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.
Contents
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
o Service management is defined as a set of specialized organizational capabilities for enabling value to customers in the form of services. o Developing the specialized organizational capabilities mentioned in the above definition requires an understanding of: ▪ the nature of value ▪ the nature and scope of the stakeholders involved ▪ how value creation is enabled through services o Value is the perceived benefits, usefulness and importance of something.
Value creation
● How is Value Created? o 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 o This view treated the relationship between the service provider and the service consumer as mono-directional and distant
Value co-creation
● Providers and Consumers Co-Create Value o 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. o Organizations who deliver services are referred to as service providers. o Those to whom services are delivered are referred to as service consumers.
Organizational influence
● Organizations Facilitate Value Creation o An organization is a person or a group of people that has its own functions with responsibilities, authorities and relationships to achieve its objectives o 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. o Example: ▪ IT department acting as a service provider within a wide business organization
Service Consumer Roles
o Customer ▪ A person who defines requirements for services and takes responsibility for outcomes from service consumption o User ▪ A person who uses services o Sponsor ▪ A person who authorizes the budget for service consumption ● Other Stakeholders in Value o Beyond the consumer and provider roles, there are usually many other stakeholders that are important to value creation ▪ Examples: ● Shareholders ● Employees ● Community
Services and Products
o 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 an organization provides are based on one or more of its products. o 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. ▪ Organizations define which product components their consumer see, and tailor them to suit their target consumer groups.
Service Offering
● What is a Service Offering? o 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 ● Ownership is transferred to the consumer ● Consumer takes responsibility for future use ▪ Access to Resources ● Ownership is not transferred to the consumer ● Access is granted/licensed under agreed terms or conditions ▪ Service Actions ● Performed by the provider to address a consumer need ● Performed according to agreement with the consumer
Service Relationships
● What are Service Relationships? o Service provisioning consists of activities performed by a service provider to provide services. o Service consumption consists of activities performed by a service consumer to consume services/ o 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
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
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
● The Service Relationship Model ● Outcomes, Costs and Risks o 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. ● Service Facilitate Outcomes o An output is a tangible or intangible deliverable of an activity. ▪ Examples: ● Report ● Bill (of a consumed service) ● Emails sent (using an email service) o An outcome is a result for a stakeholder enabled by one or more outputs. ▪ Examples: ● Being able to get to a destination in time for a meeting (outcome of using a smartphone-enabled travel service) ● Being able to collaborate with remote coworkers (outcome of using an email service) ● Understanding Costs o Costs refer to the amount of money spent on a specific activity or resource. ▪ There are costs removed from the consumer by the service. ● Example: Uber/Lyft o No need for a car o No need to pay insurance, maintenance, gas ▪ There are costs imposed on the consumer by the service, including charges by the service provider. ● Example: Uber/Lyft o Need for a modern smartphone that's capable of running app o Need for a data plan to access the service ▪ Costs expressed in non-financial terms can be translated into financial costs ● Examples: o Number of man-hours (or person-hours) o Number of FTEs
Risks
o Risks refer to possible events that could cause harm or loss, or make it more difficult to achieve objectives. ▪ There are risks removed or reduced for the consumer by the service. ● Example: Uber/Lyft o No risk of not finding parking for own car ▪ There are risks potentially imposed on the consumer by the service. ● Example: Uber/Lyft o Risk of failing smartphone, smartphone battery, or app itself o The consumer contributes to the reduction of risk through: ▪ Actively participating in the definition of the requirements of the service and the clarification of its required outcomes ▪ Clearly communicating the critical success factors and constraints that apply to the service ▪ Ensuring the provider has access to the necessary resources of the consumer throughout the service relationship ● Example: Uber/Lyft o Service provider should be able to get customer's location data in order to know where to dispatch a car
Utility and Warranty
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 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
