ITIL Financial Management - Increasingly Challenging

Managing a successful IT service delivery function (or business) during these times is an increasingly complex situation.

Today, a service owner needs to be knowledgeable about a lot of different process standards, best practices and service management developments.

As the delivery of IT products and services evolves constantly, a proper and accurate view of the company's service realted assets and underpinning financial capability is necessary.

With the dynamic breakthroughs in technology, interested internal clients are now demanding more from their IT service providers; including quality perfomance and a clearer view of the operational functions and controls that maintain the IT service operation.

Employing proper financial management within the service lifecycle can only give both the client and the service provider a sense of security and transparency during their business relationship.

After applying ITIL based financial management, both the client and the service provider aims to have the following capabilities:

* Enhanced decision making
* Speed of change
* Service portfolio management
* Financial compliance and control
* Operational control
* Value capture and creation

Though IT has been looked down in the past as a menial sector of the business organizations, the dynamic quality of the business has put IT industry, as one of the more important industries in this century.

It seems that the IT industry has a similar structure like a market-facing company, that they also regularly evaluate their business stance and aims to have an accurate view of how their services are responding to their client's needs.

This increasing similarity is a great shift for the IT business, as this would mean lowered costs while still producing quality services.

Here's a quick look at the commonality of interests between the business and IT: -

1. Visible, consistent run cost structures

For an IT firm to function flawlessly, it will be easier to know where the money is spent within the service operation.

2. Service consumption, modelling, valuation and planning confidence

They share the same need to have a client that they can serve their products, model and plan a working and efficient service strategy with.

3. Service investment analysis

It is necessary to make sure that the planned service will be valuable and worth the investment for the clients.

4. Financial process supporting rapid change in: budget, business need and value networks. There should be a strict monitoring of budget spending within the service operation.

5. Service portfolio management and optimization

The IT is advised to have an accurate description of their services and assets by providing their clients with their service portfolio. It should aim to optimize and improve the quality of their client's services and operation.

6. Known variable cost and dynamics

Knowing how to control the essential variables within the service operation is necessary and helpful for the service provider.

7. Service provisioning optimization

Once the service is functioning, the IT firm should be able to monitor and help in enhancing their client's services.

8. Financial compliance

The services organisation must work within the budget restrictions agreed and orientate around the plans of their clients.

Developing Strategic Assets - ITIL Service Strategy

In order to get a head start in life, one has to know the talent that they can peddle for success. A person might be a gifted writer, or a young woman might shine the most in dancing, whatever gift that they might possess, it is but a natural inclination to develop it as part of a person's drive towards maturity and growth.

This comparison can also be applied in the world of the ITIL Service Strategy. As part of the ITIL framework, Service Strategy is a key aspect of developing and keeping the processes and service applications in top shape.

Developing these physical assets and services provided by the service provider is one way of ensuring a successful service delivery.

What is a strategic Asset?

A strategic asset in a Service Strategy can be identified as the physical assets, products and services contained in a service lifecycle. Developing these strategic assets to their maximum capacities can only spell success for the company and the service provider.

It only seems rational for service providers to prioritize the managing and development of services and physical assets of their services, as their progress and development is connected with the progress of the client's company.

When a client is notified that a service provider delivers trusted products, and manages to be a reliable partner, this would only boost the interest of a prospective investor. That is why it is necessary to maintain a level of quality and commitment towards joint projects, as this can lead to a more clients in the future.

Developing strategic assets

Some stakeholders might go into a service agreement with a service provider that has low value contracts, but as time passes and both parties have gotten a better handle on their service needs, the service rendered will only continue to improve.

This progress would only encourage a client to renew their partnership and at this stage, it would only be logical for the service provider to invest and develop their prized services and products by employing more specialized workforce and instill applications that can enhance their services.

Deliver value capture

As much as possible, stakeholders invest in a service provider that has a transparent and trusted service history. A great service provider is measured by the efficiency of its value creation versus its value capture. It would be an ideal scenario if the services created, taking into account the cost and efforts it took to produce, can be equal, if not essentially beneficial to the company for its users and overall business organization.

Service management as a strategic asset

In order to handle and develop service management as a strategic asset, it is necessary to view and identify the value network of the service provider in conjunction with their service operation with their customers.

By having an idea of what these key assets are in their relationship, it would be easier to classify which are more significant than the other. Identifying the intricate service assets would help the service provider in monitoring them more closely and effectively.

Although the conditions around the business may not always be perfect, and change is almost inevitable, service assets are expected to be constant and stable.

It is important for service management to have great control over the relationship between customer assets and service assets.

ITIL Strategic Assessment - Service Strategy

Preparation is necessary before any step can take place in the ITIL service assessment.

It is essential for the service provider to consult and evaluate their services before it offers their business to their clients.

What separates the service provider against its competitor?

Providing them with a handy and detailed list of what your company offers best, is a great way to lure future investors. It would make it easier for them to choose if they knew what services to expect from the company. By having a list of the services that might be virtually exclusive to a certain service provider can set you apart from your competitors, and might just give you an extra edge to add more customers for their business.

