The Anatomy of a Service Portfolio
The Service Portfolio is one of those service management capabilities that is, generally, not well understood. There tends to be a wide variety of opinion on what it is and how to leverage it in a typical service management program. Some misconceptions about the Service Portfolio include:
- It’s a taxonomy of services
- It’s the list of services in the catalog/s
- It’s the service map or operational view of services
- It’s a description of service offerings
- It’s the “strategy” aspect of the Service Lifecycle
In reality the Service Portfolio is all of these and they work together forming an interconnected set of information used to manage service investments. Notice I said “service investments.” The Service Portfolio is primarily a capability to assess, plan and make investment decisions on what services to offer in a manner that allows you to sell those services to your customers. Yes, sell, because at the end of the day someone is buying your services, whether they know it or not. It’s much better to sell and articulate value in the process. Using the Service Portfolio to make investment decisions requires the development of a deeper understanding of the elements that make up a service. Stop Defending Your Budget – Start Selling Your Service series (Part 3).
At a high level, you can think of the Service Portfolio in three aspects that need to work together. A Taxonomy, the Catalogs, and the Offerings. Let’s break these down:
- Service Taxonomy: This is where the organization of the portfolio begins. Organizing services into a set of service families for use in catalog navigation is fairly common and understood. However, there is other critical information and associations required like operational elements (a.k.a; dependency mapping) and cost model aspects (what’s delivered and how with associated costing linkage) that are less understood and more difficult to capture and structure as part of the taxonomy.
- Service Catalogs: There are different types of catalogs to support a variety of uses. For example; a marketing catalog (or sometimes delivered as marketing brochures) is used to describe your service offering in “customer” language and includes information about the value, cost and how to get the service. The end user catalog is typically focused on transactional request services that can be ordered by your end users and typically includes the aid of automation capabilities. Enterprise catalogs are set up to provide services to meet the needs of enterprise businesses and are managed independent of end-user services. Technical catalogs can also be request catalogs, but are typically reserved for internal teams to manage the delivery of underlying complexities of end user and enterprise services.
- Service Offerings: This is where you describe what you sell, what the level of service is (expectations), the method of delivery and what it’s going to cost. This is also where you relate the various elements of service deliverables together to fashion an end-to-end service (e.g.; tying all the components, service elements and support aspects together that are necessary to deliver the service to your customer). Understanding the service end-to-end enables you to establish the true cost of the service. It is also important to note that your portfolio can have service offerings under consideration, those that are in operation and those that are retired.
Another important aspect of the service portfolio is the relationship it has with other processes and capabilities. A well-defined portfolio of services provides valuable information necessary to enable these processes in a “service” context: For example:
- Financial Management for Services (cost models, transparency, and budget planning from a service perspective)
- Service Level Management (operational and delivery targets tied to services)
- Demand Management (assessing, qualifying and shaping service demand to meet customer needs)
- Project Portfolio Management (linking projects to service value)
- Configuration Management and CMDB (operational service impacts).
For organizations that want to move from “order takers” to strategic partners, enabling a service portfolio capability is crucial. The key outcome of developing a Service Portfolio capability is to re-orient your business model to focus on services and delivering service value. This will lead to making better investment decisions. These decisions are based on understanding and managing your services based on what you sell in terms your customers understand.
In our next installment we’ll drill a little deeper into these areas and look at a Service Portfolio framework that will provide guidance on building a fully functioning Service Portfolio.