ITIL Intermediate Course: SOA Instructor Guide_r3.2.0

ITpreneurs™ Service Management

INSTRUCTOR GUIDE

Service Offerings and Agreements release 3.2.0 ITIL® Intermediate

ITL9332CL_Intermediate.SOA_Cover Page_IG_r3.2.0.indd 1 08-11-2012 PM 2:56:18

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www.ITpreneurs.com

Copyright © 2012 ITpreneurs. All rights reserved

Copyright Copyright and Trademark Information for Partners/Stakeholders. ITIL® is a registered trademark of the Cabinet Office. IT Infrastructure Library® is a registered trade mark of the Cabinet Office. The Swirl logo™ is a trade mark of the Cabinet Office. All contents in italics and quotes is from the ITIL® Service Lifecycle Suite © Crown copyright 2011 Reproduced under licence from the Cabinet Office. All other text is based on Cabinet Office ITIL® material. Reproduced under licence from the Cabinet Office.

Copyright © 2012 ITpreneurs. All rights reserved. Please note that the information contained in this material is subject to change without notice. Furthermore, this material contains proprietary information that is protected by copyright. No part of this material may be photocopied, reproduced, or translated to another language without the prior consent of ITpreneurs Nederland B.V. The language used in this course is US English. Our sources of reference for grammar, syntax, and mechanics are from The Chicago Manual of Style, The American Heritage Dictionary, and the Microsoft Manual of Style for Technical Publications.

ITIL Service Offerings and Agreements, Classroom course, release 3.2.0

More on: http://www.itil-officialsite.com/IntellectualPropertyRights/TrademarkLicensing.aspx

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Contents

i

LIST OF ICONS V

LIST OF ACTIVITIES VI

GENERAL TRAINING TIPS XIII

ACKNOWLEDGEMENTS XVII

FOLLOW US XIX

COURSE INTRODUCTION 1

Introductions 2

Course Introduction 3

Course Learning Objectives 5

Unique Nature of the Course 5

Course Qualification Scheme 8

Course Agenda and Exam Details 10

COURSE AGENDA 13

ITIL Intermediate Classroom Course 13

ITIL Intermediate Expert Program Course 16

ITIL Intermediate Classroom Blended Course 17

ITIL Intermediate Virtual Classroom Blended Course 18

UNIT 1: INTRODUCTION TO SERVICE OFFERINGS AND AGREEMENTS 19

1.1 SOA in the Service Strategy Stage 23

1.2 Purpose and Objectives of the Strategy Management for IT Services Process 26

1.3 Scope of the Strategy Management for IT Services Process 27

1.4 Value of the Strategy Management for IT Services Process to the Business 30

1.5 SOA in the Service Design Stage 31

1.6 Purpose and Objectives of the Design Coordination Process 33

1.7 Scope of the Design Coordination Process 34

1.8 Value of the Design Coordination Process to the Business 35

1.9 Utility and Warranty, and Their Relevance to SOA Processes 36

1.10 SOA Processes and Customer Requirements 48

1.11 Return on Investment and the Business Case 56

Summary of Unit 1 69

UNIT 2: SERVICE PORTFOLIO MANAGEMENT 73

2.1 Service Portfolio and Its Relationships with the Service Catalogue and Service Pipeline 78

2.2 Purpose and Objectives 85

2.3 Scope of SPM 86

2.4 Value to the Business 87

2.5 Policies, Principles, and Basic Concepts 88

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2.6 Process Activities, Methods, and Techniques 94

2.7 Triggers, Inputs, Outputs, and Interfaces 121

2.8 Information Management 126

2.9 Critical Success Factors and Key Performance Indicators 127

2.10 Challenges and Risks 129

2.11 Designing the Service Portfolio 131

2.12 Group/Individual Exercise 134

2.13 Sample Test Question 138


UNIT 3: SERVICE CATALOGUE MANAGEMENT 145

3.1 Importance of the Service Catalogue to the Service Lifecycle and Its Interface to the Service Portfolio 150

3.2 Purpose And Objectives 160

3.3 Scope of the Process 161



3.6 Process Activities 172

3.7 Triggers, Inputs, Outputs, and Interfaces with Other Processes 173




3.11 Production of a Service Catalogue 179



UNIT 4: SERVICE LEVEL MANAGEMENT 189

4 .1 Purpose and Objectives 194




4.5 Process Activities, Methods, Techniques, and Relationships with the Service Lifecycle 204





4.10 Contents of SLAs and OLAs 235




UNIT 5: DEMAND MANAGEMENT 251

5.1 Importance of Demand Management to the Service Lifecycle 257






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5.6.1 Identifying Sources of Demand Forecasting 266

5.6.2 Patterns of Business Activity 267

5.6.3 User Profiles 269

5.6.4 Activity-Based Demand Management 271

5.6.5 Develop Differentiated Offerings 273

5.6.6 Management of Operational Demand 274





5 .11 Group/Individual Exercise 283



UNIT 6: SUPPLIER MANAGEMENT 293


6.2 Scope of The Process 299

6.3 Value to The Business 301

6.4 Policies, Principles and Basic Concepts 303









UNIT 7: FINANCIAL MANAGEMENT FOR IT SERVICES 345

7.1 Importance to The Service Lifecycle 350


7.3 Scope of The Process 354

7.4 Value to The Business 356





7.9 Critical Success Factors And Key Performance Indicators 411

7.10 Challenges And Risks 414




UNIT 8: BUSINESS RELATIONSHIP MANAGEMENT 427




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8.6 Triggers, Inputs, Outputs, and Interfaces 466







UNIT 9: ROLES AND RESPONSIBILITIES 485

9.1 Generic Roles 488

9.2 Roles and Responsibilities of Service Portfolio Management 490

9.3 Roles and Responsibilities of Service Catalogue Management 491

9.4 Roles and Responsibilities of Service Level Management 493

9.5 Roles and Responsibilities of Demand Management 495

9.6 Roles and Responsibilities of Supplier Management 497

9.7 Roles and Responsibilities of Financial Management for IT Services 500

9.8 Roles and Responsibilities of Business Relationship Management 502




UNIT 10: TECHNOLOGY AND IMPLEMENTATION CONSIDERATIONS 513

10.1 Generic Technology Requirements to Assist Service Design 516

10.2 Evaluation Criteria for Technology and Tooling for Process Implementation 520

10.3 Good Practices for Practice and Process Implementation 530

10.4 Challenges, CSFs, and Risks in Implementing Practices and Processes 541

10.5 Planning and Implementing Service Management Technologies 559



UNIT 11 : EXAM PREPARATION GUIDE 573

11.1 Mock Exam 1 575

11.2 Mock Exam 2 611

APPENDIX A: CASE STUDY 641

APPENDIX B: MIND MAP EXCERCISE 655

APPENDIX C: GLOSSARY 657

APPENDIX D: SYLLABUS 751

APPENDIX E: ANSWERS (REFER TO WORKBOOK) NA

APPENDIX F: DIAGRAMS (MACRO VIEW) 775

APPENDIX G: RELEASE NOTES 795

INSTRUCTOR FEEDBACK FORM 797

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LIST OF ICONS

Refers to content that is meant for the instructor to lecture in class

Refers to content that is meant for the student to read on his/her own in class or at home

Refers to information items that are not covered by the instructor in class but help the student understand a particular topic in detail

Refers to a Scenario-Based Activity that the student must do in class or as homework after the completion of a topic or in between a topic

Refers to items or contents that are given in a step-by-step-instruction or checklist format

Refers to an important snippet of information that the instructors should remember to touch upon while conducting an activity or during a lecture

Refers to the simplification of content that was previously difficult to understand or confusing

Refers to an extra piece of information that is not very important but still good to know

Refers to light, conversational snippets of information or that the instructor can use in class to break the monotony of a serious and tedious lecture

Refers to general-knowledge-based information that the instructor can use to provide relief to students during a serious or tedious classroom lecture

Refers to space for the students to take notes

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LIST OF ACTIVITIESThis course uses a variety of delivery techniques. Each of these techniques is designed to help students not only learn the material but also apply the information. The various techniques used are:

Activity

DescriptionGenerally, the instructor asks students to fill up a blank diagram or to answer given questions in their Workbook.

Delivery Instructions1. Direct the students to their Workbook.

2. Ask them to do the Activity given in the Workbook.

3. Ask the students to fill up the blank diagram/write their answers in the Workbook.

4. Discuss the answer(s) in the class.

5. Let the students know that they will also find the correct answers in Appendix E of their Workbook.

or

6. The students can find the sample answers in Topic XX of the Reference Material.

Brainstorm

DescriptionThis promotes collaborative learning, where the group is encouraged to offer up ideas without analysis and to then finalize the solution after brainstorming.

Delivery Instructions1. Initiate a controlled brainstorm on the <topic/scenario/diagram/question>.

2. Ask the students to read/analyze/inspect/assess the context provided in <the slide/case study/scenario/topic/diagram >.

3. Direct them to write their response in the space provided in their Workbook.

4. Facilitate a brainstorm discussion on the <topic/scenario/diagram/question> and elicit responses from the students; encourage them to share their responses.

5. Note the key points on the whiteboard/flipchart.

6. Provide guidance when you feel the class is digressing.

7. Let students know that they will also find the correct answers in Appendix E of their Reference Material.

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Compare and Contrast

DescriptionThe class compares and lists the similarities and differences between two concepts or processes.

Delivery Instructions1. Divide the class into three to four groups.

2. Ask each group to analyze the similarities and/or differences between < processes/roles and responsibilities/techniques/and so on in the topic/content/graphics/scenarios/questions/and so on> and discuss it within their respective groups.

3. Ask the students to note down similarities and differences in the space provided in their Workbook.

4. Ask students from each group to take turns, come to the flipchart/whiteboard, and write down a similarity or difference each in the respective column (or of course, you could write as they read out from their seats).

5. Follow this up with a brainstorm on the similarities and differences.

6. Encourage the students to take notes in their Workbook during the brainstorm.

7. Let them know that they will also find the correct answers in Appendix E of their Reference Material.

Concept Jog

DescriptionThe instructor asks a “Rapid-Fire” round of questions to students. The instructor and students discuss the answers in 2 minutes.

Delivery Instructions1. The objective here is to warm up the participants to the topic activity. Keep this short

and peppy. The “dialog” given in Instructor Guide (IG) materials is indicative, and of course, you would use expressions that you are most comfortable with. When you ask the question to participants, individually call the participants names or point to participants if you do not know their names.



4. Elicit responses from the students and encourage them to share their responses.

5. Do not allow the participants to take a lot of time to answer these questions.

6. Treat the questions in a “rapid-fire” style.

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Critical Thinking

DescriptionThe students think about a given question(s), write their responses, and present their views in class.

Delivery Instructions1. Initiate a critical thinking session on the <question/content/topic/and so on>.

2. Guide the students to <perform their tasks (answer questions/complete diagrams/design a solution/and so on> in the space given in their Workbook.

3. Ask them to share their reflections with the rest of the class (use this point ONLY if you would like this; REMOVE this point if you just want students to reflect for themselves, without sharing).

4. Ask them to share their reflections with the rest of the class. Note that you don’t need to have all the participants share their responses. Randomly pick participants or offer participants an opportunity to share and pick two or three participants who are enthusiastic about sharing (use this point ONLY if you would like this; REMOVE this point if you just want students to reflect for themselves without sharing).

5. Let the students know that they will also find the correct answers in Appendix E of their Reference Material.

Discussion

DescriptionThe instructor poses questions to guide the students through complex subjects. The discussion assists the students in comprehending complicated topics.

Delivery Instructions1. Direct the students to write their response in the space provided in their Workbook.

2. Facilitate a discussion on the question and elicit responses from the students; encourage them to share their responses.



5. Let the students know that they will also find the correct answers in Appendix E of their Workbook.

Lecture

DescriptionThis is a traditional method of instruction but is done from the Instructor Guide, not from the PowerPoint presentation. The students are encouraged to follow along in their Student Reference Materials.

Delivery Instructions1. Present the content provided in the “Speaking Points” to the students.

2. Use personal styles to teach the materials.

3. Try to intersperse long snippets of content with light-hearted “Icebreakers” or “Did You Knows?” given in the Instructor Guide (IG).

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Mind Map

DescriptionThe class draws a stepwise list of activities/phases/functions or web of content, for example, processes, functions, activities, steps, and so on. The idea is to map one idea in relation to other ideas, to understand whether or not the students have understood a concept properly.

Delivery Instructions1. Present the slide with the question(s) to the class.

2. Ask the students to create a mind map of the concept given/stated in the question.

3. If the students are struggling, provide them with an example by drawing it on the whiteboard/flipchart.

4. Let them know that they will also find the correct answers in Appendix E of their Workbook.

Recall, Describe, and List

DescriptionThe class lists as many ideas on or the key points of a previously learned topic, either in the Foundations course or through the course materials.

Delivery Instructions1. Ask the class to spend a couple of minutes to reflect on what they have just learned.

2. Ask the students to list the <state topic gist (for example, benefits of xyz)>in the space provided in their Workbook.

3. Ask them to read out some of the points they just listed in their Workbook (you may either randomly pick students to read out one point each from their list or ask them to take turns).

4. List the points that they read out on the whiteboard/flipchart.

5. Check if the students have any questions.

6. Let them know that they will also find the correct answers in Appendix E of their Reference Material.

Role-Play

DescriptionThe instructor and the students play different roles. The instructor assigns roles to the students based on real-life situations/problems and asks them to act out their roles in a problem situation. The students give their views of/solutions to the situation/problem, per the specific roles assigned to them. Role-reversal can also take place where the students act as the instructor and teach the class.

Delivery InstructionsPart 1:

1. Divide the students into <#> groups.

2. Explain to the students that you are going to play an interactive role-play exercise. Let them know that you will wear two hats during this role-play - that of their instructor and that of the <role>.

3. Provide a brief but clear list of what the students are expected to do (for example, create your analysis/recommendation/pitch/and so on).

4. Instruct the students that they will find the following <template/questionnaire/graph/and so on> in their Workbook to complete their <task>.

5. Instruct the students that they will be making presentations and to choose a member from their group for the presentation.

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Part 2:

6. As the <#> groups set to work on their project, walk around to observe their work, and guide them if they are way off. They may not have the right solution as you know it nor be able to do a great job.

7. As you walk around, guide the teams to cover at least the points provided within the above <template/questionnaire/graph/and so on> in their Workbook.

8. Keep a time check, remind participants of the time available, and urge them to complete their presentations quickly.

9. Once the three teams are ready with their <presentations/responses/skits/work>, ask them to make name cards for their <teams/organizations> and place it on the Instructor table before <she/he> arrives.

10. After the <presentations/responses/skits/work>, and the subsequent class interactions, it’s time to wear the Instructor’s hat again.

Part 3:

11. Inquire of the presenters what their experience was, and how they could have improved their <presentations/responses/skits/work>.

12. Ask each team to take a couple of minutes to huddle together as a team and reflect upon their <presentations/responses/skits/work>, and how they could have improved it.

13. Ask the nonparticipating students to ask their questions or share their views/comments from their notes or from the questions raised in their team huddle.

Round-Robin

DescriptionThis is similar to a discussion, except that the conversation goes from one student to the next, and each student must offer up an idea or a concept.

Delivery Instructions1. Pick a student to read paragraph <X> to the class.

2. Follow this with the question to drive the discussion on <topic/concepts/questions/and so on>.

or

1. Ask the class the question <xx>.

2. Initiate a discussion on the question and the possible answers.

3. Make all students contribute to the session.

4. Note the key points on the whiteboard.

5. The students can find the sample answers in Appendix E of their Workbook.

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Scenario

DescriptionReal-world cases are used to provide context to apply the ITIL framework. These are particularly valuable when the students are developing a consultative view of a situation and selecting what aspect of ITIL will meet the needs of the scenario.

Delivery Instructions1. Direct the students to their Workbook.

2. Ask them to read the scenario and do Scenario-Based Activity <#> given in their Workbook.

3. Ask them to write their answer(s) <under the relevant questions/in the table given> in the Workbook.

4. Discuss the answer(s) in the class.

5. The students can find the sample answers in Appendix E of their Workbook.

Self-Study

DescriptionThis is usually used for supplemental material after a topic has been covered. It is also used to create diversification of teaching techniques in order to keep students engaged.

