ITIL4 Foundation Study Guide 1 : Service Management

Service Management (17 points)

• Understanding Value
  • Service management is defined as a set of specialized organizational capabilities for enabling value to customers in the form of services.
  • Developing the specialized organizational capabilities mentioned in the above definition requires an understanding of:
    • the nature of value
    • the nature and scope of the stakeholders involved
    • how value creation is enabled through services
  • Value is the perceived benefits, usefulness, and importance of something.

• How is Value Created?
  
  • There was a time when organizations saw their role as delivering value to their customers in much the way that a package is delivered to a building by a delivery company. 
  • This view treated the relationship between the service provider and the service consumer as mono-directional and distant.

• Providers and Consumers CO-Create Value
• More and more, organizations recognize that value is co-created through active collaboration between providers and consumers, as well as other organizations that are part of the relevant service relationships. 
• Organizations that deliver services are referred to as service providers.
• Those to whom services are delivered are referred to as service consumers. 

• Organizations Facilitate Value Creation
  • An organization is a person or a group of people that has its own functions with responsibilities, authorities, and relationships to achieve its objectives. 
  • Organizations vary in size and complexity, and in their relation to legal entities - from a single person or a team to a complex network of legal entities united by common objectives, relationships, and authorities.
  • Example: IT department acting as a service provider within a wide business organization. 

• Service Consumer Roles
  • Customer: A person who defines requirements for services and takes responsibility for outcomes from service consumption. 
  • User: A person who uses services.
  • Sponsor: A person who authorizes the budget for service consumption.

• Other Stakeholders in Value
  • Beyond the consumer and provider roles, there are usually many other stakeholders that are important to value creation.
    Example:
    
    • Shareholders
    • Employees
    • Community

• Service and Products
• A service is a means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks.
  • The services an organization provides are based on one or more of its products.
• A product is a configuration of resources, created by the organization, that will be potentially valuable for their customers.
• Products are typically complex and not fully visible to the consumer. The portion of a product that the consumer actually sees does not always represent all of the components that comprise the product and support its delivery.
• Organizations define which product components their consumer sees, and tailor them to suit their target consumer groups.

• What is a Service Offering?
  • A service offering is a description of one or more services, designed to address the needs of a target consumer group. A service offering many include goods, access to resources, and service actions.
    • Goods:
      
    • Ownership is transferred to the consumer
      
    • The consumer takes responsibility for future use
    • Access to Resources
    • Ownership is not transferred to the consumer
    • Access is granted/licensed under agreed terms or conditions
    • Service Actions
    • Performed by the provider to address a consumer need
    • Performed according to an agreement with the consumer
• What are Service Relationships?
  • Service provisioning consists of activities performed by a service provider to provide services.
  • Service consumption consists of activities performed by a service consumer to consume services.
  • Service relationship management consists of joint activities performed by a service provider and a service consumer to ensure continual value co-creation based on agreed and available service offerings.

• Service Provisioning
• Management of provider resources configured to deliver the service
• Provision of access to resources for users
• Fulfillment of the agreed service actions
• Service performance management and continual improvement
• Service Consumption
• Management of the consumer resources needed to consume the service
• Utilization of the provider's resources
• Requesting service action to fulfill
• Receipt of or acquiring of goods
• The Service Relationship Model
• Service Providers are also service consumers.
• Outcomes, Costs, and Risks
• A service is a means of enabling value co-creation by facilitating outcomes that customers want to achieve without the customer having to manage specific costs and risks.
• Service Facilitate Outcomes
• An output is a tangible or intangible deliverable of an activity.
• Examples:
• Report
• Bill(of a consumed service)
• Emails sent(using an email service)

• Understanding Costs
• Costs refer to the amount of money spent on a specific activity or resource.
• There are costs removed from the consumer by the service.
• Example: Uber/Lyft/DiDi
• No need for a car 
• No need to pay insurance, maintenance, gas
• There are costs imposed on the consumer by the service, including charges by the service provider.
• Example: Uber/Lyft/DiDi
• Need for a modern smartphone that's capable of running app
• Need for a data plan to access the service
• Costs expressed in non-financial terms can be translated into financial costs
• Examples:
• Number of man-hours(or person-hours)
• Number of FTEs (Full-Time Equivalent)

• Understanding Risks
• Risks refer to possible events that could cause harm or loss, or make it more difficult to achieve objectives.
• There are risks removed or reduced for the consumer by the service.
• Example: Uber/Lyft/DiDi
• No risk of not finding parking for own car
• There are risks potentially imposed on the consumer by the service.
• Example: Uber/Lyft/DiDi
• Risk of failing smartphone, smartphone battery, or the app itself.
• The Consumer contributes to the reduction of risk through:
• Actively participating in the definition of the requirements of the service and the clarification of its required outcomes
• Clearly communicating the critical success factors and constraints that apply to the service
• Ensuring the provider has access to the necessary resources of the consumer throughout the service relationship
• Example: Uber/Lyft/DiDi
• The service provider should be able to get a customer's location data in order to know where to dispatch a car

• Utility and Warranty
• The utility is the functionality offered by a product or service to meet a particular need.
• What the service does
• Can be used to determine whether a service is 'fit for purpose'
• Requires that service support the performance of the consumer or remove constraints from the consumer
• Warranty is the assurance that a product or service will meet the agreed requirements.
• How the service performs
• Can be used to determine whether a service is 'fit for use'
• Typically addresses areas such as availability, capacity, security levels, and continuity
• Requires that a service has defined and agreed to conditions that are met