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ITIL Service Strategy demystified.There has been feedback from itSMF members that the Service Strategy book is somewhat more theoretical or abstract than the “meat and potatoes” of Service Transition and Service Operation. However the basic concepts of Service Strategy have existed in service organisations throughout time. This presentation aims to demystify the concepts of ITIL Service Strategy by looking at the topic through the eyes of the fish and chip shop owner – here is Service Strategy as part of Service Management 101 – with the key concepts of Service Strategy explained using a familiar and non threatening metaphor.This presentation was first delivered at itSMFA 2011 annual conference in Perth, WA.
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2011
Service Strategy for the Fish and Chip Shop Owner
Patrick Keogh
UXC Consulting
patrick.keogh@uxcconsulting.com.au
ITIL 2011• The Service Strategy book has undergone
the most significant change/improvement of all of the core publications.
• This presentation has been updated based on the ITIL 2011 improvements
What is this presentation about?
• Service Strategy book may appear theoretical or abstract
• An example from day to day experience can make the ideas more concrete
• IT service strategy isn’t all that different to any service strategy
• “It all started several years ago when…”
Backstory –ITIL Foundation Certificate course
• Student taking early retirement “in a few weeks”.• What are you going to do? “We’ve got a place
down the coast.”• “Not really ready for retirement, I want to open
some sort of food business.”• “Haven’t decided what or where.”• So…
Conclusion…• This man needs a
service strategy!• ITIL Service
Strategy canprovide great guidance.
• So on with the story…
First of all, what is a service strategy?• Defining a strategy whereby a service
provider will deliver services to meet a customer’s business outcomes
• Defining a strategy for how to manage those services.
ITIL 2011 Service Strategy
4 P’s of Service Strategy• Perspective Describes the vision and direction of the organization. A
strategic perspective articulates what the business of the organization is, how it interacts with the customer and how its services or products will be provided
• Positions Describe how the service provider intends to compete against other service providers in the market. The position refers to the attributes and capabilities that the service provider has that set them apart from their competitors.
• Plans Describe how the service provider will transition from their current situation to their desired situation.
• Patterns Describe the ongoing, repeatable actions that a service provider will have to perform in order to continue to meet its strategic objectives.
ITIL 2011 Service Strategy
Strategy Management for IT Services
1. Define the market
2. Develop the offerings
3. Develop strategic assets
4. Prepare for execution
Key Concepts
How do these apply to the food service business?
2011
1. Define the market
The geography
BawleyPoint
BatemansBay
Narooma
The Market SpaceLocation Bawley Point Bateman’s Bay Narooma
Population 565 10,845 3,100
Demographics Quiet beach holiday town.
Popular retiree haven. Tourism. Central service town for 50Km radius.
Tourism, beach resort, rural service town.
Existing food service businesses
Butcher, baker, bottle shop, take away and an IGA.
> 40 restaurantse.g. at least 10 pizza shops.
< 20 restaurants and take aways,e.g. 1 pizza shop
Passing traffic Almost none. Route 1 goes through Bateman’s Bay outskirts.
Route 1 goes down the main street.
Industries Tourism. Retirement, tourism, fishing, forestry.
Fishing, tourism.
The Customer Portfolio
• What clientele would I be trying to attract?• What food services would this clientele
use?• What would the competition be?
2011
2. Develop the offerings
Potential customers• Service preferences driven by age,
income, background etc.• What customer assets do they have?
– Their own kitchen / crockery / fridge?– Somewhere to eat?
• “Locals”• Weekenders/holiday residents• Passing trade
What customer outcomes?
Somewhere quick to stop for lunch
What customer outcomes?
Day to day staple foods
What customer outcomes?
Somewhere fancy to go out for dinner
What customer outcomes?
Somewhere to get family takeaway dinnerquickly and at low cost.
What customer outcomes?
Morning coffee
or breakfast
or brunch.
Different services for different customer outcomes• Each of these will require its own specific
service model.• A customer will have multiple outcomes.• May draw on multiple services with their
unique service models in order to achieve their outcomes.
Competitors
Indicate demand forspecific services
Reduce our marketshare
How many pubs can survive in a town of 3000
people?
Where is the under-served market space?
2011
3. Develop Strategic Assets
Can you see Strategic Assets?
Can you see Strategic Assets?
2011
4. Prepare for Execution
Key Activities• Strategic Assessment
– SWOT– Critical success factors– Business strategy and plan
• Setting Objectives– Management strategy to ensure that objectives are met
• Aligning Service Assets with Customer Outcomes• Explore business potential, expansion and growth
2011
Service Economics
Demand Management
Patterns of business activity– Summer boom, winter bust– What hours of the day (do people eat later or
earlier when on holiday?)– Easter?– Long weekends?– What effect does weather have?– For peaky demand, how to manage resources?
Demand Management
User profiles– Commonly acquired baskets of services– If we have a table of 4 how much do they spend and how
long do they occupy the table? How about for a group of 8?– Do customers spend more at lunch than at dinner or vice
versa?– On average how many customers with special dietary
requirements will we get? Is it worth catering to vegans/special allergies etc.?
– What about small children?
Financial Management for IT Services
Market Price
Cost of Service Assets
RisksPrice and Profit
Market Share
Strategy and Organisation
• Our organizational structure must align with our strategy:– Hours of service– Can we appoint managers that we can rely
on?– Balance skills and resources between “front of
house” and the kitchen.
Service Management as a Strategic Asset• What is it that McDonalds sells?
– Is it the best hamburger?– Or is it predictable, timely service delivered at a good
price?
For McDonalds, Service Management is the business.
So my allegory comes to an end: what can we learn?
• Ideas and advice in ITIL Service Strategy are not new, and apply to all service organisations.
• Business intuitively apply these practices to some extent anyway.
• Make it real, make it concrete. It is about the customer and business viability.
Recommendations
• Take your service strategy seriously.• Strategy is not theoretical – it is real and
practical. If our fish and chip shop owner can do it then so can you!
• Remember the power of saying “No, we don’t do that”.
• Treasure your service assets. It isn’t heroics that deliver service, it is service assets.
2011
Questions?
Patrick Keogh
UXC Consulting
patrick.keogh@uxcconsulting.com.au
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