Delivery InstructionsIn Class and at Home:

1. Ask the students to read through the content in detail and note down their queries.

2. Let them know that you will answer their queries and clarify doubts regarding the content.

3. There might be times when you do not have enough time to answer all questions. In this case, answer only one or two questions, and either write the other questions down or request the students to give their questions in writing/e-mail to you.

Solve a Common Problem/Risk Mitigation

DescriptionThe class is divided into two groups. Each group notes down a brief, “topic-related” problem. The groups then quiz each other about “how to solve” the given problem.

Delivery Instructions1. Direct the students to read the <problem/Risk scenario> in their Workbook.

2. Ask them to analyze the various aspects and nuances of the <problem/Risk scenario>.

3. Ask them to <answer questions/create a plan, solution, or strategy/list recommendations/create a process map/and so on> in the space provided in their Workbook, based on the <problem/Risk scenario>.

4. Ask them to randomly take turns to share their responses. If they are required to create a <diagram/process map/and so on>, seek a volunteer(s) to come draw it on the whiteboard/flipchart, and initiate a discussion around it.

5. Encourage the students to take notes during the discussion.

6. Summarize the key points on the flipchart/whiteboard.

7. Let the students know that they will also find the correct answers in Appendix E of their Reference Material.Sam

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Teach-Back

DescriptionThis encourages greater retention of topics through self-study and preparation, to teach the concepts back to fellow classmates. The instructor plays a key role to ensure that the teach-back session reflects the appropriate content.

Delivery Instructions1. Slice the content/topics into logical parts.

2. Divide the class into the same number of groups as the number of content parts you have just created.

3. Assign each content part to a group.

4. Inform the students that each group will teach its section to the rest of the class.

5. Let the students know they have <xx> minutes for reading up their respective parts and for discussing them within their respective groups.

6. At the end of the allotted time, ask each group for a volunteer to teach back the material to the rest of the class.

7. Encourage the class to discuss the topic after each of the groups has completed its task.

The Big “Why”

DescriptionThe instructor asks “The Big ‘Why’” questions to introduce a <concept/topic/idea> to class. The instructor conducts this activity in a conversational or less formal manner and provides a gist of the entire course/topic(s)/subtopic(s).

Delivery Instructions1. Display the question(s) given on the slide.

2. Ask the class to answer the question(s) shown on the slide.

3. There is no provision of space for answers in the students’ Workbook.

4. The students need to given verbal answers to the question(s) asked in class.

5. Encourage the class to relate their answers to their work environment and give examples from real life or the hotel scenario.

6. There is no sample answer for the question(s) in Appendix E of the Workbook.

Think-Pair-Share

DescriptionThe instructor asks the class a question. The students then pair up with a partner to compare or discuss their responses. The instructor calls randomly on a few students to summarize their discussion or give their answer.

Delivery Instructions1. Display the slide.

2. Ask the class to answer the question(s) shown on the slide.

3. Ask the class to write their answer(s) under the relevant questions in the Workbook.

4. Give the class anywhere from 10 secs to 5 mins to work individually.

5. Ask the students to pair up with a partner to compare or discuss their responses.

6. The students can find the sample answers in Appendix E of their Workbook.Sample

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GENERAL TRAINING TIPS

Value of ScenariosScenarios provide invaluable support to the learning process. As a result, we recommend that you provide scenarios from your own or anyone else’s experience to contextualize ITIL concepts. This will facilitate a deeper understanding of some of the more-challenging concepts or aspects of the best practices you are describing. Ensure that your stories are as succinct and effective as possible. Here are some helpful guidelines to follow when sharing scenarios:

Do’s: y Be sincere and genuine.

y Make sure that the story is fresh in your mind, and that you remember all the important facts.

y Share the story with enthusiasm.

y Vary the tone and intensity of your voice.

y Smile and use facial expressions to animate the scenario.

y Share the story, as if you are talking to a close friend.

y Keep your story brief and to the point.

y Link your scenario closely to the skill or concept you are teaching. Explain why you are narrating the scenario.

y Remember to involve the group and ask for their experiences too.

y If the experience is someone else’s, be upfront about saying that.

Don’ts: y Be careful not to use space fillers, such as “and,” “umm,” “but,” “ok,” and “ya’ know,” because they detract

from the story.

y Avoid too many personal stories because that can give the impression that you are merely “reminiscing.”

y Avoid topics such as religion, politics, race, gender, or age. These can be controversial.

FacilitatingThe main difference between training and facilitating is that training involves telling or informing to directly impart knowledge to participants while facilitation guides participants to discovery. ITpreneurs’ ITIL Intermediate training materials are expressly designed for “facilitation.” A successful facilitator does the following:

y Asks questions

y Listens

y Explains concepts when they are unknown

y Answers questions

y Transfers energy by encouraging particular points of view/ideas

y Guides participants to correct conclusions (doesn’t just correct answers)

y Stimulates interaction between class participants

To quote Julie Mohr, an industry expert, “Now with the introduction of the new Intermediate ITIL® materials, ITpreneurs has elevated the playing field and developed a completely new approach to not only teaching the ITIL framework but changing the way that students learn.

The new approach requires that instructors elevate their teaching methodologies. No longer can the instructor use a PowerPoint slide as a crutch, they must know the materials - and know them well. The result is that students really know and experience the material. But instructors be forewarned - you must prepare for these courses like you have never

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prepared before!”

Participant WIIFMWIIFM stands for “What’s in it for me,” and underlies the principle that adult learners seldom learn just for the sake of it, but rather learn to achieve a personal goal. It is important that participants know how the course will help them in their lives/workplaces. Establish this at the beginning of the course and reaffirm it frequently throughout the course to maintain participants’ commitment to learning from this course. For example, you can say things like:

y “People often find they need ITIL , and the principles and practices covered in the OSA course, for their jobs.”

y “OSA will help improve your performance.”

y “Once applied, OSA will help you stand out from the crowd and can increase your chances of promotion.”

Establish What Participants Want from the Course and Achieve ItParticipants generally just want a few things to keep them happy during a course, and it is your responsibility to try to accommodate them. ITpreneurs will supply all the necessary tools/resources to satisfy these requirements, as described below.

Enjoy a Relaxed AtmosphereCreate a relaxed and fun learning environment using color, treats (sweets or fruit), and so on to stimulate creative thinking, humor, and laughter. Evolve your own mantra for creating a relaxed atmosphere conducive to learning the fun and experiential way.

Find Useful skillsProvide a learning experience that is personal to each participant. Ensure that the learning experience supplies skills that the participants can usefully apply to their own job and life. Do this by encouraging them to think of at least one concept in the OSA course that could help them at work.

Use Practical ExamplesSupplement theory about the ideas and concepts with examples of how they can be put into practice either in their working environment, public (local news) environment, or at home. The OSA Instructor Guide provides you with several ideas and resources to do so.

Respect Participants’ Feelings and ThoughtsAdult learners do not welcome surprises, nor do individuals like being singled out or criticized. Remain respectful at all times, and ensure that participants always know what is coming next.

Vary Information PresentationTry to use multiple modes of learning, including reading, listening, practicing, seeing, interacting, or introspecting! The OSA materials provide several exercises to enable this. Of course, the more you enrich these, the richer your delivery will be.

Time ManagementSome adult learners can get frustrated and feel rushed if the course is running late, even if it’s only by a few minutes. Try to get through all the topics on time. Use your judgment of the class level and experience to guide if you should spend longer or less time on specific topics.

The Top-Ten (Non-ITIL/OSA) Questions That Participants AskWe suggest that you have answers to the following questions before beginning the course. You may wish to cover some in your introduction.

y Are we going to finish on time?

y When is the coffee break?

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y Will there be a vegetarian lunch available?

y Where are the toilets?

y Is it OK if I take or make phone calls?

y Are we going out after class?

y Has my management attended this class?

y How are you qualified to train us?

y Are you going to cover anything important in the next hour?

y How will this course help me improve my career prospects?

y What other ITIL or other courses would I benefit from?

y How much do those other trainings cost?

y Can we contact you directly to train for my company or should we only go via ITpreneurs/their partner?

Considerations for Adult LearnersAdults are autonomous and self-directed. They often take charge of a situation and like to direct themselves to information discovery. They need to connect current learning to their existing experiences and knowledge.

Learner GoalsMost adult learners are goal-oriented and already know their goals when they arrive for the course. You should find out their goals when they introduce themselves on the first day of the course. Goals are not the same as course or unit objectives.

Participants usually enroll in an OSA course for one or more of the following reasons:

y Networking: Those attending OSA courses are like-minded people in similar working environments, who could offer business opportunities.

y External expectations: An employer/customer requests the certification, or potential clients have a condition that contractors must use a structured methodology. Encourage the sharing of experiences.

Adults like to apply their learning practically. Although you do not have the time to run a full ITIL Lifecycle project in the course, participants often benefit from being made to think about a scenario and discuss the implications of applying a concept equivalent to the real world. At all times, be respectful of the experiences shared with the group. Even if the experiences are not relevant to the current discussion, they should be encouraged and appreciated. If a participant does not grasp a concept, use the phrase “you would think that, wouldn’t you, but…” or “most people believe that too, however…”

Low-Intensity ActivitiesThe material provides several low-intensity activities aimed at energizing participants. Icebreakers and Concept Jogs are some such activities. Here are some more simple activities that you can utilize at any point during the course, for example, while waiting for people to return from a break, to wake people up after lunch, or to break the tension after an intensive study period.

“What If”To get your group laughing and talking right off the bat, start your session with a quick game of “What if.”

Directions: Give each participant a small piece of paper. Ask them to write a “What-if ” question, such as “What if the sky was purple?” or “What if we all had three arms?” When everyone has finished (encourage them to work quickly), ask them to pass their question to the person to their right. Then ask each person to write the answer to the question they’ve received. They should answer the question as if they had written it. For example, if Tom hands his question (“What if I won the lottery?”) to Susan, she should answer the question as if she had won the lottery, not Tom.

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When everyone has written their answer, select someone to read only the question they have in front of them. Ask the person to their right to read the answer to their question. They should then read the question on their paper and the person to their right should read the answer and so on. Even though the questions and answers are unrelated, you’ll find some hilarious combinations!

Materials/time needed: For a group of 6–20 people, this exercise will take about 10–15 minutes. No advance preparation is required, but you’ll need pens or pencils and note paper.

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Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved. xvii

We would like to sincerely thank the experts who have contributed to and shaped ITpreneurs’ ITIL Intermediate product suite.

ITpreneurs’ Course Reviewers Anessi, Ray - Pangloss Group

Costigan, Michael D - CSC

Mohr, Julie - Blue Print Audits

Vikdal, Mike - Independent

Wigmore, Michael - Independent

Per Ivar Lillebraten - Ciber

Fatih Celen – Impetus Consulting

Kaushik, Jitendra – ITpreneurs

Dumasia, Rohinton - RD TAPS

Kaushik, Jitendra - ITpreneurs

ITpreneurs’ Course Exercise WritersFoederer, Marcel - ITpreneurs

Mohr, Julie - Blue Print Audits

Vikdal, Mike - Independent

Wigmore, Michael - Independent

ACKNOWLEDGEMENTS

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www.ITpreneurs.com

Copyright © 2012 ITpreneurs. All rights reserved

Follow us

Before you start the course, please take a moment to:

“Like us” on Facebook http://www.facebook.com/ITpreneurs

“Follow us” on Twitter http://twitter.com/#!/ITpreneurs

"Add us in your circle" on Google Plus http://gplus.to/ITpreneurs

"Link with us" on Linkedin http://www.linkedin.com/company/ITpreneurs

"Watch us" on YouTube http://www.youtube.com/user/ITpreneurs

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Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved. 1

Course Introduction

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ITIL Intermediate Certification Level | Service Offerings and Agreements

Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved.2

INTRODUCTIONS

2

Course IntroductionITIL

Intermediate® Service Offerings and Agreements

Welcome!Please share with the class:

• Your name• Your profession• Your role• Your background in IT• Your familiarity with Information Technology Infrastructure Library (ITIL®)• What you expect to learn over the next few days

Course IntroductionIntroductions Course Learning Objectives Unique Nature of the Course

1. Welcome the students to the training course and introduce yourself.

2. Be sure to give the students background information that establishes you as a credible expert on the learning material. Please share with the class your experience and background in IT and ITIL.

It is important to understand the level of each student because it indicates the following challenges that the students may face:

y Difficulty in understanding the concepts taught because applying “best practices” is unfamiliar territory

y Helping students overcome the influence of “too much experience” in their current way of operating and any resistance to the thought-pattern changes required with ITIL

To overcome these challenges, you must question the students about their expectations from the course.

You can record the students’ expectations on a flipchart. The expectations may range from passing the exam to wanting to implement the changes in their organization. As the expectations are stated and recorded, you can begin to manage them within the scope of this training. You can also use this exercise to start to introduce the key concepts that will be taught as part of the course.

Delivery Instructions

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Instructor | ITIL Intermediate Certification Level | Course Introduction


COURSE INTRODUCTION

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OverviewService Offerings and Agreements (SOA) is part of the ITIL Intermediate Capability stream.The SOA course helps you understand and implement ITIL best practices related to:

The SOA course focuses on how to manage and deliver Services across the organization.

RolesProcesses

Supplier Management

Service Portfolio Management

Service Catalogue Management (SCM)

Financial Management

Service Level Management (SLM)

Demand Management

Business Relationship Management


Service Portfolio ManagerService Catalogue ManagerService Level ManagerDemand ManagerSupplier ManagerFinancial ManagerBusiness Relationship Manager

Let us now quickly understand what SOA is. Only a brief overview of SOA will be provided here. A more detailed understanding of what SOA is and the relationship of SOA with other Service Lifecycle processes will be dealt with in more detail in Unit 1.

OverviewSOA is one of the four courses that are part of the ITIL Intermediate Capability stream. The SOA course helps you understand and implement ITIL best practices related to Service Portfolio Management, Service Catalogue Management (SCM), Service Level Management (SLM), Demand Management, Supplier Management, Financial Management, and Business Relationship Management.

The SOA course focuses on a single approach to managing and delivering Services across the organization.

Talk through the bulleted list, and answer any questions that participants may have. Take a moment to establish the connect between the Course Overview and Learning Objectives slides, emphasizing the key words and phrases.


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Course PrerequisiteCandidates wishing to be trained and examined for this qualification must already hold the ITIL Foundation Certificate in IT Service Management which must be presented as documentary evidence to gain admissionCandidates who hold the following ITIL qualifications are also eligible, and similar evidence will be required:

• Earlier ITIL (V2) Foundation plus Foundation Bridge• ITIL Expert Certificate in IT Service Management (achieved via Service

Manager or Practitioner bridging routes).


5



Course Prerequisite (Contd.)It is recommended that candidates:

• Can demonstrate familiarity with IT terminology and understand that the context of Service Offerings and Agreements Management within their own business environment is strongly recommended

• Have experience of working in the Service Management capacity within a service provider environment, with responsibility for at least one of the following Management processes and activities:o Service Portfolio Managemento Service Catalogue Managemento Service Level Managemento Demand Managemento Supplier Managemento Financial Management For It Serviceso Business Relationship Management

Before attending this course, it is highly recommended that candidates refresh their concepts of the Foundation course.


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COURSE LEARNING OBJECTIVES

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Course Learning ObjectivesAt the end of this training, you will have gained the knowledge and skills to:

• Comprehend the importance of the Service Management as a Practice concept and the principles, purpose, and objectives of Service Operation.

• Understand the importance of SOA while providing Service.• Learn how all processes in SOA interact with other Service Lifecycle processes.• Identify the processes, activities, methods, and functions used in each of the

SOA processes and how each of these processes, activities, and functions is used to achieve operational excellence.

• Explain how to measure SOA.• Recognize the technology and implementation considerations surrounding SOA.• Outline the challenges, Critical Success Factors (CSFs), and Risks associated

with SOA.


UNIQUE NATURE OF THE COURSE

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Course Delivery Method


Participate in your learning experience.

Internalize learning to take your final examination.

Apply new, practical experience.You will benefit when you:

This course will not be delivered in the traditional mode of “technical training.”

