Creating a S.M.A.R.T. Service Catalog (Part 1 of 2): Determining the Value of IT Services

Creating a S.M.A.R.T. Service Catalog (Part 1 of 2): Determining the Value of IT Services

Today, many IT Service Management (ITSM) vendors offer an integrated Service Catalog within their solution suite.

The focus of the IT Service Catalog is often about the ordering of services, and the handling of requests and incidents. Yet, service catalog teams too quickly bypass the IT Service Strategy steps described in the ITIL® V3 guidance. (This is appropriately described in the ITIL® Version 3 Framework of ITSM best practices.)

The IT Service Strategy steps are fundamental to creating a Strategic, Measurable, Actionable, Relevant, and Transparent (S.M.A.R.T.) Service Catalog. One of the key steps of IT Service Strategy is the development of an IT service-utilization-and-cost model to determine the value of IT services to the business community. (This is a topic addressed in a later part of this blog series.)


Incorporating ITSM best practice, as described in the ITIL® V3 guidance, requires that your IT service catalog team develop a rock solid IT Service Strategy that:

  • gains consensus about services and their expected business value,
  • facilitates the cultural shift from a break-fix orientation to a customer-service orientation,
  • kick-starts (or reinvigorates) the creation and publication of the Service Catalog, and
  • establishes critical success factors, key performance indicators, and identifies service costs that govern improvements for all ITSM processes.

Why would you wish to bypass the IT Service Strategy steps?

Would you drive down the highway and look only in the rear-view mirror?

The IT Service Strategy steps allow you to focus on the services that deliver the greatest value to the business community, and define their utilization and cost-to-value proposition.

IT organizations that implement any of today’s ITSM tools suites without first addressing the IT Service Strategy steps frequently find that they cannot produce metrics relevant to the business or IT services.   They continue to be challenged when asked, “What is the value of IT to the business community members?”

This is problematic when one of the primary justifications for the new or upgrade of the ITSM tool suite is to bring a greater alignment and understanding of the value of IT between the IT organization and the business.

Whatever the objectives of the business, the IT organization’s “customers” provide services to their users. Those users may themselves be service providers with their own customers, users, clients, consumers, or even citizens. Each word is synonymous with defining both the receiver of business services and the receiver of technology services from the IT organization. To eliminate confusion that may come up on this topic, in this blog series we use the term “business community” to mean the receiver of technology services from the IT organization.

The value chain is continuous, and from the business community perspective, the IT organization is merely one of its valued suppliers in a chain of suppliers.

Calculating the economic value of business services in financial terms is often straight forward. Calculating the financial value of IT services is a horse of a different color.

When talking about the services in a Service Catalog, quantifying the value is significantly more complex. Value is defined not only in terms of the customer’s business outcomes. It is also highly dependent upon the customer’s perception of the quality of service, cost (if appropriate), and quantity of service they require.

The value of a service takes on many forms. Customers have preferences influenced by their perceptions. The perception and differentiation of value in the customer’s mind is primarily influenced by:

  • attributes of the IT service that are indications of value,
  • present or prior experiences with similar attributes, and
  • relevant competitors – internal vs. external IT service options.

Defining the value of services as the first step in creating a S.M.A.R.T. Service Catalog is to recognize that the business community follows this simple rule:

“The more ambiguous or intangible the differentiation of services, the lower the value they will attribute to it.”

It is incumbent on IT service providers to collaborate with the business community to establish IT service value, influence perceptions, and respond expectations and preferences.

It is important, that the service catalog team always remember, value is defined in the context of business community outcomes. The objective of any business community is to coordinate all its capabilities, and control and deploy its resources to create the desired business outcome.

Determining the business value of IT services requires that the service catalog team carefully analyze and understand the business cycle and key processes. Doing this in a collaborative consensus building manner with business customers results in a clear understanding of the environment in which the business operates. This allows the service catalog team to identify how IT services create or participate in attaining value driven business outcomes.

Taking this approach will clearly define the IT alignment to the business community, and  the value it creates.

By adopting this approach as an initial step, your IT service catalog team ensures that your S.M.A.R.T. Service Catalog and the process improvements expected from the ITSM suite implementation are stable, sustainable, and measurable. Also, that the objectives and metrics defined in the IT Service Strategy are attainable.

Click here to view Part 2 of the two-part series,
IT Service Strategy and Request Fulfillment.

 

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