ITIL V3 Chapter 2 SS 4 26 09

Chapter 2
Service Strategy
2-1
©2007 copyright of Zenetex unless otherwise stated.
Chapter Objectives
This chapter will enable you to:

Account for the main goals and objectives of Service Strategy
Define and explain Utility & Warranty, Resources & Capabilities, Service Portfolio, Service
Catalog, Business Case and Risk
Explain how Resources and Capabilities create value in the form of goods and services
State the objectives and basic concepts for the Demand Management
Management, and Financial
Management processes
2-2
Service Strategy (SS)
L
Service Strategy Processes
• Service Strategy Activities
• Service Portfolio Management
• Financial Management
Service Strategy L
• Demand Management
Designs and develops Service
Management as an organizational
capability and a strategic asset,
and manages costs and risks to
ensure effective and distinctive
performance. It assists in
developing policies, guidelines and
processes across the Service
Lifecycle.
Service Strategy: Models and

Plans Services that have value
(Utility and Warranty)
Based on OGC (ITIL) material. Reproduced under license from OGC. 2-3
Service Strategy (SS)
Strategy is a carefully devised plan of action to achieve a goal. Service Strategy is the
lifecycle phase responsible for determining an IT organization’s strategic purpose, what
the Customer needs, and how the organization differs from competitors. It is
responsible for developing plans to achieve the organization’s goals by satisfying both
Customers and Stakeholders.
Goals & ObjectivesL

Encourage Service Provider to stop and think and act in a strategic manner (think
why something is done before thinking how)
Improve strategic impact through design, development, implementation and practice
of Service Management
Transform capabilities and resources into valuable services
Transform Service Management into a strategic asset
Develop a strategic plan to meet identified business needs
Business Value
Strategic advantage (distinctive capabilities developed)
2-4
Service Strategy Questions
Service Strategy answers the following questions:

What services should we offer and to whom?
How can financial management provide visibility and control over value-
creation?
How do we:L
• Truly
T l create t value
l for
f our Customers?
C t ?
• Differentiate ourselves from competing alternatives?
• Create value for our Stakeholders?
• Make a case for strategic investment?
• Define service quality?
• Choose between different paths for improving service quality?
• Efficientlyy allocate resources across a portfolio
p of services?
• Resolve conflicting demands for shared resources?
Strategy begins with the Customer’s desired outcomes.
2-5
Service Strategy Model
Measurement and evaluation

Strategy
St t generation,
ti
Strategic assessment evaluation and selection
Determine
Analyze perspective Vision
external
factors
Form a Service Continual
position Strategy Service
Policies
Establish Improvement
objectives • Service Portfolio
• Service Design
Craft a plan requirements
Plans
Analyze • Service Transition
internal requirements
factors Adopt • S
Service
i O Operation
ti
patterns of requirements
Actions
action
Measurement and evaluation
© Crown copyright 2007 Reproduced under license from OGC 2-6

The Value Proposition of
Services (1 of 4)
Types of Assets
Service Assets (create value)
Customer Assets (receive service value)
L
Services create value for organizations and Customers by:
Increasing the performance potential of Customer assets (increase value)
Reducing risks of performance variations in Customer assets
Improving the design, transition and operation of services
L
Considerations for Creating Outcomes
Customer Business Objectives
IT Objectives
Process Metrics
2-7
Services (2 of 4)
L Perceptions Preferences
Value is defined by:
Customer Business Outcomes (Solutions)
Business
Customer Perceptions and Preferences influenced by
Attributes of a Service Outcomes
Reference values (present/prior experience and competitive offerings)
Self image (position in the market – innovator,
Self-image innovator market leader,
leader risk taker)
Economic value = difference between the sum of the reference
value and the value associated with the service – +ve difference Attributes
(utility & warranty), -ve
ve difference (losses suffered for poor quality and hidden costs)
The more intangible the value, the more important definition and differentiation become
The Service Provider must demonstrate value, Influence perceptions, respond to preferences
and focus on Outcomes
What the Customer values is frequently different from what the IT

organization
g believes it provides. Mind the Gap!
2-8
Services (3 of 4)
Marketing Mindset is required to determine

