IT Services Portfolio Management Best Practice Handbook: Planning, Implementing, Maximizing Return on Investment of Strategic IT Portfolio Management - Ready to use bringing Theory into Action
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Service Portfolio Management Workbook
Table of Contents
INTRODUCTION ROADMAP .................................................................................................. 5 SERVICE PORTFOLIO MANAGEMENT PRESENTATION................................................... 9 SUPPORTING DOCUMENTS ............................................................................................... 29 Objectives and Goals ......................................................................................................... 31 Use of the Service Portfolio................................................................................................ 37 Example Service Catalogue ............................................................................................... 41 Service Catalogue .............................................................................................................. 43 Service Catalogue 1 ........................................................................................................... 53 Service Catalogue 2 ........................................................................................................... 71 Business Justification Document ..................................................................................... 103 Service Design – The Big Picture .................................................................................... 109 Key Links, Inputs and Outputs of Service Design............................................................ 111 Roles & Responsibilities of the Product Manager............................................................ 113 Reports, KPI’s and other Metrics ..................................................................................... 117 Communication Plan ........................................................................................................ 123 IMPLEMENTATION & PROJECT PLAN ............................................................................. 131 FURTHER INFORMATION.................................................................................................. 141
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Also from Emereo Publishing and The Art of Service:
IT Service Operations Management Guide: Your Complete Guide to Managing an IT Service Operation A professional technical roadmap to ITIL V3 Framework IT Service Operations Management (Incident, Event, Problem and Access Management, plus Request Fulfilment) with 34 templates and design documents for organizational assessment and implementation.
Service Portfolio Management Workbook
INTRODUCTION ROADMAP
Many organizations are looking to implement Service Portfolio Management as a way to improve the structure and quality of the business.
This document describes the contents of the Service Portfolio Management Workbook. The information found within the Workbook is based on the ITIL Version 3 framework, specifically the Service Strategy phase.
The Workbook is designed to answer a lot of the questions that the Service Portfolio Management process raises and provides you with useful guides, templates and essential, but simple assessments.
The supporting documents and assessments will help you identify the areas within your organization that require the most activity in terms of change and improvement.
Presentations can be used to educate or be used as the basis for management presentations or when making business cases for Service Portfolio Management implementation.
The additional information and bonus resources will enable you to improve your organizations methodology knowledge base.
The workbook serves to act as a starting point. It will give you a clear path to travel. It is designed to be a valuable source of information and activities. The Service Portfolio Management Workbook:
Flows logically, Is scalable, Provides presentations, templates and documents, Saves you time.
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Service Portfolio Management Workbook Step 1 Start by reviewing the PowerPoint presentation in the following order:
The presentation provides a detailed and comprehensive overview of Service Portfolio Management in the specialist areas of ITIL Version3 •
Service Portfolio Management Presentation.
This presentation will give you a good knowledge and understanding of all the terms, activities and concepts required within the Service Portfolio Management process. They can also be used as the basis for management presentations or when making a formal business case for Service Portfolio Management implementation. Make sure you pay close attention to the notes pages, as well as the slides, as references to further documents and resources are highlighted here.
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Service Portfolio Management Workbook Step 2 Below is an itemized list of the supporting documents and resources for easy reference. You can use these documents and resources within your own organization or as a template to help you in prepare your own bespoke documentation.
•
Objectives and Goals
•
Use of the Service Portfolio
•
Example Service Catalogue
•
Service Catalogue
•
Service Catalogue 1
•
Service Catalogue 2
•
Business Justification Document
•
Service Design – The Big Picture
•
Key Links, Inputs and Outputs of Service Design
•
Roles and Responsibilities of the Product Manager
•
Reports, KPIs and other Metrics
•
Communication Plan
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Service Portfolio Management Workbook Step 3 Alternatively, continue by working through the Service Portfolio Management Implementation & Project Plan with the focus on your organization. This will help you ascertain the Service Portfolio Management maturity for your organization. You will able to identify gaps and areas of attention and/or improvement.
The supporting document and bonus resources found within the workbook will help you fill these gaps by giving you a focused, practical and user-friendly approach to Service Portfolio Management.
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Service Portfolio Management Workbook
SERVICE PORTFOLIO MANAGEMENT PRESENTATION
Definition: The complete set of services that are managed by a Service Provider. The Service Portfolio is used to manage the entire lifecycle of all services.
