Service portfolio management

This is an excerpt, you will find more detailed descriptions in the book.

Once the strategy is established, it needs to be converted into a range of IT services that are delivered to the business. At the same time, an IT organization exists in a changeable world, and needs to continually adapt its operation. In order to set the parameters for what should be done and what should not be done, a strategic document is required which delimits the range of services and thus also sets the parameters for the IT organization’s activities. This strategic document is the service portfolio.

A service portfolio describes the IT organization’s IT services in the form of the value they provide to the business. The value is described in market terms so that it can be compared with other suppliers in the market. Describing the IT organization’s operation in this way means that, among other things, the service portfolio provides answers to the following strategic questions:

  • Why does the business need our services?
  • Why should the business purchase them from us?
  • What is the financing model like?
  • What are our strengths, weaknesses, priorities and risks?
  • How should we distribute our resources?

Service Portfolio Management is responsible for which services are included in the service portfolio and how these services should be managed throughout their life cycle. Service Portfolio Management is like a gatekeeper with the task of ensuring that only services that supply value and are in line with the strategy decided are provided for the business.

Purpose

The purpose of Service Portfolio Management is to ensure that the IT organization has the right set of IT services to balance its costs with the capacity to meet the business’s requirements. The process ensures that the services are financed and that they are linked to the business’s objectives.

The purpose is achieved through:

  • Providing activities and forums which help the IT organization to investigate and decide which services it should deliver
  • Administering the portfolio of services
  • Giving the IT organization the right mechanisms to evaluate how the IT services help the business to fulfil the strategy
  • Checking which services are offered, under which circumstances and what they cost to produce
  • Tracking investments made in production of services
  • Analyzing services that are no longer offered to the business and why they have been terminated

Scope

The scope of the service portfolio is all services that the IT organization plans to deliver, those that are currently being delivered and those which were previously delivered, but no longer. The most important question for Service Portfolio Management is whether the IT organization is capable of generating a value for the business based on these services.

The service portfolio contains complete information about all services that the IT organization delivers. It is used to administer the IT services throughout their life cycle and consists of three parts:

  • Pipeline
  • Service catalogue
  • Retired services

The service portfolio follows up investments that the IT organization has made in the IT services and if possible also describes them in relation to efficiencies in the business.

The Service Portfolio

The service portfolio is a complete collection of the IT services that are managed by the IT organization, including those that are produced by an external supplier. The service portfolio also includes IT services which only exist at a conceptual level, i.e. IT services which would exist if the IT organization had unlimited money and resources. This provides an opportunity to show the business what is possible, and at the same time the documentation explains alternative costs to the existing portfolio.

Each IT service, or potential IT service, should be documented separately and described in such a way that content, costs, financing and value of the service is clearly set out. The document then constitutes the basis for the description of the IT service which is to be found in the chapter concerning Service Catalogue Management and which is shown to the customers. The difference between these two documents is that the service portfolio has an internal focus with all available information about production, dependence and costs, while the service catalogue is targeted at the customers and only contains the information that is of significance for the business.

The service portfolio is divided into three parts to distinguish between the IT service’s different life cycle statuses. These three parts are:

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