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This course will not be delivered in the traditional mode of “technical training,” where the instructor presents and lectures on slide after slide. Instead, you will be expected to participate in the learning experience through discussions, exercises, and the sharing of practical experiences. This is to ensure that you internalize the learning, as required, to sit for your final examination successfully and to apply your new practical experience back at the workplace.

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Sample from the Student Reference Material and Workbook


Take this introductory time to also walk through the student materials with your students. Explain where they will find information and how best to participate in the training session.


Student MaterialsThe student materials consist of two parts:

y Student Reference Material: Contains the concepts that are covered in class. We recommend that you use the Reference Material to study each evening, after class, to prepare for the final exam. Each unit ends with Sample Test Questions. These questions have been created based on the format of the qualification exam. The answers to these questions are given in Answers: Appendix E in the Workbook.

y Student Workbook: Contains all the exercises you have to do in class. The answers to these questions are given in Answers: Appendix E in the Workbook.

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Mock ExamThe Exam Preparation Guide contains the two sample exams released by APMG. Mock Exam 1 consists of Sample Paper 1 (a complete set with scenarios + question-and-answer options with their rationale) and Mock Exam 2 contains Sample Paper 2 (a complete set with scenarios + question-and-answer options with their rationale). On the last day of the course, you will have the opportunity to attempt the Mock Exam questions, which will help you prepare for the final exam.

The Royal Chao Phraya Hotel Case StudyActivities in this course are aimed at improving the retention of concepts learned. The Royal Chao Phraya Hotel case study provides the “scenario setting” for these activities.

Scenario-Based Activities are based on Single Points of Failure (SPOFs) that occur because of IT challenges at the Royal Chao Phraya hotel. The scenarios are often intentionally not situated in the IT department, to establish the real-life connect between IT and business.

The SPOFs at the Royal are illustrative of the connection between business and IT, and the fact that IT failures or challenges lead to business challenges and setbacks.

Working through the IT challenges faced by the Royal, students will understand the value of implementing ITIL to overcome IT challenges and, consequently, comprehend how to ensure smooth business operations at their workplace.

Also, the Royal Chao Phraya hotel is used in the Intermediate-level courses to provide a “scenario setting” for the assignments, rather than in an analogous manner, as in the Foundation-level course. This has been designed to ensure that the assignments, far more complex at this level, focus directly on the job at hand, and consequently, directly relate to IT.

Intermediate Course MatrixImportant information on Intermediate-level syllabi:

The composition of the ITIL Intermediate-level syllabi has a fair degree of overlap in concepts across each of the qualifications. The courses too, consequently, reflect this syllabus overlap. As you progress through the Intermediate levels and add one qualification after another, you may find this repetition of concepts increasing.

From a syllabus point of view, this is done to ensure that students have skills in and knowledge of all the content areas required for a given Intermediate qualification. In practice, for example, the same concept may differ in the way it is applied in say SOA vis-à-vis how it is applied in Service Operation.

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Teaching Style Suggestions:

1. For repeated topics from the Foundation course:

If the content of a unit has already been covered in the ITIL Foundation course, we suggest you do a dipstick check in class to test the students’ familiarity with and knowledge of previously covered concepts.

If you think that the class needs to revise Foundation topics, continue teaching the course. If you think that some students need reinforcement of the Foundation concepts while others do not need such revision, you could offer the latter the option of taking a coffee break while you teach these topics to their classmates.

2. For topics repeated from other Intermediate courses:

The Intermediate course syllabi are such that several topics are repeated across courses. These repeated topics may be taught in more or less detail across different courses. For example, Capacity Management is covered in three Intermediate Courses [Service Design, Service Operation, and Planning, Protection, and Optimization (PPO)]. Suppose you are taking a Service Design course and the class has some students who have passed PPO. These students will have learned this process in detail. In this situation, you must inform the students who have already done PPO that they should use this opportunity to revise the topics they have learned in the previous course and that doing this will help reinforce their knowledge.


COURSE QUALIFICATION SCHEME

9



Course Agenda and Exam DetailsCourse Qualification Scheme

© Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Legend

SS Service Strategy

SD Service Design

ST Service Transition

SO Service Operation

CSI Continual Service Improvement

OSA Operational Support and Analysis

PPO Planning, Protection, and Optimization

RCV Release, Control, and Validation

SOA Service Offerings and Agreements

ITIL Qualification Scheme and Credit Assignment

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Qualification SchemeThe purpose of this topic is to help you understand the Qualification Scheme, distinguish between the purposes of the two Intermediate streams, mention the included certificates and diplomas, and understand the different options for further training (noexaminable).

There are four levels within the new scheme: a Foundation level, two Intermediate levels, the Managing Across the Lifecycle level, and an Advanced level.

The Foundation level focuses on knowledge and comprehension to provide a good grounding in the key concepts, terminology, and processes of ITIL.

The new Intermediate level contains two streams, a Lifecycle stream and a Capability stream. The Lifecycle stream is built around the five core Cabinet Office books: Service Strategy, Service Design, Service Transition, Service Operation, and Continual Service Improvement.

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Service Design

Catalog Management

Supplier Management

ServiceCatalogue Manager

Service Level Manager

Supplier Manager

ContinualService Improvement

Improvement Process

Reporting Management

CSI

OSA

SS SD ST SO

PPO RCV SOA

CSI

OSA

SS SD ST SO

PPO RCV SOA

CSI

OSA

SS SD ST SO

PPO RCV SOA

Processes RolesLegend:

Service Strategy

Portfolio Management

Demand Management

Financial Management


Adapted from ITIL Core © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Business Relationship Management

Business Relationship Manager

Measurement Management

Service Level Management

The Capability stream is built around four clusters:

y Operational Support and Analysis (OSA): Event Management, Incident Management, Request Fulfilment, Problem Management, Access Management, Service Desk, Technical Management, IT Operations Management, and Application Management

y Planning, Protection, and Optimization (PPO): Availability Management, Capacity Management, IT Service Continuity Management, Demand Management, Risk Management, and Information Security Management

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y Release, Control, and Validation (RCV): Change Management, Service Release and Deployment Management, Service Validation and Testing, Service Asset and Configuration Management, Knowledge Management, Request Fulfilment, and Evaluation

y Service Offerings and Agreements (SOA): Service Portfolio Management, SLM, SCM, Demand Management, Supplier Management, Financial Management, and Business Relationship Management

Both Intermediate streams assess your comprehension and application of the concepts of ITIL. You will be able to take units from either of the Intermediate streams, giving you credits toward a diploma.

The Managing Across the Lifecycle course brings together the full essence of the Lifecycle approach to Service Management.

After gaining the requisite number of 22 credits through your education at the Foundation, Intermediate, and Managing Across the Lifecycle levels, you will be awarded the ITIL Expert Qualification. No further examination or course is required to gain the qualification.

The Advanced-level diploma will assess your ability to apply and analyze the ITIL concepts in new areas.

Note: The ITIL Qualification scheme is not examinable and is intended as information only. According to the APM Group, this qualification is subject to change.

COURSE AGENDA AND EXAM DETAILS

Course Prerequisites:For the Capability courses, there is no minimum mandatory experience requirement, but 2 to 4 years’ professional experience working in IT Service Management is highly desirable.

For the Lifecycle courses, there is no minimum experience requirement but basic IT literacy and around 2 years’ IT experience are highly desirable.

To be eligible for the exam you must hold the Foundation Certificate in IT Service Management or other appropriate earlier ITIL and bridge qualifications.

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Duration: 1.5 hoursQuestions: 8 Multiple-Choice Questions Each question has 4 Answer OptionsScoring Scheme: Most Correct Answer: Worth 5 marksSecond Best Answer: Worth 3 marksThird-Best Answer: Worth 1 markDistracter: No marksFormat: Closed-book, online, or paper-based examinationPass Score: 28/40 or 70% Distinction Score: Not defined yetContact Hours: 30-hour formal training with Accredited Training Organization (ATO)Personal Study Hours by APMG: 12 hours

Provisions for additional time relating to language: Candidatescompleting an exam:• in a language that is not their mother tongue, and• where the language of the exam is not their primary business language,

have a maximum of 115 minutes to complete the exam and are allowed the use of a dictionary

Exam Details

Useful Tips for Writing the Exam:

y Review the syllabus in your course material.

y Use the syllabus to focus your study within the identified chapters in the core ITIL books to prepare for these exams.

y The exam is written to a depth where you not only need to have a strong core competency in the ITIL best practice, but you also need to be able to apply this knowledge in practical scenarios.

y Read the question CAREFULLY.

y Remember that there will be qualifiers such as NOT and BEST.

y Make note of the unique business situation presented – this scenario may point you in the direction of the “best” answer from the list.

y As far as possible, try to eliminate the incorrect distracter question by using your ITIL theory and assessment of the provided information.

y Use your ITIL theory to assist with answering the question and selecting the best remaining answers from which to choose.

y Because this exam is gradient marked, you will most likely find very close similarities with the remaining answers.

y If you are stuck on a question, skip it and move to the next one.

y As you progress through the exam, you will pick up the rhythm of the structure and the language of the questions.

y When in doubt, guess – you will not lose marks for providing the wrong answer.

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1. Review the 5-day course agenda with the students.

2. Inform the students that there will be a 1-hour lunch break each day (or 45 minutes if time is of issue and lunch is available onsite).

3. Encourage the students to set time aside to study and review the material each evening to prepare for the final exam.

Let the students know that each unit will include practice questions, with a mock exam conducted on Day 5. As a result, the students will be very familiar with the format by the time they finish the course.


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Course Agenda

ITIL Intermediate Classroom Course

Day1 Service Offerings and AgreementsUnit Subject Start End Total Time

(in hours)

Course Introduction 08:00 08:30 00:30

1 Introduction to Service Offerings and Agreements 08:30 09:30 01:00

2 Service Portfolio Management 09:30 12:00 02:30

LUNCH 12:00 01:00 01:00

2 Service Portfolio Management 01:00 01:30 00:30

3 Service Catalogue Management 01:30 05:00 03:30

Homework (review of day's material) 01:00

TOTAL 10:00

Total - (less lunch & homework) 08:00

Note: Reading the Case Study

The case study used for activities in this course can be found in Appendix A of the Instructor Guide and Student Reference Material. It is recommended that you read through the case study during the first break. This will enhance your understanding of the scenarios used for the activities.

Remark: Students may choose to read the “nonessential” section of the case study as well, for more-detailed insight into the Royal Chao Phraya Hotel and its staff.

Note: Personal Study Recommendation for Students

The SOA syllabus recommends 12 hours of personal study in addition to the assigned classroom time.

The content to support such personal study for this course has been provided in the Student Reference Material. We would like to recommend that you take time after class each day to read through the sections covered in class that day. This would refresh your memory and reinforce the concepts learned in class.

Remark: While this would significantly contribute to the student’s learning, it is not mandatory.

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Some ideas for structured personal study:

You may want to direct the students to do a mind-map exercise to revise the concepts learned during the day in a structured manner.

Refer to Appendix B for a sample mind-map exercise and for instructions on how to do this exercise (this is also provided to the students in the Appendix section of the Student Reference Material). The exercise will help the students discover gaps in their understanding. You may want to utilize breaks or take time out at the start or end of the class to discuss these gaps with your students and clarify their concepts.

Direct your students to use homework time to also attempt the sample test questions.


(in hours)

4 Service Level Management 08:00 12:00 04:00

LUNCH 12:00 01:00 01:00



TOTAL 10:00



(in hours)

5 Demand Management 08:00 11:00 03:00

6 Supplier Management 11:00 12:00 01:00

LUNCH 12:00 01:00 01:00

6 Supplier Management 01:00 03:00 02:00

7 Financial Management for IT Services 03:00 05:00 02:00


TOTAL 10:00

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(in hours)

7 Financial Management for IT Services 08:00 12:00 04:00

LUNCH 12:00 01:00 01:00

8 Business Relationship Management 01:00 02:00 01:00

9 Roles and Responsibilities 02:00 03:30 01:30

10 Technology and Implementation Considerations 03:30 05:00 01:30


TOTAL 10:00



(in hours)

10 Technology and Implementation Considerations 08:00 09:00 01:00

11 Exam Preparation / Mock Exam 09:00 12:00 03:00

LUNCH 12:00 01:00 01:00

Exam 01:00 02:30 01:30

TOTAL 06:30

Total - (less lunch and final exams) 04:00

TOTAL CONTACT HOURS 36 hours

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Course Agenda

ITIL Intermediate Expert Program Course

Day1 Service Offerings and Agreements *All times in hours

Unit Subject Start End Time*

Course Introduction 08:00 08:30 00:301 Introduction to Service Offerings and Agreements (incl. 30-min RECAP) 08:30 09:00 00:302 Service Portfolio Management (incl. 30-min RECAP) 09:00 11:30 02:303 Service Catalogue Management (incl. 30-min RECAP) 11:30 12:00 00:30

LUNCH 12:00 01:00 01:003 Service Catalogue Management 01:00 02:30 01:304 Service Level Management (incl. 30-min RECAP) 02:30 05:00 02:30

Homework (review of day's material) 01:00TOTAL 10:00Total - (less lunch & homework) 08:00


Unit Subject Start End Time*4 Service Level Management 08:00 11:00 03:005 Demand Management (incl. 30-min RECAP) 11:00 12:00 01:00

LUNCH 12:00 01:00 01:005 Demand Management 01:00 02:30 01:306 Supplier Management (incl. 30-min RECAP) 02:30 05:00 02:30




7 Financial Management for IT Services (incl. 15 min RECAP) 08:00 09:45 01:45

8 Business Relationship Management (incl. 15 min RECAP) 09:45 11:00 01:15

9 Roles and Responsibilities (incl. 15 min RECAP) 11:00 12:00 01:00

LUNCH 12:00 01:00 01:00

9 Roles and Responsibilities 01:00 01:45 00:4510 Technology and Implementation Considerations (incl. 15 min RECAP) 01:45 03:30 01:45

Homework (review of day’s material) 01:00TOTAL 08:30Total - (less lunch & homework) 06:30

TOTAL CONTACT HOURS22:5

hours

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Course Agenda

ITIL Intermediate Classroom Blended Course



Course Introduction 08:00 08:30 00:301 Introduction to Service Offerings and Agreements (incl. 30-min RECAP) 08:30 09:00 00:302 Service Portfolio Management (incl. 30-min RECAP) 09:00 11:30 02:303 Service Catalogue Management (incl. 30-min RECAP) 11:30 12:00 00:30

LUNCH 12:00 01:00 01:003 Service Catalogue Management 01:00 02:30 01:304 Service Level Management (incl. 30-min RECAP) 02:30 05:00 02:30



Unit Subject Start End Time*4 Service Level Management 08:00 11:00 03:005 Demand Management (incl. 30-min RECAP) 11:00 12:00 01:00

LUNCH 12:00 01:00 01:005 Demand Management 01:00 02:30 01:306 Supplier Management (incl. 30-min RECAP) 02:30 05:00 02:30







LUNCH 12:00 01:00 01:00

9 Roles and Responsibilities 01:00 01:45 00:4510 Technology and Implementation Considerations (incl. 15 min RECAP) 01:45 03:30 01:45



hours

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Course Agenda

ITIL Intermediate Virtual Classroom Blended Course


Unit Subject Start End Time*Course Introduction 08:00 08:30 00:30

1 Introduction to Service Offerings and Agreements (incl. 30-min RECAP) 08:30 09:00 00:30

2 Service Portfolio Management (incl. 30-min RECAP) 09:00 11:30 02:30

3 Service Catalogue Management (incl. 30-min RECAP) 11:30 12:00 00:30LUNCH 12:00 01:00 01:00

3 Service Catalogue Management 01:00 02:30 01:30

4 Service Level Management (incl. 30-min RECAP) 02:30 05:00 02:30





5 Demand Management (incl. 30-min RECAP) 11:00 12:00 01:00LUNCH 12:00 01:00 01:00

5 Demand Management 01:00 02:30 01:30

6 Supplier Management (incl. 30-min RECAP) 02:30 05:00 02:30







LUNCH 12:00 01:00 01:009 Roles and Responsibilities 01:00 01:45 00:4510 Technology and Implementation Considerations (incl. 15 min RECAP) 01:45 03:30 01:45



hours

Each Cup represents one break.

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Unit 1Introduction to Service Offerings

and Agreements

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Unit 1 : Introduction to Service Offerings and AgreementsITIL

Intermediate®

2

Service Offerings and Agreements

The Big ‘‘Why”• What is Service Offerings and Agreements (SOA)?• Why SOA?

