SERVICE PORTFOLIO MANAGEMENT

The Service Portfolio describes the commitments and investments made by a service provider to its customers across all market spaces. In a nutshell, it states what the company is able to do and how it will do it while also accounting for previously agreed upon commitments. The Service Portfolio also talks about new products and services as well as ongoing service improvement projects and other third-party services which are utilized by the business in providing their service. The Service Portfolio is the defacto guide to what the business can and cannot do.

Ensuring that the Service Portfolio is accurate is one of the important roles of Service Portfolio Management (SPM). This role ensures that new services are added only after funding has been approved an appropriate financial plan is in place for recovering costs and/or showing a profit. This is sometimes called a rally point process or other similar names but in essence its a way of ensuring that the business always has a pipeline of new products and services available to meet current and future demand. The service portfolio should have the right mix of services in the pipeline and catalog to secure the financial viability of the service provider since the service catalog is the only part of the portfolio that lists services that recover costs or earn profits. You can find a lot more detail on Service Catalogs at either of the links provided below.

The service pipeline, similar to a sales pipeline, list perspective, and future projects and services – i.e. those products that are currently being considered or thought about, but are not yet available to the consumer. The service pipeline is a future looking document that provides guidance to senior leaders and while elements of this might be made available to the customer (for future prospects generally), it is not normally published as that tends to give the competition too much of an insight into the organization’s future plans and strategies.

The service catalog, however, is different … this document is generally published (& publicized) quite widely as it is the single place where all information about products, prices, ordering and request processes are documented. It defines and communicates the policies, guidelines, and accountability required for the service provider to deliver and support services to its customers. The service catalog details each service and shows the service components that make up each one. It also provides an overview of the assets, processes, and systems involved in each service.

While you might consider the service catalog to be just that … a catalog of services, it can also be used to identify gaps in services and linkages between services. This information can be used to realize new services and products for future exploration and exploitation by the business.

Retiring Services

While the common thought is that the latest and greatest is always the best (look at the mobile phone market if you don’t believe me or understand what I’m saying) the service catalog should maintain a place for retired services also. These are services that while no longer as “popular” (in call center and tech support worlds that would translate to “getting fewer calls”) still have value to the business for a variety of different reasons including:

The replacement service might not meet all requirements, and it is important to be able to fall back to the previous service
There is a significant portion of the market made up of the planned to retire service which will still need future support and/or maintenance
When defining a new service, service portfolio management might discover that some functionality is available from a retired service. This might result in the service being reinstated as part of a new service
There might be regulatory requirements to maintain archived data that can only be accessed using the previous service, in which case information is exported to a read-only database for future use

It is the job of Service Portfolio management to determine how long a service should remain in the Service portfolio – and while this is often determined based on time, in many cases other reasons are utilized to make this decision.

Service Portfolio Launch

Service portfolio management is guided from strategy management for IT services via strategic plans which provide details of new business opportunities and which services are required to fulfill those opportunities. SPM is responsible for reviewing each opportunity and determining the required investment level and also whether or not the opportunity is achievable (regardless of the potential profit that “might” be realized).

The role of Improvement in determining a Portfolio

Continual Service Improvement (CSI) has some input into SPM also, specifically:

Opportunities to improve the performance or service level achievements of services in the portfolio
New opportunities within the current strategy, or gaps in the current portfolio of services
Opportunities for overall improvements in cost, mitigation of risks etc.

By taking into account perceived deficiencies in the Service Portfolio, CSI is able to make recommendations for improvement, however, it is still the responsibility of SPM to evaluate these suggestions and determine whether or not the potential improvement warrants the investment.

Define

The creation of a Service Portfolio follows several clearly defined (no pun intended) steps as shown in the diagram to the right. The Define step talks about desired business outcomes and opportunities as well as what services are needed to realize these opportunities and the investment required.

Any new strategy or change to an existing strategy should be submitted to Service Portfolio Management. This will be in the form of strategic plans, identified market spaces and outcomes, priorities and policies. These will be used to identify specific service opportunities and the stakeholders that will be consulted in defining the services.

The role of SPM at this stage is to define the service based on the information provided:

The purpose of the service (what it must achieve)
The customers and consumers of the service
The major inputs and outputs of the service
High-level performance requirements (for example, when it needs to be available)
What business activity will it support, and is that activity stable or dynamic?
Does the service need to comply with (or enable the business to comply with) any regulatory or legal requirements?
Are there any standards that need to be applied to the service?
What are the actual business outcomes that the service will be supporting, and who is responsible for these outcomes?
Are there any other stakeholders that need to be involved in defining and evaluating this service?
The anticipated level of investments and returns. Although these will not be known, the customer will know what type of return they need, and how much they are prepared to spend to achieve it
Are there any constraints that need to be considered (e.g. budget, resources)?

The role of SPM is to understand how all of the different components fit together and complement each other and also to define the boundaries of the service as well as the technical stakeholders. Based on this analysis, the impact on the Service Portfolio can be determined and this will provide information on the following areas:

The current business outcomes
Investment levels
Service Level Agreements and contractual obligations
Warranty levels
Existing required Utility (for example, changing an existing service may benefit one customer, but it might negatively impact another)
Is there another existing service that can be combined with this service to deliver the required Utility or Warranty?
Patterns of business activity, and levels of demand on the service

Analysis

The analysis of each service moving through the Service Portfolio Management process is performed by linking each one to the Service Strategy. For external service providers, this will be a linkage to the organization’s overall strategy. For internal service providers, it will mean linking to the IT strategy and the strategies of the other business units.

About Author

Hutch Morzaria

I am an ITIL Expert and extremely passionate about customer service, customer experience, best practices and process improvement. I have led support, service, help desk and IT teams as well as quality and call center teams in Canada and the UK. I know how to motivate my teams to ensure that they are putting the customer first.

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