ITIL Intermediate Course: SS Student Handbook (Reference material_r3.2.0)

ITpreneurs™ Service Management

REFERENCE MATERIAL

Service Strategy release 3.2.0 ITIL® Intermediate

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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 Strategy, 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 (RefeR to the WoRkbook) nA

GeneRAL tRAininG tips nA

AcknoWLedGements vi

foLLoW us vii

couRse intRoduction 1

Introductions 2

Course Introduction 2

Course Learning Objectives 3

Unique Nature of the Course 4

Course Agenda and Exam Details 8

couRse AGendA

ITIL Intermediate Classroom Course (REFER TO WORKBOOK) NA

ITIL Intermediate Expert Program Course (REFER TO WORKBOOK) NA

ITIL Intermediate Classroom Blended Course (REFER TO WORKBOOK) NA

ITIL Intermediate Virtual Classroom Blended Course (REFER TO WORKBOOK) NA

unit 1: intRoduction to seRvice stRAteGy 11

1.1 Purpose and Objectives 14

1.2 Scope of Service Strategy 16

1.3 Value to the Business 17

1.4 Relationship with Other Lifecycle Phases 18

1.5 Group/Individual Exercise 22

summary of unit 1 23

unit 2: seRvice stRAteGy pRincipLes 25

2.1 Basic Approach to Deciding a Strategy 29

2.2 Strategy and Opposing Dynamics and Outperforming Competitors 30

2.3 The Four Ps of Service Strategy 33

2.4 Services and Value 38

2.5 Utility and Warranty of Services 59

2.6 Customer Assets, Service Assets, and Strategic Assets 72

2.7 Service Providers – Types and Choosing Between Them 86

2.8 Defining Services 93

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2.9 Strategies for Customer Satisfaction 115

2.10 Service Economics 120

2.11 Sourcing Strategy 142

2.12 Strategy Inputs and Outputs with the Service Lifecycle 153


unit 3: seRvice stRAteGy pRocesses 161

3.1 Strategy Management for IT Services 163

3.2 Service Portfolio Management 193

3.3 Financial Management for IT Services 221

3.4 Demand Management 244

3.5 Business Relationship Management 261


3.7 Sample Test Questions 285


unit 4: GoveRnAnce 303

4.1 Governance 306

4.2 Strategizing for Governance 308

4.3 The Governance Framework 312

4.4 IT Governance 313

4.5 Governance Bodies 314

4.6 Relationship of Service Strategy with Governance 315



unit 5: oRGAnizinG foR seRvice stRAteGy 319

5.1 Organizational Development 322

5.2 Departmentalization Organization 332

5.3 Organizational Design 334

5.4 Service Owner and Business Relationship Manager 336

5.5 Other Roles 342


unit 6: technoLoGy consideRAtions 351

6.1 Service Automation 355

6.2 Service Interfaces 366


unit 7: impLementinG seRvice stRAteGy 373

7.1 Implementation Through the Lifecycle 376

7.2 Following the Lifecycle Approach 379

7.3 Impact of Service Strategy on Other Lifecycle Phases 383



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unit 8: chALLenGes, cRiticAL success fActoRs, And Risks 393

8.1 Challenges 396

8.2 Risks 402

8.3 CSFs 408

8.4 Sample Test Question 408


AppendiX A: CASE STUDY (REFER TO WORKBOOK) nA

AppendiX b: MInD MAP EXCERCISE 411

AppendiX c: GLOSSARY 413

AppendiX d: SYLLABUS 507

AppendiX e: AnSWERS (REFER TO WORKBOOK) nA

AppendiX f: DIAGRAMS (MACRO VIEW) 525

AppendiX G: RELEASE nOTES 533

student feedbAck foRm (REFER TO WORKBOOK) nA

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

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

Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved.Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved.Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved.A Member of Simeka Business Group

