Service Portfolio Management

Financial Management is a key input to Service portfolio management. By understanding cost structures applied in the provisioning of a service, a company can benchmark that service cost against other providers. In this way, companies can use IT financial information, together with service demand and internal capability information, discussed previously, to make beneficial decisions regarding whether a certain service should be provisioned internally. For instance, if a company identifies its internal cost of providing ‘Service A’ to be Ј50 per month per user, and then finds a provider with the economics of scale and the focused skill set required to offer the identical service for Ј33 per month, the company may decide that it would rather focus its resources on other services where it possesses a greater ability to offer lower cost and/or higher quality, and to outsource Service A to the other provider.

Case example 9: Service Portfolio optimization

One of the world’s largest financial companies invests in opening its own OEM-certified desktop repair centres. Due diligence reveals that its scale enables it to offer these services at a lower cost than the market.

The firm regularly benchmark s its internal costs of providing desktop support, desktop repair and desktop provisioning, and compares these with the prices of Type II and Type III providers. On discovering a service that can no longer be offered at a cost ‘below market’, or a new service that can be provisioned internally because of benefits from the scale advantage, the firm adjusts accordingly.

The recurring financial approach to Service Portfolio results in the continual improvement of service cost structures, and measurably enhances the competitive position of the company.

This concept is no different from that of traditional businesses aligning their market-facing service and product portfolios to their core capabilities. It is a prudent strategy to exit a business (service) line that is not as profitable or cost-effective, or does not deliver the requisite combination of quality and value relative to alternatives. Many IT organizations, however, refrain from identifying service-oriented costs and making them visible to the enterprise. The result over time is a portfolio of services with ineffective cost structures and decrease in the customer’s perception of value and satisfaction. Service portfolio management is further elaborated in Section 5.3.

Дата добавления: 2015-11-14