What outcomes matter?
How are they ranked in terms of customer perceptions and preferences?
Focus on the Customer’s perspective and fulfillment of outcomes
What is our business?
Who is our customer?
What does our customer value?
Who depends on our services?
Wh are th
Why they valuable
l bl tto th
them?
?
Differentiation is important (adds value)
Communication services instead of routers and switches
Collaboration services instead of just email and voice mail services
2-9
Services (4 of 4)
abilities
Service 1 Management Organization
Customer
ets
pA
Group
vice Assetts
omer Asse
Capa
P
Processes K
Knowledge
l d
Service 2
Customer People
Group B Service 3
es
Serv
Custo
Financial
Resource
Information Capital
Customer Service 4
Group C
Applications Infrastructure
Customer Value Creation Service

Assets Value Capture Assets
Stimulates Demand/Uses Capacity
Service Organizations must configure their assets (in the form of resources
and capabilities) to deliver services that create Value for their Customers

Utility and Warranty (1 of 4)
Defined by Business Outcomes & Customer Perceptions (What the Customer

Thinks They Received vs
vs. What They Think They Needed)
From the Customer’s perspective Value = Utility & Warranty

L Utility
y – Fit for p
purpose
p ((Functionality
y)
• Functionality offered by a product or service to meet a particular need
• What the Customer receives
• Reduces constraints on performance or
• Increases performance average and potential profit
L
Warranty – Fit for use (Reliability)
• A promise or guarantee that a product or service will meet its agreed requirements
• How the service is delivered
• Guarantees Availability when needed - sufficient Capacity as required - dependable Continuity
and Security
• Reduces performance variation and possible losses
2-11
Utility and Warranty (2 of 4)

Utility & Warranty (3 of 4)
Service Type Utility Part A Utility Part B

Mobile Workspace Field staff securely
Being constrained
Services access enterprise
Provides by location or time
applications
Value
Credit Reporting to the Loan Officers
Without Slowing Down
determine credit
Services Customer the Loan Process
rating of applications
When
Business Continuity Disruptions or
Business Processes
Services loss from failures
continue to operate
or disastrous events
(Catalog)
((Outcomes Supported)
pp ) (Constraints
(Co st a ts Removed)
e o ed)

Utility & Warranty (4 of 4)
Agency Service Assets Customer Assets

Operates A Wireless
Employees
Messaging System
Value is
delivered to A Credit Reporting Lending
Leases For the That
the Customer Process
when the Customer System Facilitates
Service Provider Business
A Contingent Unit
Secures
of Business Assets Process
Outcomes Supported Constraints Removed

Activity or Task W
Warranty
t Part
P tA W
Warranty
t Part
P tB
Coordinate & Accessible
Collaborate <A specified area>
In a Reliable
Estimate Lending For the
Ri k on
Risks Manner
To Customer <A specified area>
Loan Applications that is Secure
Work Accurate
Continuously <A specified area>

Service Strategy Concepts
Core Services
Deliver basic outcomes the customer wants
Represent the value Customer wants and for which they are willing to pay
Supporting Services
Enable or enhance the value of a service
Enabling services – basic factors qualifying for an opportunity to serve
Enhancing Services – excitement factors for differentiation
Service Package (SP)
Detailed description of an IT service that is available to Customers
A Service Package includes one or more core services and supporting services as well as a
Service Level Package
Service Level Package
g (SLP)
( )
Defined level of Utility & Warranty for a particular Service Package
Each Service Level Package is designed to meet the needs of a particular pattern of demand
and associated with a set of Service levels (pricing, policies and a core Service Package –
e.g.,
g , Gold,, Silver,, Bronze))