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

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

Michale D Costigan - CSC

itpreneurs’ course exercise WritersFoederer, Marcel - ITpreneurs

Mohr, Julie - Blue Print Audits

Vikdal, Mike - Independent

Wigmore, Michael - Independent

Julie Mohr – Blue Print Audits

AcknoWLedGements

Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved. Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved.Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved.Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved. Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved.Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved. Copyright © 2012, ITpreneurs Nederland B.V. All rights reserved.A Member of Simeka Business Group

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

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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 Strategy

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

intRoductions

2

Course IntroductionCourse IntroductionITIL

Intermediate® Service Strategy

Course Introduction Course Learning Objectives Unique Nature of the CourseIntroductions

Welcome!Please share with the class:

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

couRse intRoduction

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OverviewService Strategy is one of the five courses that are part of the ITIL Intermediate Lifecycle stream.The Service Strategy course helps you understand and implement ITIL best practices related to:

Service Strategy principles

Services and market spaces

Strategic assessments

Financial Management

Service Portfolio Management

Demand Management




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Student | ITIL Intermediate Certification Level | Course Introduction


overviewService Strategy is one of the five courses that are part of the ITIL Intermediate Lifecycle stream. The Service Strategy course helps you understand and implement ITIL best practices related to Service Strategy principles, defining Services and market spaces, conducting strategic assessments, Financial Management, Service Portfolio Management, and Demand Management; how the Service Strategy processes contribute to driving strategy through the Service Lifecycle, and the Critical Success Factors (CSFs) and Risks associated with Service Strategy.

couRse LeARninG obJectives

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

• Understand the fundamentals of Service Strategy.• Understand the importance of the principles and basic concepts of

Service Strategy.• Learn the process activities, methods, and techniques used in each of the

Service Strategy processes and its interfaces with other processes.• Understand the importance of governance. • Recognize the need to organize for Service Strategy to achieve

operational excellence.• Explain how to implement Service Strategy.• Understand the technology and implementation considerations surrounding

Service Strategy.• Outline the challenges, Critical Success Factors (CSFs),

and Risks associated with Service Strategy.




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unique nAtuRe of the couRse

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Course Delivery Method

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

You will benefit

when you:


Internalize learning to take your final examination.

Apply new, practical experience.

Participate in your learning experience.

course delivery methodThis course will not be delivered in the traditional mode of “technical training”, where the instructor presents and lectures 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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My Notes

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Sample from the Student Reference Material and Workbook


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.

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 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.



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The SPOFs at the Royal are illustrative of the connect 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 was used 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 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 Service Strategy vis-à-vis how it is applied in Service Operation.

couRse quALificAtion scheme

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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

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 (no examinable).



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My Notes

There are four levels within the new scheme: Foundation, Intermediate, Managing Across the Lifecycle, and Advanced. The Advanced level, known as ITIL Masters, was officially launched on May 1, 2012.

The new Intermediate level contains two streams, a Lifecycle stream and a Capability stream.

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Service Strategy

Strategy Management for IT Services

Service Portfolio Management

Financial Management for IT Services

Demand Management

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


Business Relationship Management

The Lifecycle stream is built around the five core Cabinet Office books: Service Strategy, Service Design, Service Transition, Service Operation, and Continual Service Improvement

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

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

y Service Offerings and Agreements (SOA): Service Portfolio Management, Service Level Management, Service Catalogue Management, Demand Management, Supplier Management, Financial Management for IT Services, 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.



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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 ITIL concepts in new and old 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. However, basic IT literacy and around 2 years of IT experience is 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: 21-hour formal training with Accredited Training Organization (ATO)Personal Study Hours by APMG: 21 hours

Provisions for additional time relating to language: Candidates completing 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 120 minutes to complete the exam and are allowed the use of a dictionary

Exam Details



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My Notes

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.

note: Refer to the Workbook for the Course Agenda.



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Unit1Introduction to Service Strategy



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Course IntroductionUnit 1 : Introduction to Service StrategyITIL


The Big ‘‘Why’’• What is Service Strategy?• What does Service Strategy do for you?• What does Service Strategy do for your organization? • Why Service Strategy?

