ITIL® Foundation Certification Notes : Service Design : Purpose, Design Process & Others

3.6.2 Financial Management for IT services

A) Purpose of Financial Management Process

1) Secure the appropriate level of funding to design, develop and deliver services that meet the strategy of the organization.
2) Act as a gatekeeper that ensures that the service provider does not commit to services that they are not able to provide.
3) Identify the balance between the cost and quality of service and maintain the balance of supply and demand between the service provider and their customers

B) The Objectives of Financial Management Process

1) Reduce long term costs - empower management.
2) Declares Added Value of IT.
3) Improved Total cost of ownership and return on investment.
4) Forces business to make service levels and their costs more visible.
5) Assures senior management/stakeholders that IT is well managed and meeting business needs.
6) Assists change management processes.

C) Scope of Financial Management Process

Ensures the financial practices within IT is consistent with organizational standards so that other business units will have an understanding of how IT is funded

D) Activities of Financial Management

1) Budgeting: is the predicting the expected future requirements for funds to deliver the agreed upon IT services to the service customers. Budgets are typically created on an annual basis. The activity requires careful monitoring of agreed budgets against the actual spend (accounting).
2) Accounting: enables the IT organization to account fully for the way its money is spent (the practices allow identification of costs by customer, service and/or activity). The activity is not simple and this is one area that should involve some outside expertise usually provided from within the Finance Department.
3) Charging: is an optional activity within financial management for IT services. The decision whether the IT department will charge customers for the actual provision of IT services is made at a strategic level - not from within the IT department. Charging must be linked to controllable aspects for customers/users as they may wish to alter their behavior/usage of services based on the charges they incur.

E) Business Case

1) A business case is the justification for a significant item of expenditure. The business case includes information about costs, benefits, options, issues, risks and possible problems.
2) A business case is a tool for decision planning and support for understanding the likely consequences of a business decision in quantitative or qualitative terms.
3) Information can be captured from the Service Portfolio with sound financial management.
4) Business cases are built in Business Relationship Management process and evaluated in Service Portfolio Management process.
5) Example for business case structure is as follows:
1. a) Introduction - business objectives addressed.
2. b) Methods and assumptions - boundaries of the business case.
3. c) Business impacts - financial, non-financial results anticipated.
4. d) Risks and contingencies - probability that alternative results will emerge.
5. e) Recommendations - specific actions recommended.

3.6.3 Business Relationship Management Process (BRM)

Business Relationship Management is a process responsible for maintaining a positive relationship with customers. BRM identifies customer needs and ensures that the service provider is able to meet these needs with an appropriate catalogue of services. This process has strong links with service level management.

A) Purpose of Business Relationship Management Process

The purpose of BRM is to establish relationship between the service provider and customers and to ensure customers satisfaction by responding to changing requirements and managing customer expectation.

B) Objectives of Business Relationship Management Process

1) Understand customers needs and prioritize services accordingly to meet user requirements

2) Maintain good communication.

3) Handle conflicts and complaints effectively

4) Identify changes in business environment and technology that could impact services

5) Ensure customer satisfaction.

C) Scope of Business Relationship Management Process

1) BRM focuses on understanding how services meet customer requirements.
2) Business outcomes that the customer wants to achieve
3) Services currently offered to the customer, and how they are used by the customer
4) How services are currently offered including who is responsible for them, agreed
5) levels of service, quality of services delivered and any changes that are anticipated
6) Technology trends that could impact current services and the customer, and how
7) Levels of customer satisfaction; action plans in place to deal with the causes
8) How to optimize services for the future
9) How the service provider is represented to the customer

4. Service Design

4.1 Purpose of Service Design

1) The purpose of Service Design is to deliver a new service / service amendment that can deliver the strategic outcome required the design of both the services and the service management processes need to be included.
2) Need to ensure the service will run within budget and meet/exceed customer requirements.

4.2 Objectives of Service Design

An objective of Service Design stage of ITIL service life cycle is to design Services that can be easily and efficiently developed and enhanced.

4.3 Scope of Service Design

1) Consider not only the current requirements but also future needs (e.g. take advantage of technical advancements, can be easily adapted to future needs)
2) Describes how to identify requirements (functional and service level) and ensure the delivery of such requirements

4.4 Value to Business

1) Ensuring that services are aligned with business objectives
2) Ensuring that services are able to provide the utility and warranty required for them to meet the objectives outlined during Service Strategy.
3) Ensuring that service management systems and tools are capable of supporting service offerings
4) Ensuring that service-e management processes are capable of supporting service offerings
5) Ensuring that services are constructed according to agreed architectural standards
6) Ensuring that services are designed so as to be implemented efficiently
7) Ensuring that services are designed so that their performance can be measured

4.5 Four P's of Service Design

A Service Designer need to consider the following "Four P's of Service Design" while designing a service. The Four P's are as follows:

1) People: Human resources and organizational structures required to support the service
2) Processes: Service Management Processes required to support the service
3) Products: The products are the tools, services, and technology used in the delivery of, and support of, the services.
4) Partners: When designing services, vendors, manufacturers, and suppliers should be considered as they will be utilized to support the service once it is live.

4.6 Five major Design aspects of Service Design

The 'Five Aspects of Service Design' are areas which should also receive design focus as part of the overall effort design a service. The areas include:

1) Service solutions: Include all of the functional requirements, resources and capabilities needed and agreed upon
2) Service Management systems and tools: these are used to support and automate processes (e.g. quality management system, information security system). To ensure consistency with other services and guarantee that supporting and dependent services are adequate to maintain on-going reliable service delivery
3) Technology architectures and management systems: To ensure they are consistent with the new service and are suitable to operate and maintain it.
Architecture is defined as the fundamental organization of a system, embodied in its components, their relationships to each other and to the environment, and the principles guiding its design and evolution.
4) Processes: To ensure that the process, roles and responsibilities are adequate to operate, support and maintain the new or changed service
5) Measurement methods and metrics: To ensure that the methods can provide the required metrics on the service.

4.7 Basic Concepts in Service Design Processes

1) Service catalogue: A service catalogue is a database or structured document with information about all live IT services, including those available for deployment. The service catalogue is part of the service portfolio and contains information about two types of IT service: customer-facing services that are visible to the business and supporting services required by the service provider to deliver customer-facing services.
The service catalogue has different views for different people (users, IT, etc.)
1. a) Two-view (business service/technical service)
2. b) Three-view (wholesale customer, retail customer and supporting services).
2) Service level agreement (SLA): SLA is a written agreement between the Service Provider and a customer containing mutual goals and responsibilities.
3) Operational level agreement (OLA): An Operational Level Agreement (OLA) is an agreement between an IT service provider and another part of the same organization. An OLA defines the goods or services to be provided from one department to the other, and the responsibilities of both parties.
4) Underpinning contract: An Underpinning Contract (UC) is a contract with a third party, in support of the delivery of an agreed IT service to a customer. The UC defines targets and responsibilities that are required to meet agreed service level targets in an SLA.
5) Service design package: The Service Design Package (SDP) that was created in the Service Design phase contains all aspects of an IT service and its requirements through each stage of its lifecycle. It includes the information about the execution of activities of the Service Transition team.
6) Availability: The ability of a service, component or CI to perform its agreed function when required.
Availability is measured and reported as a percentage.