Alright! So, we come to that big fundamental “why” question. Why Service Offerings and Agreements?

The objective here is to warm the participants up to the course. Keep this peppy. The “dialog” above is indicative, and of course, you would use expressions that you’re most comfortable with.

But importantly, keep this short and energetic. Point to participants when you ask the question, call them out by their names individually…

Then once there have been a couple of responses, say you would now go to what this course really deals with.


Great! Let us now have an overview of SOA.

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Instructor | ITIL Intermediate Certification Level | Introduction to Service Offerings and Agreements



Intermediate®

3


Overview: SOA Architectural Framework

ITFlexible and

responsive to business

Adaptive Cost effective

Tools and Technology

OverviewService Offerings and Agreements (SOA) helps in understanding how to develop and use Services that matches to specific business processes. The architectural framework of SOA consists of set of tools and technologies which when combined helps in achieving current and new tasks easily and consistently.

The SOA approach makes the IT more flexible and responsive to the business, more cost-effective, and more adaptive to the environment by monitoring, reporting, and responding to the rapidly evolving business environment.

Talk through the bulleted list, and answer any questions participants may have.


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Intermediate®

4


Unit Learning ObjectivesAt the end of this unit, you will be able to:

• Comprehend the context of the SOA processes in the Service Strategy phase.• Understand the purpose and objectives of the Strategy Management for IT

Services processes.• Explain the scope of the Strategy Management for IT Services processes.• Understand how the Strategy Management for IT Services processes add value

to the business.• Identify the context of the SOA processes from the Service Design stage.• Understand the purpose and objectives of the design coordination processes.• Explain the scope of the design coordination processes.• Understand how the Design Coordination process adds value to the business.• Identify Utility and Warranty as the two factors for the customers’ perception of a

Service as successful and their relevance to the SOA processes.• Comprehend how the SOA processes help understand and identify the needs of

customers.• Understand Return on Investment (ROI) and the business case.

The Learning Objectives on the slide shows what you will be able to do at the end of taking this SOA course.

Take a moment to establish the connection between the unit overview and this Unit Learning Objectives slide as suggested in the speaking points, proceed to read out the Unit Learning Objectives, emphasizing on the key words and phrases.


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Intermediate®

5


Topics Covered in This Module:1.1 SOA in the Service Strategy Stage 1.2 Purpose and Objectives of the Strategy Management for IT Services Process1.3 Scope of the Strategy Management for IT Services Process1.4 Value of the Strategy Management for IT Services Process to the Business 1.5 SOA in the Service Design Stage 1.6 Purpose and Objectives of the Design Coordination Process1.7 Scope of the Design Coordination Process1.8 Value of the Design Coordination Process to the Business1.9 Utility and Warranty, and their Relevance to SOA Processes1.10 SOA Processes and Customer Requirements 1.11 Return on Investment and the Business Case

1.1 SOA IN THE SERVICE STRATEGY STAGE


Intermediate®

6


1.2Purpose and Objectives of the Strategy Management forIT Services Process

1.3 Scope of the Strategy Management for IT Services Process 1.4

Value of the Strategy Management for IT Services Process to the Business

SOA in the ServiceStrategy Stage1.1

The ITIL Service LifecycleContinualService

Improvement ServiceTransition

ServiceStrategy

ServiceOperation

ServiceDesign

Adapted from The ITIL Service Lifecycle© Crown Copyright 2011 Reproduced under licence from the Cabinet Office

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The ITIL Service LifecycleCore Guidance Reference — SS 1.2 Student Reference Material — Pg. 15

The diagram on the slide shows the ITIL core, which consists of five Lifecycle phases. These are Service Strategy, Service Design, Service Transition, Service Operation, and Continual Service Improvement (CSI). Each Lifecycle phase provides guidance that is essential for an integrated approach, as specified by the ISO/IEC 20000 standard.

“Service strategyAt the centre of the service lifecycle is service strategy. Value creation begins here with understanding organizational objectives and customer needs. Every organizational asset including people, processes and products should support the strategy.

ITIL Service Strategy provides guidance on how to view service management not only as an organizational capability but as a strategic asset. It describes the principles underpinning the practice of service management which are useful for developing service management policies, guidelines and processes across the ITIL service lifecycle.

Topics covered in ITIL Service Strategy include the development of market spaces, characteristics of internal and external provider types, service assets, the service portfolio and implementation of strategy through the service lifecycle. Business relationship management, demand management, financial management, organizational development and strategic risks are among the other major topics.

Organizations should use ITIL Service Strategy to set objectives and expectations of performance towards serving customers and market spaces, and to identify, select and prioritize opportunities. Service strategy is about ensuring that organizations are in a position to handle the costs and risks associated with their service portfolios, and are set up not just for operational effectiveness but for distinctive performance.

Organizations already practising ITIL can use ITIL Service Strategy to guide a strategic review of their ITIL-based service management capabilities and to improve the alignment between those capabilities and their business strategies. ITIL Service Strategy will encourage readers to stop and think about why something is to be done before thinking of how.

Service designFor services to provide true value to the business, they must be designed with the business objectives in mind. Design encompasses the whole IT organization, for it is the organization as a whole that delivers and supports the services. Service design is the stage in the lifecycle that turns a service strategy into a plan for delivering the business objectives.

ITIL Service Design provides guidance for the design and development of services and service management practices. It covers design principles and methods for converting strategic objectives into portfolios of services and service assets. The scope of ITIL Service Design is not limited to new services. It includes the changes and improvements necessary to increase or maintain value to customers over the lifecycle of services, the continuity of services, achievement of service levels, and conformance to standards and regulations. It guides organizations on how to develop design capabilities for service management.

Other topics in ITIL Service Design include design coordination, service catalogue management, service level management, availability management, capacity management, IT service continuity management, information security management and supplier management.

Service transitionITIL Service Transition provides guidance for the development and improvement of capabilities for introducing new and changed services into supported environments. It describes how to transition an organization from one state to another while controlling risk and supporting organizational knowledge for decision support. It ensures that the value(s) identified in the service strategy, and encoded in service design, are effectively transitioned so that they can be realized in service operation.

ITIL Service Transition describes best practice in transition planning and support, change management, service asset and configuration management, release and deployment management, service validation and testing, change evaluation and

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knowledge management. It provides guidance on managing the complexity related to changes to services and service management processes, preventing undesired consequences while allowing for innovation.

ITIL Service Transition also introduces the service knowledge management system, which can support organizational learning and help to improve the overall efficiency and effectiveness of all stages of the service lifecycle. This will enable people to benefit from the knowledge and experience of others, support informed decision-making, and improve the management of services.

Service operationITIL Service Operation describes best practice for managing services in supported environments. It includes guidance on achieving effectiveness and efficiency in the delivery and support of services to ensure value for the customer, the users and the service provider.

Strategic objectives are ultimately realized through service operation, therefore making it a critical capability. ITIL Service Operation provides guidance on how to maintain stability in service operation, allowing for changes in design, scale, scope and service levels. Organizations are provided with detailed process guidelines, methods and tools for use in two major control perspectives: reactive and proactive. Managers and practitioners are provided with knowledge allowing them to make better decisions in areas such as managing the availability of services, controlling demand, optimizing capacity utilization, scheduling of operations, and avoiding or resolving service incidents and managing problems. New models and architectures such as shared services, utility computing, web services and mobile commerce to support service operation are described.

Other topics in ITIL Service Operation include event management, incident management, request fulfilment, problem management and access management processes; as well as the service desk, technical management, IT operations management and application management functions.

Continual service improvementITIL Continual Service Improvement provides guidance on creating and maintaining value for customers through better strategy, design, transition and operation of services. It combines principles, practices and methods from quality management, change management and capability improvement.

ITIL Continual Service Improvement describes best practice for achieving incremental and large-scale improvements in service quality, operational efficiency and business continuity, and for ensuring that the service portfolio continues to be aligned to business needs. Guidance is provided for linking improvement efforts and outcomes with service strategy, design, transition and operation. A closed loop feedback system, based on the Plan-Do-Check-Act (PDCA) cycle, is established. Feedback from any stage of the service lifecycle can be used to identify improvement opportunities for any other stage of the lifecycle.

Other topics in ITIL Continual Service Improvement include service measurement, demonstrating value with metrics, developing baselines and maturity assessments.”

(Source: Service Strategy book)

Organizations can adapt to the core ITIL guidance for supporting various business environments and organizational strategies. There are also complementary ITIL publications that provide flexibility for implementing the core in a diverse range of environments. Practitioners can select complementary publications as needed to apply the ITIL core in a given context.

Just Concluded T R A N S I T I O N

1.2Purpose and Objectives of the Strategy Management for IT Services Process

1.1SOA in the Service Strategy Stage

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1.2 PURPOSE AND OBJECTIVES OF THE STRATEGY MANAGEMENT FOR IT SERVICES PROCESS


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Purp

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•“The purpose of a service strategy is to articulate how a service provider will enable an organization to achieve its business outcomes; it establishes the criteria and mechanisms to decide which services will be best suited to meet the business outcomes and the most effective and efficient way to manage these services. Strategy management for IT services is the process that ensures that the strategy is defined, maintained and achieves its purpose.”


Obj

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The objectives of Strategy Management for IT Services are to:

• “Analyse the internal and external environments in which the service provider exists, to identify opportunities that will benefit the organization.

• Identify constraints that might prevent the achievement of business outcomes, the delivery of services or the management of services; and define how those constraints could be removed or their effects reduced.

• Agree the service provider’s perspective and review regularly to ensure continued relevance. This will result in a clear statement of the vision and mission of the service provider.”


Refer to the Student Reference Material for more objectives of Strategy Management of IT Services.

Purpose and ObjectivesCore Guidance Reference — SS 4.1.1 Student Reference Material — Pg. 17

Strategy Management for IT Services is the process of defining and maintaining an organization’s perspective, position, plans, and patterns with regard to its Services and the management of those Services. The slide lists the purpose of a Service Strategy. The slide also lists some objectives of Strategy Management for IT Services. Some more objectives are to:

y “Establish the position of the service provider relative to its customers and other service providers. This includes defining which services will be delivered to which market spaces, and how to maintain a competitive advantage.

y Produce and maintain strategy planning documents and ensure that all relevant stakeholders have updated copies of the appropriate documents. This will include the IT strategy, the service management strategy, and the strategy plans for each service, where appropriate.

y Ensure that strategic plans have been translated into tactical and operational plans for each organizational unit that is expected to deliver on the strategy.

y Manage changes to the strategies and related documents, ensuring that strategies keep pace with changes to the internal and external environments.”


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1.3Scope of the Strategy Management for IT Services Process

1.2Purpose and Objectives of the Strategy Management for IT Services Process

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1.3 SCOPE OF THE STRATEGY MANAGEMENT FOR IT SERVICES PROCESS


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Adapted from Overall business strategy and the strategies of business units © Crown Copyright 2011 Reproduced under licence from the Cabinet Office





Zoomed graphic provided in Appendix F.

Overall Business Strategy and Strategies of Business Units

Overall Business Strategy and Strategies of Business UnitsCore Guidance Reference — SS 4.1.2 Student Reference Material — Pg. 18

Executives are responsible for Strategy Management in the organization. The executives set the objectives, specify how to meet those objectives, and prioritize the investments that are necessary to meet the objectives. They do not usually conduct the assessments, draft strategy documentation, or manage the execution of the strategy. A dedicated Strategy and Planning manager usually performs these activities and then reports to the senior staff and board.

The strategy of the organization applies to all Business Units. The organization is likely to have multiple strategies for managing the enterprise and other aspects of the business. The slide illustrates an example of how a business strategy might be broken down into strategies for IT and for manufacturing. These strategies must be linked and consistent with each other. This process ensures that the Services and the way they are managed support the overall strategy of the organization.

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Scope of Strategy Management

Adapted from The Scope of Strategy Management © Crown Copyright 2011 Reproduced under licence from the Cabinet Office


Scope of Strategy ManagementCore Guidance Reference — SS 4.1.2 Student Reference Material — Pg. 19

Strategy Management is a generic process that applies to the business as a whole or to any of the Business Units. Take an example of Strategy Management applied to an external IT Service Provider. Here, the business strategy might be related to IT Services delivered to an external customer and the IT strategy would be related to how those Services will be delivered and supported.

The diagram on the slide shows the scope of Strategy Management in ITIL Service Strategy where a business strategy is used to develop a set of tactics and operations. The IT strategy, and therefore also the strategy for IT Services, is derived from the overall business strategy and validates the business strategy. For example, the IT strategy can validate the technical feasibility of a strategic objective, enabling the business to decide on the inclusion of the objective. As shown in the diagram, IT tactics are determined by both the IT strategy and business tactics. On the other hand, IT tactics help business determine whether the business tactics are appropriate. For example, defining how a sales team will work will partly depend on the type of sales automation services provided by IT.

IT operations are derived from both IT tactics and the requirements of business operations. The type of coordination and interaction between different operational environments influences Strategy Management for IT Services. This is because you can validate a strategy only after it executes. Assessment of the actual performance of activities and services can indicate whether the parameters used in setting the strategy were accurate and also validate any assumptions made.

The top dotted line in the diagram indicates that IT strategy is related to business tactics. Since both IT strategy and business tactics are derived from the business strategy, they have to be checked to ensure consistency. IT should not define a strategy that clashes with the business tactics. Also, the business tactics should not make a tactical decision about how IT Services are going to be used if the IT strategy does not allow for that type of usage.

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The bottom dotted line in the diagram indicates a similar relationship between business operation and IT tactics. Any tactics deployed by IT should be valid for business operation.

Key message

“A Service Strategy is a subset of the overall strategy for the organization. In the case of an IT organization, the IT strategy will encompass the IT service strategy.”


Service Strategy is not the same as an ITSM strategy. The table sums up the differences.

“Service Strategy: The strategy that a service provider will follow to define and execute services that meet a customer’s business objectives. For an IT service provider the service strategy is a subset of the IT strategy.”


“ITSM Strategy: The plan for identifying, implementing and executing the processes used to manage services identified in a service strategy. In an IT service provider, the ITSM strategy will be a subset of the service strategy.”



1.4Value of the Strategy Management for IT Services Process to the Business

1.3Scope of the Strategy Management for IT Services Process

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1.4 VALUE OF THE STRATEGY MANAGEMENT FOR IT SERVICES PROCESS TO THE BUSINESS


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Value to the Business





More Investments Shifting Investment PrioritiesCost Saving

Value to the BusinessCore Guidance Reference — SS 4.1.3 Student Reference Material — Pg. 21

A well-defined and managed strategy ensures that the organization’s resources and capabilities are in alignment with the business outcomes. It also ensures that investments match development and growth. With effective Strategy Management, all stakeholders are represented in the direction and objectives, and agree on how the resources, capabilities, and investments are prioritized. It also ensures that resources, capabilities, and investments are managed appropriately to achieve the strategy.

Strategy Management for IT Services ensures that the Service Provider has the right Services in its Service Portfolio, with a clear purpose, and that everyone knows their role in achieving that purpose. The results are:

y “Cost savings, since investments and expenditure are matched to achievement of validated business objectives, rather than unsubstantiated demands

y Increased levels of investment for key projects or service improvements

y Shifting investment priorities. The service provider will be able to de-focus attention from one service, and re-focus on another, ensuring that their efforts and budget are spent on the areas with the highest level of business impact.”


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Strategy Management for IT Services helps the customers articulate business priorities that are understandable to the Service Provider. It also helps the Service Provider decide how to respond when priorities and investments change.


1.5SOA in the Service Design Stage

1.4Value of the Strategy Management for IT Services Process to the Business

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1.5 SOA IN THE SERVICE DESIGN STAGE


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SOA

ServiceCatalogue

Management

Service Level Management

SupplierManagement

1.6 Purpose and Objectives of the Design Coordination Process 1.7 Scope of the Design

Coordination Process 1.8 Value of the Design Coordination Process to the Business

SOA in the Service Design Stage1.5

Service Catalogue ManagementCore Guidance Reference — SD 1.2 Student Reference Material — Pg. 22

ITIL defines a Service Catalogue as:

“A database or structured document with information about all live IT services, including those available for deployment. The service catalogue is part of the service portfolio and contains information about two types of IT service: customer-facing services that are visible to the business; and supporting services required by the service provider to deliver customer-facing services.