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Student | ITIL Intermediate Certification Level | Introduction to Service Strategy


overviewTo begin developing any Service, it is essential that you put a strategy for the Service in first place. Service Strategy helps organizations determine the most crucial Service attributes for meeting and exceeding customer expectations. A good Service Strategy is an important attribute for Service Providers because it helps determine the live and upcoming Service capabilities of the organizations. As a result, organizations should develop a strategy that addresses the needs of the customer, exploits the vulnerabilities of the competition, and suits the organizations’ capabilities and potential.

Service Strategy provides best-practice guidance for the Service Strategy stage of the ITIL Service Lifecycle. Although this publication can be read in isolation, it is recommended that it be used in conjunction with the other, core ITIL publications.

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

• Understand the concepts and terms of Service Strategy.• Understand the purpose and objectives of Service Strategy.• Understand the scope of Service Strategy.• Know the value to the business.• Understand the relationship of Service Strategy with other Lifecycle stages.



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Topics Covered in This Module1.1 Purpose and Objectives1.2 Scope of Service Strategy1.3 Value to the Business1.4 Relationship with Other Lifecycle Phases1.5 Group/Individual Exercise

1.1 puRpose And obJectives

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"The objectives of service strategy include providing:• An understanding of what strategy is• A clear identification of the definition of services and the

customers who use them• The ability to define how value is created and delivered• A means to identify opportunities to provide services and how

to exploit them• A clear service provision model, that articulates how services

will be delivered and funded, and to whom they will be delivered and for what purpose

• The means to understand the organizational capability required to deliver the strategy

• Documentation and coordination of how service assets are used to deliver services, and how to optimize their performance

• Processes that define the strategy of the organization, which services will achieve the strategy, what level of investment will be required, at what levels of demand, and the means to ensure a working relationship exists between the customer and service provider.”

(Source: Service Strategy book)

“The purpose of the service strategy stage of the service lifecycle is to define the perspective, position, plans and patterns that a service provider needs to be able to execute to meet an organization’s business outcomes.”


1.1 Purpose and Objectives 1.2 Scope of Service Strategy 1.3 Value to the Business 1.4 Relationship with Other Lifecycle Phases

Purp

ose

Obj

ectiv

es



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My Notes

purpose and objectivesCore Guidance Reference — SS 1.1.1

The Service Strategy stage of the Service Lifecycle defines the perspective, position, plans, and patterns that a Service Provider needs to meet an organization’s business outcomes.

The objectives of Service Strategy include providing:

y An understanding of what strategy is

y A clear identification of the definition of services and the customers who use them

y The ability to define how value is created and delivered

y A means to identify opportunities to provide services and how to exploit them

y A Service provision model that articulates clearly how Services will be delivered and funded, to whom they will be delivered, and for what purpose.

y The means to understand the organizational capability required to deliver the strategy

y Documentation and coordination of how service assets are used to deliver Services and how to optimize their performance

y Processes that define the strategy of the organization, which services will achieve the strategy, what level of investment will be required, at what levels of demand, and the means to ensure a working relationship exists between the customer and Service Provider.

The reader should be able to understand the most important practices related to defining and executing a service strategy within a service provider organization.

Just Concluded t r a n s i t i o n

1.2Scope of Service Strategy

1.1Purpose and Objectives

Coming Up



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1.2 scope of seRvice stRAteGy

Core Guidance Reference — SS 1.1.2

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Scope of Service StrategyThe scope of Service Strategy includes:

• Defining and discussing the generic principles and processes of Service Management. Then, applying the principles to consistently manage IT Services.

• Being applicable to both internal and external Service Providers. • Providing guidance to organizations that offer IT Services as a profitable business

and to those that offer IT Services to other Business Units within thesame organization.


Aspects of service strategy The two aspects of Service Strategy are:

y Define a strategy to deliver Services that meet a customer’s business outcomes. y Define a strategy to manage those Services.