Resources and Capabilities (1 of 2)
L
Types of Service Assets used to create value in the form of goods & services
Resources - A g
generic term that includes IT Infrastructure, people,
p p moneyy or anything
y g
that might help to deliver an IT Service
Considered to be Assets of an Organization
Direct inputs for production
Easier
E i tto acquirei th
than capabilities
biliti
Capabilities - The abilities of an organization, person, process, application,
configuration item or IT service to carry out an activity
Organization
Organization’s
s capacity to coordinate
coordinate, manage
manage, and apply resources to produce value
Based on experience and knowledge embedded in processes & technology
Developed over time from experience gained (number and variety of Customers, market
spaces, contracts and services)
Used to develop, deploy and coordinate resources
Resources + Capabilities = Value of a Service

p
Capabilities can’t produce
p value without Resources and vice versa.
2-16
Resources and Capabilities (2 of 2)
L
RESOURCES CAPABILITIESL
Financial Capital
p Management
g
Infrastructure Organization
Applications Processes
Information g
Knowledge
People People
Similar Resources
+
Distinctive Capabilities
________________
= Competitive Advantage
2-17
L
Service Portfolio (1 of 4)
The Service Portfolio is the complete set of services that are managed by a Service
Provider. It represents the commitments and investments made across all Customers
and market spaces
spaces. It includes present contractual commitments
commitments, services under
development, retired services and ongoing service improvements initiated by Continual
Service Improvement. The portfolio also includes third-party services which are an
Integral part of service offerings to Customers.
M
Mostt critical
iti l managementt systemt used d tto manage the
th entire
ti lif
lifecycle
l off all
ll
services
Represents opportunities and readiness to serve Customers and the Market
(f
(formulates
l t th the need
d andd th
the reaction
ti tot that
th t need)
d)
Contains details of all services and their status within the Service Lifecycle
Designed by Service Design and owned and managed by Service Strategy
Describes services in terms of business value (marketing)
Part of the Service Knowledge Management System (SKMS) and registered as a
document in the Configuration Management System (CMS)
2-18
Part of a decision-framework
L
Divided into three service subsets:
Service Catalog
• Active & Approved Considerations for Creating Outcomes
• Visualization tool for Service Portfolio Management
• Virtual projection of actual and present capabilities
Service Pipeline
• Proposed Services (under development)
• Represents growth and strategic outlook for the future
• Reflects general health of the Service Provider
• Details of all business requirements
• Basis for definition, analysis, prioritization and approval
Retired Services
• Inactive Services
• Ensures all customer commitments are fulfilled and resources are released
2-19
Financial Feasibility
=
a Good Mix of
Service Catalog &
Pipeline Services
What is the only part of the Service Portfolio that recovers costs or earns profits?

L
Clarifies or helps to clarify the following strategic questions:

Whyy should a customer buy y these services?
Why should they buy these services from you?
What are the pricing or chargeback models?
What are myy strengthsg and weaknesses,, priorities
p and risk?
How should my resources and capabilities be allocated?
2-21
Value of the Service Portfolio
Most effective way of managing all aspects of services throughout their lifecycle
Uses appropriate
pp p management
g tools to support
pp all pprocesses
Helps prioritize investments and improve the allocation of resources
Articulates business needs and Service Provider’s response to them
Main source of information on the requirements and services
Provides a means for comparing service competitiveness
2-22
L
Service Catalog (1 of 4)
Database or structured document with detailed information about all live IT services
including those under development and those transitioning.
Subset of the Service Portfolio that includes Active and Approved Services
(Active & Current Capabilities)
Defines
D fi criteria
it i ffor what
h t services
i ffallll under
d S Service
i P Portfolio
tf li MManagementt and
d
objectives of each service
Clustered into Lines of Service (LOS) based on common patterns of business
activity (PBA) they can support
Communicates and defines policies, guidelines & accountability
Service order and demand channeling mechanism - acquisition portal for Customers
(pricing,
(p g, service-level commitments & terms of services p provided))
Important tool for Service Strategy to visualize Service Portfolio Management
decisions
2-23
Expression of the Service Provider’s operational capability within the context of a

Customer or Market Space
May be multiple Service Catalogs chartered from the Service Portfolio
Divided into two parts:L

