SS

Figure 4.13 Service Catalogue and Demand Management

LOS performing well are allocated additional resource s to ensure continued performance and anticipate increases in demand for those services. Items performing above a financial threshold are deemed viable services. An effort is to be made to make them popular by introducing new attributes, new service level package s (SLP), improved matching with sources of demand, or by new pricing policies. If performance drops below a threshold, then they are marked for retirement. A new Service Transition project is initiated and a Transition Plan is drafted to phase out the service.

Services with poor financial performance may be retained in the Catalogue with adequate justification. Some catalogue services may have strategic use of such contingency for another service and contractual obligations to a few early customers. Whatever the justification, it must be approved by senior leadership who may choose to subsidize. This issue differs with Type I (internal) providers who are often required to maintain a catalogue of service, regardless of their independent financial viability.

A subset of the Service Catalogue may be third-party or outsourced services. These are services that are offered to customers with varying levels of value addition or combination with other Catalogue items. The Third-Party Catalogue may consist of core service package s (CSP) and SLP. It extends the range of the Service Catalogue in terms of customers and market space s. Third-party services may be used to address underserved or unserved demand (Figure 4.13) until items in the Service Pipeline are phased into operation . They can also be used as a substitute for services being phased out of the Catalogue. Sourcing is not only an important strategic option but can also be an operational necessity. Section 6.5 provides more guidance on sourcing strategy .

Candidate supplier s of the Third-Party Catalogue may be evaluated using the eSourcing Capability Model for Service Providers (eSCM-SP™) developed by Carnegie Mellon University.

4.2.3.2 Service Pipeline

The Service Pipeline consists of services under development for a given market space or customer . These services are to be phased into operation by Service Transition after completion of design , development, and testing. The pipeline represents the service provider’s growth and strategic outlook for the future. The general health of the provider is reflected in the pipeline. It also reflects the extent to which new service concepts and ideas for improvement are being fed by Service Strategy , Service Design and Continual Improvement. Good Financial Management is necessary to ensure adequate funding for the pipeline.

4.2.3.3 Retired services

Some services in the Catalogue are phased out or retire d. Phasing out of services is part of Service Transition . This is to ensure that all commitments made to customers are duly fulfilled and service asset s are released from contract s. When services are phased out, the related knowledge and information are stored in a knowledge base for future use. Phased-out services are not available to new customers or contracts unless a special business case is made. Such services may be reactivated into operations under special conditions and SLAs that are to be approved by senior management. This is necessary because such services may cost a lot more to support and may disrupt economies of scale and scope .

4.2.3.4 The role of Service Transition

Approval from Service Transition is necessary to add or remove services from the Service Catalogue . This is necessary for the following reasons:

 Once an item enters the catalogue it must be made available to customers who demand it. Due diligence is necessary to ensure that the service is a complete product that can be fully supported. This includes technical feasibility, financial viability, and operational capability . Incomplete products offered in haste can result in significant losses for service providers and customers.

 Items in the Service Catalogue are mostly in the Service Operation phase with contractual commitments made to customers. Any changes to the catalogue have to be evaluated for impact on the ability to meet those commitments.

 Adding items to the Service catalogue means the need to set aside capabilities and resource s for present and prospective customers. This is like maintaining spares for every piece of equipment in every type of aircraft in operation in the fleet. Having more has advantages if each item is doing well. Otherwise, valuable resources are locked by catalogue items not doing well. There is a need to balance flexibility and choice for customers with the increase in complexity, uncertainty, and resource conflicts.

Standardization and reuse

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There are instances in which certain business needs cannot be fulfilled with services from a catalogue. The service provider has to decide how to respond to such cases. The options are typically along the following lines:

 Explain to the customer why the need cannot be fulfilled.

 Explain what is needed of the customer in terms of commitment, sponsorship or funding for new service development . Customers may reconsider their needs in view of service development costs they may have to bear.

 Develop the service if the customer makes the necessary commitment

 Decline the opportunity if the customer cannot commit.

 Consider supporting the customer in partnership with third parties.

4.3 Develop strategic assets

Service provider s should treat service management as a strategic asset and entrust it with challenges and opportunities in terms of customers, services, and contract s to support. Investments made in trusted assets are less risky because they have the capability to deliver consistently time and again. Service management begins with capabilities that coordinate and control resources to support a catalogue of services (Figure 4.14). Challenges are overcome in achieving progressively higher service levels. There is mutual reinforcement between the two. Capabilities and resources are adjusted until the goal is reached. Customer s perceive demonstrated value from the service provider.

Figure 4.14 Growth and maturity of service management into a trusted asset

Customers perceive benefits in a continued relationship , and entrust the provider with the business of increasing value and also adding new customers and market space s to the realm of possibilities. This justifies further investments in service management in terms of capabilities and resource s, which have a tendency to reinforce each other.