1.3Value to the Business

1.2Scope of Service Strategy

Coming Up



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My Notes

1.3 vALue to the business

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Value to the Business

Some benefits that organizations can achieve with the adoption and implementation of Service Strategy include:

• Support the ability to link activities to outcomes that are critical to customers.• Enable a clear understanding of the types and levels of Services to make

customers successful.• Enable quick and effective response to Changes in the business environment, to

ensure increased competitive advantage.• Support the creation and maintenance of portfolios of quantified Services.• Facilitate functional and transparent communication between customers and

Service Providers.• Provide the means for the Service Provider to organize itself to provide Services

that are efficient and effective.


value to the businessCore Guidance Reference — SS 1.1.4


y Support the ability to link activities to outcomes that are critical to customers. As a result, the Service Provider will be seen to be contributing to the value and not just the costs of the organization.

y Enable a clear understanding of the types and levels of Services to make customers successful. This enables the Service Provider to organize optimally to deliver and support the Servicesthrough a process of:

y Defining strategies and Services

y Defining how value will be built and delivered to all stakeholders through a consistent, repeatable approach

y Enable quick and effective response to Changes in the business environment to ensure increased competitive advantage.

y Support the creation and maintenance of a portfolio of quantified Services that help the business achieve positive Return on Investment (ROI).

y Facilitate functional and transparent communication between customers and Service Providers, which ensures a consistent understanding of what is required and how to deliver it.

y Provide the means for the Service Provider to organize itself to provide Services that are efficient and effective.



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1.4Relationship with Other Lifecycle Phases

1.3Value to the Business

Coming Up

1.4 ReLAtionship With otheR LifecycLe phAses

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The ITIL Service LifecycleService Strategy provides the guidance for how the other lifecycle phases should be managed and integrated.

ContinualService

Improvement Service Transition

ServiceStrategy

Service Operation

ServiceDesign


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

the itiL service LifecycleCore Guidance Reference — SS 1.2

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

The ITIL core provides structure, stability, and strength to Service Management capabilities and its robust principles, methods, and tools. This helps organizations protect investments and provide the basis for measurement, learning, and improvement.

Let us now understand the relationship between Service Strategy and the other Lifecycle phases. Let us begin with Service Design.



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My Notes

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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.”(Source: Service Strategy book)

The scope of Service Design includes:• The design of new Services.• Implementing Changes and improvements to increase or maintain value to

customers over the Service Lifecycle.• Ensure Service Continuity, Service-level achievements, and conformance with

standards and regulations. • Guide the organization to develop design capabilities for Service Management.


service designCore Guidance Reference — SS 1.2.2

Services must be designed with the objectives of the business in mind to provide true value to the business. Service Design covers the entire IT organization, and the IT organization as a whole delivers and supports the Services. Service Design is the phase in the Lifecycle that takes Service Strategy and turns it into a plan to deliver the objectives of the business.



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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.”



service transitionCore Guidance Reference — SS 1.2.3

Service Transition describes best practices in Transition Planning and Support, which includes:

y Guidance on the Service Management processes of Change Management, Service Asset and Configuration Management (SACM), Release and Deployment Management, Service Validation and Testing, Change Evaluation, and Knowledge Management.

y Guidance on managing the difficult Changes related to Services and Service Management processes, to avert undesired outcomes while supporting the business requirement for innovation.

y Support for organizational learning through the Service Knowledge Management System (SKMS).

y Help for improving the overall efficiency and effectiveness of the Service Lifecycle and enabling informed decision-making and Service improvement.



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My Notes

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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.”(Source: Service Strategy book)


service operationCore Guidance Reference — SS 1.2.4

Service Operation is a critical capability, where strategic objectives are finally realized. Service Operation provides guidance on maintaining stability while allowing for Changes in design, scale, scope, and Service levels. Detailed process guidelines, methods, and tools are provided with two major perspectives: Reactive and proactive. Knowledge is provided to managers and practitioners, which allows better decisions in managing availability, controlling demand, optimizing capacity, scheduling operations, avoiding or resolving Incidents, and managing Problems.

