ITIL Service Strategy Definition, Processes, and Implementation

Sophie Danby June 5, 2023
- 8 min read

The ITIL Service strategy is the first stage in the service lifecycle. It paves the way for the following four. This stage contains the guidelines for organizations to set out a solid strategy for their IT services, position them in the appropriate place in the service portfolio, and ensure they add value from a financial and experience perspective.

This article will define service strategy, its purpose, and examine in detail the five processes that comprise it. Then we will explain the different stages to effectively implement one in your organization and build a solid structure for your IT service delivery.

Are you prepared to learn all about service strategy? Let’s go! 

ITIL service strategy definition

Service strategy is the stage defined in the ITIL framework’s service lifecycle that looks at the overall approach for IT services. Its purpose is to define the perspective, position, plans, and patterns that a service provider needs to be able to execute to meet an organization's business outcomes. 

Put simply, the strategy phase of the ITIL lifecycle is in place to ensure that IT and the business work together to create a solid foundation and approach on which to design, build, and improve effective and efficient IT services.

Service strategy in ITIL v3

Service strategy is a crucial part of ITIL v3. It acts as the service lifecycle's starting point, ensuring a solid strategy is in place before the service can be designed, transitioned into service, supported, maintained, and improved. 

Service strategy in ITIL 4

ITIL 4 has changed the game slightly, but there is still a place for service strategy. The five service strategy processes defined in ITIL v3 still exist in ITIL 4, but they live in the service value system (SVS) within the General Management practices. 

ITIL 4 divides practices into three sections: Service, Technical, and General Management. General Management practices are a set of processes that can be applied across the organization for the success of the business and the services it provides.

Seven benefits of the ITIL service strategy

Service strategy has the following benefits:

  • Improved alignment of IT services with business objectives - By considering and incorporating business interests from the start, IT services will be more consistent and integrated with the whole organization.

  • Better Financial Management - During this first stage, the adequate accounting, budgeting, and charging activities are carried out. This means that cost-effectiveness will be a central motive when designing your ITIL service lifecycle. 

  • Increased efficiency and effectiveness - Both the utility and warranty requirements are captured and addressed during this process, improving overall productivity.

  • Improved decision-making processes - Because this stage makes sure that the appropriate Risk Management activities are in place, organizations have the ability to make better informed decisions.

  • Clearly defined roles and responsibilities - Everybody and everything within the IT department will be assigned clear duties and obligations that are codified in RACI charts.

  • Enhanced collaboration - The Business Relationship Management process – we'll circle back to that in just a minute – supports communication and stronger team work between IT and the whole business.

  • Increased visibility of IT services - Building a comprehensive service portfolio will give your organization a centralized display of everything it has to offer. 

The 4 Ps of service strategy

One of the fundamental tenets of service strategy is the 4 Ps. These four elements ensure that the strategy is balanced and has considered the overall approach, market position, patterns of business activity, and overall service delivery.

The 4 Ps of service strategy are:

  • Perspective: the overall strategy and approach that the organization will take to achieve its goals and objectives.
  • Position: the organization's competitive position in the market and how it plans to differentiate itself from its competitors.
  • Patterning: designing and developing service offerings that align with the organization's strategy and position in the market.
  • Provision: delivering services to customers and ensuring they are delivered consistently and reliably.

The 5 ITIL processes in the service strategy

There are five processes that make up the service strategy process:

  • Strategy Management for IT services
  • Financial Management
  • Demand Management
  • Service Portfolio Management
  • Business Relationship Management

Let's take a moment to look at each process in more detail.

Strategy Management for IT services

ITIL Strategy Management for IT services aims to position ITSM as a strategic asset. IT is often seen as a black hole or a source of costs rather than a critical business enabler. This first process sets out a series of steps for aligning and integrating IT into the rest of the business. 

Strategy Management recognizes that for any service provider to be successful, they must have a thorough understanding of the market space in which they operate. They must know their strengths, weaknesses, and threats as a provider and what opportunities for improvement are available.  

