IT Service Management is about Delivering Services, not Products

One of the challenging transitions teams need to make when they adopt ITIL Service Management is
thinking in terms of Services rather than Products.  Products are the means by which services are delivered. However, the Customer usually cares about the service, not the delivery system.

By definition, Service Management is about providing services to Customers who do not want to own the processes themselves.  Payroll is an example of a service that was once commonly provided within the finance department. As payroll legislation and processes became more complex, companies developed the capability to deliver payroll in their “computer department”.  Payroll became a service to finance. Once the service was defined, with requirements, costs and performance expectations, the Customer could then do comparison shopping, selecting the best service provider for the best price. Customers could contemplate whether the service would be “contracted” in house or outsourced to an external service provider like ADP. 

Defining services falls within the ITIL process groups Service Strategy and Service Design. Service Strategy articulates the services needed by the Customer and Service Design lays out the requirements for the service.  Defining services in the absence of the Service Strategy analysis is difficult for existing product-based organizations, but eventually leads to the same end state if all of ITIL Service Management is adopted.

Immediate benefits can be realized. Duplicate services are sometimes identified that had previously been disguised by product offerings.  Also, teams might be performing activities whose services are hard to define, and perhaps are not even needed. These discoveries  lead to great discussions between the Customer and the service providers when writing the contract known as the Service Level Agreement.

The Service Level Agreement is where Customer expectations are reconciled with the Customer’s budget. Costs are applied to Customer requirements, and the Customer then has the opportunity to choose the level of service that maximizes their profit. Instead of the Customer arbitrarily insisting on the best possible service, the Customer can think thru the service level that is truly needed, based on the actual costs to the business. With expectations clearly articulated, the service provider knows the expected service level targets, and can then demonstrate to the Customer in future meetings how well the expectations were met, and if not, what changes are required going forward.

One of the benefits of a service-based organization is the potential for innovation.   If the services can be distilled so that the true services are defined, the service owner can then contemplate alternative and possibly inventive solutions for delivering the service. The emergence of cloud computing is a great illustration of innovative solutions providing the same or better service but freed from the products from which the service was previously provided.

IT Service Management can result in innovation and a very pleased Customer – two outcomes not usually anticipated when companies embark on the service management journey.