Business Service Catalog (Customer View)
• Maps Services to business units & business processes they rely on
• Facilitates development or more proactive & preemptive Service Level Management
process
Technical Service Catalog (Service Provider View)
• Maps Services to those services, shared services, components & CIs required to
support them
• Facilitates development of SLAs, OLAs & 3rd party Contracts
– Identifies technology and responsible support groups
2-24
Business Business Business

Process # 1 Process # 2 Process # 3
Business Service Catalog
Service A Service B Service C Service D Service E
Technical Service Catalog
Support
Hardware Software Applications Data
Services


L
Business Case
A Business Case is a justification for a significant item of expenditure. It is a decision

support & planning tool that projects the likely consequences of a business action, both
qualitative and quantitative
quantitative.
Detailed analysis of business impact or benefits linked to business objectives

Justification
J tifi ti for f Improving/adding/changing
I i / ddi / h i service
i
Includes:
Introduction – business objectives addressed (reasons)
Methods and Assumptions - expected costs, benefits, time, alternatives
Business Impacts – financial and non-financial Business Case results
Risks and Contingencies – probability of risks and potential problems occurring
Recommendations – specific actions proposed
2-27
L
Return on Investment (1 of 2)
Return on Investment is a concept for quantifying the value of an investment. It is a

measure of the ability to use assets to generate additional value. It is calculated by
dividing the net profit of an investment by the net worth of the assets invested
invested. This is an
important concept for CSI as few organizations are willing to underwrite costs and efforts
associated with improvements without some evidence of benefits and outcomes.
Considerations
Investment Cost (to improve services and service management processes) – resources, tools,
consulting
What the organization gains in return
To compute return you must know
Downtime – loss of customer productivity and revenue
Rework – failed changes
Redundant work
Non value added projects
Non-value
Late delivery of applications
Escalating incidents to 2nd and 3rd level support groups
Different employee levels (fully allocated hourly cost)
2-28
Return on Investment (2 of 2)
Availability is a good measure of cost of lost productivity, cost of not being able to
create a transaction and true cost of downtime
Different approaches
• Impact by minutes lost (duration x customers impacted)
• Impact by business transaction (# business transactions that couldn’t be completed
during downtime)
• True cost of agreed downtime (Component Failure Impact Analysis (CFIA) – 3 users
impacted (calculate non-productivity)
2-29
Risk Management
A Risk is a potential event that could cause harm or loss, or affect the ability to achieve
objectives. Risk Management is the process responsible for identifying and assessing the
level of risk so appropriate decisions can be made and countermeasures adopted to
manage and control them.
Uncertain outcome
Positive opportunity or negative threat
Measured by Probability, Vulnerability of Assets, and Impact
Ensures visibility to support better decision-making by understanding Risks and their Impact
Utilizes a cost effective framework - well-defined steps
Risk Analysis – gathers, analyzes and evaluates risks
Risk Management – monitors & controls to deal with risks and decision-making processes
I l d
Includes
Business Continuity Management, Security, Program/Project, and operational service management
risks
Identification, selection and adoption of countermeasures to reduce risks to an acceptable level
2-30
Risk Management Benefits
Improves Performance by contributing to

Increased certaintyy and fewer surprises
p
Better service delivery
More effective change management
More efficient use of resources
Better management through improved decision-making
Reduced waste and fraud & better value for money
Innovation
Management of contingency & maintenance activities
2-31
L
Service Provider Types
Type I – Internal Service Provider

Business functions embedded within the units they serve
Funded by overheads
Examples: Finance, Administration, Human Resources, IT
Type
T II – Shared
Sh d Services
S i Unit
U it
Business unites under a corporate parent, common stakeholders and an enterprise-level
strategy
Functions like a business unit and leverages opportunities across the enterprise
Autonomous special units called shared services
Examples: Finance, Administration, Human Resources, IT
Type III – External Service Provider

Offers competitive prices and drives down unit costs by consolidating demand
Assume additional risks
2-32
Service The Business, Customers & Users

Strategy
A ti iti
Activities
Service
Service Strategy
Portfolio
Management
Financial
M
Management t
Demand
Management
CMS & SKMS
The Service Strategy Process

