SS

Who are our service provider s?

Who are their customers?

How do services create value for them?

How do they create value?

What asset s do we deploy to provide value?

Which of their assets receive value?

Which assets should we invest in?

Which of our assets do they value most?

How should we deploy our assets?

How do they deploy their assets?

Table 4.2 Probing questions to gain insight

4.2 Develop the offerings

4.2.1 Market space

A market space is defined by a set of business outcomes, which can be facilitated by a service. The opportunity to facilitate those outcomes defines a market space. The following are examples of business outcomes that can be the bases of one or more market spaces.

 Sales teams are productive with sales management system on wireless computers

 E-commerce website is linked to the warehouse management system

 Key business applications are monitored and secure

 Loan officers have faster access to information required on loan applicants

 Online bill payment service offers more options for shoppers to pay

 Business continuity is assured.

Each of the conditions is related to one or more categories of customer assets, such as people, infrastructure, information, accounts receivables and purchase orders, and can then be linked to the services that make them possible. Each condition can be met through multiple ways (Figure 4.7). Customer s will prefer the one that means lower costs and risk s. Service providers create these conditions through the services they deliver and thereby provide support for customers to achieve specific business outcomes.

Figure 4.7 Market spaces are defined by the outcomes that customers desire

A market space therefore represents a set of opportunities for service provider s to deliver value to a customer’s business through one or more services. This approach has definite value for service providers in building strong relationships with customers. Customer s often express dissatisfaction with a service provider even when terms and conditions of service level agreement s (SLAs) are fulfilled. Often it is not clear how services create value for customers. Service s are often defined in the terms of resource s made available for use by customers. Service definitions lack clarity on the context in which such resources are useful, and the business outcomes that justify the expense of a service from a customer’s perspective. This problem leads to poor designs, ineffective operation and lacklustre performance in service contract s. Service improvements are difficult when it is not clear where improvements are truly required. Customers can understand and appreciate improvements only within the context of their own business asset s, performances and outcomes. A proper definition of services takes into account the context in which customers perceive value from the services.

4.2.2 Outcome-based definition of services

An outcome -based definition of services ensures that managers plan and execute all aspects of service management entirely from the perspective of what is valuable to the customer. Such an approach ensures that services not only create value for customers but also capture value for the service provider.

Solutions that enable or enhance the performance of the customer assets indirectly support the achievement of the outcomes generated by those assets. Such solutions and propositions hold utility for the business. When that utility is backed by a suitable warranty customers are ready to buy.

Services are a means of delivering value to customers by facilitating outcomes customers need to achieve without owning specific costs and risks .

Well-formed service definitions lead to effective and efficient service management processes. Generic examples are given below:

 Example 1: Collaboration services provide value to the customer when cooperative business communications are conducted without the constraints of location or device. Value is created when the provider operate s for the customer store-and-forward and real-time methods of electronic messaging, so that (the customer’s) employees can compose, send, store and receive communications in a manner convenient, reliable and secure, for a specified community of user s.

 Example 2: Application -hosting services provide value to the business when business function services and processes continue to operate without the need to invest capital in a non-core business capability . Value is created when the provider maintains for the business an application software platform system and assures that employees and business systems can work continuously in a manner convenient, secure and reliable, for a specified portfolio of services.

 Example 3: Mobile workplace services provide value to the customer when business activity is conducted without the constraints of fixed location. Value is created when the provider operates for the customer a wireless messaging system and assures that (the customer’s) employees and business systems can exchange voice and data messages in a manner convenient, reliable and secure, within a specified area of coverage.

 Example 4: Order-to-cash services provide value to the business when purchase orders are converted to cash flows without the need to invest capital in a non-core business capability. Value is created when the provider licenses to the business an order fulfilment system and assures that the sales teams and online shoppers can enter or modify purchase orders in a manner convenient, fast and secure within a specified time schedule.

Service definitions are useful when they are broken down into discrete elements that can then be assigned to different groups, who will manage them in a coordinated manner to control the overall effect of delivering value to customers (Figure 4.8).

Figure 4.8 Actionable components of service definitions in terms of utility

Being able to define services in an actionable manner has its advantages from a strategic perspective. It removes ambiguity from decision making and avoids misalignment between what customers want and what service providers are organized and capable enough to deliver.

Figure 4.9 Actionable components of service definitions in terms of warranty

Well-constructed definitions make it easier to visualize patterns across Service catalogue s and portfolios that earlier were hidden due to unstructured definitions (Figure 4.9). Patterns bring clarity to decisions across the Service Lifecycle . Table 4.3 shows the type of questions that can guide analysis of service definitions to make them actionable.

Service type

Utility (Part A and B)

What services do we provide?

Who are our customers?

What outcomes do we support?

How do they create value for their customers?

What constraints do our customers face?

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