(Source: Service Design book)

Service Catalogue Management (SCM) is the process to ensure that the information contained within the Service Catalogue is accurate, regularly updated, and readily available to those who need it.

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The objective of SCM is to give to all the authorized people reliable information on agreed Services. Consequently, the goal of SCM is to make sure that the organizations create and maintain the Service Catalogue and keep all information, such as Service status, Service interfaces, and Service dependencies, in the catalog accurate and up-to-date.

Service Level ManagementITIL defines a Service level as “Measured and reported achievement against one or more Service Level Targets. The term is sometimes used informally to mean Service Level Target.”


On the other hand, ITIL defines SLM as “The Process responsible for negotiating Service Level Agreements, and ensuring that these are met. SLM is responsible for ensuring that all IT Service Management Processes, Operational Level Agreements, and Underpinning Contracts, are appropriate for the agreed Service Level Targets. SLM monitors and reports on Service Levels, holds regular service review with customers, and identifies required improvements.”


In today’s global market, there is an active relationship between the demand and supply of Services. Consequently, it has become crucial for Service Providers, users, and customers to understand each other well to meet the growing demands of the market.

The main objective of SLM is to make sure that the Service Providers provide the agreed quality of Service to their customers for all their current Services. It also makes sure that Service Providers deliver to their customers all the Services in planning (future) based on their agreed and attainable goals. To ensure this, it is essential that you implement proactive measuring in your organization so that you can identify and execute all Service improvements.

The best platform for this implementation is SLM, which is the main function of ITSM. SLM aligns the requirements of business with the practically cost-effective possibilities of the IT Service organization.

The goal of SLM is to agree to, secure, monitor, and control Service Level Agreements (SLAs) with clear, measureable Service quality targets. Service Providers must secure the customer’s Service Level Requirements (SLRs) with the internal and external Service Providers of the ITSM organization. For this reason, it is essential to break down the IT Service requirements into subcomponents.

Supplier ManagementITIL defines a supplier as “A Third Party responsible for supplying goods or Services that are required to deliver IT Services. Examples of suppliers include commodity hardware and software vendors, network and telecom providers, and outsourcing Organizations.”


On the other hand, ITIL defines Supplier Management as “The process responsible for obtaining value for money from suppliers, ensuring that all contracts and agreements with suppliers support the needs of the business, and that all suppliers meet their contractual commitments.”

The main goal of Supplier Management is to make sure that suppliers adhere to the conditions and targets contained in the contracts. Suppliers make important contributions to the delivery of IT Services. Consequently, the Supplier Management process should be driven by the supplier strategy.

Organizations should document the contracts and suppliers in the Supplier and Contracts Database so that the contract’s reliability and the adherence with corporate guidelines is centrally verified.

Supplier Management must cover all suppliers and contracts that are needed for business service delivery. You should formally define the supplier and Service Provider relationship. However, if the strategic importance of the supplier is crucial, make provisions for greater integration of the supplier within the Service Strategy plan or Service Design. If the additional benefits of the supplier are less, you can manage the suppliers more at the operational level in the Service Transition or Service Operation stages.

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1.6Purpose and Objectives of the Design Coordination Process

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Purp

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•“The purpose of the design coordination process is to ensure the goals and objectives of the service design stage are met by providing and maintaining a single point of coordination and control for all activities and processes within this stage of the service lifecycle.”


Obj

ectiv

esThe objectives of the Design Coordination process are to :• “Ensure the consistent design of appropriate

services, service management information systems, architectures, technology, processes, information and metrics to meet current and evolving business outcomes and requirements

• Coordinate all design activities across projects, changes, suppliers and support teams, and manage schedules, resources and conflicts where required

• Plan and coordinate the resources and capabilities required to design new or changed services

• Produce service design packages (SDPs) based on service charters and change requests”



Coordination Process 1.8 Value of the Design Coordination Process to the Business

SOA in the Service Design Stage1.5

Refer to the Students Reference Material for more objectives of the Design Coordination process.

Purpose and ObjectivesCore Guidance Reference — SD 4.1.1 Student Reference Material — Pg. 24

The slide lists the purpose and some objectives of the Design Coordination process. Some more objectives are to:

y “Ensure that appropriate service designs and/or SDPs are produced and that they are handed over to service transition as agreed

y Manage the quality criteria, requirements and handover points between the service design stage and service strategy and service transition

y Ensure that all service models and service solution designs conform to strategic, architectural, governance and other corporate requirements

y Improve the effectiveness and efficiency of service design activities and processes

y Ensure that all parties adopt a common framework of standard, reusable design practices in the form of activities, processes and supporting systems, whenever appropriate

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y Monitor and improve the performance of the service design lifecycle stage.”



1.7Scope of the Design Coordination Process

1.6Purpose and Objectives of the Design Coordination Process

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1.7 SCOPE OF THE DESIGN COORDINATION PROCESS


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1.6 Purpose and Objectives of the Design Coordination Process 1.8SOA in the Service Design

Stage1.5

Scope

1.7 Scope of the Design Coordination Process

Scope

Assisting and supporting

Project and/or Change

ManagingService Design activities and

processes

ManagingService Design

resources

Planning and forecastingresources

Improvingperformance

MeetingRequirements

Production of Service Designs

and/or SDPs

Value of the Design Coordination Process to the Business

Scope of the ProcessCore Guidance Reference — SD 4.1.2 Student Reference Material — Pg. 25

The scope of the Design Coordination process includes all design activity, particularly all new or changed Service solutions that are being designed for transition into the live environment.

Some more scope aspects of the Design Coordination process include:

y Assisting and supporting each project or other Changes through all the Service Design activities and processes

y Maintaining policies, guidelines, standards, budgets, models, resources, and capabilities for Service Design activities and processes

y Coordinating, prioritizing, and scheduling of all Service Design resources to satisfy conflicting demands from all projects and Changes

y Planning and forecasting the resources needed for the future demand for Service Design activities

y Reviewing, measuring, and improving the performance of all Service Design activities and processes

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y Ensuring that all requirements are appropriately addressed in Service Designs, particularly Utility and Warranty requirements

y Ensuring the production of Service Designs, SDPs, or both and their handover to service transition.

However, the scope of the process does not include:

y Responsibility for any activities or processes outside of the design stage of the Service Lifecycle

y Responsibility for designing the detailed Service solutions themselves or the production of the individual parts of the SDPs. These are the responsibility of the individual projects or Service Management processes.


1.8Value of the Design Coordination Process to the Business

1.7Scope of the Design Coordination Process

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Coordination ProcessSOA in the Service Design Stage1.5

Value to the Business

1.8 Value of the Design Coordination Process to the Business

Achieve the intended business value

DesignCoordination

Business

Improve satisfaction

Confidence in IT

Consistent architectureFocus on Service

value

Greater agility and better quality

Efficiency and effectiveness

Value to the BusinessCore Guidance Reference — SD 4.1.3 Student Reference Material — Pg. 26

The Design Coordination process provides several benefits to the business, the primary being the production of a set of consistent quality solution designs and SDPs that will provide the desired business outcomes.

Design Coordination also enables organizations to:

y “Achieve the intended business value of services through design at acceptable risk and cost levels

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y Minimize rework and unplanned labour costs associated with reworking design issues during later service lifecycle stages

y Support the achievement of higher customer and user satisfaction and improved confidence in IT and in the services received

y Ensure that all services conform to a consistent architecture, allowing integration and data exchange between services and systems

y Provide improved focus on service value as well as business and customer outcomes

y Develop improved efficiency and effectiveness of all service design activities and processes, thereby supporting higher volumes of successful change delivered in a timely and cost-effective manner

y Achieve greater agility and better quality in the design of service solutions, within projects and major changes.”



1.9Utility and Warranty, and their Relevance to SOA Processes

1.8Value of the Design Coordination Process to the Business

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1.9 UTILITY AND WARRANTY, AND THEIR RELEVANCE TO SOA PROCESSES


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Value

1.10 SOA Processes and Customer Requirements 1.11 Return on Investment and

the Business CaseUtility and Warranty, and their Relevance to SOA Processes1.9

Defined by customers

Affordable mix of features

Achievement of objectives

Changes over time and circumstances

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ValueCore Guidance Reference — SS 3.2.3 Student Reference Material — Pg. 28

The value of a Service is the level to which the Service meets customer expectations. It is measured by how much the customer is willing to pay rather than the cost of the Service. The value of a Service comes from what it enables the business or customers to do and is not determined by the provider, but by the person who receives it.

The characteristics of value are:

y “Value is defined by customers: No matter how much the service provider advertises the worth of their services, the ultimate decision about whether that service is valuable or not rests with the customer.

y Affordable mix of features: It is possible to influence the customer’s perception of value through communication and negotiation, but that still does not change the fact that the customer will still make the final choice about what is valuable to them. A good sales person can convince a customer to change the priorities influencing their purchase, but the customers will select the service or product that represents the best mix of features at the price they are willing to pay.

y Achievement of objectives: Customers do not always measure value in financial terms, even though they may indicate how much they are prepared to pay for a service that helps them to realize the desired outcome. Many services are not designed to produce revenue, but to meet some other organizational objective, such as social responsibility programmes, or human resource management. While commercial organizations tend to measure most services by financial returns, government organizations tend to focus on other objectives. For example, police might focus on reduction in crime or apprehension of criminals; social welfare departments might focus on the amount of funding disbursed to needy families; a mountain rescue organization might focus on the number of people warned about, or rescued from, avalanches.

y Value changes over time and circumstance: What is valuable to a customer today might not be valuable in two years. As each customer changes to meet the challenges of their environment, so too do their service needs and values. For example, retail outlets might focus on selling a higher percentage of luxury goods when the economy is good, but during a recession they shift the focus to budget product lines and fewer luxury goods.”


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Understanding IT Value



Information for Understanding

IT Value

WhatService(s)

did IT provide?

What did the

Service(s)achieve?

How much did the

Service(s)cost?

To an organization, Services contribute value only when their value is perceived to be higher than the cost of the Service. Understanding the value of IT requires the following information:

y “What service(s) did IT provide?: If IT is only perceived as managing a set of servers, networks and PCs it will be very difficult for the customer to understand how these contributed to value. In order for a customer to calculate the value of a service, they must be able to discern a specific, discrete service and link it directly to specific business activities and outcomes. For example, an IT organization claims that application hosting delivers value to the business. The business, however, does not know what application hosting is, or what applications are hosted. If the IT organization wants to communicate its value, it must be able to identify what the customer actually perceives, and then link their activities to that service. The service portfolio, and the service catalogue in particular, will help IT to quantify this.

y What did the service(s) achieve?: The customer will identify what they were able to do with the service, and just how important that was to them and their organization.

y How much did the service(s) cost – or what is the price of the service(s)?: When a customer compares the cost or price of a service with what the service enabled them to achieve, they will be able to judge how valuable the service actually was. If IT is unable to determine the cost of the service, it will be very difficult for them to claim that they delivered value, and very difficult for the customer to perceive IT as ‘valuable’.”

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Adapted from Components of Value © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Preferences Perceptions

Value

Businessoutcomes

Creating ValueCore Guidance Reference — SS 3.2.3.1 Student Reference Material — Pg. 30

Calculating the value of a Service can be straightforward and provided in financial terms. In other situations, the outcomes are not financial and it is much harder to quantify the value. There is more to value than the function of the Service and its cost. Value needs to be defined in terms of these areas: Achieved business outcomes, customer preferences, and the customer’s perception of what was delivered, as illustrated in the diagram.

Value highly depends on customer perceptions and preferences, not just in terms of customer outcomes. Perceptions are influenced by the attributes of the Service. Present or prior experiences with similar attributes and the capability of competitors will influence perceptions. In addition, perceptions are influenced by the customer’s self-image or position on the market. Customers have preferences influenced by their perceptions, which affects how they differentiate the value of one offering or provider over another.

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Adapted from How Customers Perceive Value © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Understanding Customer Perception of ValueA Service Provider can influence how the customers perceive the value of the Service, as shown in the diagram. The reference value is the starting point for customer perception and is based on what the customer has heard about the Service or on previous experience with similar Service. The reference value may be vague or based on hard facts. The positive difference is based on the perceived benefits and gains of the Service or the additional Warranty and Utility that is delivered. With a marketing approach, the Service Provider can influence the customer’s perception.

The negative difference is the perception of what the customer would lose by investing in the Service. The Service Provider can influence perception here by listening to the customer and matching the features of the Service to the customer requirements.

The net difference is the actual customer’s perception of how much better or worse the Service is than the original reference value. This is what drives the customer’s decision to invest in the Service or not.

The economic value of the Service is the total value that the customer perceives. This includes the reference value plus or minus the net difference and is measured by the customer’s ability to meet desired outcomes.

A focus on business outcomes is a critical advancement in outlook for many Service Providers. Customers do not buy Services; they buy the fulfillment of their requirements. This distinction frequently explains the disconnect between IT and the business. What the IT organization believes it provides is often different from what the customer values.Sam

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Marketing Mindset

Is our business?

Does the customer value?

WHAT?

Is our customer?

Depends on our Services?

WHO?

Are our Services valuable to them?

WHY?

Do customers use our Services?

HOW?

Marketing MindsetThe Service Provider must understand and communicate value with a marketing mindset. This refers to advertising Services to influence perception and understand the customer requirements and their context. The Service Provider needs to ensure that Services are developed to meet the outcomes that are important to the customer. To determine what outcomes matter, the Service Provider must look from the outside in to understand the customer’s perspective. This can begin with the questions listed on the slide.

Value can be provided at different levels or differentiated. This differentiation should focus on the fulfillment of customer outcomes, not on Service attributes, and this is possible with a marketing mindset and viewing the Service from the customer’s perception of value.

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Adapted from Money Spent, Value Added, and Value Realized © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Value Added and Value RealizedCore Guidance Reference — SS 3.2.3.2 Student Reference Material — Pg. 33

To understand this relationship, we need to look at a value chain or a sequence of processes that create a product or Service. Each step in the process builds on the previous step and contributes to the overall value, as shown in the diagram.

Many components are used to deliver a Service, and each component is managed by an IT department. Money is spent on procuring, developing, and maintaining the components and on department salaries, office space, benefits, and so on. Because the departments manage the components, it adds value to the Service. To add value, the Service Provider must ensure that every time a step is added to the Service, the value must grow at a higher rate than the amount of money spent.

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Rules to Add ValueRules to adding value:• “The amount of value added can only be calculated once value has been realized

(once the service has achieved the desired outcome).• The value realized has to be greater than the money spent. This is true whether

measured in financial terms (for example, how much money the customer paid for the service) or in non-financial terms (for example, could the local government process the planned number of driver’s licence applications per day?). In these cases the non-financial value of the outcome is compared with the financial costs of the service. A decision is then made as to whether the service is worthwhile or not.

• If the value realized is not greater than the money spent, then the service provider has not added any value. Rather they have simply spent money (and made a loss).”




Rules to Add ValueThe true value of a Service can only be calculated after the value has been realized when the customer achieves the desired outcome. The slide lists the rules to adding value.

These rules also apply to IT organizations:

y “If IT wants to show that it has added value, it must link its activities to where the business realizes value.

y If IT is unable to do this, it will be perceived as a money-spending organization, not a value-adding organization.

y The only way a money-spending organization can demonstrate value is by cutting costs (thus assumedly increasing the profit margin). This results in a vicious circle. IT is not perceived as adding value, so the business demands that they cut costs. When they cut costs their ability to add value is reduced even more, and the business demands even more cost cutting.”


So, how does IT ensure that it is perceived as a value adder, rather than a money spender? The secret is in being able to link IT activities to Services and then link those Services to outcomes. In other words, IT should not be undertaking activities unless they can show that each activity helps achieve the business outcome.Sam

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Utility and Warranty

Utility Warranty“Utility is used to improve the performance of the tasks used to achieve an outcome, or to remove constraints that prevent the task from being performed adequately (or both).”


“Warranty refers to the ability of a service to be available when needed, to provide the required capacity, and to provide the required reliability in terms of continuity and security.”


