Road to Service Financial Management: Building Complete Services
This is part two of a four part journey on the Road to Service Financial Management.
In part 1 of this journey; “The Anatomy of a Service Portfolio” we discussed the interconnected aspects of a Service Portfolio (taxonomy, catalogs and offerings). I also introduced the concept of the service portfolio as an investment tool that you can use to sell services to your customers and the need to define services in an end-to-end context. In this article we’ll take a closer look at a service framework that will help you build services that are strategically aligned to the businesses you support. The framework includes elements necessary to build complete services. Complete service are necessary to enable a service portfolio capability that can function as an investment tool that can help you build a strategic partnership with your customers.
Figure 1 is an illustration of a service complete framework. The framework is organized in three aspects; Service Strategy, Service Design, and Service Complete. Let’s unpack these areas.
Service Strategy: Building complete services starts with your strategy. This is where we engage our clients and business partners to understand their needs and what they are willing to pay for in the context of your organizational strategy. Establishing an overarching set of guiding principles is helpful to guide service strategy. Typically this includes a SWOT analysis to better understand organizational strengths, weaknesses, opportunities and threats. This sets the tone for what to focus on when trying to develop a strategic service plan. Service Strategy also looks at services end-to-end, not just the technology or functional parts. This starts with thinking about what you sell and how your customers interpret value. For example; most IT organizations provide hosting capabilities, but in many cases what is being discussed with customers are the various underlying parts like servers, storage and associated infrastructure technology or specific support capabilities. The hosting service they really want gets obscured in that discussion. After a while, they just started going to outside providers that sell hosting services and have a complete offering with clearly defined value including service levels. Some key considerations of service strategy include:
- Defining end-to-end services that provide value to you constituency.
- Focus on what the customer needs and how they interpret value rather than the best possible solution. Make sure you understand what they are willing to pay for the service.
- Analyze and be honest about your organizational strengths, weaknesses, opportunities and threats.
- Understand the market and competition (use benchmarks where possible).
- Seek to understand the service demand.
- Don’t forget about the customer experience. Be sure to engage your customers to understand the level of service and the type of interaction they are looking for.
Service Design: The service strategy activity includes a set of requirements that is used by service design to build the service. This includes a clear vision with objectives based on customer needs. The design activities can be organized into three key areas:
- End-to-End Service Alignment. This is where customer needs identified in the strategy are further defined and aligned with the underlying technical product and services. The assessment of existing capabilities in the strategy will provide the requirements necessary to build an end-to-end service. In most cases, existing products and service can be reused. Where necessary, outside suppliers or new technology may be necessary to meet customer needs.
- Service Offering: The service now has to be fully defined including all aspects of utility and warranty. This includes a description of the service in clear language; what the customer gets, how they get it, and what level of support and performance they can expect. Costs are also defined including usage based models where possible.
- Service Delivery: The service offering will provide the necessary requirements to enable the associated delivery capabilities. This includes an end-to-end approach that wires in all support and delivery teams that participate in the delivery of the service. Focus here is on end-to-end processes with clear roles and responsibilities across all the participating functional areas and associated service support. Performance metrics are established and product and supporting technology is defined.
Some key considerations for the design of complete services:
- Know the service vision and objectives (design with the end in mind). You’ll need to include your customers to fully understand this.
- Leverage Demand and PPM capabilities (in a service context) to help shape and manage requirements.
- Include service experience design. Doesn’t matter how cool your service or product is if the service experience is poor.
- Understand the service and process inter-dependencies across the impacted tools and support organizations.
- New roles and responsibilities are likely and they need to be formalized.
- Make sure you can measure what you manage.
Service Complete: The finished products is a set of capabilities based on customer needs with a clear set of interdependent functions that together enable you to provide a complete service. This is captured in your service information system and leveraged by your portfolio management and governance process. Some key considerations:
- Understand the relationships between products, services, and technologies. This requires understanding what you sell to your customers and what you sell internally across the functional organization in support of the customer facing service.
- Align technology plans and processes with the service plan. Services are now the organizing construct for your business. Technology and processes support your services, not the other way around.
- Build in customer engagement and feedback – develop an engagement plan.
- Make sure you can measure supplier performance (internal and external).
- Ensure you have a service portfolio and governance process to add, change, retire services.
Although this might sound complex and beyond reach, there are many “bite size” projects that can provide quick wins. There are also many iterative approaches that can leverage your existing service management capabilities that will get you on a path to providing service value and enabling a strategic partnership with your customers. What are you waiting for?