Financial Management

Financial Management for IT services is the practice that looks after all financial aspects of IT service delivery. It ensures that the appropriate levels of funding and commitment are in place and bandages the balance between supply and demand and between cost and quality. It also covers the activities of accounting for previous IT spending, sets the budget for future IT spending, and ensures the appropriate cost models are in place.

Demand Management

Demand Management aims to help the business understand and predict customer demand for services. Every business is subject to changing user behaviors, and service demand will ebb and flow over time. 

ITIL defines Demand Management as understanding, anticipating, and influencing customer demand for services. This means that service demand can grow or shrink with the business cycle. A key feature of this process is defining business activity patterns; simply, this means knowing when your busy times are and ensuring you have the appropriate IT services to support them.

Service Portfolio Management

Service Portfolio Management is the process that ensures the business has the right mix of services to balance investment, and ensures that services are correctly linked to business outcomes. This process is made up of the following:

  • The service pipeline for planned and future services
  • The service catalog to capture the current service offering.
  • The retired service system, a list of retired and legacy services 

Business Relationship Management

Business Relationship Management is the process that establishes and maintains an effective relationship between the service provider and the customer. Done well, it helps the business articulate the value of a service, identifies customer needs, and ensures that the service provider understands and meets those needs.

How to create a service strategy in 4 stages

So many strategies fail to add value because of scope creep. It's important to have a solid structure from the start to avoid future inconsistencies or confusions. 

An effective strategy should follow four main stages:

  • Definition - The stage that defines the strategy and overall approach; the definition should ensure that the utility and warranty requirements are captured so that the service specified in the strategy is fit for purpose and fit for use.

  • Analysis - This stage investigates how the strategy is going to be implemented, identifying any potential risks that could derail implementation as well as creating a plan to mitigate any risks, obstacles, and threats.

  • Approval - We all need governance and approval to keep us honest. This stage manages the process of getting senior management approval. 

  • Charter - The exciting part. The charter stage is the implementation of the strategy you and your team have worked so hard on.

Make sure you take enough time to work on each stage before moving on to the next. This way you will be well prepared for the implementation, avoiding the need to constantly look back or reevaluate.

How to implement a service strategy

Implementing a service strategy is all about people. To deliver an effective ITIL strategy, defining the following roles can provide support during the process:

  • IT Steering Group (ISG) - Sets the strategy and direction for IT services. It includes members from Senior Management and Business and IT to ensure everyone is heard.
  • Service Strategy Manager - Supports the ISG in developing and maintaining the IT service provider's strategy.
  • Service Portfolio Manager - Works with the IT Steering Group to improve the service provider's offerings and capabilities.
  • Financial Manager - Responsible for managing an IT service provider's accounting, budgeting, and charging requirements.
  • Demand Manager - Responsible for understanding, anticipating, and influencing customer demand for services and capturing patterns of business activity.
  • Business Relationship Manager - Responsible for maintaining a positive relationship with customers, identifying their needs, and ensuring that the service provider can fulfill those needs with an appropriate catalog of services.

Service strategy certification

The service strategy certification is an AXELOS qualification on the ITIL Service Strategy publication. It gives successful candidates a comprehensive understanding of the strategy stage of the ITIL lifecycle, its roles, processes, and working practices. Ideal candidates include IT finance managers, IT managers, and project managers. AXELOS classifies the service strategy certification as an intermediate course. 

Key takeaways

Service strategy is the first stage in the ITIL v3 service lifecycle. Its objective is to create a solid approach from which to serve our customers. The strategy phase of the lifecycle ensures that the appropriate requirements are captured to be defined in detail in the design stage.

It’s important to put in the effort to make your strategy as strong and comprehensive as possible before moving on to the rest of the life cycle. Consider all five ITIL service strategy processes and take your time with each stage of the implementation process. This will lay the groundwork for a successful journey through service delivery.

Frequently Asked Questions 

Why is service strategy important in ITIL? 

In short, because it's good to have a plan. Having a strategy ensures that your services are fit for purpose and use so they can deliver value.

Read other articles like this : ITIL, ITSM

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