Service management

Service management is a set of specialized organizational capabilities for enabling value for customers in the form of services. The concept of value co-creation is central for management of those services that involve significant inputs from the customers and other stakeholders.

Definitions

According to the ITIL Foundation 4e by Axelos,

Service management. A set of specialized organizational capabilities for enabling value for customers in the form of services.

Value

Value is the perceived benefits, usefulness and importance of something. Since service management is a set of specialized organizational capabilities, developing them requires an understanding of (a) the nature of value, (b) the nature and scope of the stakeholders involved, and (c) how value creation is enabled through services.

Classic view

There was a time when organizations saw their role as delivering value to their customers in much the way that a package is delivered to a building by a delivery company. This view treated the relationship between the service provider and the service consumer as mono-directional and distant.

Value co-creation

More and more organizations recognize that value is co-created through an active collaboration between providers and consumers, as well as other organizations that are part of the relevant service relationships. Organizations who deliver services are referred to as service providers. Those to whom services are delivered are referred to as service consumers.

Organizational influence

Organizations facilitate value creation. An organization is a person or a group of people that has its own functions with responsibilities, authorities and relationships to achieve its objectives. Organizations vary in size and complexity, and in their relation to legal entities – from a single person or a team, to a complex network of legal entities united by common objectives, relationships and authorities.

Service consumer roles

Within a service consumer, the roles are:

Role	Description
Customer	A person who defines requirements for services and takes responsibility for outcomes from service consumption.
User	A person who uses services.
Sponsor	A person who authorizes the budget for service consumption.
Other stakeholders	Beyond the consumer and provider roles, there are usually many other stakeholders such as shareholders, employees, community, that are important to value creation.

Services vs products

Service

Main wikipage: Service

A service is a means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks. The services are based on one or more of its products.

Product

Main wikipage: Work product

A product is a configuration of resources, created by the organization, that will be potentially valuable for their customers. Products are typically complex and not fully visible to the consumer. The portion of a product that the consumer actually sees does not always represent all of the components that comprise the product and support its delivery. Service providers define which product components their consumer see, and tailor them to suit their target consumer groups.

Service offering

A service offering is a description of one or more services, designed to address the needs of a target consumer group. A service offering may include goods, access to resources, and service actions.

Goods

Goods may be a part of a service. Their ownership is transferred to the consumer, who takes responsibility for future use.

Access to resources

With regard to access to resources. ownership is not transferred to the consumer. The access is granted or licensed under agreed terms or conditions.

Service actions

According to agreement with the consumer, a service provider performs service actions to address a consumer need.

Service relationships

Service relationship management consists of joint activities performed by a service provider and a service consumer to ensure continual value co-creation based on agreed and available service offerings.

Service provisioning

• Service provisioning consists of activities performed by a service provider to provide services.

o Management of provider resources configured to deliver the service
o Provision of access to resources for users
o Fulfillment of the agreed service actions
o Service performance management and continual improvement

Service consumption

• Service consumption consists of activities performed by a service consumer to consume services.

o Management of the consumer resources needed to consume the service
o Utilization of the provider's resources
o Requesting of service actions to fulfill
o Receipt of or acquiring of goods

Utility vs warranty

Utility

o Utility is the functionality offered by a product or service to meet a particular need.
▪ What the service does
▪ Can be used to determine whether a service is 'fit for purpose'
▪ Requires that a service support the performance of the consumer or remove constraints from the consumer

Warranty

o Warranty is the assurance that a product or service will meet agreed requirements.
▪ How the service performs
▪ Can be used to determine whether a service is 'fit for use'
▪ Typically addresses areas such as availability, capacity, security levels and continuity
▪ Requires that a service has defined and agreed conditions that are met

Practices

• Service continuity management practice