Strategy
Activities
Service
Service Strategy
Portfolio
Management
Financial
Service Strategy defines the Management
market, develops the strategic
assets and offerings, and
prepares for execution of the
strategy.. Demand
M
Management
t
CMS & SKMS
Service Strategy Process
1. Define the Market

a) Understand the Customer
b) Understand the Opportunities
c) Classify and visualize the
Service
2. Develop the Offering
3. Develop Strategic Assets
4 Prepare for Implementation
4.
2-35
The Service Portfolio Management Process

Strategy
Activities
Service
Service Strategy
Portfolio
Management
Service Portfolio Management describes a

provider’s services in terms of business value, Financial
articulating business needs and the provider
provider’s
s Management
response to those needs. Business value terms
correspond to marketing terms, providing a
means for differentiating and comparing services
among Service Providers. Demand
Management
CMS & SKMS
Service Portfolio Management (SPM) (1 of 2)
Service Portfolio Management represents a dynamic method of governing investments in

Service Management across the enterprise, in terms of financial values.
Goals & ObjectivesL

Creates and realizes maximum value (return)
Manages costs and risks
Anticipates Changes (maintains strategy and planning)
Creates a framework for decision-making
Answers Strategic Questions: L
Why should a client buy these services?
Why should a client buy these services from us?
What are the price and charge back models?
What are our strong and weak points, our priorities and our risks?
How should our resources and capabilities be allocated?
2-37
Service Portfolio Management (SPM) (2 of 2)
Service
Strategy
•Inventories
Define •Business Case
•Value Proposition
Analyze •Prioritization
•Service Portfolio
Approve •Authorization
•Communication
Charter •Resource allocation

The Financial Management Process

St t
Strategy
Activities
Service
Service Strategy
gy
P tf li
Portfolio
Management
Financial
Fi i l
Financial Management quantifies the value of Management
IT services, their supporting assets, and
operational forecasting. Talking about IT in
terms of services is critical to changing the
perception
ti off IT andd its
it value
l tot the
th business.
b i Demand
Management
CMS & SKMS
Financial Management (1 of 3)
Financial Management is the process responsible for managing an IT Service Provider’s

Budgeting, Accounting and Charging Requirements.
Goals & Objectives L

Provide cost-effective services
Quantify
Cost of IT services, supporting assets, and operational forecasts
Ensure financial compliance & control
Agree on the value of services received
Enable demand modeling and management
Provide proper funding for delivery and consumption
of services
Strategic tool that provides financial information to enable operational visibility &
insight (forecasting), and improve management & investment decisions
2-40
Interacts with many parts of the enterprise to generate and obtain financial
information (Operations, Support units, PMOs, Application development ,
Infrastructure, Change Management, Business units, Users)
Financial data is owned by finance and accounting and generated and used by
other areas
Collects
C ll t iinformation
f ti ffrom everywhereh andd assists
i t iin generating
ti and
d di
disseminating
i ti
information to feed critical decision-making
2-41
Valuation – Determining the costs Budgeting – Predicting the resources

(value) of services, supporting assets needed to keep services running
and operational forecasts (funding)
Charging – Recovering the costs of Accounting – Identifying and

services from Customers controlling spending

The Demand Management Process

Strategy
Activities
Service
Service Strategy
Portfolio
Management
g
Financial
Management
Demand Management is a critical aspect of Service Management. Poorly

managed demand is risk for Service Providers because uncertainty in Demand
demand generates excess capacity and cost without creating value that M
Management
t
enables recovery of those costs.
CMS & SKMS
Demand Management (DM)
Demand Management is responsible for understanding and influencing Customer behavior

in the use (demand) for IT services and resources.
Goals & ObjectivesL

Understand & influence Customer Demand for Services
Analyze patterns of business activity patterns (PBAs) and User Profiles (at a
strategic level)
Offer Differential Charging to promote off-peak use of Services (at a tactical level)
Influence
I fl Customer
C t behavior
b h i tto eliminate
li i t wasted
t d capacity
it
Provide Capacity to meet Demands
Avoid excess capacity – generating costs without creating value
Prevent insufficient capacity – impact on quality of services delivered
A business activity pattern is a workload profile of one or more business