Service Operation provides guidance on the Service Management processes of Event Management, Incident Management, Request Fulfilment, Problem Management, and Access Management processes. It also provides guidance on the Service Desk, Technical Management, IT Operations Management, and Application Management functions.



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Continual Service Improvement (CSI) “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.”(Source: Service Strategy book)


continual service improvement Core Guidance Reference — SS 1.2.5

CSI:

y Describes how to achieve increasing and large-scale improvements in Service quality, operational efficiency, and business continuity.

y Helps ensure that the Service Portfolio aligns to the requirements of the business.

y Provides guidance on helping link improvement efforts and outcomes to Service Strategy, Service Design, Service Transition, and Service Operation.

y Establishes the Plan-Do-Check-Act (PDCA) cycle, which creates a closed-loop feedback system. Feedback from any of the Lifecycle phases is used to identify improvement opportunities for any other Service Lifecycle phase.

y Provides guidance on Service measurement, value through metrics, developing baselines, and maturity assessments.


1.5Group/Individual Exercise

1.4Relationship with Other Lifecycle Phases

Coming Up

1.5 GRoup/individuAL eXeRciseRefer to the Workbook to do the exercise.



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summary of unit 1

introduction to service strategyunit Roadmap summaryoverview

unit Learning objectives

Overview of the Unit.

Learning Objectives of the Unit.

1.1 purpose and objectives

The purpose of Service Strategy is “To define the perspectives, positions, plans, and patterns that a Service Provider needs to be able to execute to meet an organization’s business outcomes.”(Source: Service Strategy book)

Some objectives of Service Strategy are to understand what strategy is, identify the definition of Services and customers, define how value is created and delivered, identify opportunities to provide Services and exploit them, and so on.

1.2 scope of service strategy

The scope of Service Strategy includes: y Defining and discussing the generic principles and processes of Service Management.

Then, applying the principles to consistently manage IT Services. y Being applicable to both internal and external Service Providers. y Providing guidance to organizations that offer IT Services as a profitable business and

to those that offer IT Services to other Business Units within the same organization.

1.3 value to the business


y Support the ability to link activities to outcomes that are critical to customers. y Enable a clear understanding of the types and levels of Services. y Enable quick and effective response to Changes in the business environment, to ensure

increased competitive advantage. y Support the creation and maintenance of portfolios of quantified Services. y Facilitate functional and transparent communication between customers and Service

Providers. y Provide the means for the Service Provider to organize itself to provide Services that

are efficient and effective.

1.4 Relationship with other Lifecycle phases

The ITIL core provides structure, stability, and strength to Service Management capabilities and its robust principles, methods, and tools. This helps organizations protect investments and provide the basis for measurement, learning, and improvement.

service designServices must be designed with the objectives of the business in mind to provide true value to the business. Service Design covers the entire IT organization, and the IT organization as a whole delivers and supports the Services. Service Design is the phase in the Lifecycle that takes Service Strategy and turns it into a plan to deliver the objectives of the business.

service transitionService Transition describes best practices in Transition Planning and Support, which includes:

y Guidance on the Service Management processes of Change Management, Service Asset and Configuration Management (SACM), Release and Deployment Management, Service Validation and Testing, Change Evaluation, and Knowledge Management.

y Guidance on managing the difficult Changes related to Services and Service Management processes.

y Support for organizational learning through the SKMS. y Help for improving the overall efficiency and effectiveness of the Service Lifecycle and

enabling informed decision-making and Service improvement.



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service operationService Operation provides guidance on maintaining stability while allowing for Changes in design, scale, scope, and Service levels. Detailed process guidelines, methods, and tools are provided with two major perspectives: Reactive and proactive. Knowledge is provided to managers and practitioners, which allows better decisions in managing availability, controlling demand, optimizing capacity, scheduling operations, avoiding or resolving Incidents, and managing Problems.

csi y Describes how to achieve increasing and large-scale improvements in Service quality,

operational efficiency, and business continuity. y Helps ensure that the Service Portfolio aligns to the requirements of the business. y Provides guidance on helping link improvement efforts and outcomes to Service

Strategy, Service Design, Service Transition, and Service Operation. y Establishes the PDCA cycle, which creates a closed-loop feedback system. y Provides guidance on Service measurement, value through metrics, developing

baselines, and maturity assessments.



