Managing Services Across the Service Lifecycle Tutorial

4.1 Welcome


4.2 Managing Services Across the Service Lifecycle

Welcome to Learning Unit- 4 of ITIL Managing Across the Lifecycle Certification Course by Simplilearn. Identification and assessment of stakeholder needs is a very important aspect of service management. This is then followed by development of a service design package and effective transition. Service rehearsals give confidence and assurance that the services can perform as expected in live environments. Service level management ensures that services are monitored, measured and reported. It is responsible for organising the service review meetings and initiating service improvements. All along the lifecycle, business relationship management is responsible for measuring and managing customer satisfaction. Service management can be more effective when the challenges, risks and critical success factors of each lifecycle stage are identified and appropriately actioned. All these aspects are important for managing services and this module covers them in detail. In the next slide we will look into the diagram which contains the key elements of a service design.

4.3 Identification and Assessment of Customer and Stakeholder Needs Across Service Lifecycle

Service design must design the required functionality through effective use of available resources and within the defined timescales. Thus, service design is a delicate balancing act of three elements, namely – functionality, resources and schedule. Let us look at what these three terms refer to: Functionality, in this context of balanced design, refers to both utility and warranty of the service and includes everything that is part of the service and its provision. This includes features, quality, performance and management and operational aspects of the service. Resources represent the people, technology and money available for delivering the service. Schedule refers to the timescales for completion of service implementation. As seen in the diagram, these three elements are represented as three sides of a triangle. This implies that changes made to one side of the triangle invariably impacts at least one other side of the triangle. A complete understanding of the business drivers and needs is important to deliver effective business solutions with an appropriate balance of these three elements. Let us look into the different areas to be covered by service design in the next slide.

4.4 Identification and Assessment of Customer and Stakeholder Needs Across Service Lifecycle

It is important that a holistic approach is adopted while developing service designs. Identifying all relevant components and their inter-relationships is the foremost activity. The next step is to ensure that services are designed to meet business requirements covering all the following areas: The scalability of the service to meet future requirements, in support of the long-term business objectives; The business processes and business units supported by the service; The IT service and the agreed business requirements for functionality, in other words the utility of the service; The service itself and its service level requirement or service level agreement; The technology components used to deploy and deliver the service, i.e. infrastructure, environment, data and applications; The internal supporting services and components and their associated operational level agreements; The externally supplied supporting services and components and their associated underpinning contracts; The performance measurements and metrics required; The legislated or required security levels; and Sustainability requirements. We will discuss about the different areas of which business information needs to be obtained in the next slide.

4.5 Identification and Assessment of Customer and Stakeholder Needs Across Service Lifecycle

Business needs and requirements trigger changes to business processes. Business processes are supported by IT services. It is therefore essential that IT teams should identify and document business requirements and drivers in a systematic way so that these can be used to design and build appropriate IT services. The business information that needs to be obtained mainly relate to the three areas: Information on the requirements of existing services, basically indicating what changes will be required to the existing services and includes new features and functionality required; changes in business processes, transaction volumes and service levels; and requirements for additional service management information. Information on the requirements of new services, this should cover information on new features and functionality, business processes supported, business cycles, service level requirements and targets, business transaction levels and level of business capability or support to be provided. Information on requirements for retiring services, that needs to be captured includes exact scope of retirement, business justification, services, if any, that would replace the retiring services, interfaces and dependencies with other services, disposal or reuse requirements and archiving strategy for business data if required. Let us discuss the different activities of the business requirement stage in the following slide.

4.6 Identification and Assessment of Customer and Stakeholder Needs Across Service Lifecycle

As stated a number of times earlier, IT services should be designed and delivered with the key objective of meeting customer and business needs. To ensure this, all business requirements collected and documented should be clear, concise, accurate and unambiguous. It is also essential that these requirements are signed-off by senior representatives from business. If incorrect or wrong information is obtained and documented at this stage, all the subsequent stages will be adversely impacted and the services developed and delivered will not match the needs of the business. Thus, the requirements gathering stage is of paramount importance in the service lifecycle. The business requirements stage actually consists of a number of activities which we shall discuss now. They are: Appointment of a project manager, the creation of a project team and the agreement of project governance by the application of a formal, structured project methodology; Identification of all stakeholders, including the documentation of all requirements from all stakeholders and the benefits they will obtain from the implementation; Requirements analysis, prioritisation, agreement and documentation; Determination and agreement of outline budgets and business benefits; Resolution of the potential conflict between business units and agreement on corporate requirements; Sign-off processes for the agreed requirements and a method for agreeing and accepting changes to avoid ‘scope creep’; and Development of a customer engagement plan, outlining the main relationships between IT and the business and how these relationships and communication to stakeholders will be managed. The next slide represents diagrammatically the relationships and dependencies of the various elements and components that constitute a service and its overall environment.