Defines fitness for purpose of a Service Defines fitness for use of a Service

Utility and WarrantyCore Guidance Reference — SS 3.2.4 Student Reference Material — Pg. 35

Value consists of achieving business objectives from the customer’s perspective, and the value of a Service is created by combining two primary elements, which are Utility and Warranty. These must be in balance for the customer to get benefits from the Service. Therefore, Utility and Warranty must both be designed and delivered.

Many IT organizations develop Services separately from the operation of Services. If operational teams get involved only when an application is deployed and if key operational considerations have been omitted, additional funding is often required. From the customers’ perspective, they have already paid for the functionality and any additional request for funding seems to add no value.

Warranty is an essential part of the design of a Service and should be built together with Utility. If this is not done, it might result in a limited ability to deliver the Utility. Attempts to design Warranty after deployment are more expensive and cause additional disruption to the business.

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Examples of Utility and Warranty Statements



“Utility Sales people will be able to submit orders for processing during or immediately after a customer meeting, using data-enabled mobile telephones.The customer and sales person will receive a confirmation of the order by email as soon as the order has been accepted.Sales assistants must be able to submit sales orders on behalf of sales people if the sales people are unable to submit them themselves.

Warranty Each sales person will be provided with a data-enabled wireless mobile telephone, with the MoSOP client installed.The software will operate over 2G, 3G and 4G mobile phone networks.The service will be available from 7.00 a.m. to 7.00 p.m.A sales order will be transmitted within 15 seconds after ‘Send’ is selected.The sales order will be processed within 2 minutes of receipt.The sales confirmation will be emailed within 30 seconds of sales order processing.The sales order processing system will be able to process up to 1,000 sales orders per hour.If a mobile signal is not available, the sales person will use a landline to contact a sales assistant to process the order. Once the order has been submitted, the processing and emailing of the sales confirmation will take the same amount of time.”


Examples of Utility and WarrantyThe table on the slide provides examples of how the value of a “Mobile Sales Order Processing (MoSOP)” Service is described in terms of Utility and Warranty.

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Adapted from Utility Increases the Performance Average © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Effect of Improved Utility on a ServiceCore Guidance Reference — SS 3.2.4.1Student Reference Material — Pg. 36

Improvements in the Utility of a Service have the effect of increasing the functionality of a Service or what it does for the customer. This results in the increase of the type and range of achievable outcomes.

The diagram on the slide illustrates an example of an airline baggage-handling service. The complete loading of baggage onto an aircraft within 15 minutes, 80% of the time is shown by the lighter curve. With new security legislation, the baggage-handling service will be required to perform additional security checks and to record the location of each bag in the aircraft hold. These additional activities will necessitate Changes to the Utility of the Service. The airline changes the Service to be able to do the additional work, while still maintaining the standard of loading baggage onto the aircraft within 15 minutes, 80% of the time. The darker curve in the diagram represents the new level of Utility. Even with the change in Utility level, note in the diagram that the standard deviation remains unchanged. This happens because the Warranty has not changed.

The diagram represents the standard distribution of the items being measured. The x-axis represents the Utility of the Service, while the y-axis refers to the number of data points used to measure the Service.

Warranty does not automatically stay the same when Utility is increased. In fact, maintaining consistent levels of Warranty and Utility at the same time requires good planning and increased investment. This investment is required for changes to processes, tools, training, hiring additional employees, and implementing additional tools to perform newly automated activities. The Utility effect means that although the customer assets perform better and the range of outcomes increases, the probability of achieving those remains the same. Therefore the shape of the graph and the space under the line remain the same.

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Adapted from Warranty reduces the performance variation © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

The Effect of Improved Warranty on a Service

Standard deviation of the performance of a service with inadequate warrantyStandard deviation of the performance of a service with improved warranty

Acceptable performance thresholds

Warrantyeffect

Warranty effect

The Effect of Improved Warranty on a ServiceThe effect of improved Warranty of a Service means that a Service continues to perform the same tasks with increased reliability.

The results of improving Warranty of a Service are:

y Higher probability of achieving the desired outcomes

y Less risk of the customer suffering losses due to variations in Service performance

y Increase in the number of times a task can be performed within an acceptable level of cost, time, and activity

The lighter line in the diagram shows that a significant percentage of Service delivery is outside of the acceptable range. In order to increase the probability that the Service will be performed within an acceptable range, the Service Provider can make improvements in training, process, automation and new tools or processes.

Revisiting the airline baggage handling example, assume that after one year of adding the new Utility, the airline targets an increased “on-time departure” rate. In order to achieve the target, the baggage handling service needs to find a more optimum way of scanning and recording the location of bags without adding any new Utility. As a result, the baggage handling service is able to complete the loading of baggage onto the aircraft within 15 minutes, 90% of the time, which can be regarded as a significant improvement.

In the diagram, the Warranty is increased such that the Service does exactly the same activity. However, it is more reliable because the performance of the Service Assets is improved. The improvement in Service Asset performance results in the ability to achieve the business outcomes more consistently.

In this diagram, which represents the standard distribution of the items being measured, the x-axis represents the Warranty of the Service while the y-axis refers to the number of data points used to measure the Service.

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To summarize, the Warranty effect means that the performance of the Service Assets is improved while the Utility effect means that the performance of the customer assets is improved.


1.10SOA Processes and Customer Requirements

1.9Utility and Warranty, and their Relevance to SOA Processes

Coming Up

1.10 SOA PROCESSES AND CUSTOMER REQUIREMENTS


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Adapted from Scope of Service Design © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

BusinessProcess 3Business

Process 2


Process 5


Process 8

The business

Business service A Business service B Business service C

Businessprocess 1

Businessprocess 4

Businessprocess 7

SLAs Service A B C D E F G

IT service provider

Servicestrategy

Servicetransition

Serviceoperation

Continualservice

improvement

Support teams

Suppliers

Service managementprocess




Service managementprocess 1

2

3

4

5

Design of processes

Service design Design of managementinformation systems and tools

Design of service solutions

Design of technologyarchitectures and

management architectures

Design of measurementmethods and metrics

Service knowledgemanagement system

Serviceportfolio

Servicecatalogue

23 5 6 8 9

Scope of ServiceDesign


Scope and Flow of Service DesignCore Guidance Reference — SD 3.1.3Student Reference Material — Pg. 39

A set of new or changed business requirements initiates the Service Design stage. This stage completes once the Service solution designed to meet the documented needs of the business is developed. This service solution, together with its SDP, is then passed to Service Transition to evaluate, build, test, and deploy the new or changed Service, or to retire the Service. Finally, control is transferred to the Service Operation stage of the Service Lifecycle. There are five individual aspects of Service Design:

y “Service solutions for new or changed services The requirements for new or changed services are extracted from the service portfolio. Each requirement is analysed, documented and agreed, and a solution design is

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produced that is then compared with the strategies and constraints from service strategy to ensure that it conforms to corporate and IT policies. The design must ensure that this new or changed service is consistent with all other services, and that all other services that interface with, underpin or depend on the new or changed service are consistent with the new service. If not, either the design of the new service or the other existing services will need to be adapted.

Each individual service solution design is also considered in conjunction with each of the other four aspects of service design.

y The management information systems and tools, especially the service portfolio The management information systems and tools should be reviewed to ensure they are capable of supporting the new or changed service.

y The technology architectures and management architectures These are reviewed to ensure that all the technology architectures and management architectures are consistent with the new or changed service and have the capability to operate and maintain the new service. If not, then either the architectures will need to be amended or the design of the new service will need to be revised.

y The processes required These are reviewed to ensure that the processes, roles, responsibilities and skills have the capability to operate, support and maintain the new or changed service. If not, the design of the new service will need to be revised or the existing process capabilities will need to be enhanced. This includes all IT and service management processes, not just the processes involved in the service design stage itself.

y The measurement methods and metrics These are reviewed to ensure that the existing measurement methods can provide the required metrics on the new or changed service. If not, then the measurement methods will need to be enhanced or the service metrics will need to be revised.”



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Identifying Service Requirements



Service Scalability

Internallysupported

Services and Components

Businessprocesses and Business Units

Agreed business functionality

Services, SLRs, or SLAs

Technology components

Externallysupported

Services and Components

Performancemeasurements

Security levels

Sustainabilityrequirements

Consider

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Identifying Service RequirementsCore Guidance Reference —SD 3.4Student Reference Material — Pg. 41

As understood in the previous topic, while designing a new Service, it is important to have a holistic approach to Service Design. You must consider all components of Services and their interrelationships. The Services delivered should meet the functionality and quality that the business expects in all areas. In your approach to Service Design, consider the:

y Service scalability to meet potential requirements, aligned with long-term business goals.

y Business processes and Business Units that the Service supports.

y Agreed business functionality and requirements for IT Services.

y Services, SLRs, or SLAs.

y Technology components for deploying the Service, including infrastructure, environment, data, and applications.

y Services and components that are internally supported and their associated Operational Level Agreements (OLAs).

y Services and components that are externally supported and their associated Underpinning Contracts (UCs) that have their own specific agreements, schedules, or both.

y Performance measurements and metrics required.

y Appropriate and legislative security levels.

y Sustainability requirements.

The slide lists the things that you need to do to identify the Service requirements.

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Adapted from The service relationships and dependencies © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Service Relationships and Dependencies

The business

Business unit A Business unit B Business unit C

Businessprocess

Businessprocess

Businessprocess

Service A B C D E F G

1 23

4 56

7 89

SLAs

IT serviceprovider

Infrastructure

SystemH/W

SystemS/W

Databasemanagement

systemNetworks Environment Data Applications

OLAsSupporting

services Supportingservices

Underpinningcontracts

TeamsSuppliers

SupplierSupport team (i)

(ii)(iii)

(i)(ii)

(iii)


Service Relationships and DependenciesIt is important for everyone within the Service Provider organization to understand the relationship of each Service with its supporting components and Services. The slide shows the Service relationships and dependencies diagram. Targets contained within supporting agreements, such as OLAs and contracts, support the targets agreed between the Service Provider and its customers. When changing an individual aspect of a Service, you must also consider other areas of the Service to ensure that any alterations necessary to support the Change are included in the overall design. It is beneficial to establish a central Service Design authority to integrate Services and processes across all parties effectively.

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Types of Technology Domains



Data

Environment

Infrastructure

Application

Types of Technology DomainsThe following are the four technology domains that are the supporting components of each Service and contribute to its overall performance:

y Infrastructure: Manages, controls, and organizes infrastructure elements, including mainframes, servers, network equipment, database systems, Storage Area Networks (SANs), Network Attached Storage (NAS), systems software, utilities, backup systems, firewalls, development and test environments, management tools, and so on.

y Environment: Manages and controls environmental aspects for crucial equipment rooms, including physical space and layout, power, air-conditioning, cabling, physical security, and so on.

y Data: Manages and controls data, information, and the associated access, including test data, where applicable.

y Applications: Manages and controls applications software, including both bought applications and applications software developed in-house.

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Business Requirements and Drivers

To maintain alignment, you need to acquire information and reach an agreement into the following areas:

• Information on the requirements of existing services • Information on the requirements of new services• Information on the requirements for retiring services

Retain accurate information on business requirements and drivers

Business Requirements and DriversCore Guidance Reference —SD 3.5 Student Reference Material — Pg. 43

You need to retain accurate information on business requirements and drivers to provide the most-appropriate catalog of Services with an acceptable level of Service quality that is aligned with business needs. To achieve this, it is important that IT develops and sustains close, regular, and appropriate relationships and exchanges information to identify the operational, tactical, and strategic requirements of the business.

To maintain alignment, you need to acquire information and build agreement in the following areas:

y “Information on the requirements of existing services What changes will be required to existing services with regard to:

• New facilities/features and functionality requirements (utility)

• Changes in business processes, dependencies, priorities, criticality and impact

• Changes in volumes of service transactions

• Increased service levels and service level targets due to new business drivers, or reduced for old services, lowering priority for those due for replacement (warranty)

• Business justification, including the financial and strategic aspects

• Requirements for additional service management information

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y Information on the requirements of new services:

• Facilities/features and functionality required (utility)

• Management information required and management needs

• Business processes supported, dependencies, priorities, criticality and impact

• Business cycles and seasonal variations

• SLRs and service level targets (warranty)

• Business transaction levels, service transaction levels, numbers and types of users and anticipated future growth

• Business justification, including the financial and strategic aspects

• Predicted level of change – for example, known future business requirements or enhancements

• Level of business capability or support to be provided – for example, local business-based support

y Information on the requirements for retiring services:

• Exact scope of retirement: what facilities/features and functionality are to be retired

• Business justification, including financial and strategic aspects

• What, if anything, will replace the retiring service

• Interfaces and dependencies with other services, components or configurations

• Disposal and/or reuse requirements for the service assets and configuration items associated with the retiring service

• Business requirements related to the retirement strategy and plan, such as timing of the retirement and the retirement approach to be used (i.e. phased retirement)

• Archiving strategy for any business data and any potential access requirements for archived data related to the retiring service.”


Business drivers consist of the people, information, and tasks that support the fulfillment of business objectives.

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Gathering Business Requirements

Ensure accuracy and representation

of business

Agree and signoff

Document and build agreement

Requirement Information

Gathering Business RequirementsCollecting information is an important step in designing and delivering new Services or major Changes in existing Services. It is important to have accurate and representative information from the business. You must ensure that the need for accurate information is agreed upon and signed off with senior representatives within the business. Using incorrect or misleading information at this stage will affect all the subsequent stages because there could be a mismatch between the Service delivered and the actual needs of the business. It is important to have a formal process for the agreement and acceptance of Change in business requirements because these will frequently change and evolve during the Service Lifecycle.

To deliver a Service that meets customer requirements and business needs, you must document and build agreement on the clear, concise, and unambiguous specifications of requirements. This prevents the issues and discussions that could arise because of variances in customer and business expectations.

To meet business expectations, requirements and design must evolve with the changing business environment. However, you must keep the rate of Change at an agreed and manageable level, and ensure that it does not delay the project or its implementation.

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At the business requirements gathering stage, you should: y Appoint a project manager, create a project team, and build agreement on project governance

by applying a formal, structured project methodology. y Identify all stakeholders, including the documents they require and the benefits they obtain

from the implementation. y Analyze, prioritize, agree on, and document the requirements. y Establish and agree on outline budgets and business benefits. The management must set the

budget. y Resolve any potential conflict between Business Units and agree on corporate requirements. y Sign off the agreed requirements and a process for Changes in the agreed requirements.

Carefully manage and control the process of developing requirements because it is an iterative or incremental approach.

y Develop a customer engagement plan that outlines the main relationships between IT and the business. The plan will explain how to manage these relationships and the necessary communication between wider stakeholders.


1.11Return on Investment and the Business Case

1.10SOA Processes and Customer Requirements

Coming Up

1.11 RETURN ON INVESTMENT AND THE BUSINESS CASE


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ROI



ROI =Increase in profit resulting from the Service

Total investment in the Service

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Return on InvestmentCore Guidance Reference — SS 3.6.1 Student Reference Material — Pg. 47

ROI is a concept for quantifying the value of an investment. It is normally calculated and performed by Financial Management. ROI is used to measure how assets generate value in Service Management. It is the net profit of an investment divided by the worth of the invested assets. A good investment, in economic terms, is one that exceeds the rate of return.

A very simple ROI calculation is shown on the slide.

ROI calculations can be helpful in indicating the success of a Service or Service Management implementation, including:

y “ROI exercises that focus purely on financial metrics do not indicate the full potential return. For example, some services have little direct return, but provide the basis whereby other services can be delivered.

y The ROI calculation should include some measure of how much closer the service, or service management project, moved the organization closer to achieving its strategy. These will often be qualitative statements about the service or project – for example, increased levels of customer loyalty.

y ROI that is only based on cost savings for the service provider will not be perceived by the business as a return on their investment if there is no corresponding impact on the cost per unit of business service or product.

y ROI calculations that only focus on the short-term results will often yield negative figures. For example, many service management processes are focused on improving the capability and resources of the service provider. These may take some time to design and build (and significant investment) before they yield any returns.”


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Focus of ROI

• Business case

• Pre-programme ROI

• Post-programme ROI

ROI

Focus of ROIFew companies can readily identify the financial return of Service Management. It is often an investment that companies must make in advance of any return and by itself, does not provide the tactical benefits that business managers budget for. The focus areas of ROI are:

y “Business case A means to identify business imperatives that depend on service management

y Pre-programme ROI Techniques for quantitatively analysing an investment in service management

y Post-programmeROI Techniques for retroactively analysing an investment in service management.”


