Service Strategy has the potential for many significant benefits to be delivered to the IT organization and the business/customers it serves. However in many cases, these benefits fail to be realized due to insufficient connection and interfaces with other elements of the Service Lifecycle. For example:

The IT Strategy Group from an international banking and managed investment firm has decided to address the current economic downturn by reducing investments into the IT organization and Service Portfolio. As a result, the quality of some key services fall, with the support organization struggling to respond effectively to all calls for assistance. After a few months of lowered quality of service, the organization loses a number of major customers to their primary competitors. In response to the loss of these customers, further budget reductions are planned to counter the decrease in revenue earned.

By failing to realize their customers’ value perception of services through service quality, the organization became caught in a negative cycle with potentially serious long term consequences. The missing link between the decisions being made by the strategy group and the potential impact they may have on elements of service quality (in particular the support of services in this example) or service value is often a challenge when developing Service Strategy.

When developed successfully as part of a holistic IT Service Management implementation, effective Service Strategy can provide:

  • Improved understanding of the IT organization’s customers and market space they reside in
  • Detection and analysis of patterns in the demand for and use of IT services
  • Improved understanding of the costs involved in providing and supporting IT services
  • Identification and communication of the business value provided by IT services
  • Enhanced capabilities for managing the overall portfolio of services, and in particular, optimizing investments into IT
  • Consistent policies, standards and guidelines by which IT Service Management processes can align to.
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