Which of the services are the most cost efficient and profitable?

Try to identify which services in your company provides a great and reliable service without too much expense. In terms of non profit organizations, find out which among the services offered by the business serves the non profit organization better.

Which customers are the most satisfied?

This can be measured either through monetary or via the benefits received by the customers with the services provided by the company.

Which of the activities in the value chain network are the most different and effective?

To answer this question, it's best to have a look at the structure and basis of a strategic assessment: -

- Strength and weaknesses

It is necessary to begin the assesment by evaluating the company's strength and weaknesses. Try to measure the attributes of the company, on whether its resources, service quality, skills, cost structures, applications and customer relationship is an asset or a weak spot for the business.

- Distinctive competencies

Try to find out what sets your business apart from your competitors.

- Business strategy

Identify what kind of positions, plans, perspectives and patterns are used for the business operation. This information would help in understanding how the business delivers its services.

- Critical success factors

To make sure that the services are successful, the service provider should provide a set of measurements to be able to identify that they have achieved what was demanded of their services.

- Threats and opportunities

Another critical factor to identify while the company undergoes a strategic assesment is figuring out if there are underlying threats and alternatives for the services in the business operation. This can be a great opportunity to improve and enhance the service provider's weak spots and take advantage of the possible opportunities.

The Service Pipeline - ITIL Service Strategy

The service pipeline is one of three phases included in the service portfolio of an ITIL Service Strategy.

The service pipeline is a great opportunity to view the direction of a service provider's growth, as it discusses and includes the future services that are currently under development by the service provider.

These future services can take part in the service operation process once it goes through a rigorous process of design, development and testing.

The service pipeline can be a great springboard for change in a company's future projects, and it's also an effective way of reassuring the business of the service provider's reliability and commitment to their service delivery and improvement of their services.

The 4 P's of ITIL Service Strategy

Competition is extremely fierce in the world of business, only a handful survive, and some can barely keep up with the demands of the times. That's why it is necessary to have an idea of what it takes to be successful and an integrated strategy to help maintain excellent service results.

ITIL Service Strategy, the core point of ITIL, offers ideas and tips on how to have a longstanding IT firm, as it shares immeasurable nuggets of wisdom from trusted service owners. Here's a look at the four P's of ITIL Service Strategy: -


Having a vision of what the company wants to deliver will mostly give a better view of their business goals and objectives. A company that has a clear vision of the services that they want to offer can strike a better chord to the customers, as it notes the business philophy of interacting with their customers.

By having a strategic perspective, the company can create a distinctive stance against their competitors, and this would help the customers to remember them better for their specialized services and products.


To have a successful IT firm, it is necessary to have a definite view and projections on the kind of business that you are going to produce. ITIL Service Strategy affirms the need for a company to know for sure the position they have on all the aspects of their business.

Before taking any serious steps, the company should decide early on what their stance on issues would be, such as budget, the kinds of service they are going to deliver, and if either their value should be biased to either utility or warranty.

A company with a defined position, informs their customers their policies and gives them a chance to have an air of distinctiveness against other firms.


A key factor in achieving anything in this world, is creating a detailed plan on how you're going to make it all happen. ITIL Service Transition values the need for a company to have a concrete plan on how it can transition from “as is” to “to be.”

This discusses which methods and forms of execution that the company will likely end up taking into account.


Knowing which patterns and actions are good for the company is one of the key ITIL Service Strategy principles in achieving a great business. A pattern is defined as a series of ongoing actions and adjustments that the company possesses, that enables a company to run smoothly.
The company should decide which features, policies, technology applications, service providers and training procedures are perfect and consistent with the company's position.

It depends on how the company manages these 4 P's as it deems fit to their own busines needs.

A successful execution of the ITIL Service Strategy is picking the best start that fits the need, and then working over all remaining Service Strategy areas. To achieve the best result, it is advised that all 4 P's should be used across the entire lifecycle of IT Service Management and not just the core service operation.

ITIL Service Catalogue - Critical for ITIL Service Strategy

ITIL Service Strategy aims to build a seamless service operation in an IT business firm. With its structured principles and processes, it helps give the business owners a chance to compete with a fierce stance against their competitors.

A key aspect of the Service Strategy is its service portfolio, with a detailed and comprehensive information on the services that the company can offer to its client, it can entice new prospects and projects with their compiled notes on their delivered services.

Service portfolio has three phases, which includes the service catalogue, service pipeline and its retired services. Let's take a look at what a service catalogue contains.

A service catalogue is one of the most important part of the service portfolio, as it offers a comprehensive look at the present services that the company can offer to its clients. It provides them with a clear view of what services can fit their needs the most and it also provides details on how much it can cost them when they acquire their services.

A service catalogue acts as a service order for the client, as it is filled with useful service information that contains a clear description of each services. It helps a business find the perfect application for their operation, and if they needed it to be done, it can be customized to their own service requirements.

The contents of a service catalogue goes through a rigid process, as the service provider sifts through which services are reliable and are in demand, while it phases out the services that are not cost efficient and productive for their clients.

As these changes progresses, they offer new services and changes through the introduction of a service transition in their business.