Service Strategy 1
Service Strategy 1
It provides guidance
on clarification and prioritization of service-provider investments in services. More generally,
Service Strategy focuses on helping IT organizations improve and develop over the long term. In
both cases, Service Strategy relies largely upon a market-driven approach.
This is a view of ITIL where IT and business align their visions. Its key topics covered include
service value definition, business-case development, service assets, market analysis, and
service provider types. List of covered processes:
Strategy Management
Service Portfolio Management
IT Financial Management
Demand Management
Business Relationship Management
Importance of this view is because this phase that is responsible to define service value. When
defining a service is important to have in mind four Ps for strategy: Perspective, Position, Plan,
Pattern.
Strategy activities are:
Define market
Develop strategic offer
Develop strategic assets
Prepare for execution
Service Strategy
Principles
When defining a service, strategist must have in mind list of principles, as stated below:
Value creation
Service assets
Service provider types
Service structure
Stages
Stages for definition of strategy are:
1. Define
2. Analyze
3. Approval
4. Charter
1. Internal service provider: exists within an organization and provides service solely for a
unique business unit
2. Shared service unit: exists within an organization, but provides service for more than
one business unit
3. External service provider: operates outside organization
Processes[edit | edit source]
Service strategy has two processes: Service Portfolio Management and IT Financial
Management, as depicted below.
The company should also take care of their employees and personal appearance
and all other small factors which influence the perceptions of the customers
towards the service. there should also be an effective calculation of the service so
as to be on par with the industry standards. There is often a gap between the
perception of the company and the expectations of the customer.
The companies of an strive to device a service strategy in such a way that the gap
is minimum. The wider the gap more difficult it will be for the company to sustain
in the market. The strategies used by the organizations vary on the nature of the
offering and the business.
Both of these companies provide products which are electronics and they also
provide after Sales service. In both of them, Apple stands out as the best because of
efficient after sales service.
Table of Contents
Importance of service strategy
1. The cost of getting a new customer is much more than entering the retention of the existing
customers. The customer strategy for service strategy should be in sync with the marketing
strategy of the company.
2. It is a well-known fact that to get a new customer the cost would be 5 to 10 times more than
that of the cost of retaining a current customer. More often than not customers are lost
because of poor services and bad treatment which gives them unsatisfactory. It is also
estimated that an unhappy customer will talk about his dissatisfaction to at least 8 to 16 other
potential customers. Adding social media and that the satisfied customer’s voice will reach
1600 more people which is why customer retention is of crucial importance to the
organization.
3. Looking on the other side of service strategy a customer who is satisfied or who is loyal will
cost not even a single penny but will add value to the business by being word-of-mouth
ambassador. This will save millions of bucks of the company since it is free publicity from the
customer to a potential customer. This is the reason why every customer should be satisfied
with the service strategy.
4. It is also stated that customer loyalty can have any impact on the business. Making the
customer is important creates all customers and those all customers will continue to do
business in spite of increasing competition. Higher customer loyalty translates into higher
customer retention and better competitive advantage.
5. Companies should ensure that the service strategy is in sync with the vision and mission of
the organization. They should complement the strategy of the organization. Companies to
take time in order to develop and implement an efficient service strategy which will be
responsible for the retention of the existing customers.
The primary step is to communicate the vision of the service to the employees
associated with the business. The employees associated with the organization
should understand and comprehend the organizational goals and the vision of the
organization and should be able to write their responsibility to help the company
achieve that vision.
More often than not the companies fail and waste their valuable resources in
creating services of product that the company thought customers would want only
to know that the offering was not what the customers wanted at all.
The important part is to know what the customer needs and to put it in sync with
the organization’s vision and mission. Taking the feedback of customers is the first
step in order to know and determine what their expectations are so that the
company can form a strategy around the feedback obtained in order to deliver and
meet the expectations of customers.
The market needs for customer needs can be assessed using a method such as
satisfaction surveys for focus groups and the customer feedback
forms. Development of such feedback forms and questionnaires is very important
and should focus on the questions that need to be answered by the customers.
It is also very important to keep in mind that the needs of customers keep on
changing with time and are like a moving target. Since it constantly keeps
changing it is very important for the companies to form a process which will
continuously keep on updating them about the changing needs of the customer so
that the companies can prepare and modify themselves and their offerings
accordingly.
3) Right hiring
When it comes to facing the customers it is not the company who is going to face
them rather it is the employees who are going to face the customers. Employees are
the face of the organization and organization has to ensure that the face is
represented correctly.
The employees should have the right skill set which meets the goals of the
organization and helps to form a strong network and backbone to provide service
to the customers. Having a right attitude and personality is something which
companies cannot develop in the employees which is why they should take care of
these things with hearing.
Most of the things can be incepted and developed in the employees but most of the
other things have to be built in. Interacting with customers and providing services
is an art more than science and not everyone can achieve it.
The employees should be able to understand the vision and mission and the target
of the organization so that they can align themselves to reach chief and exceed
those objectives. An example of customer satisfaction can be given as follows:
The service team of a refrigerator company provides after sales service. Once the
customer causes about the breakdown of the machine the time taken by the service
team to reach the place of the customer and correct the machine is measured.
The lesser the time to attend the customer breakdown calls the higher would be the
customer satisfaction. This can be a measurable parameter in order to appraise the
employees.
The training should focus not only on technical skills but also on interacting with
customers. Right service strategy requires suitable training to the service team so
that not only the customer but also your organization benefit from it.
The employees need to know about the goals of the organization so that they can
modify themselves to fit accordingly. The need to be trained not only on the
technical skills but also on other soft skills like answering the customer phone calls
and customer complaints and providing services.
6) Accountability
For example, rewarding the employee with the highest customer satisfaction and
working on the employee with over customer satisfaction.
This also reinforces the vision and mission of the organization and the service
strategy which is chalked out for everyone. A successful organization is
categorized by strong customer service.
The 5 processes of ITIL service
strategy
Reading time: about 8 min
Service Strategy
Service Design
Service Transition
Service Operation
Continual Service Improvement
These four P’s guide your service strategy and play an integral role
in how you outline and implement your service plans. Strategies
that lack any of these components are less likely to succeed. Here
are the basic definitions and applications for each strategy stage:
There are five processes within the service strategy lifecycle stage:
Assessment
Definition
Execution
The final step is implementation. This step is all about planning your
strategy for the successful execution of your strategic initiatives.
2. IT Financial Management
IT Financial Management (also known as financial management for
IT services) focuses on service valuation. This process involves
accounting, budgeting, and charging services so that the
organization covers costs and generates profits for those services.
Accounting
Accounting activities help you understand exactly what you’re
spending on IT services.
Budgeting
Capital expenditures
Operational costs
Strategic investments
Charging
Service catalog
Service pipeline
Retired services catalog
Your service pipeline contains any services that are not yet visible to
the customer (such as those that are in proposal or development
stages). The pipeline also outlines projected service timelines and
growth trajectories so you can understand the strategy and plans
for each service.
This process helps you make a business case for each service and
answer questions like:
Why does a customer need this service?
What sets our service apart from competitors?
What are the strengths and weaknesses of this service?
How can we manage risk factors?
What is the best way to allocate resources for this service?
4. Demand management
Demand management helps businesses understand, predict, and
influence customer demand for their IT services.
Analyzing
These data are called Patterns of Business Activity (PBA). You can
use PBA to measure components of customer service usage like:
Frequency
Volume
Duration
Location
Anticipating
Communicate with your customers about their forecasted needs,
track trends and rely on your data analysis to make educated
predictions about future service requirements.
Influencing