activities. Patterns of Business Activity are used to help the IT Service
Provider understand and plan for different levels of business activity.
activity
2-44
L
The Role of Demand Management
Monitor overall demand and capacity to maintain service quality and reduce the risk
of unavailability
Monitor & manage capacity potential of individual resources
Identify, analyze & respond to changing Patterns of Business Activity (PBA) to align
supply and demand
Develop and manage incentive/penalty schemes
Reduce excess capacity to manage costs and create value
Participate in development of Service Level Agreements (SLAs)

Challenges in Managing Demand for Services (1 of 2)
Demand management is a critical aspect of service management

Poorly managed demand is a risk for Service Providers because uncertainty in demand
generates cost without crating value that provides a basis for
f cost recovery
Insufficient capacity impacts the quality of services
Pull-system - consumption cycles stimulate production cycle
Consumption produces demand and Production consumes demand
Service production can’t occur without demand that consumes its output
2-46
Challenges in Managing Demand for Services (2 of 2)
Productive capacity of resources available to a service is adjusted according to

demand forecasts and patterns
SLAs, forecasting, planning and tight coordination with the customer can reduce
uncertainty in demand (can’t eliminate it)
L
Techniques to influence demand
Pricing incentives - Off Peak Pricing (differential charging)
Differentiated service levels – patterns of demand
2-47
L
Patterns of Business Activity (PBAs)
Generated by Customer Assets (people, processes, applications)

Business Activityy influences patterns
p of demand for services
Identify, analyze and predict demand for services and service assets (Business &
Technical Service Catalogs) to provide sufficient capacity
Includes interactions with customers, suppliers, partners and other stakeholders
Generate revenue, income and costs
Account for a large portion of business outcomes
Identified, cataloged, profiled, codified (coded with a unique identifier) and shared
across processes
Business Activity Profiles - One or more attributes describe
Frequency, volume, location, duration
Associated
A i t d with
ith requirements
i t – security,
it privacy
i and
d llatency
t or ttolerance
l ffor d
delays
l
Change over time – business changes/improvements, people, organizational, application
and infrastructure
Under changeg control
2-48
PBA Profile
PBA No. 45F Activities Activity Levels

Hi 3 2 1 Lo N/A
Frequency of remote interaction with customers X
Frequency of on-site interaction with customers X
Archive or handle customer information X
Generate confidential information X
Provide technical support (frequency) X
Seek technical assistance X
Network bandwidth requirements X
Data storage requirements (volume) X
Tolerance for delay in service response X
Seasonal variations in activity X
Print documents and images X
Process transactions with wireless mobile device X
Access work systems during domestic travel X
Access work systems during overseas travel X
2-49
L
User Profiles (UPs) (1 of 2)
Associated with one or more PBAs

Based on roles and responsibilities
p of p
people
p and functions with operations
p for
processes and applications
Associated with one or more PBAs
Under Change Control
Represents persistent and correlated patterns
Used to communicate demand
Matching patterns using PBA and UP ensures a systematic approach to
understanding and managing customer demand with services, service levels, and
service assets
Improves value for Customers & Providers – eliminates waste and poor
performance
Communicates information on roles, responsibilities, interactions, schedules, work
environments and social context of related users.
2-50
User Profiles (UPs) (2 of 2)
User Profile Applicable Patterns of Business Activity (PBAs) PBA