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Service Portfolio Management Workbook
More information Objectives and Goals can be found in a separate document within this workbook on page 31.
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Service Portfolio Management Workbook
A Service Portfolio describes a provider’s services in terms of business value. It articulates business needs and the provider’s response to those needs. By definition, business value terms correspond to marketing terms, providing a means for comparing service competitiveness across alternative providers. By acting as the basis of a decision framework, a Service Portfolio either clarifies of helps to clarify strategic questions (see page 14)
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Service Portfolio Management Workbook
More information on the Use of the Service Portfolio can be found in a separate document within this workbook on page 37.
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Service Portfolio Management Workbook
Further information on Service Catalogues can be found in the following documents within this workbook.
•
Example Service Catalogue on page 41
•
Service Catalogue on page 43
•
Service Catalogue 1 on page 53
•
Service Catalogue 2 on page 71
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Service Portfolio Management Workbook
By acting as a basis to the decision framework Service Portfolio Management clarifies or helps to clarify these Strategic questions.
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Service Portfolio Management Workbook
The operative word is METHOD. Often the term portfolio is marginalized to a list of services, applications, assets or projects. A portfolio is essentially a group of investments that share similar characteristics. They are grouped by size, discipline or strategic value.
A Business Justification Document can be found as a separate document within this workbook on page 103.
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Service Portfolio Management Workbook
IT Service Management: Some processes can be self-contained within a functional area, while others are cross-functional. Some processes manage and produce a product or service received by a customer external to IT. Organizational performance improves as these processes allow. The discipline of these processes is commonly known as IT Service Management (ITSM). ITSM thus means thinking of IT as a cohesive set of business resources and capabilities. These resources and capabilities are managed through processes and ultimately represented as services.
Business Service Management (BSM): BSM is the ongoing practice of governing, monitoring and reporting on IT and the business service it impacts.
IT priorities must be clearly aligned with other drivers of business value. In order to organize its activities around business objectives, the organization must link to business processes and services and not simply observe them. IT leadership must engage in a meaningful dialogue with line-of-business owners and communicate in terms of desired outcomes.
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Service Portfolio Management Workbook
SPM is a dynamic and ongoing process set. The four methods above make up the processes of SPM. •
Define – inventory services, ensure business cases and validate portfolio data
•
Analyse – maximize portfolio value, align and prioritize and balance supply and demand.
•
Approve –finalize proposed portfolio, authorize services and resources.
•
Charter – communicate decisions, allocate resources and charter services.
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Service Portfolio Management Workbook
This documentation helps to understand the opportunity costs of the existing portfolio. If a service provider understands what it cannot do, then it is better able to assess if it should keep doing what it is doing or reallocate its resources and capabilities.
The next step in the process, Analyse, should be well defined prior to beginning this phase. If the organization does not understand what analysis it will perform, it is unlikely to know the right data to collect. Data collection exercises are usually disruptive and should be as streamlined as possible.
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Service Portfolio Management Workbook
The answers to these questions guide not only the analysis but also the desired outcomes of Service Portfolio Management. The ability to satisfactorily answer these questions requires the involvement of senior leaders and subject matter experts.
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Service Portfolio Management Workbook
The outcomes for existing services fall into six categories: 1. Retain 2. Replace 3. Rationalize 4. Refactor 5. Renew 6. Retire (see page 24 for more detail)
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Service Portfolio Management Workbook
Decisions should be correlated to budgetary decisions and financial plans. Budget allocations should enforce the allocation of resources.
The expected value of each service should be built into financial forecasts and resource plans. Tracking both tracks the progress of service investments. Newly chartered services are promoted to Service Design. Existing services are refreshed in the Service Catalogue. Retired services begin their sunset to Service Transition.
A useful overview of the Service Design phase can be found in the following documents within this workbook. •
Service Design – The Big Picture on page 109.
•
Key Links, Inputs and Outputs of Service Design on page 111.
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Service Portfolio Management Workbook
Service Investments are split among 3 strategic categories:
Run the business (RTB) - RTB investments are centred on maintaining service operations
Grow the business (GTB) - GTB investments are intended to grow the organization's scope of services.
Transform the Business (TTB) – TTB investments are moves into new market spaces
The investment categories are further divided into budget allocations: •
Venture – Create services in a new market space.
•
Growth – Create new services in existing market space.
•
Discretionary – Provide enhancements to existing services.
•
Non Discretionary – Maintain existing services.
•
Core – Maintain business critical services.