4.7 Identification and Assessment of Customer and Stakeholder Needs Across Service Lifecycle

While identifying service requirements, it is important to analyse the relationships and dependencies of the various elements and components that constitute a service and its overall environment. The diagram on this slide represents this aspect very clearly. An organisation will have a number of business units each running or executing their own set of business processes. IT services support these business processes and they are managed through an agreed set of service level agreements between the business and the service provider. The services are in fact based on an integrated set of components like hardware and software systems, databases, networks, environments, data and applications. The services and these components are managed by well-documented and executed set of policies, processes, roles and responsibilities, and organisation structures. A number of supporting services are also required for delivering the core services. These supporting services may be delivered by internal organisational units or external suppliers. The relationships with the internal units are managed through operational level agreements whereas those with external suppliers are managed through contracts. Each of these have their own set of teams performing relevant tasks in the overall service provision. It is essential that all targets contained within supporting agreements should underpin those agreed between the service provider and its customers in the service level agreements. The key point to note here is that, when an individual aspect of a service is changed, all other areas of the service should also be considered to ensure that any amendments necessary to support the change are included in the overall design. We will now discuss the service model and service design package in the next slide.

4.8 Service Models and SDP

A service model is a diagrammatic representation that shows how service assets interact with customer assets to create value. It also indicates how the various components are related and how they are used by the service. Service models provide the basic architecture that is used to develop services during service design. Service design packages are defined and developed based on service models. Service models provide information on the market space that the service is being designed for and the type of assets that are required to deliver and support the service. Service design coordination in collaboration with customers, external and internal suppliers and other relevant stakeholders develop the service design and document it in a service design package. The service design package consists of well-integrated designs of service solutions, processes, management tools and architectures and measurement systems. These will assist in easier implementation of new or changed services in the service transition phase. This package should conform to strategic, architectural, governance and other corporate requirements, as well as IT policies and plans. The service design package includes the service lifecycle plan which covers all stages of the lifecycle of the service, namely transition, operation and subsequent improvement of the new service. It also includes the service transition plan, service acceptance criteria and the service operational acceptance plan. Moving ahead, we will understand the different information included in a service design package, which are required by the service transition team.

4.9 SDP as a Link Between Service Design Transition and Operation

We know that the service design package is a set of documents defining all aspects of an IT service and its requirements through each stage of its lifecycle. A service design package is produced for each new IT service, major change or IT service retirement. The service design package is handed over to service transition for building and implementing the service or release. The service design package includes the following information that is required by the service transition teams: The service charter, which includes a description of the expected utility and warranty, as well as outline budgets and timescales; The service specifications, defining the technical and operational requirements of the service; The service models, providing a representation of how service assets interact with customer assets; The architectural design, required to deliver the new or changed service, including constraints; The definition and design of each release; The detailed design of how the service components will be assembled and integrated into a release package; Release and deployment of management plans; and The service acceptance criteria. We will now move on to the different stages within service transition in the next slide.

4.10 SDP as a Link Between Service Design Transition and Operation

As discussed earlier, the service design package defines the requirements through each stage of the service lifecycle. It thus defines the stages for the service transition also. We shall now briefly discuss the stages within service transition. They are: Acquire and test new configuration items and components: This stage involves acquiring the required configuration items and components from projects, suppliers, partners and development teams. Configuration items should meet the required quality levels and hence these are assessed, tested and authorised for use in specific conditions. Build and test: The next stage is to build and test the release package. Release packages are built in a standard and controlled way in line with the solution design defined in the service design package. The applicable build management procedures, methodologies, tools and checklists are applied. All relevant and planned tests are performed to ensure that the components and release packages are functioning as expected. Upon satisfactory testing, the baselined release package is checked into the definitive media library. Service release test: A service release test ensures that the service components can be integrated correctly and aims to build confidence in the service capability prior to final acceptance in live environments. It will be based on the test strategy and the model for the new or changed service. Service operational readiness test: The service operational readiness test aims to determine whether a service and its underlying service assets can be released into the live environment. It also ensures that the business processes, customers, users and service provider interfaces are capable of using the service properly and that the service teams are capable of operating the service and using the service management systems. Deployment: In this stage the release package in the definitive media library is deployed to the live environment. There may be many separate deployment phases for each release, depending on the planned deployment options. Early life support: This stage is responsible for the transition of the new or changed service to service operation in a controlled manner and establish the new service capability and resources. Review and close service transition: This is the final stage and it ensures that the experience and feedback of the complete service transition phase are captured, performance targets and achievements are reviewed and lessons learned are documented and published. Next slide contains the diagrammatic representation of the upstream flow of knowledge, experience and skills between lifecycle stages.

4.11 Flow of Knowledge Experience Skills Between Lifecycle Stages

The skills and experience gained by service transition and service operation staff will typically be valuable in the upstream stages in the service lifecycle. The diagram on this slide represents the upstream flow of knowledge, experience and skills between lifecycle stages. Let us look at a few examples of this upstream relationship. Expert advice and input from design, transition and operation help in the development and maintenance of service strategy. Service design establishes the transition approach and within service transition the viability and quality of that approach is assessed and feedback provided to service design for improvements and amendments. Service transition will depend on appropriate experience from skilled staff in the service operation functions to deliver much of the knowledge required to make key decisions. In order to retain and make effective use of experience, service operation staff may well find themselves allocated to support design and transition activities. In this figure the continual service improvement lifecycle stage is represented by the arrows, which include feedback and improvement suggestions. In the next slide we will look into some examples of the downstream relationships.

