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BCIS 5520
IT Service Management
ITSM Service Strategy
Class 3.01
Spring 2016
Dr. Becker
Future Guest Speakers
• Wil Clark
Director, IT Service Performance
AVC & CIO ITSS Admin; UNT System
Office: (940) 565-4518
• Alan Garrison
IT Specialist IV; AITS-UIT
University of North Texas
Office: (940) 369-7594
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Announcements
• Project Ideas?
▫ Wil Clark
▫ Alan Garrison
• Homework Class 4 –
• Chapter readings:
▫ Foundations of ITSM based on ITIL v3, von Bon
 Chapter 8: Introduction to Functions & Processes
▫ Foundations in ITSM (ITIL v3 Foundations
Course in a Book), Orand & Villarreal (O&V)
 Chapter 2: Service Strategy (follow-up to last week’s readings)
▫ Research Topics:
▫ #2A- ITSM Service Strategy; ITSM CSFs and KPIs
Top 5 Areas for Additional ITSM Research
Topics and Applied Theories in ITSM (HICSS 2013) Website (Class 3); Proehl, Erek,
Limbach, and Zarnekow (Berlin)
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ITIL ITSM Lifecycle
1.
2.
3.
4.
5.
Service Strategy
Service Design
Service Transition
Service Operation
Continual Service
Improvement
ITSM Service Strategy: Introduction
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Introduction
Basic Concepts
Processes and other activities
Organization
Methods, Techniques, and Tools
Implementation
NOTE: ITIL terminology represents a standardized language for doing Systems
Analysis, Design and Developments work. Most organizations do 70%-80% of
the ITIL activities; however, call them by a different in-house name.
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What is Strategy? Old –vs.- ITIL
• Components
▫ Market Forces (Porter’s 5 Forces)
 Know where & how to compete
▫ Distinctive Capabilities
 Create & identify your distinctive & profitable
components– Core Business
▫ Performance Anatomy
 Organizational “standpoints” that are measurable
and feasible – e.g. Value Chain
Recall the “Old” SWOT Analysis
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Strengths
Weaknesses
Opportunities
Threats
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Porters Five Forces Model of Industry Structure
Porter’s Four Competitive Strategies
To be effective, organization goals, objectives, culture, and activities
must be consistent with organization strategy.
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Value Chain Analysis
Value Chain Analysis (Porter) is a process of analyzing an organization’s
activities to determine where value is added to products and/or services
and what costs are incurred in doing so.
Primary Activities in the Value Chain
• Inbound logistics—receiving, handling raw materials and other
inputs
 Value in parts, time required to contact vendors, maintaining
relationships with vendors, ordering parts, receiving shipment,
and so forth
• Operations—transform or assemble materials into finished
products
• Outbound logistics —deliver finished products to customers
• Marketing and sales— create marketing strategies and sell
products or services to customers
• Services —after-sale customer support
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Support Activities in the Value Chain
• Contribute indirectly to production, sale, and service of
product
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Procurement —finding vendors, setting up contractual
arrangements, and negotiating prices
Technology development —research and development,
developing new techniques, methods, and procedures
Human resources —recruiting, compensation, evaluation,
and training of full-time and part-time employees
Firm infrastructure —general management, finance,
accounting, legal, and government affairs
What is Strategy?
• Mintzberg’s (1994) 4 P’s:
▫ Perspective – Vision & Focus
▫ Position – Distinguishing Characteristics of
service provider in eyes of customer; based upon:
 Variety; Needs; and/or Access
▫ Plan – Specific action plan to accomplish goals &
objectives
▫ Pattern – Organizational procedures to
accomplish plans
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Organizational Strategy
Determines Information Systems
Mission & Objectives
• Mission of the Service Organization
▫ Develop the capacity to achieve and maintain a
strategic advantage
• Objectives
▫ Create specific approaches to accomplish &
support each goal and strategy
 Determine: Priorities; directions; assets; outcomes;
competition; performances
 Measureable & feasible
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ITSM Service Strategy
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Introduction
Basic Concepts
Processes and other activities
Organization
Methods, Techniques, and Tools
Implementation
ITIL ITSM Value Drivers (ITIL terms)
• Utility is what the customer receives (dimension 1)
• Warranty is how it will be delivered (dimension 2)
• Value is the profit created (inside the 4 cells)
Warranty (Security)
High
Low
Figure: ITSM Value 2x2 Matrix
Marginal
Balance Zone
High Value
influence on
business but
highly Secure
Low Value
Considerable
influence on
business, but with
little security
Low
High
Utility (Service received)
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“QHID (Australia) Case Study …”, Tan, Cater-Steel, Toleman
Service Assets
• Resources & Capabilities
• Asset Types
▫ Management
▫ Organization
▫ Process
▫ Knowledge
▫ People
▫ Information
▫ Applications
▫ Infrastructure
▫ Financial Capital
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Types of Service Provider
• Type I
▫ Internal Service Provider (ISP)
 E.g., R&D, IT Support where high control is required
• Type II
▫ Shared Services Unit (SSU)
 HR, Finance & Admin., Customer Care, IT, Logistics
• Type III
▫ External Service Provider (ESP)
 Outsourcing… Payroll, Help Desk, etc.
Customer’s Choice of Service
Provider (fig 3.8)
From Customer Type I (ISP)
/ To Provider
Type II ( SSU)
Type III (ESP)
Type I (ISP)
Customer
Functional
Reorganization
Disaggregation
Outsourcing
Type II ( SSU)
Customer
Aggregation
Corporate
Reorganization
Outsourcing
Type III (ESP)
Customer
Insourcing
Insourcing
Value Net
Reconfiguration
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ITSM Service Strategy
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Introduction
Basic Concepts
Processes and other activities
Organization
Methods, Techniques, and Tools
Implementation
Activities
1. Define the Market
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Customer?