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Unit2Service Strategy Principles



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2

Course IntroductionUnit 2 : Service Strategy PrinciplesITIL


3



The Big “Why”• What are Services and market spaces?• Why do you need to understand the concepts of Services

and market spaces?• How do these concepts help your organization?



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Student | ITIL Intermediate Certification Level | Service Strategy Principles


My Notes

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OverviewTo gain an understanding of market spaces, Service Providers should:

• Get a sense of the outcomes that the customer desires. • Tailor Services to facilitate outcomes. • Base the definitions of Services on the outcomes that customers desire.

“Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.”- Peter Drucker, Innovation and Entrepreneurship

overviewTo spot emerging opportunities, it is extremely important for Service Providers to gain an understanding of their respective market spaces. The first step toward this is to get a sense of the outcomes that the customer desires. Knowing what outcomes the customer desires enables the Service Providers to tailor their Services to facilitate those outcomes.

Definitions of Services must also be based on the outcomes that customers desire. This makes customers more inclined to buy the Service. It also creates value for the Service Providers because implementing Service Management from the point of view of what is valuable to the customer makes the entire Service Management process more effective. These outcome-based definitions of Services also ensure that the capabilities of the Service Provider are always in line with customer needs.



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5



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

• Understand the basic approach to deciding strategy for the organization.• Describe the strategy and opposing dynamics. • Define outperforming competitors for the organization.• Explain the four Ps of Service Strategy. • Understand and explain the formal definitions of Services suitable for planning and

executing across the Service Lifecycle.• Understand the value that the business provides to the organization.• Comprehend the Utility and Warranty elements of Services.• Identify the different types of Service Assets; that is customer, Service, and

strategic assets.• Identify the different types of Service Providers, and explain how to choose

between them.• Understand how to define Services.• Comprehend strategies for customer satisfaction.• Define the concepts of Service economics.• Understand and explain what a sourcing strategy is and how to

apply it in the organization.• Identify what are the strategy inputs and outputs with the Service Lifecycle.

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Topics Covered in This Unit2.1 Basic Approach to Deciding a Strategy2.2 Strategy and Opposing Dynamics and Outperforming Competitors2.3 The Four Ps of Service Strategy 2.4 Services and Value2.5 Utility and Warranty of Services2.6 Customer Assets, Service Assets, and Strategic Assets2.7 Service Providers – Types and Choosing Between Them2.8 Defining Services2.9 Strategies for Customer Satisfaction2.10 Service Economics2.11 Sourcing Strategy2.12 Strategy Inputs and Outputs with the Service Lifecycle



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My Notes

2.1 bAsic AppRoAch to decidinG A stRAteGyCore Guidance Reference — SS 3.1.1.3

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2.2Strategy and Opposing Dynamics and Outperforming Competitors

2.3 The Four Ps of Service Strategy 2.4 Services and ValueBasic Approach to Deciding a

Strategy2.1

Basic Approach to Deciding a Strategy

The organization must perform its mission better than the competing alternatives do though the created value can be difficult to define and measure.

Every organization also must have an objective or desired end state that differentiates the value of what you do and how you do it.

Service Strategy is what the Service Providers must define in terms of achieving the customer’s business outcomes while adhering to the necessary constraints of the industry or environment.

basic Approach to deciding strategy Organizations have competition. Even government agencies are subject to the competitiveness of industry. The value that is created can be difficult to define and measure but the organization must still perform its mission better than the competing alternatives do. Every organization must also have an objective or desired end state that differentiates the value of what you do and how you do it. In this way, customers will perceive greater value generated by your company over the alternatives. The value may be monetary or social, and differentiation can come from the barrier to entry or the switching costs. Often, organizations develop vision and mission statements that help articulate what differentiates them from the competition and defines the value to the customers.