4.12 Flow of Knowledge Experience Skills Between Lifecycle Stages

Now let us look at downstream relationships and influences. Hope you will agree that the downstream relationship is natural and logical one; as a service is initiated in strategy phase, all aspects are designed in design stage, built and tested in transition stage and finally delivered to customers and users in operation stage. Let us discuss some examples of this downstream relationship. They are: Many of the capabilities of a service that require testing and acceptance with transition are established and the approach and measures are set within the service design stage of the lifecycle. Similarly, many elements initiated or perfected during service transition will be established and become key elements within service operation. One of the key phases during transition is testing. The defects and incidents detected may reveal errors within the new or changed service. These defects and incidents identified and resolved provide direct input to the service operation procedures for supporting the new or changed service in live use. Service transition will share processes with service operation, possibly with some variations in procedure. A good example is the maintenance test procedures developed by service transition and passed over to service operation teams. We will learn about the important role played by IT operation staff in supporting some key service strategy activities in the next slide.

4.13 Flow of Knowledge Experience Skills Between Lifecycle Stages

It is during service operation that customers and users start using the services. Service management focuses on achieving service level targets and maintaining higher levels of customer satisfaction. In achieving these key objectives, service operation staff, gains a lot of exposure to various types of situations and circumstances. This translates to gaining more experience, enhancement of skills and knowledge. It is therefore extremely important that service operation staff is involved in various activities within other service lifecycle stages where appropriate. We shall now discuss lifecycle stage-wise examples of activities where service operation staff can be involved to add value. Let us start with service strategy. IT operation staff can play an important role in supporting some key service strategy activities. They are: They can be involved in identifying and communicating current operation capabilities, workforce levels and operational staff skills while developing IT strategies. This throws light on the strengths and weaknesses of current IT organisation and enables development of right strategies. Another activity where service operation staff can contribute is for 'gathering and identifying IT operational costs'. While it is easy to estimate project costs, it is difficult to forecast the operating expenditure. Costs incurred with respect to current services delivered will help in computing the total cost of ownership and other financial data required by service strategy. The most important activity where operations staff involvement is of great value is ’identifying high-level impacts of chosen IT strategies on current operational activities’. This will ensure that the new strategies are not detrimental to existing services. ’Identifying operational constraints that may impact IT strategies such as workforce union restrictions or inadequate physical environment capabilities’ is another area where operations staff can be involved. ’Identifying operational risks for IT strategies being considered’ is an area where the best and the most relevant inputs can be expected only from operations teams. In the next slide we will look into some activities where operations staff can contribute during service design stage.

4.14 Flow of Knowledge Experience Skills Between Lifecycle Stages

Operations staff involvement in service design activities should be strongly encouraged. This is essential from two angles. Firstly, operation staff can provide valuable inputs in the development of service designs and design packages. Secondly, their involvement will be beneficial to the service operation stage itself as, well-designed and implemented services will deliver the expected value to customers during service operation. The following are some activities where operations staff can contribute during service design stage: Service operation staff can help in the clear definition of IT service objectives and performance criteria. With a lot of exposure to operational environments and customer expectations, they can help in determining the right objectives and performance criteria. They can also provide valuable input in establishing the linkage of IT service specifications to the performance of the IT infrastructure. An important aspect of service design is to ensure the operational performance requirements of a service. Operations staff is the right people to provide inputs in this direction. Another critical area is the mapping of services and technology. It is essential to know which services use what type of technology. Operations staff involvement is very important in this area as well. The ability to model the effect of changes in technology and changes to business requirements is very important to ensure that current and new services are not adversely impacted. IT operations staff can be involved to analyse the impact and suggest appropriate measures. Service operations staff keep tract of operational costs and hence should be involved to develop appropriate cost models and to evaluate return on investment and cost reduction strategies. We will learn about the important role played by IT operation staff in supporting some key service transition activities in the next slide.

4.15 Flow of Knowledge Experience Skills Between Lifecycle Stages

Service operation is the next logical stage to service transition. Services built and deployed by service transition are handed over to service operation for day-to-day management and maintenance. Hence, involvement of service operation staff in service transition activities, where appropriate, will lead to a more robust and efficient services. We shall look at some important service transition activities where operations staff can be effectively involved. They are: Operations staff should participate in appropriate trainings to learn how to operate a new or changed service. They should be closely involved in operational acceptance tests to ensure that the services meet operational and manageability requirements and the staff is capable of operating the service and service management systems. The operations staff should also participate in transition planning to identify impacts of transition activities on current operational activities. They might be required to work on various transition tasks such as moving applications and other components from the development environment to the live environment. One area where their involvement is mandatory is the early life support stage. It is during this stage that the operations team will gain complete knowledge and information about the new services or major changes that have been released to the live environment. They may also be required to participate in quality assurance activities such as testing and validating the functionality, performance and operational readiness of the new or changed service. Moving on to the next slide let us look into some activities where operations staff can contribute during the continual service improvement stage.

4.16 Flow of Knowledge Experience Skills Between Lifecycle Stages

Service operation is responsible for coordinating and carrying out the activities and processes required to deliver and manage services at agreed levels to business users and customers. Service operation staff monitors, manages and controls the services to ensure that the required business outcomes are achieved by customers. As part of executing the tasks and activities required for managing and delivering the services, the staff needs to look for opportunities to continuously improve the services as well as customer satisfaction levels. They also need to align service provision to the changing business requirements. Thus, operations teams have a great opportunity to participate and contribute to continual service improvement. The key ones are: IT operations teams are responsible for capturing operational data and making it available to personnel involved in continual service improvement activities. They are also responsible for validating the accuracy of operational data that may be used to identify improvement opportunities. One of the key areas where operations staff can add value is—assessing the impact of proposed improvement actions on existing operation activities and services. They are generally involved in executing operational tasks to support service monitoring, measurement and reporting activities. Another area where there involvement is essential is to identify and promote operational issues and concerns to continual service improvement staff. The most important activity they need to perform is to identify and propose improvements that can enhance the performance and quality of the IT services being delivered. In the next slide we will understand the different policies and principles to be implemented to ensure involvement of service transition in early stages of service lifecycle.

