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Service Strategy
London: TSO
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The OGC logo ® is a Registered Trade Mark of the Office of Government Commerce
ITIL ® is a Registered Trade Mark, and a Registered Community Trade Mark of the Office of Government
Commerce, and is Registered in the U.S. Patent and Trademark Office
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First published 2007
ISBN 978 0 11 331045 6
Printed in the United Kingdom for The Stationery Office
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iii
Contents
List of figures
iv
7 Strategy, tactics and operations
159
List of tables
viii
7.1
Implementation through the lifecycle
161
7.2
Strategy and design
163
OGC’s foreword
ix
7.3
Strategy and transition
168
Chief Architect’s foreword
x
7.4
Strategy and operations
170
7.5
Strategy and improvement
173
Preface
xi
8 Technology and strategy
179
Acknowledgements
xii
8.1
Service automation
182
1 Introduction
1
8.2
Service interfaces
185
8.3
Tools for service strategy
188
1.1
Overview
3
9 Challenges, critical success factors
and risks
1.2
Context
5
191
1.3
Purpose
9
1.4
Expected use
10
9.1
Complexity
193
9.2
Coordination and control
193
9.3
Preserving value
194
9.4
Effectiveness in measurement
197
9.5
Risks
199
Afterword
209
29
Appendix B: Supplementary guidance
217
B1
Description of asset types
219
3.1
Value creation
31
B2
Product managers
221
3.2
Service assets
38
Further information
223
3.3
Service provider types
41
3.4
Service structures
47
References
225
3.5
Service strategy fundamentals
52
Further reading
226
4 Service strategy
63
Glossary
229
4.1
Define the market
65
Acronyms list
231
4.2
Develop the offerings
70
Definitions list
233
4.3
Develop strategic assets
78
Index
257
4.4
Prepare for execution
84
5 Service economics
95
5.1
Financial Management
97
5.2
Return on Investment
112
5.3
Service Portfolio Management
119
5.4
Service Portfolio Management methods
123
5.5
Demand Management
129
6 Strategy and organization
139
6.1
Organizational development
142
6.2
Organizational departmentalization
147
6.3
Organizational design
148
6.4
Organizational culture
149
6.5
Sourcing strategy
150
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iv
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List of figures
All diagrams in this publication are intended to provide an
illustration of ITIL Service Management Practice concepts
and guidance. They have been artistically rendered to
visually reinforce key concepts and are not intended to
meet a formal method or standard of technical drawing.
The ITIL Service Management Practices Integrated Service
Model conforms to technical drawing standards and
should be referred to for complete details. Please see
www.best-management-practice.com/itil for details.
Figure 3.3 Utility increases the performance average
Figure 1.1 Sourcing of service management practice
Figure 3.8 Resources and capabilities are the basis for
value creation
Figure 1.2 The ITIL Core
Figure 1.3 The Golden Pony
Figure 3.9 Business units are coordinated goal-driven
collections of assets
Figure 2.1 Generalized patterns and specialized
instances
Figure 3.10 Customer assets are the basis for defining
value
Figure 2.2 Logic of value creation through services
Figure 2.3 A conversation about the definition and
meaning of services
Figure 3.12 Type I providers
Figure 3.13 Common Type II providers
Figure 2.5 The end points of a business process are
often defined by enterprise applications
Figure 3.14 Type III providers
Figure 2.6 Relationships defined by the dynamics of
ownership, control and utilization
Figure 3.16 Advantage of being a well-performing
incumbent
Figure 2.7 The agency model in service management
Figure 3.17 Generic value network
Figure 2.8 Encapsulation based on separation of
concerns and modularity
Figure 3.18 Basic value chain and value network
Figure 2.9 Types of feedback
Figure 3.19 Example value network
Figure 2.10 The Service Lifecycle
Figure 3.20 Unit of analysis for value nets in service
management
Figure 3.21 Existing flowchart of how the Service Desk
was supposed to work
Figure 2.12 Today’s problem is often created by
yesterday’s solution
Figure 3.22 Value net exchanges showing how things
really worked
Figure 2.13 Performance over time for differing service
management structures
Figure 3.23 Innovative solutions break through
performance barriers
Figure 2.14 A basic process
Figure 3.25 Perspectives, positions, plans and patterns
Figure 3.1 Attributes, perceptions and preferences
Figure 3.2 Economic value of a service
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List of figures |
v
Figure 3.27 Variety-based (left) and needs-based (right)
positioning
Figure 4.21 Critical success factors
Figure 4.22 Critical success factors leveraged across
market spaces
Figure 3.28 Positioning based on location, scale or
structure
Figure 4.23 Critical success factors and competitive
positions in playing fields
Figure 3.29 Combining variety-based, needs-based and
access-based positioning
Figure 4.24 Strategic analysis of Customer Portfolio
Figure 4.25 Prioritizing strategic investments based on
customer needs
Figure 4.1 Strategies for services and services for
strategies
Figure 4.26 New service development
Figure 4.27 Customers and market spaces
Figure 4.2 Analysing an outcome
Figure 4.28 Strategies and market spaces
Figure 4.29 Expansion into adjacent market spaces
Figure 4.30 Growth in a market space
Figure 4.5 Asset-based and utility-based positioning
Figure 4.31 Differentiation in the market space
Figure 4.6 Visualization of services as value-creating
patterns
Figure 5.1 Shared imperatives framework: business
and IT
Figure 5.2 Customer assets are the basis for defining
value
Figure 5.3 Translation of cost account data to service
account information
Figure 5.4 Shared services
Figure 5.5 Business Impact Analysis
Figure 4.10 Service Portfolio
Figure 5.6 The funding lifecycle
Figure 4.11 Service Pipeline and Service Catalogue
Figure 5.7 Single business impact can affect multiple
business objectives
Figure 4.12 Elements of a Service Portfolio and Service
Catalogue
Figure 5.9 Post-programme ROI approach
Figure 5.10 Trend line analysis
Figure 4.15 Mutual welfare when service assets are
engaged in supporting customer outcomes
Figure 5.11 Business service and IT service
Figure 5.12 Service perspectives
Figure 5.15 The IT management continuum
Figure 5.16 The embedded nature of services
Figure 4.19 Forming and formulating a service strategy
Figure 5.17 Service Portfolio process
Figure 4.20 Moving from customer-driven to customer-
outcomes
Figure 5.18 Option Space
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