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.

Service: Game of Utility & Warranty

What is Service

A Service is a means of delivering value to customer by facilitating outcomes customers want to achieve without the ownership of specific Cost & Risk.

A customer may or may not be having expertise in a field where he needs some outcomes for example; A Software Company with huge Datacenter may need an insurance of its datacenter devices against any hazard. Cost of replacing all devices and setting up the Datacenter by itself is going to cost very high and the associated risk will also be very high (due to lack of experience) which the company may not want to own. Hence it will seek service from an insurance company.

Let us return to the definition of Service again. It talks about delivering value. Hey! What is that? I can deliver value to my Customer through my Services if Customer can get benefited from my Service. But how to ensure that? Wait…It’s simple…Only 2 things you need to take care-

• Is my service actually what customer needs? You cannot help your customer with a cup of tea if he is feeling thirsty and looking for cold drink. This criteria we call “FIT for PURPOSE”
•  Is my Service available when my customer needs? My Customer needs Cold Drink and I have it but not at the time he was feeling thirsty but hours after that. This simply meant that I had the required service in my kitty but still I could not help my customer. So…Service Must be “FIT for USE”.

Means.....Right Service at Right time in right form create Value for Customer

We call Fit for Purpose as Utility

&

Fit for Use as Warranty

Utility: 

This is what Customer gets. The attributes of Services that has positive effect on task associated with desired outcome.

Warranty: 

How it is delivered. Availability of Positive effect when it is needed.

As Utility is expected to improve the positive effect of a task, we can see that it actually improved the probability of getting better results i.e. Performance Average.

As Warranty ensures that desires performance will be available when needed, it actually reduces Variation in the performance.

Both Utility & Warranty togather results into better performance average with least deviation i.e. Value created for customer.

Cheers..!!!

ITIL Volumes and Processes

My today's post is an extension to the yesterday's discussion. Today we’ll take a closure look towards each part of Service Life Cycle and its processes.

I.                    Service Strategy: Think WHY to do before HOW to do

Service Strategy is the first volume of ITIL which guides us how to design, develop and implement service Management so that it becomes the capability and an asset of organization.  Service strategy ensures that organization can handle the cost and risk associated with the Service Portfolio. Service Strategy is also aimed for Operational Effectiveness and Distinctive Performance.

Major Processes coming under Service Strategy are-

a.       Financial Management: How to allocate budget to keep it aligned with Organization’s Goal.

b.      Service Portfolio Management: Portfolio of Services.

II.                  Service Design: HOW to turn strategy into Capability

This volume of ITIL guides us about Design and Development of Service and Service Management Processes. Service design converts Strategic Objectives into Portfolios of Services and Service Assets.

Major Processes of Service Design are-

•  Capacity Management : Plan capacity so that it can provide desired Output.
•  Availability management: Ensure Services are available to business.
•  IT Service Continuity Management: Ensure Services can be resumes within acceptable time.
• Supplier Management: Suppliers meets the expectation
• Service Level Management: All Service Level Requirements are met.

III.                Service Transition:  Turn Capability into Service

This part of ITIL volumes guides us about Development & Improvement of capabilities for Transitioning new and changed Services into production (or Operation). This is actually realization of designed services.

Major processes of Service Transition are-

• Configuration Management: Managing all Configuration Items.
• Change Management: Implement the required changes.
• Release Management: Changes released to Production.

IV.                Service Operation: Business as Usual

Service Operation as per ITIL focuses on practices for managing the operation of Services. It ensures effectiveness and efficiency of Service Delivery.

Major Service Operation Processes are-

• Event Management: Manage the event happening during the operation.
• Incident Management: Handle degradation or disruption to the Services due to know issues.
• Problem Management: Root Cause Analysis of the cause of issue to prevent future incidents.
• Service Request Fulfillment: Fulfill Service Request which are mostly very low risk changes
• Access Management: Grant Access to Authorized and stop Unauthorized users.

V.                  Continuous Service Management: Let’s make it better

This volume of ITIL focuses on improvement of services by combining Principles, Practices and Methods of Quality Management, Change Management and Capability Improvement. It is majorly based on Plan-Do-Check-Act Model (also known as Deming Cycle).

The major process is-

• Service Reporting and Measurement. You cannot improve if you don’t measure it.

      Dear Readers: Today we discussed the meaning of each of five volumes of ITIL and the processes covered. Please let me know if it was able to fulfill your expectations. Your feedback is a valuable resource to improve the contents.