4.17 Service Transition in Early Stages of Service Lifecycle

Hope you are able appreciate the fact that the service lifecycle is a closely integrated set of stages with a logical flow of activities from one stage to another. You may also be able to establish the dependencies and overlapping of activities between stages. It is therefore important that service management teams from subsequent stages are involved in previous stages of the lifecycle as early as possible to enable better understanding, development and delivery of services. This greatly helps in minimising risks and achieving desired objectives. We shall now discuss the policy and principles that need to be put in place and the best practices that need to be followed to ensure the involvement of service transition in early stages of service lifecycle. The policy to be adopted is – to establish suitable controls and disciplines to check at the earliest possible stage in the service lifecycle that a new or changed service will be capable of delivering the value required. And the principles to be followed are: To use a range of techniques to maximise fault detection early in the service lifecycle in order to reduce the cost of rectification; and To identify changes that will not deliver the expected benefits and either change the service requirements or stop the change before resources are wasted. Let us now look into the best practices that need to be followed to ensure early involvement of service transition in the service lifecycle in the next slide.

4.18 Service Transition in Early Stages of Service Lifecycle

ITIL is all about best practices in IT service management. We shall now look at the best practices that need to be followed to ensure early involvement of service transition in the service lifecycle. They are: Involve customers or customer representatives in service acceptance test planning and test design. This will enable the service transition teams to understand how to validate that the service will add value to the customer’s business processes and services. Involve users in test planning and design whenever possible. This will ensure that the tests will be based on how the users actually work with a service and not just on how the designers intended it to be used by the customers and users. Defects and errors in design sometimes are identified during transition stage. Such instances should be documented and maintained as knowledge base. These previous experiences should be utilised to identify errors in the service design as early as possible. Service management should be able to build, as early as possible during the initial lifecycle states, the ability to check for and to demonstrate that a new or changed service will be capable of delivering the value required of it. Evaluation is one of the best techniques to identify the risks and issues at each stage of the service development and implementation. Appropriate decision can be taken based on the evaluation findings. Using a formal evaluation process and conducting internal audits of the service design stage help to establish whether the identified risks and issues are acceptable and whether the service development can progress further. We will now look into the concept of service rehearsals in the next slide.

4.19 Service Rehearsals

A service rehearsal is a comprehensive test performed just before deployment of the service. It is a simulation of as much of the service as possible in an extensive and widely participatory practice session. It constitutes representation from all relevant stakeholders and is intended to identify and correct errors and unworkable procedures that may impact the business in live operation. The objectives of service rehearsal are: To gain confirmation that all stakeholders have been identified and are committed to operate or use the service; To verify and ensure that all stakeholders have processes and procedures in place and service support teams are equipped to resolve incidents and problems and are in a position to process changes relating to the new or changed service; and To test the effectiveness of ‘mistake proofing’ included within the service procedures. Mistake proofing refers to the introduction of advance warnings of user mistakes or bad practices and where possible implementing additional steps in the procedures to prevent these mistakes. Service rehearsals are complex, time-consuming and relatively expensive to prepare, deliver and document. Therefore, these rehearsals should be carefully planned and agreed, to ensure timely and adequate allocation of resources. The next slide will give us an idea of the different stages of service rehearsals.

4.20 Service Rehearsals

The first stage of service rehearsal is to 'PLAN' - that is to 'PREPARE FOR THE SERVICE REHEARSAL DAY'. This planning normally happens a few days or weeks before the execution of the service rehearsal. A rehearsal manager is appointed and all key and secondary business and IT processes to be tested are identified. All relevant stakeholders are also identified. The detailed rehearsal scripts along with the simulation, processing, tracking and analysis of the expected scenarios are documented. Finally, all stakeholders are invited to participate in the planning and preparation meetings. The 'DO' stage is concerned with 'DELIVERING THE REHEARSAL'. It starts with holding meetings to convey the objectives, share documents and solicit active involvement of all stakeholders. This is followed by a walkthrough of the scenarios and scripts to establish authenticity of the approach at a detailed level. The rehearsal is carried out wherein the relevant players deliver the script and observe the processing of key events and elements. As far as possible an end-to-end execution of the identified process is performed. The third stage is to 'CHECK' which basically involves 'DOCUMENTING THE DAY '. The results of the rehearsal are analysed to determine the implications of the activities performed. A test report on the rehearsal along with recommendations is produced and all identified errors, issues and risks are also recorded. The final stage is to 'ACT' which represents 'TAKING APPROPRIATE ACTION FOLLOWING THE REHEARSAL'. Based on the results of the rehearsal, the service is either declared as 'passed without serious concerns' or that the service is not suitable for progressing at this stage. Finally, a review meeting is conducted and the service rehearsal is closed. This may include logging improvement ideas in the CSI register or to service design and service transition lifecycle stages as appropriate. We will now learn of some of the key activities of the service level management in the next slide.