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Service Portfolio Management Workbook
Understanding their options helps senior executives to make informed investment decisions in service initiatives with appropriate levels of risks and rewards. These initiatives may cross business functions and may span short, medium and longer time frames.
Note: the calculated value realization for each service investment should be commensurate with its level of risk.
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Service Portfolio Management Workbook
RENEW: These services meet functional fitness criteria, but fail technical fitness.
REPLACE: These services have unclear and overlapping business functionality.
RETAIN: Largely self contained, with well defined asset, process and system boundaries. These services are aligned with and are relevant to the organization’s strategy
REFACTOR: Often services that meet the technical and functional criteria of the organization display fuzzy process or system boundaries. In these cases, the service can often be refactored to include only the core functionality, with common services used to provide the remainder. RETIRE: services that do not meet minimum levels of technical and functional fitness.
RATIONALIZE: Used to address portfolios that offer services which in fact are composed of multiple releases of the same operating system, service or application etc.
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Service Portfolio Management Workbook
Few providers have a clear plan for retiring increasingly redundant services. As retiring a service can temporarily exceed the cost of maintaining it, they are often left in production for too long due to management decisions.
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Service Portfolio Management Workbook
External events occur that have significant impact such as mergers and Acquisitions, new public legislation or redeployed missions. Various techniques, such as SWOT Analysis, can be used to maintain effectiveness and efficiency.
Information on the Roles and Responsibilities of the Product Manager can be found in a separate document within this workbook on page 113.
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Service Portfolio Management Workbook
More information on Reports, KPIs and other Metrics can be found in a separate document within this workbook on page117.
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Service Portfolio Management Workbook
A Communication Plan can be found in a separate document within this workbook on page 123.
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Service Portfolio Management Workbook
SUPPORTING DOCUMENTS Through the documents, look for text surrounded by > these are indicators for you to create some specific text.
Watch also for highlighted text which provides further guidance and instructions.
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Service Portfolio Management Workbook
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Service Portfolio Management Workbook
Objectives and Goals
IT Services Detailed Objectives/Goals Process: Service Portfolio Management Status:
In draft Under Review Sent for Approval Approved Rejected
Version:
Release Date:
Note: SEARCH AND REPLACE
Search for any > as your input will be required
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Service Portfolio Management Workbook Detailed Objectives/Goals for Service Portfolio Management
The document is not to be considered an extensive statement as its topics have to be generic enough to suit any reader for any organization. However, the reader will certainly be reminded of the key topics that have to be considered. The detailed objectives for Service Portfolio Management should include the following salient points: Objective After they have been agreed upon a specific objective for the process is to continue reporting metrics. This is an activity that is often forgotten over time or simply not done from the out-set.
Notes Met/Exceeded/Shortfall
☺ Dates/names/role titles
Appoint/Recruit the SLM team and provide ongoing awareness, education and training for staff involved with the process and communication to non-involved, but affected personnel. Setting schedules for reviews of Service Level Agreements and associated supporting documentation. Arranging the logistics of bringing the involved parties together (at intervals that are not considered to be a “nuisance” but will allow the process objective to be upheld. Monitor customer and end-user satisfaction levels. Monitor the marketplace for appropriate process tools and make recommendations. Design, manage and implement an awareness/communication plan appropriate for this process.
Refer also to the Communication Plan on page 123 for ideas on how to communicate the benefits of Service Portfolio Management. Page 32
Service Portfolio Management Workbook Use these objectives to generate discussion about others that may be more appropriate to list than those provided.
Failure to meet objectives (or when service breaches are detected) should trigger a process for improvement. Under the Service Portfolio Management process, we refer to this as a Service Improvement Plan (SIP). Service Improvement Plan (SIP)
Where an underlying difficulty has been identified that has lead to a degradation in service quality it is necessary for the Service Portfolio Management process to start a Service Improvement Plan (SIP). The SIP must be drawn together with input from other processes (in particular Problem Management) so that the action steps in the SIP do in fact contribute to improvements and eradication of poor performance.
Areas to address SIP Reference number
Owner
Comments/Examples
Time Frame/Notes/Who
Unique identifying number for the SLA (for inclusion in the Configuration Management Data Base – CMDB)
Functional role description of who is responsible for this SIP (who would participate in a review of this document). Representatives from customer and IT.
Service Name
Preferably use a name that is common language in the organization (not a technical name).
