original_1453953632_1451366631_Module_2_Capsule_1_Strategy_and_Service_Portfolio_Management_V5.0.pdf

RiO Application Operations Module 2 Capsule 1 Slide 1 2 3 Character NA 1 1 4 Grace 5 Grace 6 Grace Audio Script Background music Welcome to the video course on Application Operations. You are now watching Module 2 on Service Strategy. Capsule 1 introduces you to Strategy Management and Service Portf...

RiO Application Operations Module 2 Capsule 1 Slide 1 2 3 Character NA 1 1 4 Grace 5 Grace 6 Grace Audio Script Background music Welcome to the video course on Application Operations. You are now watching Module 2 on Service Strategy. Capsule 1 introduces you to Strategy Management and Service Portfolio Management (SPM). Hello, I am Grace, an ITIL Certified Professional. I am a Service Strategy Manager and I am in this role for the past 4 years. At the end of this video, you will be able to explain  Service Strategy Activities and Processes  Strategy Management for IT Services and  Service Portfolio Management (SPM) In the previous module, Andrew had shared inputs on the basics of ITIL, its core concepts and the five stages of ITIL service lifecycle. In this module, I will cover details on Service Strategy. 7 Grace The Service Strategy phase of the Service Lifecycle provides guidance on how to design, develop, and implement IT Service Management. ITIL Service Strategy asks Service Providers BIG questions, such as:  What IT Services should we Offer and to whom?  How do we genuinely differentiate from competitors?  If you are a bank. How do you make sure the customers come to your bank and not the bank across the street?  How do we create lasting business value for our customers?  How can we make a case for ROI and Strategic investments? Means how do we ask for more money?  How should we best define and measure service quality?  How do we choose between different paths for improving service quality?  How do we efficiently allocate resources (people, infrastructure) across a portfolio of services?  How do we resolve conflicting demands for shared resources?  Say you have 10 projects and only 5 developers, how do we assign those resources? Comments 8 Grace If you look at these questions, anyone can ask these questions. Your Business can ask these questions. We as an IT service provider can ask these questions. Having proper strategies in place can give the company a proactive and productive approach to their business operations. Strategy tells the organization how to focus on the big picture, far from the day-to-day fight in the trenches, and to consider services through costs, risks, and service performance. Imagine a head of the Banking Line of Business in your organization comes to you and says that," I have bought this software. I saw it in the conference and it was really cool. Since I have a budget I bought it. Can you install it and support it. Lot of times we think that, we have to do it. We have to make the customer happy. I guess we are supporting this thing. So, how are we going to support it? How many servers do I need and how am I going to do it? 9 Grace Hold on... the wonderful thing the Service Strategy allows us to do is, to ask, Why do we need this thing? Instead of, How am I going to support this software? We are allowed to ask, "Hey customer, why do you need this? What are the outcomes you hope that this piece of software is going to provide? What functionality is this software going to give you?" The Business might say, This is a great payroll application with the features x, y and z. If we ask the strategic questions and say the business, ‘Well wait a minute, slow down, We already have a list of services that we provide to Retail Line Of Business within our company. Instead of me installing the new set of software you want me to install, there is exactly the same kind of software being used by Retail Line of Business, so, why don’t you use the one there. Now you as a IT service provider, you have to support only one thing, as opposed to supporting two software packages, that sort of do the same thing. 10 Grace In essence, Service Strategy wants to say Why this service, not How. Strategy management comprises of four activities.     11 Grace Market Definition Develop offerings Develop strategic assets Prepare for Execution Market Definition is defining who the customers are for IT services. Develop Offering, identifies services to be offered to customers and understand how we can deliver value through one or more services Develop strategic assets involves identifying assets that may be used as building blocks for the creation of services In Prepare for Execution, you Prepare the IT organization to be able to carry out the service strategy successfully, including identifying critical success factors, setting objectives, prioritizing initiatives, promoting growth, and differentiating the IT organization as a service provider. 12 Grace Let us take an example of “IT Service Helpdesk” a solution offered by TCS to its customers. Let us understand the activities involved in strategy management. In Market Definition, the customers that TCS would target will be, any organization who finds IT services deviating them from their core service. For Instance General Motors may outsource their IT Service Helpdesk to TCS. In Develop offerings o   13 Grace Service Strategy defines five processes, three of them being new in ITIL 2011 edition.     14 Grace TCS has taken up the IT Service Helpdesk services for GM, let us look at some of the offerings by TCS IT service Helpdesk.  A single consolidated service desk  Customized Tools  Global Account Management Automation In Develop strategic assets o TCS develops strategic assets to provide service to the customer, Some of the assets are  Innovative medium for Social Collaboration with customer.  Knowledge repository for quick resolution Prepare for Execution TCS differentiators like Global Network Delivery Model, Risk Free Transition, ITIL based delivery model will help to execute the service strategy successfully. Strategy Management for IT Services defines What is the Strategy for IT? Service Portfolio Management defines What services does the IT deliver? Demand Management helps to understand, Can IT meet the demand of the customer? Financial Management for IT Services helps us understand What does it cost? Whom can I bill it to? Business Relationship Management determines Am I gathering needs by establishing good working relationship with the customer? Let’s take a closer look at the process - Strategy Management for IT Services. 15 Grace This is a new process in ITIL 2011, derived from strategic assessments and service strategy development activities in V3.  