4.21 Service Level Management

The services delivered by a service provider should align with business requirements and meet the expectations of the customers and users in terms of service quality. This is possible only by implementing the service level management process. In today's world success of IT is measured in terms of achieving agreed service level targets as well as the resulting business outcomes achieved. Service level management is responsible for agreeing and documenting service level targets and responsibilities for every service and related activity within IT. Let us now look at some of the key activities of service level management. They are: The most important activity is to involve the business and determine its service level requirements with respect to services delivered. This is essential because business can provide correct and relevant inputs regarding which business processes and activities are important and critical. Service level management is also responsible for identifying the relationships between internal departments and functions within IT organisations. The next step is to negotiate the terms and responsibilities of the internal relationships which are then translated into formal operational level agreements. Another important activity is identifying existing contractual relationships with external vendors and then work with the supplier manager to verify that the underpinning contracts meet the revised business requirements. Service level management is ultimately responsible for negotiating service level agreements with the business. It should be based on service catalogue and should be documented and signed-off by both IT and business representatives. Once services are deployed and service level targets are agreed, a recurring activity is to review service achievement and to identify areas of improvements. These are fed into continual service improvement for initiating next steps. In the next slide we will discuss about service review meetings.

4.22 Service Level Management Review Meeting

After accepting and signing-off the service level agreement, the next logical step is to initiate monitoring and reporting of service level achievements. The service level reporting intervals, formats and mode must be defined and agreed with customers. The frequency and formats of service review meetings should also be agreed. The service level reports must be produced and circulated to customer and IT representatives well before the service review meetings. Service review meetings must be held on a regular basis with customers. Key agenda items of the meeting should be to review the service achievement in the last period and to preview any issues for the next period. It is a good practice to conduct these meeting at monthly intervals or at least quarterly. Minutes of the meeting should be produced with all actions incorporated. Actions should be assigned to appropriate people on the customer and or service provider side. This is to ensure identification and improvement of weak areas within the service or where service level targets are not being met. The meetings should specially focus on each breach of service level to determine the cause and what can be done to prevent any recurrence. This may lead to either renegotiating service level targets that have become unachievable or may lead to review of underpinning contract or operational level agreements if the breaches are attributed to suppliers or internal departments. Where required and justified, service improvement plans may be initiated. These are normally routed through continual service improvement. It is important to produce reports on the progress and success of such service improvements. This will enable keeping track of number of service improvements completed and whether expected benefits and outcomes have been achieved or not. The next slide discusses the contribution of business relationship management across lifecycle stages.

4.23 Business Relationship Management and Customer Satisfaction

Services are designed and delivered to meet customer requirements. Business relationship management is primarily responsible for ensuring that customers are satisfied with the services they receive. To achieve this, this process works throughout the service lifecycle to understand customer requirements and expectations and ensure that they are being met or exceeded. We shall now discuss the contribution made by business relationship management across lifecycle stages in maintaining and enhancing customer satisfaction. During service strategy stage, business relationship management ensures that the service provider understands the customer’s objectives and overall requirements. It passes on this information to service portfolio management for evaluation and approval. As the service moves through various statuses within the pipeline and into operation, business relationship management will represent the customer’s perspective and requirements. It also makes the customer aware of the service provider’s constraints and requirements. In service design, business relationship management provides guidance to both the customer and the design teams about who to communicate with and what the content of that communication will be. Business relationship management also ensures that the service provider has properly understood the customer’s detailed requirements and initiates corrective action where required. It also collaborates with service level management to ensure that the customer’s expectations of the new service are set at the appropriate level, based on service provider's current capabilities and constraints faced. During service transition stage, business relationship management provides a valuable communication channel and ensures that the customers are involved in change, release and deployment activities that impact their services. Customer and user involvement is essential during user acceptance testing. Business relationship management agrees the plan and schedules with them and ensures their participation. During service operation, business relationship management works with service level management, incident management and the service desk to ensure that services have been delivered according to the contract or service level agreement. This is done in close coordination with respective process owners. These processes or functions measure the level of customer satisfaction regularly and share the reports with business relationship management. Business relationship management takes the onus in resolving any issues and complaints raised by either party. In continual service improvement, business relationship management monitors service reports, levels of customer satisfaction, exceptions to service levels or specific requests or complaints from the customer. It works with concerned process and function owners to identify suitable remedial actions and resolve them. Customer agreement is always sought before implementing or providing the resolutions. We will move ahead to the various methods for monitoring customer satisfaction in the next slide.