Service Description (Business)
Briefly describe the primary function (refer to Technical of the service. Considerations later in this table) Use language that is business user
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Service Portfolio Management Workbook friendly. (eg. instead of “NT Server, with 2Gb RAM and 500Gb of disk storage” – we would say “large central server designed for all customers to use and share information from”) Service Breach(s) details (refer to Problem & Availability Management issues).
The SIP will generally be based on broken SLAs. Use this section to briefly detail in generic terms why this SIP is required.
Problem Management details
The SIP will be driven as a result of the need to improve degraded performance. It is likely that there have been continuing Problems that have led to the service degradation. From Problem Management we can gain a better understanding of the background to the SIP.
Availability Management details
After the SIP is instigated the end users and customers should expect a higher level of service availability than they have in the past. The SIP must directly address the issue of availability by reviewing the past, current and future availability metrics for this service.
Service Security Considerations
Briefly list any considerations regarding security considerations for this SIP.
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Service Portfolio Management Workbook
SIP Validity period
SPECIFIC SIP ACTIONS
Is there a life-span for this SIP; is the life of the SIP time based or driven by activities only?
This part of the SIP will outline actual steps to be taken to improve availability and eradicate poor performance. This section of the SIP can be run as a Project if large enough, or as a simple list of action items, responsible person and timeframe. Action items will centre on discussions, negotiations, communications, documentation (new and updates to existing), testing, reviews, training/education and reworking current procedures and work practices. (Note: don’t forget to track changes and ensure the Configuration Management database is updated).
Version Control Information
SIP Creation Date SIP Last Modify Date
Technical considerations
In this section you can describe any technical considerations that are essential to document. It is more likely however, that you will include here a link to the Service Catalogue or Technical Specification.
Notes & Comments
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Service Portfolio Management Workbook
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Service Portfolio Management Workbook
Use of the Service Portfolio The Service Portfolio represents the commitments and investments made by a service provider across all customers and market spaces. It represents present contractual commitments, new service development, and ongoing service improvement plans initiated by Continual Service Improvement. The portfolio also includes third-party services, which are an integral part of service offerings to customers. Some third-party services are visible to the customers while others may not be. The portfolio management approach helps managers to prioritize investments and improve the allocation of resources. Policies and procedures govern all changes to portfolios. Portfolios instil a certain financial discipline necessary to avoid making investments that will not yield value. Service Portfolios represent the ability and readiness of a service provider to serve customers and market spaces. The Service Portfolio is divided into three phases:
• Service Catalogue • Service Pipeline • Retired Services
The Service Portfolio represents all the resources presently engaged or being released in various phases of the Service Lifecycle. Each phase requires resources for completion of projects, initiatives and contracts. This is a very important governance aspect of Service Portfolio Management (SPM). Entry, progress and exit are approved only with approved funding and a financial plan for recovering costs of showing profit as necessary. The Portfolio should have the right mix of services in the pipeline and catalogue to secure the financial viability of the service provider. The Service Catalogue is the only part of the Portfolio that recovers costs or earns profits.
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Service Portfolio Management Workbook SPM is about maximising value while managing risks and costs. The value realization is derived from better service delivery and customer experiences. Through SPM, managers are better able to understand quality requirements and related delivery costs. They can then seek to reduce costs through alternative means while maintaining service quality. This process begins with the documentation of the organization’s standardized services and thus has significant links to the processes of Service Level Management and Service Catalogue.