Code
Senior Executive (UP1) Moderate domestic and overseas travel; highly sensitive information; zero latency on service 45F
requests; high need for technical assistance; need to be highly available to the business. 4A
35D
Highly Mobile Executive Extensive domestic and overseas travel; sensitive information; low latency on service requests; 45A
(UP2) moderate need for technical assistance; high customer contact; need to be highly available to 35D
customers. 2A
Office-Based Staff (UP3) Office-based administrative staff; love domestic travel; medium latency on service requests; low 22A
need for technical assistance;; full-featured desktopp needs;; moderate customer contact;; high
g 14B
volume of paperwork; need to be highly productive during work hours. 3A
Payment Processing Business system; high volume; transaction-based; high security needs; low latency on service 12F
System (UP4) requests; low seasonal variation; mailing of documents by postal service; automatic customer
notification; under regulatory compliance; need to be highly secure and transparent (audit
control).
2-51
Benefits of Analyzing PBAs
Enables:
Optimization
p of designs
g to suit demand p patterns ((Service Design)
g )
Approval of additional capacity, new services or changes to services can be
approved (Service Catalog)
Allocation of resources and scheduling can be adjusted (Service Operation)
Identification of opportunities to consolidate demand by grouping closely matching
demand patterns
Approval of suitable incentives to influence demand
2-52

Strategy
A ti iti
Activities
Service
Service Strategy
Portfolio
Management
Financial
M
Management t
Demand
Management
CMS & SKMS
Sample Questions
2-54
Sample Question 2 - 1
When analyzing an outcome for Value Creation for Customers, what attributes of
the service should be considered?
A. IT Objectives, Metrics, Customer Outcome
B. Desired Outcome, Supplier Metrics, IT Objectives
C People,
C. People Products,
Products Technology
2-55
Which of the following identifies two Service Portfolio components within the
Service Lifecycle?
A. Service Pipeline and Service Catalog
B. Service Knowledge Management System and Service Catalog
C Service Knowledge Management System and Requirements Portfolio
C.
D. Requirements Portfolio and Configuration Management System
2-56
Which of the following questions is NOT answered by Service Portfolio

Management?
A. How should our resources and capabilities be allocated?
B. What opportunities are there in the market?
C Why should a Customer buy these services?
C.
D. What are the pricing or chargeback models?
2-57
“Warranty of a service” means which of the following?

A. The service is fit for purpose
B. There will be no failures in applications and Infrastructure associated with
the service
C All service-related
C. service related problems are fixed free of charge for a certain period of
time
D. Customers are assured of certain levels of availability, capacity, continuity
and security
2-58
Which of the following statements is CORRECT about patterns of demand

generated by the Customer’s business?
A. They are driven by patterns of business activity
B. It is impossible to predict how they behave
C It is impossible to influence demand patterns
C.
D. They are driven by the delivery schedule generated by Capacity
Management
2-59
A Service Catalog should contain which of the following?

A. The version information of all software
B. The organizational structure of the company
C. Asset information
D. Details of all operational services
2-60
Demand Management is primarily used to?

A. Increase Customer value
B. Eliminate excess capacity needs
C. Increase the value of IT
D. Align business with IT cost
2-61
Chapter 2 Exercises
2-62
Exercise 2 - 1
Match the Terms with their Definitions

Term Definition
1 S
1. Service
i C Catalog
l A A promise
A. i or guarantee that
h a product
d or service
i will
ill meet iits
agreed requirements
2. Demand B. The activities responsible for identifying, assessing and
Management
g controlling
g Risks
3. Utility C. A decision support & planning tool that projects the likely
consequences of a business action
4. Warranty D. Represents the commitments and investments made by a
Service Provider across all Customers and market spaces
5. Business Case E. The functionality offered by a product or service to meet a
particular need
6 Risk Management
6. F The process that understands and influences Customer demand
F.
for services and provides capacity to meet those demands
7. Service Portfolio G. A database or structured document containing information about
all Live IT Services, including those available for Deployment
2-63
Exercise 2 - 2
Fill in the blanks
Capabilities Resources
M _________ F______ _______
O ___________ I __________
P ______ A ___________
K ________ I _____________
P ______ P _____
2-64
Exercise 2 - 3
Match Service Strategy Processes with their Definitions
Service Strategy Process Definition
1. Service Strategy Activities A. Represents a dynamic method to govern

investments in Service Management across the
enterprise in terms of financial values
enterprise,
2. Service Portfolio Management B. Understands and influences Customer demand

for services and provides the capacity to meet
these demands
3. Financial Management C. Understands the Customer, defines the market,

and develops offerings and strategic assets
4. Demand Management D. Quantifies the value of IT Services, supporting

assets, and operational forecasts in financial
terms
2-65
Exercise 2- 4
Service Strategy
2. __________________
Focuses on
3. _____________________
1. _____________________________ 4. _____________________
______________________________ 5. _____________________
Fill in the blanks.
ITIL® is A Registered Trademark of the Office of Government Commerce in the United Kingdom and other countries.