4.24 Customer Satisfaction Surveys

Customer satisfaction can be measured and managed at two levels. While the business relationship management is concerned with overall customer satisfaction, service level management is focused around customer satisfaction relating specifically to the levels of service provided. Satisfaction is sometimes defined as perception minus expectation. So it is important to manage customers' expectations by setting them at right levels and defining appropriate targets. This should be supported by a systematic process of managing the expectations throughout the relationship. It is important to regularly monitor and measure customer satisfaction and perception with respect to services delivered. It is a good practice to set targets and incorporate them within service level agreement. This will ensure the right level of focus required for this most important aspect of service provision. We shall now look at the various methods of monitoring and measuring customer satisfaction. They are: Sending questionnaires and conducting surveys at periodic intervals is one of the best ways to ensure regular monitoring of customer satisfaction. It also provides an opportunity to track the trends in customer satisfaction leading to taking appropriate actions to maintain or enhance the satisfaction levels. Another important and best method of monitoring customer satisfaction is to seek and record customer feedback during the service review meetings. As service review meetings are conducted at periodic intervals, this helps in knowing customer perception and satisfaction levels on a regular basis. The feedback received as part of post implementation reviews conducted by the change management process is a good method to measure customer satisfaction on specific changes or releases. Telephone perception surveys are generally used by service desk staff to randomly monitor and measure user satisfaction levels regarding incidents resolved or service requests fulfilled. ‘Satisfaction survey hand-outs’ is again a method for specific activities performed like completion of installations or after service visits. Where collective feedback and satisfaction levels are expected to be measured, user group or forum meetings are the best way. This helps in gaining an understanding of the overall perception and satisfaction level of the entire group. Another simple and effective way of monitoring and measuring customer satisfaction is to analyse the complaints and compliments received from customers and users. This will throw light on the areas where user dissatisfaction is higher and enables taking specific actions. Whatever is the method used, it is important for the service provider to demonstrate that actions are being taken based on feedback received or survey scores analysed. These may be implemented through service improvement plans and tracked in service review meetings. The next two slides deals with the different survey techniques and the advantages and disadvantages of each technique.

4.25 Survey Techniques(12)

Various tools and techniques can be used for conducting customer satisfaction surveys. Every technique will have its own advantages and disadvantages. Service management teams, especially the process mangers should decide on the right technique to be used based on the cost and effort involved, the persons or groups being surveyed, and the objective of the survey. Some general techniques along with advantages and disadvantages are detailed in this slide and the next one. Please spare a few minutes to go through these techniques. We will learn about the strategic assessment of the internal and external environment in the next slide.

4.27 Strategic Assessment(12)

Organisations are part of an ever-changing environment. It is therefore essential that strategies developed are based on a systematic assessment of the changing environment and what changes are likely to impact the organisation in the foreseeable future. It is also important that the strategic assessment analyses both the internal environment as well as the external environment. The internal environment represents the service provider’s own organisation and the external environment represents the outside world with which the service provider’s organisation interacts. We shall discuss these in more detail now. Analyse the internal environment The internal environment analysis is mainly focused on the service provider’s strengths and weaknesses. This will help the organisation in identifying the strengths that can be leveraged and the weaknesses that need to be overcome. The strengths and weaknesses of a service provider’s organisation can be categorised as follows: The existing services delivered and the key differentiators when compared to similar services provided by others fall under the first category of strengths and weaknesses. They also represent the service provider’s distinctive capabilities and core competencies. The next category to analyse is the financial assets and investments. This includes analysing the cost of services and the return on investment derived by the service provider. This analysis should mainly focus on finding out how the services and the service provider are able to contribute to the achievement of business outcomes. Human resources are another important category. Human resources analysis tries to determine skills and capabilities of the service provider and how these are sourced. This analysis should also focus on the quality of training, recruitment, management, compensation, succession planning and labour relations. The next category is operations capability representing the efficiency and effectiveness of the organisation in supporting and delivering the services. It also includes the management of the technology upon which the services are based. For internal service providers, another important area to be analysed is the 'relationship with the business units'. The analysis should reflect how well the service provider is able to understand and contribute to the overall strategy and requirements of the customer. Existing resources and capabilities should also be analysed to understand how well they are currently utilised and whether they are really contributing to the desired objectives and outcomes. Another important category is 'existing projects'. Analysis of the current projects and how they will influence and impact the future operations and performance of the service provider organisation is also an essential part of the internal environment analysis. ? Analyse the external environment The external environment analysis is mainly concerned with opportunities and threats and tries to identify opportunities that can be exploited and threats that need to be overcome or guarded against. Let us now discuss the key factors relating to external environment. They are: The first and foremost factors to analyse are 'industry and market'. The analysis should focus mainly on the trends and practices in the industry in which the service provider is operating. This may include new technology, management methods and frameworks and sourcing models that are becoming more popular in the industry. The next factor to analyse is 'customers'. It is essential to understand the customers and their current strategies. The challenges faced and opportunities considered by customers will influence on the service provider’s strategies. Analysis of the current relationship with customers is a key aspect to consider as well. It is also important to analyse the current suppliers. Key areas to look for are the planned and current changes that are in progress with respect to services and products delivered by them. This should be followed by an analysis of the impact of these changes on the service provider’s current services and architectures. In case there are any partners involved in the provision of services, it is essential to analyse them as well. This should include the opportunities and strengths of the partners that may be leveraged and the organisation’s obligations and responsibilities towards the partners. Another important factor to analyse is 'competitors'. It is necessary to understand how the competitors differentiate themselves and how are they managing the quality and cost aspects. Their market status and new services being launched should also be considered during the analysis. The two factors that greatly influence the strategies and performance of the service provider organisation are 'legislations and regulations'. Impact of compliance with and changes to legislations and regulations should be analysed. Sometimes the political situations or changes may impact the strategies of the organisation. Hence this becomes an important factor to analyse, especially in volatile political environments. The next factor to consider is the 'socio-economic' condition. Economic forecast and social responsibilities may lead to changes in strategies and plans. One factor that cannot be ignored in current day world is 'technology'. The fast pace in technological changes have a direct impact on the services provided and may also influence the way services will need to be provided in future. In the next slide we will understand the concept of market spaces in detail.