Service Strategy is what the Service Providers must define in terms of achieving the customer’s business outcomes while adhering to the necessary constraints of the industry or environment. Organizations have constraints in terms of resources and capability and must still hold a competitive position to survive. Understanding the trade-offs involved is part of making the necessary strategic choices on what Services to offer, markets to serve, and how to outperform competitors. The goal is to have better performance than the competition.



2.1Basic Approach to Deciding a Strategy

Coming Up



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2.2 stRAteGy And opposinG dynAmics And outpeRfoRminG competitoRs

A c t i v i t y t i m e

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Strategy Synthesizes Opposing Dynamics

Future course of action: When the management puts together a strategy, the initial response is to develop a strategic plan that details how to move the organization from the current state to a desired future state.

Future versus present: When we create a plan today for some future outcome, that plan might become a liability in the future.

Operational effectiveness: Another challenge is the balance between operational effectiveness and improvements in functionality.

Value capture: Focusing solely on the strategic plan can also impede the organization’s ability to be agile and respond to the changing needs of the business.

2.2 2.3 The Four Ps of Service Strategy 2.4 Services and ValueBasic Approach to Deciding a

Strategy2.1Strategy and Opposing Dynamics and Outperforming Competitors

strategy synthesizes opposing dynamicsCore Guidance Reference — SS 3.1.1.5

Strategy is thought of in the context of a future course of action. When the management is asked to put together a strategy, the initial response is to develop a strategic plan that details how to move the organization from the current state to a desired future state. There are, however, some disadvantages of this approach to Service Strategy.

The first challenge is the future versus the present. When we create a plan today for some future outcome, that plan might become a liability in the future. Focusing solely on the strategic plan can also impede the organization’s ability to be agile and respond to the changing needs of the business.

Another challenge is the balance between operational effectiveness and functionality improvement. If the organization constantly focuses on improving operational effectiveness, this might lead to an inability to improve the competitive advantage. Both are necessary, but organizational effectiveness does not always lead to competitive advantage. If the strategy of the organization is focused on operational effectiveness, at the expense of its distinctiveness, it might not survive in the industry for long. Every organization has competitors. This applies even to the public sector, where an agency may choose to outsource IT.

Another challenge is how to capture value when innovation is driven through the launch of new strategies instead of captured during the delivery and support of live operations. A strategic plan is not usually focused on the long-term capture of value. There is often a small window of opportunity between the time that an innovation program is launched and operated. The company can then maintain its competitive advantage.



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My Notes

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Focus on the future Focus on the present

Improvements inoperational effectiveness

Improvements infunctionality

Immediate value captureat launch

Value capture duringongoing operations


Strategy2.1

Adapted from Achieving a Balance Between Opposing Strategic Dynamics © Crown Copyright 2011 Reproduced under licence from the Cabinet Office

Strategy and Opposing Dynamics and Outperforming Competitors

Strategic Failure

strategic failureFailures in strategy will often result if the organization fails to manage these opposing dynamics. The organization must be able to react and predict, adapt and plan. The diagram on the slide shows how organizations should balance these opposing dynamics.



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11



Strategy as a Means to Outperform Competitors

Organizations can use strategy as a means to outperform competitors.

A Service Provider must also meet the objectives that are defined as the business outcomes of customers.

An organization can provide superior performance as well ascompeting alternatives.

When a Service Strategy is high performing, it will help enable the Service Provider outperform its competitors consistently over time.



strategy as a means to outperform competitorsCore Guidance Reference — SS 3.1.1.6

Organizations can use strategy as a means to outperform competitors. A Service Provider must also meet the objectives that are defined as the business outcomes of customers. These outcomes are often subject to many constraints. Strategic choices have trade-offs. An organization can better service customers or outperform its competitors, but the goal is both: Superior performance versus competing alternatives.

When a Service Strategy is high-performing, it will help enable the Service Provider to outperform its competitors consistently over time. This includes outperformance across business cycles, disruptions in the industry, and even changes in leadership. Strategy is both the ability to be successful today and to position the organization for future success.


