the costs and risks managed by a service provider. How quickly a service is transitioned from design to operations depends on the capabilities of the service transition phase. Transition capabilities reduce the costs and risks for customers and service providers throughout the lifecycle by maintaining visibility and control over all service management systems and processes. In this manner, transition capabilities not only act as filters but also as amplifiers that increase the effectiveness of design and operation. They interact with service designs to provide new and improved service models. They interact with operation models and capacity to increase the operational effectiveness of plans and schedules. The net effect is the service levels delivered to customers in fulfilment of contracts.
Customers and service providers both face strategic risks from uncertainties. It is impossible to either control or predict all the factors in a businessenvironment. The risks may translate into challenges or into opportunities depending on alignment between service management capabilities and the emergent needs of customers. Service Strategy requires Continual Service Improvement to drive feedback through the Lifecycle elements to ensure that challenges and opportunities are not mismanaged (Figure 7.4).
Figure 7.4 Feedback and learning driven by Continual Service Improvement
New strategic positions are adopted based on patterns that emerge from executing the Service Lifecycle. This bottom-up development of service strategy is combined with the traditional top-down approach to form a closed-loop planning and control system for service strategies (Figure 7.5). Such feedback and learning is a critical success factor for service management to drive changes and innovation.
Figure 7.5 Closed-loop planning and control system for strategy
7.2 Strategy and design
Service strategies are executed by delivering and supporting the Contract Portfolio in a given market space. Contracts specify the terms and conditions under which value is delivered to customers through services. From an operational point of view this translates into specific levels of utility and warranty for every service. Since every service is mapped to one or more market spaces, it follows that the design of a service is related to categories of customer assets and the service models. These are the basic inputs for service design. For example, the design for managed storage services must have input into how customer assets such as business applications utilize the storage, how storage adds value to the applications, and what costs and risks the customer would like to avoid. The service model is managed services. Therefore the input to service design includes a service archetype in which the service provider takes responsibility for operating and maintaining the customer’s storage systems at specified levels of availability, capacity, continuity and security. Customers provide input into the demand that needs to be supported and requirements for technical support, and indicate their willingness to pay for the services. These represent high-level inputs for service design.
7.2.1 Service models
Service models codify the service strategy for a market space. They are blueprints for service management processes and functions to communicate and collaborate on value creation. Service Models describe how service assets interact with customer assets and create value for a given portfolio of contracts (Figure 7.6). Interaction means demand connects with the capacity to serve. Service agreements specify the terms and conditions in which such interaction occurs with commitments and expectations on each side. The outcomes define the value to be created for the customer, which itself rests on the utility provided to customers and the warranty.
Figure 7.6 Service models are shaped by market spaces
Service models codify the structure and dynamics of services. The structure and dynamics are influenced by factors of utility and warranty to be delivered to customers (Figure 5.29). The structure and dynamics have consequences for Service operations, which are evaluated by Service Transition (Figure 7.7).
Figure 7.7 Service models describe the structure and dynamics of a service
Structure is defined in terms of particular service assets needed and the patterns in which they are configured. Service models also describe the dynamics of value creation. Activities, flow of resources, coordination, and interactions describe the dynamics (Figure 7.8). This includes the cooperation and communication between service users and service agents. The dynamics of a service include patterns of business activity, demand patterns, exceptions and variations.
Figure 7.8 Dynamics of a service model
The methods and tools of systems engineering and workflow management are useful for developing the process maps, workflow diagrams, queuing models and activity patterns necessary for completeness of service models. Service Transition evaluates detailed service models to ensure they are fit for purpose and fit for use before entering Service Operation through the Service Catalogue. It is necessary for service models to be under changecontrol because the utility and warranty of a service can have undesired variation if there are changes to the service assets or their configuration. The integrity of a service model depends on the integrity of the structure.
Service models are useful for effectiveness in Continual Service Improvement. Improvements can be made to the structure or the dynamics of a model. Service Transition evaluates the options or paths for improvements and recommends solutions that are cost-effective and low-risk. Service models continually evolve, based on external feedback received from customers and internal feedback from service management processes. CSI processes ensure the feedback to the strategy, design, transition and operation processes.
7.2.2 Design driven by outcomes
Attributes of a service are the characteristics that provide form and function to the service from a utilization perspective. The attributes are traced from business outcomes to be supported by the service. Determining which attributes to include is a design challenge. Certain attributes must be present for value creation to begin. Others add value on a sliding scale determined by how customers evaluate increments in utility and warranty. Service level agreements commonly provide for differentiated levels of service quality for different sets of users.
Some attributes are more important to customers than others. They have a direct impact on the performance of customer assets and therefore the realization of basic outcomes. Such attributes are must-have attributes.28 Table 7.1 describes the type of attributes that influence the customer’s perception of utility from a service.
Type of attribute
Fulfilment and perceptions of utility (gain/loss)
Basic factors (B)
(Must-have, non-linear)
Attributes of the service expected or taken for granted. Not fulfilling these will cause perceptions of utility loss. Fulfilling them results in utility gain but only until the neutral zone after which there is no gain.
Excitement factors (E)