4.28 Strategic Assessment(22)

Define Market Spaces Once internal and external environments are analysed, the next step is to define the market spaces. Market spaces represent the opportunities where a service provider can deliver value to its customers. It includes current market spaces as well as potential new market spaces. An essential aspect to focus on while defining market spaces is exploring business potential. Service providers can be present in more than one market space. Hence, while performing strategic reviews and assessment, they should include the analysis of strengths, weaknesses, opportunities and threats in each market space. Service providers should then identify business potential based on unserved or under- served market spaces. These basically represent unserved and under-served customer needs. Following this analysis, service strategy gets clarity on which market spaces are best served by existing service assets and which market spaces are to be avoided with existing service assets. For each market spaces to be served, decisions are made with respect to: Services to offer - by incorporating them in the service portfolio Customers to serve - by including them in the customer portfolio Critical success factors for the identified services Service models to be adopted and service assets to be utilised for each service Prioritising services in service pipeline and service catalogue. Though market space analysis for internal service providers are based on the same principles as that of external service provides, there are certain aspects that may influence the decisions discussed earlier. Let us briefly touch upon these aspects. They are: Priority and strategic value: Business priorities and strategic objectives play a key role in decisions relating to introduction of new services or changes to existing services. Investments required: The quantum of funds required for new services or for modifying existing services needs to be estimated and verified with financial position of the organisation before decisions are taken. Financial objectives: Apart from business and strategic objectives, financial objectives like cost reduction, return on investment and charging will definitely influence market space decisions. Risks involved: The risks involved in implementing as well as not implementing the services or changes, are analysed to enable informed decision-making. Policy constraints: The policies established by governing bodies regarding investments, resource utilisation and lines of business represent the constraints and restrictions within which decisions need to be taken. The next slide lists out the different challenges relating to service strategy.

4.29 Service Strategy Challenges

One essential requirement of service management is to pre-empt challenges and risks, and define critical success factors for all stages and processes. Through this approach, organisations will be more equipped and capable to manage and deliver services efficiently. We shall start with challenges relating to service strategy: Complexity: An IT organisation is a combination people, processes, technology, assets and information. These components have to interact and perform as a cohesive set to deliver the services and meet organisational objectives. Thus, IT organisations are considered as complex systems and because of this complexity there exists a tendency to resist change. To overcome this challenge, services must be broken down into discrete processes that are managed by different groups with specialised knowledge, experience and resources. Coordination and control: The challenge of complexity also leads to the challenge of coordination and control. When discrete processes and functions are managed by different groups, there arises a need for coordination and control. Putting in place well-defined management systems and processes and ensuring cooperation amongst all functions and groups within the organisation is the key way to overcome this challenge. Preserving value: One of the key challenges of service strategy stage is to maintain the value of the services delivered to customers. It is important to continuously align the services to changing business requirements. Eliminating or reducing variations in service performance, maintaining operational effectiveness and efficiency and reducing hidden costs can lead to better customer’s perception of the services. Implementing additional aspects like automation, web-based functionality and support tools can also lead to reduction in costs and better customer satisfaction and perception. Effective measurement: Generally measurements are designed to focus more on service provider’s internal goals rather than customer’s needs and satisfaction. Performance measurements should be aligned to business environments and customer’s requirements. Discrete or individual components’ monitoring and measurement is of very low value to the organisation. An integrated measurement approach with cross-domain coordination will be more effective. Also, it should be ensured that while defining new strategic goals, the related measurements should also be defined or changed. In this slide we found out the different challenges relating to service strategy, in the next slide we will look into the risks.

4.30 Service Strategy Risks

Identifying and managing risks is essential to build efficiency, credibility and trust within the service provider organisation as well as with customers. The major risks relating to service strategy are: Inaccurate information is considered to be one of the major risks in an organisation. This will lead to wrong decisions and adversely impacts the services as well as the organisation. This risk can be mitigated by building good relationships and communication channels within all business units and with customers and suppliers. Using these channels, timely and accurate business information can be sought. Risk of taking or falling to take, opportunities: Risks can be associated with threats or opportunities. Failure to take opportunities to serve under-served market spaces and unfulfilled demand can be a risk. On the other hand the opportunity costs of under-served market spaces and unfulfilled demand is a risk to be avoided. Similarly, if service management is effective, services in the catalogue and pipeline, represent opportunities to create value for customers and capture value for stakeholders. Otherwise, those services can be threats from the possibility of failure associated with the demand patterns they attract, the commitments they require and the costs they generate. The effective way of managing these risks is by making accurate assessment in the given situation and analyse the potential benefits. Design risks: A major cause for poor performance of a service is poor design. Poor design may also lead to diminished utility of a service when there is a change in the pattern of demand. Service design processes and methods are a means to reduce the performance risks and demand risks of services. They also help in defining the best configuration of service assets that can provide the necessary performance potential and accept not only a specific pattern of demand but also tolerate variations within a specified range. Operational risks: Schedule pressures during service transition may lead to early delivery of new capability without the agreed level of warranty. This leads to a number of risks during operations stage. Service management must look at risks faced by the business as well as risks to IT services. Service transition should filter and negate such risks. Market risks: A common risk faced by all types of service providers is the shift in choice or market trends the customers have on sourcing decisions. Examples include customers moving from insourcing to outsourcing or from outsourcing to insourcing based on their strategic objectives. These risks can be mitigated by reducing the total cost of utilisation, giving customers financial incentives, providing services that are unique and consolidating the services delivered. We will discuss critical success factors in the next slide.