Let us now understand each of these areas in detail.

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Business CaseSample Business Case Structure


“A. Introduction Presents the business objectives addressed by the service.B. Methods and assumptions

Defines the boundaries of the business case, such as time period, and which organizational context is being used to define costs and benefits.

C. Business impacts The financial and non-financial results anticipated for the service or service management initiative. Please bear in mind that many non-financial results can also be expressed in financial terms. For example, an increase in staff morale can result in lower staff turnover, and therefore less expenditure on hiring and training.

D. Risks and contingencies

The probability that alternative results will emerge.

E. Recommendations Specific actions recommended.”

Business CaseCore Guidance Reference — SS 3.6.1.1 Student Reference Material — Pg. 48

According to ITIL, a business case is “a decision support and planning tool that projects the likely consequences of a business action. The consequences can take on qualitative and quantitative dimensions.” A financial analysis is central to a good business case. The table shows a sample business case structure:

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Business Objectives• “The business objectives for commercial provider organizations are usually the

objectives of the business itself, including financial and organizational performance.

• The business objectives of an internal service provider should be linked to the business objectives of the business unit to which the service is being provided, and the overall corporate objectives.

• The business objectives for not-for-profit organizations are usually the objectives for the constituents, population or membership served as well as financial and organizational performance.”


Refer to the Student Reference Material for examples of possible business objectives.

Business ObjectivesThe structure of a business case varies from organization to organization. However, a detailed analysis of business Impact or benefits are common in organizations. Business Impact is in turn linked to business objectives. A business objective is the reason for considering a Service Management initiative in the first place. The following table lists some business objectives:

“Operational Financial Strategic IndustryShorten development time Improve return on assets Establish or enhance

strategic positioningIncrease market share

Increase productivity Avoid costs Introduce competitive products

Improve market position

Increase capacity Increase discretionary spending as a percentage of budget

Improve professionalism of organization

Increase repeat business

Increase reliability Decrease non-discretionary spending

Improve customer satisfaction

Take market leadership

Minimize risks Increase revenues Provide better quality Recognized as producer of reliable or quality products or services

Improve resource utilization Increase margins Provide customized offerings

Recognized as low-price leader

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“Operational Financial Strategic IndustryImprove efficiencies Keep spending to within

budgetIntroduce new products or services

Recognized as compliant to industry standards

Meeting contractual obligations

Ensure that performance supports revenue generation

Deliver to meet objectives and obligations

Recognized as a reliable provider

Reducing customer complaints

Reduce the cost of rework Improve customer retention Recognized as a provider of quality goods and services”



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Adapted from Single business impact can affect multiple business objectives © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Business impact Business Objectives

Lower costs

Customer satisfaction

Market image

Improved maintainability

Tangible measure:MTRS (mean time to restore service)Impact:MTRS to 2 hours from 6 hours

Tangible measure:Service delivery costsTarget:Lower service delivery costs by 30%

Tangible measure:Repeat rate of businessTarget:Improve rate to 60% from 25%

Tangible measure:Customer quality surveysTarget:Improved industry ranking to 1st from 3rd

Single Business Impact Affecting Multiple Business Objectives

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Adapted from Multiple business impacts can affect a single business objective © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Business impact Business Objectives

Improved reliability

Improved maintainability

Improved services

Customer satisfaction

Tangible measure:Repeat rate of businessTarget:Improve rate to 60% from 25%

Tangible measure:MTBF (mean time between failure)Impact:MTBF to 600 hours from 200 hours

Tangible measure:MTRS (mean time to restore service)Impact:MTRS to 2 hours from 6 hours

Tangible measure:Product orders can now be placed onlineImpact:Product orders can be placed 24x7

Multiple Business Impacts Affecting a Single Business Objective

Business ImpactThe business Impact on Service Management can be either financial or nonfinancial. The financial Impact depends on the cost analysis. A business Impact is only valuable if it is linked to a business objective. A business case will be more convincing if it includes nonfinancial Impacts that are linked to business objectives. Organization can identify a nonfinancial Impact and how the business objectives are affective, as shown in the diagrams on the slides.

The diagrams illustrate how business Impact of improved maintainability could result in reduced costs. The reduction in cost, in turn, results in a lower investment in the Service from the business, and increased profitability. Also, as the business is able to improve its quality of delivery, customer satisfaction is increased. The increase in customer satisfaction in turn results in an increase to the percentage of customers that return to the organization for repeat business. The market image of the organization is improved, since Service quality results in higher customer satisfaction and company performance, which in turn results in an improved ranking in industry survey results.

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Pre-programme ROI



Capital budgeting

The present commitment of funds in order to receive a return in the future in the form of additional cash inflows or reduced cash outflows

Decisions

Screening Preference

Pre-programme ROICore Guidance Reference — SS 3.6.1.2 Student Reference Material — Pg. 52

Pre-programme ROI provides visibility and planning activities around determining if significant cash outlays on a project will have long-term implications. When an initiative requires capital budgeting to fund a project, the return does not occur until sometime in the future. That payoff in the future needs to take into account the discounted cash flows that occur over the time between the investment and when the return is achieved.

Capital budgeting decisions fall into the following two broad categories:

y “Screening decisions relate to whether a proposed service management initiative passes a predetermined hurdle – for example, a minimum return. Screening decisions are usually made using a discounted cash flow method of net present value (NPV).

y Preference decisions relate to choosing from among several competing alternatives – for example, electing between an internal service improvement plan (SIP) and a service sourcing program. Preference decisions are usually made using a discounted cash flow method of internal rate of return (IRR).”

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NPV Decisions


“If the NPV is: Then the programme is:Positive Acceptable. It promises a return greater than the required rate of

return.Zero Acceptable. It promises a return equal to the required rate of return.Negative Unacceptable. It promises a return less than the required rate of

return.”

Screening Decisions (Using Net Present Value)Using the Net Present Value (NPV) method of calculation, a program’s cash inflows are compared to the discounted cash outflows over time. The difference is known as the net present value and will help the organization determine if an investment is suitable. A negative net present value indicates that an investment is not likely to be suitable. The table explains NPV decisions.

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Example of the NPV of a Proposed Service Management Program

*Present value of an annuity of £1 in 5 years’ arrears.”(Source: Service Strategy book)

“Years Amount of cash flow (£) Discount of 20% Present value of

cash flow (£)1 to 5 16,500 2.991* 49,352

Initial investment Now (50,000) 1 –50,000Net present value

–648

Initial investment: £50,000; investment window: 5 years; annual cost savings: £16,500; salvage value: 0; required rate of return: 20%

The table shows an example calculation of NPV. This results in the following analysis:

y “The projected cost saving is £16,500. This inflow is multiplied by 2.991 (the present value of a series of 5 payments of £1 at yearly intervals.

y The initial investment is subtracted from the savings, providing the net present value.”


An organization’s discount rate is the cost of capital that is typically considered the minimum required rate of return for an organization. This is the average rate of return that must be paid to its long-term shareholders or creditors to use their funds. The cost of capital serves as a minimum screening device.

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Advantages of the NPV MethodThe NPV method has several advantages over the IRR method:• “NPV is generally easier to use.• IRR may require searching for a discount rate resulting in an NPV of zero.• IRR assumes the rate of return is the rate of return on the programme, an

assumption which may not hold true for environments with minimal service management programme experience.

• When NPV and IRR disagree on the attractiveness of the project, it is best to go with NPV. It makes the more realistic assumption about the rate of return.”



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Types of Cash Flows

ServiceManagement

Inflow

Incremental revenues

Reduced costs

Salvage the investment in old assets, either from operational retirement or project end

Release of working capital

Outflow

Initial investment in assets, including installation costs

Periodic outlays for maintenance

Training and consulting

Incremental operating costs

Increase in working capital

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In a Service Management NPV, the focus remains on cash flows, not on accounting net income. Managers should look for the types of cash flows shown in the table.

Intangible BenefitsExamples of difficult-to-estimate cash flows include process improvement and automation. The upfront and tangible costs are easy to estimate but the intangible benefits are much more difficult to estimate. They are very real in impact but nonetheless challenging when estimating cash flows.


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Preference Decisions (Using Internal Rate of Return)The Internal Rate of Return (IRR) is used for preference decisions.Example of the IRR of a Proposed Service Management Program


“Years Amount of cash flow (£) Discount of 19–20% Present value of

cash flow (£)Annual cost savings

1 to 5 16,500 3.0303 50,000

Initial investment Now (50,000) 1 –50,000Net present value 0Initial investment: £50,000; investment window: 5 years; annual cost savings: £16,500; salvage value: 0; required rate of return: 20%”

Preference Decisions (Using IRR)Financial or resource constraints might preclude investing, and preference decisions must be made. In this method, the competing alternatives are ranked. The IRR is used for preference decisions. The more desirable the initiative, the higher the IRR should be for that initiative.

The IRR is the rate of return over the life of an initiative. It is computed by finding the discount rate that equates the present value of a project’s cash outflows with the present value of its inflows. IRR is the discount rate resulting in an NPV of zero or break-even point. It starts producing a positive contribution. The table shows an example of IRR.Sam

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Summary of Unit 1

Introduction to Service Offerings and AgreementsUnit Roadmap SummaryOverviewUnit Learning Objectives

Overview of the UnitLearning Objectives of the Unit

1.1 SOA in the Service Strategy Stage

SOA:

y Service Portfolio Management y Demand Management y Financial Management for IT Services y Business Relationship Management

1.2 Purpose and Objectives of the Strategy Management for IT Services Process

Purpose:“The purpose of a service strategy is to articulate how a service provider will enable an organization to achieve its business outcomes; it establishes the criteria and mechanisms to decide which services will be best suited to meet the business outcomes and the most effective and efficient way to manage these services. Strategy management for IT services is the process that ensures that the strategy is defined, maintained and achieves its purpose.”


Objectives:The objectives of Strategy Management for IT Services are :

y “Analyse the internal and external environments in which the service provider exists, to identify opportunities that will benefit the organization.

y Identify constraints that might prevent the achievement of business outcomes, the delivery of services or the management of services; and define how those constraints could be removed or their effects reduced.

y Agree the service provider’s perspective and review regularly to ensure continued relevance. This will result in a clear statement of the vision and mission of the service provider.

y Establish the position of the service provider relative to its customers and other service providers. This includes defining which services will be delivered to which market spaces, and how to maintain a competitive advantage.

y Produce and maintain strategy planning documents and ensure that all relevant stakeholders have updated copies of the appropriate documents. This will include the IT strategy, the service management strategy and the strategy plans for each service where appropriate.

y Ensure that strategic plans have been translated into tactical and operational plans for each organizational unit that is expected to deliver on the strategy.

y Manage changes to the strategies and related documents, ensuring that strategies keep pace with changes to the internal and external environments.”

(Source: Service Operation book)

1.3 Scope of the Strategy Management for IT Services Process

Scope:Strategy Management applies to:

y The business as a whole or to any of the Business Units y IT as a Service Provider y External Service Providers y External customers y Services

1.4 Value of the Strategy Management for IT Services Process to the Business

y “Cost savings, since investments and expenditure are matched to achievement of validated business objectives, rather than unsubstantiated demands

y Increased levels of investment for key projects or service improvements y Shifting investment priorities. The service provider will be able to de-focus attention from

one service, and re-focus on another, ensuring that their efforts and budget are spent on the areas with the highest level of business impact.”


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1.5 SOA in the Service Design Stage

SOA: y SCM y SLM y Supplier Management

1.6 Purpose and Objectives of the Design Coordination Process

Purpose:The purpose of the design coordination process is to ensure the goals and objectives of the service design stage are met by providing and maintaining a single point of coordination and control for all activities and processes within this stage of the service lifecycle.”(Source: Service Design book)

Objectives: y “Ensure the consistent design of appropriate services, service management information

systems, architectures, technology, processes, information and metrics to meet current and evolving business outcomes and requirements

y Coordinate all design activities across projects, changes, suppliers and support teams, and manage schedules, resources and conflicts where required

y Plan and coordinate the resources and capabilities required to design new or changed services

y Produce service design packages (SDPs) based on service charters and change requests”(Source: Service Design book)

1.7 Scope of the Design Coordination Process

Scope: y Assisting and supporting each project or other Change through all the Service Design

activities and processes y Maintaining policies, guidelines, standards, budgets, models, resources, and capabilities

for Service Design activities and processes y Coordinating, prioritizing, and scheduling of all Service Design resources to satisfy

conflicting demands from all projects and Changes y Planning and forecasting the resources needed for the future demand for Service

Design activities y Reviewing, measuring, and improving the performance of all Service Design activities

and processes y Ensuring that all requirements are appropriately addressed in Service Designs,

particularly Utility and Warranty requirements y Ensuring the production of Service Designs and/or SDPs and their handover to Service

Transition.

1.8 Value of the Design Coordination Process to the Business

Value to the Business y Achieve the intended business value of Services through design at acceptable risk and

cost levels y Minimize rework and unplanned labor costs. y Improve customer and user satisfaction. y Build confidence in IT and in the Services received. y Ensure a consistent architecture for all Services. y Provide improved focus on Service value as well as business and customer outcomes y Improve the efficiency and effectiveness of all Service Design activities and processes. y Achieve greater agility and better quality in the design of Service solutions

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1.9 Utility and Warranty, and their Relevance to SOA Processes

Value of a Service y Is the level to which the Service meets customer expectations. y Is measured by how much the customer is willing to pay rather than the cost of the

Service. y Comes from what it enables the business or customers to do and is not determined

by the provider, but by the person who receives it.

Understanding IT Value y What Service(s) did IT provide? y What did the Service(s) achieve? y How much did the Service(s) cost – or what is the price of the Service(s)?

Marketing MindsetTo determine what outcomes matter, the Service Provider must look from the outside in to understand the customer’s perspective.

Rules to Add Value y “What service(s) did IT provide?: If IT is only perceived as managing a set of

servers, networks and PCs it will be very difficult for the customer to understand how these contributed to value. In order for a customer to calculate the value of a service, they must be able to discern a specific, discrete service and link it directly to specific business activities and outcomes. For example, an IT organization claims that application hosting delivers value to the business. The business, however, does not know what application hosting is, or what applications are hosted. If the IT organization wants to communicate its value, it must be able to identify what the customer actually perceives, and then link their activities to that service. The service portfolio, and the service catalogue in particular, will help IT to quantify this.

y What did the service(s) achieve?: The customer will identify what they were able to do with the service, and just how important that was to them and their organization.

y How much did the service(s) cost – or what is the price of the service(s)?: When a customer compares the cost or price of a service with what the service enabled them to achieve, they will be able to judge how valuable the service actually was. If IT is unable to determine the cost of the service, it will be very difficult for them to claim that they delivered value, and very difficult for the customer to perceive IT as ‘valuable’.”

Utility and Warranty “Utility is used to improve the performance of the tasks used to achieve an outcome, or to remove constraints that prevent the task from being performed adequately (or both). Warranty requires the service to be available, continuous and secure and to have sufficient capacity for the service to perform at the required level. If the service is both fit for purpose and fit for use, it will create value.”(Source: Service Strategy book)

Warranty is an essential part of the design of a Service and should be built together with Utility. If this is not done, it may result in limited ability to deliver the Utility.

1.10 SOA Processes and Customer Requirements

Identifying Service RequirementsIn your approach to Service Design, consider the:

y Service’s scalability to meet potential requirements, aligned with long-term business goals.

y Business processes and Business Units that the Service supports. y Agreed business functionality and requirements for IT Services. y Services, SLRs, or SLAs. y Technology components for deploying the Service, including infrastructure, environment,

data, and applications. y Services and components that are internally supported and their associated OLAs. y Services and components that are externally supported and their associated UCs that

have their own specific agreements and/or schedules. y Performance measurements and metrics required. y Appropriate and legislative security levels.Sam

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1.11 Return on Investment and the Business Case

ROI quantifies the value of an investment. y Measures business performance. y Measures the ability to generate additional value from assets.

Funds for ITIL projects: y Business case: Is a means to identify business imperatives that necessitate Service

Management. y Preprogram ROI: Is a technique for quantitative analysis investment in Service

Management. Post-program ROI: Is a technique for retroactive analysis investment in Service Management.