Service Catalogue The Service Catalogue is the subset of the Service Portfolio that is visible to customers. It consists of services that are presently active in the Service Operation phase and those approved to be readily offered to current or prospective customers. Items can enter the Service Catalogue only after due diligence has been performed on related costs and risks. Resources are engaged to fully support active services. The Catalogue is useful in developing suitable solutions for customers from one or more services. Items in the Catalogue can be configured and suitably priced to fulfil a particular need. The Service Catalogue is an important tool for Service Strategy because it is the virtual projection of the service provider’s actual and present capabilities. Many customers are only interested in what the provider can commit now, rather than in future. The value of future possibilities is discounted in the present. It serves as a service order and demand channelling mechanism. It communicates and defines the policies, guidelines and accountability required for SPM. It defines the criteria for what services fall under SPM and the objective of each service. Acting as the acquisition portal for customers, the Service Catalogue includes pricing and service-level commitments, and the terms and conditions for service provisioning. It is in the Service Catalogue that services are decomposed into components; it is where assets, processes and systems are introduced with entry points and terms for their use and provisioning. As providers may have many customers or service many businesses, there may be multiple Service Catalogues projected from the Service Portfolio. In other words, a Service Catalogue is an
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Service Portfolio Management Workbook expression of the provider’s operational capability within the context of a customer or market space. The Service Catalogue is also a visualisation tool for SPM decisions. Demand for services come together with the capacity to fulfil it. Customer assets that are attached to a business outcome are sources for demand and have expectations of both utility and warranty. If any items in the catalogue can fulfil those expectations, a connection is made resulting in a service contract or agreement. Catalogue items are clustered into Lines of Service (LOS) based on common patterns of business activity (PBA) they can support. LOS that are performing well are allocated additional resources 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 packages (SLP), improved matching with sources of demand, or by new pricing policies. If performance drops below a threshold, they will then be marked for retirement. 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. A subset of the Service Catalogue may be third-part of outsourced services. These are services that are offered to customers with varying levels of value addition of combination with other Catalogue items. The Third-Party Catalogue may consist of core service package (CSP) and SLP. It extends the range of the Service Catalogue in terms of customers and market spaces. Third-party services may be used to address underserved or unserved demand 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.
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Service Portfolio Management Workbook Service Pipeline The Service Pipeline consists of service 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. Representing the service provider’s growth and strategic outlook for the future, the pipeline reflects the general health of the provider. 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 also necessary to ensure adequate funding for the pipeline.
Retired Services Services in the Catalogue may be either phased out or retired. Phasing out of services is part of Service Transition to ensure that all commitments made to customers are duly fulfilled and service assets are released from contracts. 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.
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Service Portfolio Management Workbook
Example Service Catalogue Some organizations only maintain either a Business Service Catalogue or a Technical Service Catalogue. The preferred situation adopted by the more mature organizations maintains both aspects within a single Service Catalogue, which is part of a totally integrated Service Management activity and Service Portfolio. The Business Service Catalogue facilitates the development of a much more proactive or even preemptive SLM process, allowing it to develop more into the field of Business Service Management. The Technical Service Catalogue is extremely beneficial when constructing the relationship between services, SLAs, OLAs and other underpinning agreements and components, as it will identify the technology required to support a service and the support group(s) that support the components. The combination of a Business Service Catalogue and a Technical Service Catalogue is invaluable for quickly assessing the impact of incidents and changes on the business. An example of relationships between the Business and Technical portions of a Service Catalogue is shown below.
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Service Portfolio Management Workbook
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Service Portfolio Management Workbook
Service Catalogue
IT Service Management Service Catalogue
Prepared by:
Prepared for:
Date:
Special notes: E.g. Does the Service Catalogue have a limited life span, if so, indicate that here.
Search for any instance of > as your input will be required.
Version number
Owner
Location
Date
Any industry associated logos or ISO stamp or other Quality system related indicators (e.g. ISO Accreditation)
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Service Portfolio Management Workbook Executive Overview
In the past organization’s IT Services have generally grown and developed into large complex environments. Unfortunately this growth has not always been as structured and pre-planned as it needs to be.
This has resulted in the IT department not having a very clear picture of all the services they currently provide with no accurate profile of the actual customers for each of these services.
Therefore it has become imperative for the IT department to establish an accurate picture of the services it provides. This can be done through a comprehensive IT Service Catalogue.
The Service Catalogue must be developed in conjunction with customers, who are better able to describe what they see as “services” than an IT person. If there is an asset register or configuration management database (a concept from the ITIL Configuration Management process) these are good sources of information.
The Executive Overview should establish the reason for this documents existence and its benefit back to the business. The above words are generic and can be tailored to suit your organization.
Scope
It is imperative to determine the scope of the document. What will be included in the document and why, and what will not be included in the document and why.
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Service Portfolio Management Workbook It is also advisable to establish a common understanding of some of the terminology used throughout the document. For example, the scope section should determine the definition of a Service.
The Service Catalogue will list all of the IT services currently being provided to our organization.
The Service Catalogue will provide a summary of the service characteristics, and details of the users and those responsible for ongoing maintenance of each service.
Restriction 1 Text description
Restriction 2 Text description
Restriction x Text description
Assumption 1 Text description
Assumption 2 Text description
Assumption x Text description Page 45
Service Portfolio Management Workbook For the purpose of this document, a service will be defined as the following:
One or more IT Systems which enable a business process
