Tuesday, 12 February 2013

Utility and Warranty: The Value Enablers


Dear Friends,

This blog about ITIL concepts has become and integral part of my life and I really missed it last three days. There were some personal commitments and I could not make it. Anyways, let’s move ahead.

In my last post, we discussed what ITIL says about Value creation for the customer with the combination of Utility and Warranty. What if we want to increase the value for customer? Simple…!!! Increase any of these and you enjoy the increase in Value….right? NO…Remember, alone utility and warranty are insufficient. Hence we need to increase both in order to achieve higher Value for customer.

Ensuring Utility is quite easier to understand. You only need to ensure that you take proper understanding of the customer requirement (Coffee or Cold Drink) and provide that. Although  it may not be that simple.

How do we ensure Warranty? There are certain pointers for that.

1.       Availability: Service is available to the user when he needs it (in an agreed manner). This is the most visible aspect. Hence Availability management is the most critical aspect of value creation in Service Delivery.

2.       Capacity: Service with required quality is able to support up to an agreed level of demand. Suppose a service has been created to support 100 concurrent users. Everything is fine up to 50 concurrent users but slowness is observed if users increases. It means that although the service is available, its capacity is not sufficient.
Capacity becomes important where Utility arises from sharing of resources. Hence Capacity management is critical.

3.       Continuity: This ensured that Services are continued even in case of disruption or failures. Another important aspect of the continuity ensures that services backs to normalcy within the agreed timelines in case of any failure. Continuity is assured with redundancy. E.g. using cluster of servers.

4.       Security: It assures the secure utilization of services. Security supports the previous three aspects of warranty.

So…How do we create value? If we want to create value by providing services to customer, we definitely need to have Capability and we need to have Resources. Resources and capabilities are assets used to create value.

Resources are the direct inputs and Capabilities are the Organization’s ability to coordinate, control, manage and deploy resources to produce value. Management, Organization, Knowledge, People etc are used to transform resources into value.

Capabilities => Management      Organization      Process             Knowledge         People

Resources => Financial Capital    Infrastructure    Applications       Information        People

Did you observed something? “People” is the part of Capability and Resources both. Why? Because of its skills it is part of capability and because of its ability to produce results, it s part of resource. Clear? Not yet? Let’s take an example-

Suppose you are given with the process to make toys by hands. You can have document on method to make a toy but to make that toy; you need money, infrastructure and a person to make it. Similarly if you have money, infra etc; you need to know the process (method) to make the toy. Now “People” with knowledge of making toys may act as capability (knowledge & method) and Resource (hands) both. Hope this example clarifies the concept.

Cheers and Happy reading.


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