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Unit 2Service Portfolio Management

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2

Unit 2 : Service Portfolio ManagementITIL


The Big ‘‘Why’’• What do you understand by the term “Service Portfolio?”• What is SPM?

Alright, to understand SPM, it is important to know what the Service Portfolio is first. Can anyone quickly define “What is Service Portfolio?”

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Instructor | ITIL Intermediate Certification Level | Service Portfolio Management


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Service Portfolio is “The complete set of services that are managed by a service provider. The service portfolio is used to manage the entire lifecycle of all services. It includes three categories of service: service pipeline (proposed or in development), service catalogue (live or available for deployment) and retired services.The service portfolio represents the investment made in an organization’s services, and also articulates the value that services help it to realize.”


SPM is “The process responsible for managing the service portfolio. Service portfolio Management considers Services in terms of the Business value that they provide.”“In other words service portfolio management acts as a gatekeeper for the service provider, ensuring that they only provide services that contribute to strategic objectives and meet the agreed business outcomes.”


So, how does all this fit together with what you do at work?

The Service Portfolio describes all of the Service Provider’s Services so that organizations realize the value of the Services to its business. A Service Portfolio is more than just a list of Services.

The aim of SPM is to transform Service management into Strategic Assets. Thus, as a Service Provider managing Services in an organization, it is essential that you ask the following questions:

y “Why should a customer buy these services?

y Why should they buy these services from us?

y What are the pricing or chargeback models?

y What are our strengths and weaknesses, priorities and risks?

y How should our resources and capabilities be allocated?”


To answer these questions, you should assume a wholesome approach. In addition to technical knowledge, you should also have some experience in areas such as marketing, finances, operation management, IT, and industrial engineering.

Case Study ConnectionThe Royal plans to retire some of its old Services, such as provision of heater Services in every room during winters. Instead, it is planning to introduce a central heating system for the entire hotel. To do this, the hotel management has appointed Dan, the Maintenance Chief, to list all the Services under his control.

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IT ConnectionThe IT organization has many portfolios to manage. To stay up-to-date and be competitive in the market, it must retire outdated software and hardware and set up new ones in its place. To do this, they bring out a list of all Configuration Items (CIs) in their organization and separate it into three groups: Service Pipeline, Service Catalogue, and retired Services. What is the IT organization doing here? They are in effect putting in place an SPM.Now to the overview of what is covered in this Unit.

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Overview

SPM• Offers a systematic approach to govern investments in Service Management

across the business.• Ensures that the company obtains optimum value.

Service Inventory of Business

New Services May Need to be Added Services May Need to be Retired

Existing Services May Need Changes

OverviewThe Service inventory of a Service Provider is always changing. New Services may need to be added, and others may need to be retired. There may even be Changes to existing Services. An SPM offers a systematic approach to govern investments in Service Management across the business to ensure that the company obtains optimum value.

Let us now understand the objectives of the SPM process.

Walk through the bulleted list, and answer any questions participants may have. Take a moment to establish the connection between the Unit Overview and Learning Objectives slides, emphasizing the key words and phrases.


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Unit Learning ObjectivesAt the end of this training, you will be able to:

• Understand the role of the Service Portfolio and its relationships with the Service Catalogue and Service Pipeline.

• Understand the purpose and objectives of the SPM process.• Comprehend the scope of the SPM process.• Examine the importance of SPM as a capability to generate business value.• Assess the policies, principles, and basic concepts of SPM.• Evaluate the main activities, methods, and techniques used by SPM.• Distinguish the triggers, inputs, outputs, and interfaces of SPM.• Understand and apply Critical Success Factors and Key

Performance Indicators. • Identify the challenges and Risks of SPM.• Learn how to design a Service Portfolio.

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Topics Covered in This Unit:2.1 Service Portfolio and Its Relationships with the Service Catalogue

and Service Pipeline2.2 Purpose and Objectives 2.3 Scope of SPM2.4 Value to the Business2.5 Policies, Principles, and Basic Concepts2.6 Process Activities, Methods, and Techniques2.7 Triggers, Inputs, Outputs, and Interfaces2.8 Information Management2.9 Critical Success Factors and Key Performance Indicators2.10 Challenges and Risks2.11 Designing the Service Portfolio2.12 Group/Individual Exercise2.13 Sample Test QuestionSam

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2.1 SERVICE PORTFOLIO AND ITS RELATIONSHIPS WITH THE SERVICE CATALOGUE AND SERVICE PIPELINE

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2.2 Purpose and Objectives 2.3 Scope of SPM 2.4 Value to the Business

Service Portfolio

2.1Service Portfolio and Its Relationships with the Service Catalogue and Service Pipeline

Includesand

manages

ServicePipeline

ServiceCatalogue

RetiredServices

Service PortfolioCore Guidance Reference — SS 4.2, SD 3.7.2.1Student Reference Material — Pg. 66

The Service Portfolio supports all Services and explains a provider’s Service in terms of business value. It communicates the response of the Service Provider to business needs. The Service Portfolio would therefore contain details of all Services and their status with respect to the current stage within the Service Lifecycle. The Service Portfolio is the basis of the decision framework because it clarifies the strategic issues listed on the slide. You must register the Service Portfolio as a document under the Configuration Management System (CMS), and it should preferably form part of a comprehensive Service Knowledge Management System (SKMS). The Service Portfolio is designed during Service Design. It is managed during Service Strategy and beyond through the SPM process. Service Strategy and Service Design personnel, as well as personnel in other important areas such as Change Management, will need access to all records within the Service Portfolio. Other members of the Service Provider organization will have access to a permitted subset of the records within the Service Portfolio.

Business value terms are a means to evaluate the competitiveness of Services across Service Providers. Sam

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A Service Portfolio describes the Services of a provider in terms of business value. It articulates business needs and the provider’s response to those needs. A Service Portfolio either clarifies or helps to clarify the following strategic questions:

y Why should a customer buy these services?

y Why should they buy these services from us?

y What are the pricing or chargeback models?

y What are our strengths and weaknesses, priorities and risks?

y How should our resources and capabilities be allocated?

“Service portfolio management is responsible for managing the service portfolio. It is therefore also the process that is responsible for defining which services will be entered into the service portfolio and how those services are tracked and progressed through their lifecycle. In other words service portfolio management acts as a gatekeeper for the service provider, ensuring that they only provide services that contribute to strategic objectives and meet the agreed business outcomes.”


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Service Pipeline, Service Catalogue, and Retired Services

2.2 Purpose and Objectives 2.3 Scope of SPM 2.4 Value to the Business2.1Service Portfolio and Its Relationships with the Service Catalogue and Service Pipeline

Refer to the Student Reference Material to learn more about Service Pipeline, Service Catalogue, and Retired Services.

• The Service Pipeline contains details of business needs, such as Services that are yet to be released into the live environment.

ServicePipeline

• The Service Catalogue contains details of all Services that are visible to the customer.

ServiceCatalogue

• Retired Services are those Services that are no longer available or in use.

RetiredServices

Service Pipeline, Service Catalogue, and Retired ServicesThe slide shows the three parts of Service Portfolio: Service Pipeline, Service Catalogue, and Retired Services.Sam

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The Service PipelineThe Service Pipeline is a subset of the overall Service Portfolio that is not normally published to customers. The Service Pipeline:

y Lists all Services that are under consideration or development but are not yet available to customers. These records are organized into a database or structured document listing.

y Provides a business view of possible future Services.

y Contains details of all the business requirements that have not yet been addressed via Services released to the live environment.

y Is used by the ISG and Service Strategy as a basis for the definition, analysis, prioritization, and approval of all requests for new or changed Services. This is done to ensure that new and changed Services are aligned to business requirements.

y Is used as input to the activities of the Service Strategy and Service Design stages of the Service Lifecycle.

y Is used as input to the activities of the Service Transition stage of the lifecycle in determining the Services to be released.

The Service Catalogue y Is a subset of the overall Service Portfolio, organized into a database or structured document with information

about all live IT Services, including those available for deployment.

y Is the only part of the Service Portfolio published to customers.

y Is used to support the sale and delivery of IT services.

y Includes information about deliverables, prices, contact points, and ordering and request processes.

The Service Catalogue Management process must ensure that all details within the overall Service Portfolio are accurate and up-to-date as the requirement and its new or changed Service is migrated into the live environment.

Retired Services y Are a subset of the overall Service Portfolio representing those Services that are phased out or retired.

y Are not available to new customers or contracts unless a special business case is made.

y May be reactivated into operation under special conditions and SLAs that need to be approved by senior management.

The retirement of a Service must be carefully planned during Service Design and managed through Service Transition.

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Service Portfolio and Its Contents

Service knowledge management system

Service portfolio

Servicepipeline

Servicecatalogue

Retired services

Customer/supportteam viewablesection of theservice portfolio(the servicecatalogue, withselected fieldsviewable)

Service lifecycle

Service status

RequirementsDefinitionAnalysisApprovedCharteredDesignDevelopmentBuildTestReleaseOperational/liveRetiringRetired

Adapted from The service portfolio and its contents © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Service Portfolio and Its ContentsThe Service Portfolio tells you the status of all Services within the Service Lifecycle. The Service Portfolio should include:

y “Service name

y Service version

y Service description

y Service status

y Service classification and criticality

y Applications used

y Data and/or data schema used

y Business processes supported

y Business owners

y Business users

y IT owners

y Service warranty level, SLA and SLR references

y Supporting services

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y Supporting resources

y Dependent services

y Supporting OLAs, contracts , and agreements

y Service costs

y Service charges, (if applicable)

y Service revenue (if applicable)

y Service metrics.”


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Status of ServicesService portfolio

Servicepipeline

Servicecatalogue

Retired services

Service status

RequirementsDefinitionAnalysisApprovedCharteredDesignDevelopmentBuildTestReleaseOperational/liveRetiringRetired

Adapted from The service portfolio and its contents © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Status of ServicesAfter making the strategic decision to charter a Service, you come to a stage where Service Design starts engineering the Service. This ultimately becomes part of the Service Catalogue. Ensure that the Service Portfolio has all possible information relating to Services and their status in the organization.

The status of Services in the Service Portfolio:

y “Requirements A set of outline requirements have been received from the business or IT for a new or changed service

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y Defined The set of requirements for the new service are being assessed, defined, and documented and the SLR is being produced

y Analysed The set of requirements for the new service are being analyzed and prioritized

y Approved The set of requirements for the new service have been finalized and authorized

y Chartered The new service requirements are being communicated and resources and budgets allocated

y Designed The new service and its constituent components are being designed – and procured, if required

y Developed The service and its constituent components are being developed or harvested, if applicable

y Built The service and its constituent components are being built

y Test The service and its constituent components are being tested

y Released The service and its constituent components are being released

y Operational The service and its constituent components are operational within the live environment

y Retired The service and its constituent components have been retired. “


Service Design and Service Strategy staff should have access to all the records in the Service Portfolio and other important areas, such as Service Management. The rest of the staff members must have access only to the permitted subset of records. The Service Design staff designs the Service Portfolio, but the Service Strategy staff manages it.

Other Service Management Information Systems It is important that you consider the design of the Service Portfolio in the same way as the design of other IT Services. Other Service Management information systems in which you should use this approach are:

y “Service Knowledge Management System (SKMS)

y Configuration Management System (CMS)

y Service Desk system

y Capacity Management Information System (CMIS)

y Availability Management Information System (AMIS)

y Security Management Information System (SMIS)

y Supplier and Contract Management Information System (SCMIS), which is a set of tools, data, and information that is used to support Supplier Management.”


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Outsourced ServicesThird-party or outsourced Services, consisting of Core Service Packages (CSPs) and Service Level Packages (SLPs), can also be part of the Service Catalogue. The third-party catalog helps the business expand the range of customers and market spaces it serves, address underserved demand until items in the Service Pipeline are transitioned, or substitute for Services being retired. Sourcing is not just a strategic option. At times, it can be an operational necessity. Third-party suppliers can be evaluated through the eSourcing Capability Model for Service Providers (eSCM-SPTM) developed by Carnegie Mellon University.

Phasing Out and Reviving Retired ServicesPeriodically, some Services may need to be retired from the catalog. While phasing out Services, Service Transition must make sure that commitments to customers are fulfilled, Service Assets are released from contracts, and associated information is recorded for future use. Retired Services are not provided to customers. If a special business case is made, phased-out Services may be reactivated under special conditions and Service Level Agreements (SLAs) may be approved by the senior leadership. The decision to revive a retired Service has to be carefully considered because it might need more support and even disrupt economies of scale and scope.


2.2Purpose and Objectives

2.1Service Portfolio and Its Relationships with the Service Catalogue and Service Pipeline

Coming Up

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2.2 PURPOSE AND OBJECTIVES

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• “The purpose of service portfolio management is to ensure that the service provider has the right mix of services to balance the investment in IT with the ability to meet business outcomes. It tracks the investment in services throughout their lifecycle and works with other service management processes to ensure that the appropriate returns are being achieved. In addition, it ensures that services are clearly defined and linked to the achievement of business outcomes, thus ensuring that all design, transition and operation activities are aligned to the value of the services.”


Purp

ose

The objectives of Service Portfolio Management are to:• “Provide a process and mechanisms to enable an

organization to investigate and decide on which services to provide, based on an analysis of the potential return and acceptable level of risk

• Maintain the definitive portfolio of services provided, articulating the business needs each service meets and the business outcomes it supports”


Obj

ectiv

es

Refer to the Student Reference Material for more objectives of the Service Portfolio Management process.

Purpose and ObjectivesCore Guidance Reference — SS 4.2.1Student Reference Material — Pg. 73

SPM ensures that the Service Provider has the right mix of Services to maintains the crucial balance between IT investments with the ability to meet business outcomes. SPM keeps an eye on all investments in Services throughout their Lifecycle. It collaborates with other Service Management processes to maintain appropriate returns on all investments. SPM also defines the Services and links them to the achievement of business outcomes. This, in turn, aligns all design, transition, and operation activities to the Service value.

Some more objectives of SPM are to:

y “Provide a mechanism for the organization to evaluate how services enable them to achieve their strategy, and to respond to changes in their internal or external environments

y Control which services are offered, under what conditions and at what level of investment

y Track the investment in services throughout their lifecycle, thus enabling the organization to evaluate its strategy, as well as its ability to execute against that strategy

y Analyse which services are no longer viable and when they should be retired.”


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2.3Scope of SPM

2.2Purpose and Objectives

Coming Up

2.3 SCOPE OF SPM

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SPM Scope


Delivered Services

WithdrawnServices

CurrentlyDeliveringServices

FutureServices to

be Delivered

Scope of SPMCore Guidance Reference — SS 4.2.2Student Reference Material — Pg. 74

SPM focuses on whether the Service Provider is generating any value from the Services. SPM tracks all Service investments and compares them with business outcomes.

Internal Service Providers works with the Business Units in the organization to link each Service to the business outcomes before they can compare investment with returns. On the other hand, external Service Providers evaluate value more directly, as each Service needs to be able to generate revenue directly, or support revenue-generating services.

SPM

y Evaluates the value of Services throughout their Lifecycles

y Must be able to compare what newer Services have offered over the retired Services they have replaced.

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2.4Value to the Business

2.3Scope of SPM

Coming Up

2.4 VALUE TO THE BUSINESS

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Comparing the expected outcomes of a Service to the

investment required to build and deliver the Services

Ensuring that thecustomers have a clear

understanding of the Service and the conditions attached

to them to make the appropriate decisions

Becoming a tool for innovation for the organization by evaluating

customer's decisions, if a service is good or bad.

BusinessValue

Value to the BusinessCore Guidance Reference — 4.2.3Student Reference Material — Pg. 75

SPM enables the business to make sound decisions about investments. Services cannot be implemented because they are an industry standard. They are implemented only if there is a good business case demonstrating a clear return on investment. SPM does this by comparing the outcomes that are expected by the customer with the investment required to build and deliver the service.

SPM can also be a tool for innovation for the organization that allows customers to:

y Understand exactly what the Service Provider will deliver to them.

y Make decisions about whether the service is a good or bad investment

y Evaluate additional opportunities that the service will open.

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ITIL Intermediate Course: SOA Instructor Guide_r3.2.0

Documents

Transcript of ITIL Intermediate Course: SOA Instructor Guide_r3.2.0