4.31 Service Strategy CSFs

A number of factors are critical to the success of a service management organisation. These should be clearly identified based on challenges and risks identified and the strategic objectives of the organisation. Examples of such critical success factors for service strategy stage include: A team of experienced, skilled and trained staff with the strategic vision and decision-making skills needed for success; Adequate support and funding from the business which must recognise the potential value IT service management can offer; and Appropriate and effective support tools to allow the processes to be quickly and successfully implemented and operated in a cost-effective way. Let us move on to the different challenges faced in the service design phase of the lifecycle.

4.32 Service Design Challenges

We shall now look at some challenges that may be faced by service management teams during the service design phase of the lifecycle. These are: Organisational resistance to change due to wrong perception, attitudes and communications; Difficulty with documentation and adherence to agreed practices and processes; Unclear or changing requirements from the business; A lack of awareness and knowledge of service and business targets, requirements and priorities; A resistance to planning or a lack of planning leading to unplanned initiatives and unplanned purchases and inefficient use of resources causing wasted time and money; Poor relationships, communication or lack of cooperation between the IT service provider and the business resulting in the design not achieving the business requirements; Required tools are too costly or too complex to implement or maintain with the current staff skills; Lack of information, monitoring and measurements; Unreasonable targets and timescales previously agreed in the service level agreements and operational level agreements; Poor supplier management and/or (pronounce as and or) poor supplier performance; Lack of focus on service availability which is a very important component of service warranty; The need to ensure alignment with current architectural directions, strategy and policies; The use of diverse and disparate technologies and applications leading to more complexity; Lack of awareness and adherence to the operational aspects of security policies and procedures; and Cost and budgetary constraints as well as difficulty in ascertaining the return on investments and the realisation of business benefit. Now that we are aware of the challenges, let us look into the common risks associated with service design stage of the lifecycle in the next slide.

4.33 Service Design Risks

It is a good practice to initiate risk identification, assessment and management activities as early as possible in the service lifecycle. This will ensure putting in place relevant risk response and mitigation plans resulting in a more efficient service design, development and delivery. The common risks associated with the service design stage of the lifecycle are: If any of the critical success factors for service design are not met, then the service design or service management process will not be successful. If maturity levels of one process are low, it will be impossible to achieve full maturity in other processes. Business requirements are not clear to IT staff. Business timescales are such that insufficient time is given for proper service design. Insufficient testing, resulting in poor design and therefore poor implementation. An incorrect balance is struck between innovation, risk and cost while seeking a competitive edge, where desired by the business. Alignment between infrastructures, customers and partners is not sufficient to meet the overall business requirements. There is a lack of coordinated interface between IT planners and business planners. The policies and strategies, especially the service management strategy, are not available from service strategy or its content is not clearly understood. Over- or under-engineered processes. Processes with too little definition and control may not consistently meet the stated objectives. Processes with too much definition and control can become an impediment to efficiency and may actually produce a negative impact on business outcomes. There are insufficient resources and budget available for service design activities. The services are being developed in isolation using their ‘own’ assets and infrastructure. There is insufficient engagement or commitment with the application’s functional development, leading to insufficient attention to service design requirements. The service transition stage also faces some challenges, let us now move ahead and see what they are.

4.34 Service Transition Challenges

Service transition is an important stage within the overall service lifecycle and there is a lot of complexity involved in transitioning services from service design stage to service operation stage. This complexity poses a number of challenges for service transition to be successful. The challenges pertaining to service transition are: Managing many contacts, interfaces and relationships through service transition, including a variety of stakeholders, namely, customers, users, project teams, suppliers and partners; Little harmonisation and integration of the processes and disciplines that impact service transition; Achieving a balance between maintaining a stable live environment and being responsive to the business needs for changing the services; Achieving a balance between pragmatism and bureaucracy; Being an enabler of business change and, therefore, an integral component of the business change programmes; Establishing leaders to champion the changes and improvements; Establishing ‘who is doing what, when and where’ and ‘who should be doing what, when and where’; Developing a culture that encourages people to collaborate and work effectively and an atmosphere that fosters the cultural shifts necessary to get buy-in from people; Developing standard performance measures and measurement methods across projects and suppliers; Ensuring that the service transition time and budget are not impacted by events earlier in the service lifecycle; and Understanding, and being able to assess the balance between managing risk and taking risks. There are some key risks involved in the service transition stage, lets discuss them now.

4.35 Service Transition Risks

One of the key objectives of service transition is to manage risks relating to new, changed or retired services. Thus, risk management is a vital activity during service transition stage. The major risks relating to service transition are: One major and frequently faced risk during this stage is the change in accountabilities, responsibilities and practices of existing projects. As new governance policies and project management practices are implemented, they are made applicable to projects currently underway. These changes will impact the project personnel and may demotivate the workforce. The best performers are always on demand in any organisation. When new projects are initiated or when critical phases require experienced and qualified resources, they are generally picked up from operations teams. This alienation of key support and operations staff may negatively impact the current services being delivered. Due to change in scope, requirements or technology, requests for change may be initiated to projects and releases. This will lead to additional unplan

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