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Advantage of core service packages

IT Service Management | Business Service Management | Service Portfolio Management methods | The Option Space Tool | Retirement or divestiture | Challenges in managing demand for services | Activity-based Demand Management | Business activity patterns and user profiles | Core services and supporting services | Developing differentiated offerings |


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Some enterprises have highly consolidated core infrastructure units that support the operations of business unit s at a very large scale with high levels of reliability and performance. An example is a global supply chain and logistics company famous for its brown delivery trucks and industrialized service. The high levels of performance and reliability translate into similar levels of service warranty offered to businesses and consumers on the delivery of parcels and document s. The strategy is tight control over core service s used by all business units so that complexity is under control, economy of scale is extracted, and business outcomes are assured. Each business unit can develop SLPs based on application s and processes to serve their own market space s, and have them hosted on top of the core infrastructure services (Figure 5.28).

Figure 5.28 Going to market with service packages

From the business unit perspective, where the SLP is hosted has implications for exposure to quality, cost, and risks. The company is required to negotiate the best possible terms for having their SLPs supported by appropriate CSPs. The principle of separation of concerns is applied here to increase focus on customers without compromising the economy, efficiency and stability of centralized service operations and infrastructure.

The infrastructure unit may offer their CSPs as third-party OEM services to other service provider s who package them with their own set of SLPs. This further reduces the financial risk s of service asset s used to operate the CSP.

Segmentation

SLPs are effective in developing service package s for providing value to a segment of user s with utility and warranty appropriate to their needs and in a cost-effective way. SLPs are combined with CSPs to build a Service Catalogue with segmentation (Figure 5.29). This avoids underserved and over-served customers and increases the economic efficiency of service agreement s and contract s.

Figure 5.29 SLPs are targeted at customer segments

CSPs and SLPs are each made up of reusable component s many of which themselves are services (Table 5.10). Other components include software application s, hardware, licences, third-party services and public infrastructure service s (Figure 5.30). Some service components are assets owned by customers.

Figure 5.30 SLPs composed of service components and component services

Making component services visible to customers on the Service Catalogue is a matter of policy with respect to pricing and bundling of services. Risk s described in Section 9.5 have to be considered for decisions on expanding the Service Catalogue.

Warranty SLP Workspace SLP1 Workspace SLP2 Workspace SLP3
Availability SLP 24x7x365 Plan with High availability Worldwide Mobility PC Notebook Wireless PDA Service Desktop Phone 3G Wireless 24x7x365 Plan with Very High Availability Worldwide Mobility PC Notebook Wireless PDA Service Desktop Phone 3G Wireless 9-5 Weekday Plan with Standard Availability Designated Office Location PC Desktop Desktop Phone Standard Wireless
Capacity SLP Large Mailbox Priority Broadband Extra large Mailbox Priority Broadband Basic Mailbox Basic Broadband Heavy Duty Print Service
Continuity SLP PSTN backup Level-2 backup and restore Worldwide travel support PSTN backupLevel-3 backup and restore Worldwide travel support PSTN backup Level-1 backup and restore On-site support
Security SLP Multi-factor authentication Hardware tokens Virtual Private Network Secure FTP Multi-factor authentication Virtual Private Network

Table 5.10 Warranty SLPs composed of service components and component services

A Service catalogue is also a collection of Lines of Service (LOS), each under the control of a Product Manager. Section B.2 in Appendix B provides a description of the role s and responsibilities of Product Managers within the domain of service management. Each LOS provides a combination of utility and warranty most preferred by a segment of customers. Customer segments are defined in terms of business outcomes. This type of segmentation cuts across traditional market segments based on criteria such as demographics, location, size of business, purchasing behaviour, and perceived needs.23 The links between such criteria and actual business outcomes are often weak or unstable, whereas business outcomes of customers are permanently linked with customer ’s perception of value. Outcome -based segmentation improves the focus and specialization for service providers in truly meeting customer needs.

Each LOS has one or more service offerings (Figure 5.31). Each service offering is made up of CSPs and SLPs. This modular approach provides multiple control perspective s within the Service Lifecycle. CSPs and SLPs can be managed by separate specialized groups within the service provider. Utility SLPs and Warranty SLPs may similarly be assigned to groups with specialized capabilities and resource s, or to third parties.

Figure 5.31 Mapping customer outcomes to lines of service

Figure 5.32 Services are framed by the customer outcomes they support

It is the responsibility of the Business Relationship Manager (BRM) to identify the most suitable combination of LOS and SLP for every customer outcome they are concerned with. BRMs relate customer outcomes to the supporting UP (Figure 5.32). Each UP is then matched to the appropriate SLP to create a customized service offering for every customer outcome (Figure 5.33). The Kano Model Method28 is applied to develop complex value-added service offerings based on service components and component services. CSPs and SLPs may be basic, performance or excitement service packages according to customer preferences and perceptions.

Figure 5.33 Mapping user profiles to service level packages

This component -based approach greatly reduces the cost of providing services while maintaining high levels of customer satisfaction. BRMs represent customers and work closely with Product Managers to ensure that the Service Catalogue has the right mix of LOS and SLP to fulfil the needs of the Customer Portfolio.


 


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