Service Strategy – The Hub around which The ITIL® V3 Lifecycle revolves

This is a follow-up post to ITIL V3 - what does it deliver?

This key phase looks at the design, development and implementation of service management as a strategic resource.  Service Strategy is critical to all the processes involved in the Service Lifecycle.

If your organisation has already adopted ITIL® processes for its Service Management, then the Service Strategy Phase can help you improve the synchronisation between your IT and Business strategies.  This part of the V3 lifecycle can be used as a guideline for developing an overview of your capabilities. 

Service Strategy urges you to think about “Why” rather than “How”…the “Why” is far more important to your customer’s business than the “How”.

The aim of Service Strategy is to identify your competition and then compete with them by making your business stand apart and by delivering superior performance.

ITIL® names the following building blocks of well-performing service providers:

Market Focus – know where and how to compete

Distinguishing capabilities – create distinctive and profitable assets that the business appreciates

Performance anatomy – organisational standpoints that are measurable and feasible, such as viewing services as a strategic asset in which constant improvement is necessary.

The Service Strategy phase of ITIL® V3 can help your organisation to do business in a strategic manner. It encourages you to ask the questions that will help you stand apart from the competition. You should emerge from this phase with a clear vision of where you want to be and what milestones you need to reach to achieve that vision.

There are three processes involved in this phase of the lifecycle.

  • Financial Management
  • Demand Management
  • Service Portfolio Management

Financial management is critical to ensure that the correct financing is available for delivery and purchase of services.

The goal of Demand Management is to predict and, if possible, regulate demand.  Poorly managed demand is a risk on two fronts.  Excess capacity results in cost that cannot be recovered.  Insufficient capacity impacts the quality of service and limits its growth.

Service Portfolio Management (SPM) starts with the Service Catalogue. The process is dynamic and ongoing and comprises the following stages

  • Define
  • Analyze
  • Approve
  • Charter  

I'll follow this up later with more about ITIL V3.