2.3The Four Ps of Service Strategy


Coming Up



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My Notes

2.3 the fouR ps of seRvice stRAteGy

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PatternsPlans

Perspective

Positions

Adapted from Perspective, Positions, Plans, and Patterns © Crown Copyright 2011 Reproduced under licence from Cabinet Office



the four ps of strategyCore Guidance Reference — SS 3.1.2

The four Ps of Service Strategy are shown in the diagram on the slide. The four Ps can be best described as:

y “Perspective: Describes the vision and direction of the organization. A strategic perspective articulates what the business of the organization is, how it interacts with the customer and how its services or products will be provided. A perspective cements a service provider’s distinctiveness in the minds of the employees and customers.

y Positions: Describe how the service provider intends to compete against other service providers in the market. The position refers to the attributes and capabilities that the service provider has that set them apart from their competitors. Positions could be based on value or low cost, specialized services or providing an inclusive range of services, knowledge of a customer environment or industry variables.

y Plans: Describe how the service provider will transition from their current situation to their desired situation. Plans describe the activities that the service provider will need to take to be able to achieve their perspective and positions.

y Patterns: Describe the ongoing, repeatable actions that a service provider will have to perform in order to continue to meet its strategic objectives.”




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It is appropriate for a Service Provider to start with one of the four Ps and evolve over time to improve all areas. The sequence of development is not as important as using all four Ps.

Let us now understand each of the four Ps in more detail.

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Perspective

Perspective is how an organization describes itself in terms of what it does, who it does it for, and how it works.

Position

Position is the distinctiveness with which a market space is served.



perspectiveCore Guidance Reference — SS 3.1.2.1

Perspective is how an organization describes itself in terms of what it does, who it does it for, and how it works.

This perspective makes it easy to communicate the beliefs, values, and purpose of the organization both internally and externally, and sets the overall direction of the organization.

Some examples include:

y “Focus on the user and all else will follow

y It’s all about growth, innovation and the dependency of technology, led by the greatest people anywhere

y Consumer connectivity first – anytime, anywhere

y [Our] purpose is to improve the quality of life of the communities we serve

y We will be a best-in-class service provider in [our] industry.

y Highly efficient back-office operations’ during the emergence of service outsourcing

y Low-cost service provider’ during the emergence of offshore skilled labour

y Technology-specific expertise’ with the emergence of open systems and software.”




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My Notes

positionCore Guidance Reference — SS 3.1.2.2

Position is the distinctiveness with which a market space is served. It is the organization’s differentiated value proposition to its customers. A brief overview of the four different positions includes:

y “Variety-based positioning: The service provider differentiates itself by offering a narrow range of services to a variety of customers with varied needs. For example, a cell phone company offers a range of pre-defined packages based on time and type of usage. Customers choose the package that suits them, even though customers may use the same package differently.

y Needs-based positioning: The service provider differentiates themselves by offering a wide range of services to a small number of customers. This type of positioning is also called ‘customer intimacy’, where the service provider identifies opportunities in a customer, develops services for them, and then continues to develop services for new opportunities, or simply continues to provide valuable services that keep other competitors out. The service provider’s relationship with and knowledge about the customer is key in needs-based positioning.

y Access-based positioning: The service provider offers highly tailored services to a very specific target market, usually based on location, special interest or some other category. Only people in that group will typically have access to the service. For example, branded motorcycle accessories can only be purchased from stores that sell that brand of motorcycle.

y Demand-based positioning: This is an emerging type of positioning in which the service provider uses a variety-based approach to appeal to a broad range of customers, but allows each customer to customize exactly which components of the service they will use, and how much of it they will use. Online service providers are exploring this form of positioning at the time of writing.”




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ITIL Intermediate Course: SS Student Handbook (Reference material_r3.2.0)

Documents

Transcript of ITIL Intermediate Course: SS Student Handbook (Reference material_r3.2.0)