Wednesday, September 19, 2007

Activities of Strategy Generation

There are four defined activities for Strategy Generation, defined in the Service Strategy volume in ITIL version 3.

The concepts and ideas raised are fairly heavy - so a brief synopsis is provided here.


Understanding the opportunities available to the Service Provider is at the heart of defining the market.

The service provider gets to understand the opportunities by first understanding the customer required outcomes and then providing a service to enable that outcome.

A service will increase performance and improve outcomes; but real value comes from reduction in customer asset performance variation.

The visible element of market definition is the service catalog. A service catalog entry is a combination of customer assets and service archetypes (a combination can be one or more from either side). The term given to these combinations are Lines of Service (LOS) and they are the actual services about which agreements are made.


The market space is the main concept raised under develop the offerings. The market space is a set of opportunities for service providers to provide VALUE to a customer through the provision of one of more services.

Service providers focus on outcomes to ensure they deliver value, through utility and backed by warranty. (Summary: LOS delivers value that support outcomes and remove constraints). BUT a service can be developed without a customer – a speculative investment.


Service Management is a catalyst for higher achievements, because it coordinates customer assets and service assets. This coordination in practice is the adjustment of resources and capabilities that will enable a goal to be reached.

Reaching goals is inherently valuable and is a reflection of increased service and potential performance. The value creation creates profits and surplus that can be used to justify further investments/enhancements. The confidence and trust that comes from increasing value is what will ensure that customers continue to buy.


Success is not guaranteed even though a service strategy model exists. There is a requirement to think and formulate - it is not a mechanical process.

Understanding our current strategy and what works and doesn't work is the first step. Following this analysis we are able to determine the strategy objectives. Objectives are presented as solutions, specifications, needs or benefits; these benefits will also include one or more of the following information elements:
Customer tasks: What job or activity will the service actually do?
Customer outcomes: What is the desired customer outcome?
Customer constraints: What will prevent the outcome being reached and what actions can the service provider take to overcome these constraints?

Service assets must be aligned with the customer outcomes to be of any value and there is a requirement to define the CSF's (Critical Success Factors) for each service.

Understanding the CSFs is often a chance to analyze the competitive situation and even realize their own distinct competitive advantage (distinct value proposition).

Of course, there are always limited funds for developing services, which is why there must be an ability to prioritize investments. Of course, the basic rule of business applies here which is to address the needs of a good customer that are being poorly addressed.

Another basic rule of business is to continually survey the market for opportunities to expand into other market spaces. This requires a traditional SWOT analysis and can lead to significant expansion and growth.

The risks associated with expansion and growth are substantially reduced when they are dealt with as part of a service strategy associated with a market space. The least risky strategy for expansion is within existing customer portfolios and utilizing exist service assets (essentially through the provision of complementary services).

Finally, the ability to stand out from competitors when it comes to controlling existing market spaces or looking for new growth areas is a vital element. The ability to be competitive is what helps you to retain customers. Failure to meet or exceed the expected industry standard for a service will create a loss of satisfaction in customers and they will seek alternatives. Look to exceed the expected industry levels across the multiple attributes (reliability, multi-platform support, on site support, etc) of a service and you have competitive differentiation.

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