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Chapter 2

 This chapter will enable you to:

Service Strategy: Models and

Goals & ObjectivesL

 Service Strategy answers the following questions:

Strategy begins with the Customer’s desired outcomes.

Measurement and evaluation

Measurement and evaluation

© Crown copyright 2007 Reproduced under license from OGC 2-6

What the Customer values is frequently different from what the IT

Marketing Mindset is required to determine

Customer Value Creation Service

Stimulates Demand/Uses Capacity

© Crown copyright 2007 Reproduced under license from OGC 2-10

 Defined by Business Outcomes & Customer Perceptions (What the Customer

 From the Customer’s perspective Value = Utility & Warranty

© Crown copyright 2007 Reproduced under license from OGC 2-12

Service Type Utility Part A Utility Part B

© Crown copyright 2007 Reproduced under license from OGC 2-13

Agency Service Assets Customer Assets

Outcomes Supported Constraints Removed

© Crown copyright 2007 Reproduced under license from OGC 2-14

© Crown copyright 2007 Reproduced under license from OGC 2-15

Resources + Capabilities = Value of a Service

© Crown copyright 2007 Reproduced under license from OGC 2-20

 Clarifies or helps to clarify the following strategic questions:

 Expression of the Service Provider’s operational capability within the context of a

 Divided into two parts:L

Business Business Business

Business Service Catalog

Service A Service B Service C Service D Service E

Technical Service Catalog

© Crown copyright 2007 Reproduced under license from OGC 2-25

© Crown copyright 2007 Reproduced under license from OGC 2-26

A Business Case is a justification for a significant item of expenditure. It is a decision

 Detailed analysis of business impact or benefits linked to business objectives

Return on Investment is a concept for quantifying the value of an investment. It is a

Improves Performance by contributing to

 Type I – Internal Service Provider

 Type III – External Service Provider

Service The Business, Customers & Users

Service The Business, Customers & Users

1. Define the Market

Service The Business, Customers & Users

Service Portfolio Management describes a

Service Portfolio Management represents a dynamic method of governing investments in

Goals & ObjectivesL

© Crown copyright 2007 Reproduced under license from OGC 2-38

Service The Business, Customers & Users

Financial Management is the process responsible for managing an IT Service Provider’s

Goals & Objectives L

Valuation – Determining the costs Budgeting – Predicting the resources

Charging – Recovering the costs of Accounting – Identifying and

© Crown copyright 2007 Reproduced under license from OGC 2-42

Service The Business, Customers & Users

Demand Management is a critical aspect of Service Management. Poorly

Demand Management is responsible for understanding and influencing Customer behavior

Goals & ObjectivesL

A business activity pattern is a workload profile of one or more business

© Crown copyright 2007 Reproduced under license from OGC 2-45

 Demand management is a critical aspect of service management

 Productive capacity of resources available to a service is adjusted according to

 Generated by Customer Assets (people, processes, applications)

This chapter will enable you to:

Service Strategy answers the following questions:

Defined by Business Outcomes & Customer Perceptions (What the Customer

From the Customer’s perspective Value = Utility & Warranty

Clarifies or helps to clarify the following strategic questions:

Expression of the Service Provider’s operational capability within the context of a

Divided into two parts:L

Detailed analysis of business impact or benefits linked to business objectives

Type I – Internal Service Provider

Type III – External Service Provider

Demand management is a critical aspect of service management

Productive capacity of resources available to a service is adjusted according to

Generated by Customer Assets (people, processes, applications)

Associated with one or more PBAs