16 17 Grace Grace The purpose of this newly minted process is to use a company’s perspective, position, plans and patterns to ensure better management, governance and control of the IT services an organization provides to support the business outcomes. The 4 Ps describe four forms of strategy that should be a part of strategy definition. The four Ps of Service Strategy are Perspective, Position, Plan and Pattern. - Perspective describes the vision and direction of the organization. It articulates the business philosophy of the organization, how it interacts with the customer and the manner in which services are provided. - Positions describe how the service provider intends to compete with other service providers in the market. It describes the stance a service provider has adopted based on value, specialized services and other attributes. Different types of positions taken are Variety-based positioning, Needs-based positioning and Access-based positioning. - Plans describe how the Service Provider will transition from their current state to their desired state. It describes the activities to be taken to achieve their perspective and position 18 19 Grace Grace Pattern describes the ongoing repeatable actions that a Service Provider will have to perform consistently in order to continue to meet its strategic objectives. Let us look at the sub processes of Strategy Management. This figure represents the key Strategy management activities and outcomes of each activity. Strategy Management lives through three sub-processes: Strategic Assessment Strategy generation Strategy execution - Operational inputs are fed into Continual Service Improvement which acts as a reference point for establishing revised objectives. Strategic assessment involves analyzing internal and external factors that affect the service to define market space, industry dependencies and establish objectives. Grace Strategy generation involves definition of perspective, position, plan and pattern. Grace Strategy execution involves prioritizing investments, aligning service assets to business outcomes, optimising performance on critical success factors and management of well-defined service management processes. Now let’s delve deep into the next Service Strategy Process – Service Portfolio Management. One of the most important roles an IT Organization can provide is the Lifecycle Management or Portfolio Management of their services. 20 21 22 Grace 23 Grace A Service Portfolio describes the services of a provider in terms of value to the business. 24 Grace The purpose of Service Portfolio Management is to create, manage and improve a service portfolio containing a detailed design package for each IT service. SPM helps to, o Decide what services to offer and to whom? o We have a service in our company called “email” and everybody in our company gets the service called email. We also have a service called “Payroll”. Only finance and accounting should have access to that. This shows what services we offer and whom we are offering them to.  Maintain a definitive portfolio of all services provided o Each item in the service portfolio needs to have a business case written. This is to ensure that we do not accidently retire services that are still live.  Control under what conditions services are offered and at what level of investment.  Track the investment in services throughout their lifecycle  Analyze which services should be retired. Let’s say we want to move from Lotus Notes to Exchange for Email services. We need to retire the Lotus Notes Email service. 25 Grace Service portfolio consists of three parts:  Service pipeline  Service catalogue  Retired services Service Pipeline Service Pipeline represents all the Planned services. They are new services or changes in the existing services that emerge from the Strategy phase. These are the services that are being built, developed or tested. The pipeline services represent the organization’s ability to address the new opportunities with the existing or new customers, and the company’s will and determination to support the important business processes, adding value to the services catalogue and pushing cooperation between the business and IT to a new level. Service Catalog Like a restaurant menu, a Service Catalog contains all current operational services. This is the customer facing section of the portfolio. Retired Services Retired Services are archived services. These are services that are no longer being used. During the periodic service review, the organization will decide about the retirement of the less-popular or inefficient services. Criteria for the retirement will vary from provider to provider depending on many specific factors, including company strategy, marketplace, customer profiles and financial ecosystem. 26 Grace Now let us talk a little bit about the Retired Services here. Most often, reasons for service retirement are the following:  Service is replaced by a new service  Service is seldom used  Service is financially inefficient o Retired services can sometimes still be available to existing customers through the defined phase-out period of time. The provider should have a retention policy for the retired services, defining how long they will be in the portfolio after the retirement. 27 Grace We are almost at the end of this video. Before I leave, let me list the key activities of SPM. The following diagram shows the key activities of Service Portfolio Management process. There are four main phases of activities in this process. Define: Collect information and inventories of existing services. Establish the requirements for the requested service, and establish the business case for implementing the service. Analyze: Review the long-term business goals, and determine what services are required to meet those goals. Then analyze the requested service for financial viability, operational capability, and technical feasibility to determine how the organization is going to get there. (You may decide to obtain the service from an outsourcer rather than develop it internally) Approve: Make a decision to retain, replace, renew, or retire the services. Charter: Communicate action items to the organization to implement approved service, and allocate budget and resources. 28 1 In this video, you learnt that: Strategy Management comprises of four activities: Market Definition, Develop Offerings, Develop Strategic Assets, and Prepare for Execution. Service Strategy processes includes Strategy Management for IT Services, Service Portfolio Management, Demand Management, Financial Management for IT Services, and Business Relationship Management. Strategy Management for IT Services lives through three subprocesses: Strategic Assessment, Strategy Generation, and Strategy Execution. Service Portfolio describes the services of a provider in terms of value to the business. Service Portfolio consists of three parts: Service Pipeline, Service Catalogue, and Retired Services. The key activities of SPM: Define, Analyze, Approve, and Charter. 29 1 Thank you for watching this video on the Service Strategy phase of the ITIL Life Cycle. Let us discuss the remaining service strategy processes in the subsequent sessions.