Opportunities?
Envisioning the Services?
2. Develop the Offer
3. Develop the Strategic Assets
4. Prepare for Implementation
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Develop the Offer
• Service Portfolio components:
▫ Service Catalog – Lines of Service (LOS)
 Business services
 Technical services
▫ Service Pipeline
 New services in transition or development
 Represents growth and future anticipation
▫ Retired Services
 Services in transition to elimination
 Retiring SLAs, services no longer provided
Develop the Strategic Assets
• ITSM as a Strategic Asset
▫ Closed Loop Control Systems
 Develop and maintain service assets
 Understand the performance potential of Customer
assets
 Map Provider Service assets to Customer assets
through services
 Design, develop, and Adapt Services
▫ Transform ITSM into a Strategic Asset
 Identify Customers Value Network (Value Chain)
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ITIL Questions Raised
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What is our market?
What does the market want?
Do we have something unique to offer?
Do we have the right portfolio?
Do we have the right catalogue?
Are services designed properly?
Example: Value Chains
for Bicycle Rental Companies
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Prepare for Implementation
• Strategic Audit
▫ Identify our services that are most distinctive and
profitable
• Setting Goals
▫ ITIL defines the following Information Required
to Determine Objectives:
 Tasks
 Results
 Constraints.
Example Application Portfolio
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In: “QHID (Australia) Case Study …”, Tan, Cater-Steel, Toleman
Critical Success Factors
• The CSF approach was first established in the
1960s and popularised by various researchers,
including Rockart and Bullen who provided an
operational definition of CSF:
“ …key areas where things must go right in order
to successfully achieve objectives and goals”
Wui-Ge, T., & Toleman, M. (2009). “Implementing IT Service Management: A Case Study
[Queensland Health] Focusing On Critical Success Factors.” Journal of Computer
Information Systems, 50(2), 1-12. Retrieved February 18, 2013, from URL NEW 2013
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4 Types of CSFs
• Williams and Ramaprasad noted that although
the CSF approach is widely used by researchers
to produce a plethora of factors, it is important
to discriminate between different levels of
criticality. They distinguish four types of
criticality:
1. Factors linked to success by a known causal
mechanism,
2. Factors necessary and sufficient for success,
3. Factors necessary for success, and
4. Factors associated with success.
Critical Success Factors
• A.k.a, Strategic Industrial Factors (SIF)
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Defined in terms of capabilities and resources
Are key to success for market leaders
Defined at the market level
Basis for competition among rivals
Dynamic (time dimension)
Capital intensive to develop
Measurable value calculated through a
combination of other factors
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Sample CSFs
ITIL Strategic Process Levels
• Financial Management
▫ Service Value
 Provisioning value (production costs)
 Service value potential (value-adding component)
• Demand Management
▫ Managing Customer Expectations
▫ SLAs based upon:
 Patterns of Business Activity (PBA)
 Service Level Pacakages (SLP)
• Service Portfolio Management
▫ Document and manage
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Organizational Strategy
Determines Information Systems
Business Process Modeling Notation
(BPMN)
• Software industry standardized notation for
BPMN by Object Management Group (OMG)
• BPMN information
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BPMN Process Diagram of Top-Level
Business Processes at MRV
Task Assignments: Business Process
with Three “Swim” Lanes
Figure 7.7
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MRV Assemble & Ship Equipment
Process (As-Is Diagram)
Figure 7.8
Example of Changing Business
Processes [BPR]
1. Adding a specialist to each activity in the process
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ITSM Service Strategy
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Introduction
Basic Concepts
Processes and other activities
Organization
Methods, Techniques, and Tools
Implementation
Organization
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Development of the an Organization (SDLC)
Organization Design
Organizational Culture
Sourcing Strategy
Sourcing Governance
CSFs
Roles and Responsibilities
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ITSM Service Strategy
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Introduction
Basic Concepts
Processes and other activities
Organization
Methods, Techniques, and Tools
Implementation
Methods, Techniques, and Tools
• Increase Effectiveness (vs. Efficiency)(
▫ Service Automation
▫ Improve Service Interfaces
▫ Tools for Service Strategy
 Simulation can be used to evaluate consequences of
new policies or structures
 Analytical Modeling
 Six Sigma
 PMBOK
 PRINCE2
▫ ROI

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ITSM Service Strategy
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Introduction
Basic Concepts
Processes and other activities
Organization
Methods, Techniques, and Tools
Implementation
Implementation: From Strategy to
Tactics and Production
• Lifecycle Approach
• Strategy and Continual Service Improvement
(CSI)
• Benefits, Bottlenecks, and Risks
• Preserving Value
• Risk Management
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Contract risks
Design and Performance risks
Operational risks – business units and service units
Market risks
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ITIL ITSM Lifecycle
1.
2.
3.
4.
5.
Service Strategy
Service Design
Service Transition
Service Operation
Continual Service
Improvement
ITIL's IT Service Lifecycle - The Five
New Silos of IT by Rick Lemieux
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ITSM Service Strategy: Summary
• ITIL provides a structured framework
based upon best practices and
management theory
• Asks the right questions for Service
Providers to address
• Creates a framework for controls and
measurements
• ITIL V3 incorporates the Lifecyle
approach to ITSM
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