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Monday, December 19, 2011

Introduction to Service Management

This is the first chapter in our series to learn about ITIL V3 and proceed towards our goal of being ITIL V3 certified.
In order to understand what Service Management is, and why it is so important to enterprises, we need to understand what services are, and how Service Management can help service providers to deliver and manage these services.

ITIL defines a service as follows:
A service is a means of delivering value to customers by facilitating outcomes that customers want to achieve without the ownership of specific costs and risks.

The outcomes that customers want to achieve are the reason why they purchase or use a service. Typically this will be expressed as a specific business objective. For ex: A hospital may want to keep track of all its patients and the treatment they were offered. To enable the Hospital an IT company may create an “Hospital Management System” using which the Hospital can meet its requirement. The value of the service to the customer is directly dependent on how well a service facilitates these outcomes.

Although the enterprise retains responsibility for managing the overall costs of the business, they often wish to devolve responsibility for owning and managing defined aspects to an internal or external entity that has acknowledged expertise in the area.

This is a generic concept that applies to the purchase of any service. Another example could be financial planning. As a normal individual, we realize that we don’t have the expertise, or the time, or the inclination to handle all the day-to-day decision-making and management of individual investments that are required. Therefore, we engage the services of a professional manager to provide us a service. As long as their performance delivers a value (increasing wealth) at a price that we believe is reasonable, we are happy to let them invest in all the necessary systems and processes that are needed for the wealth creation activities. (The above is a simple example of how an Investment Manager or a Mutual Fund works)

From an investors perspective, the above is a Service but from the Service Providers perspective, whatever they do to keep us (the customer) satisfied of the service that is being provided it is “Service Management”

Service Management is what enables a service provider to:
• understand the services that they are providing from both a consumer and provider perspective;
• ensure that the services really do facilitate the outcomes that their customers want to achieve;
• understand the value of those services to their customers and hence their relative importance;
• Understand and manage all of the costs and risks associated with providing those services.

The definition of Service Management is:
Service Management is a set of specialised organisational capabilities for providing value to customers in the form of services.

These ‘specialized organizational capabilities’ include the processes, activities, functions and roles that a service provider uses to let them to deliver services to their customers, as well as the ability to establish suitable organization structures, manage knowledge, and understand how to facilitate outcomes that create value.

Although there is no single definition of a profession, it is widely accepted that the word profession applies where a group of people share common standards and disciplines based on a high level of knowledge and skills, which are gained from organized education schemes supported by training through experience and are measured and recognized through formal qualifications. Moreover, a profession seeks to use its influence through the development of good practice guidance and advice in order to improve the standard of performance in its given field. Service Management has a clear right to regard itself as a profession and the exercise of Service Management disciplines as professional practice.

Service Management is also a professional practice performed and supported by a global community drawn from all market sectors. There is a rich body of knowledge and experience including formal schemes for the education of individuals.

Difference between “Best Practice” and “Good Practice”

Enterprises operating in dynamic environments need to improve their performance and maintain competitive advantage. Adopting practices in industry-wide use can help to improve capability. If you were a customer who wants to acquire a service, you will most probably choose the company that implements industry wide best practices and offers the best quality product. Of course, this comes at a cost, but in most cases customers are willing to shell out some extra cash in order to receive the best possible product/service.

The term ‘best practice’ generally refers to the ‘best possible way of doing something’. As a concept, it was first raised as long ago as 1919, but it was popularized in the 1980s through Tom Peters’ books on business management.
The idea behind best practice is that one creates a specification for what is accepted by a wide community as being the best approach for any given situation. Then, one can compare actual job performance against these best practices and determine whether the job performance was lacking in quality somehow. Alternatively, the specification for best practices may need updating to include lessons learned from the job performance being graded.

Enterprises should not be trying to ‘implement’ any specific best practice, but adapting and adopting it to suit their specific requirements. In doing this, they may also draw upon other sources of good practice, such as public standards and frameworks, or the proprietary knowledge of individuals and other enterprises.

These sources have different characteristics:
• Public frameworks and standards have been validated across diverse environments.
• Knowledge of them is widely distributed among industry professionals.
• Training and certification programmes are publicly available.
• The acquisition of knowledge through the labor market is more readily achievable.

The proprietary knowledge of enterprises and individuals is usually customized for the local context and specific business needs of an organization. It may only be available to a wider market under commercial terms and may be poorly documented and hard to extract. If embedded within individuals it may not be documented at all.

Enterprises deploying solutions based on good and best practice should, in theory, have an optimal and unique solution. Their solution may include ideas that are gradually adopted by other enterprises and, having been widely accepted, eventually become recognized inputs to good and best practice.

Company’s sometimes choose the good practice over the best practice due to cost constraints or feasibility constraints.

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Next: The ITIL Framework

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