What is Service Portfolio Management?
Service portfolio management is a system for managing and optimizing services. It involves the planning of all service activities and the analysis and evaluation of those services to ensure that they are meeting customer needs. The goal is to provide an efficient way of delivering service offerings to customers by creating a plan which will cover all aspects of their requirements. Service providers can use this information to make strategic decisions on deploying resources and maximizing profitability.
The first step in developing a profitable service portfolio management strategy is understanding your current performance - what's working, what isn't, etc. This will help you create accurate benchmarks against which future progress can be measured (See "The Importance of Performance Measurement").
Once you understand your current state, the next step is to define your business goals and objectives. For example, what do you want your service portfolio to achieve? How will it help improve customer satisfaction or increase revenue (See "Defining Your Business Goals and Objectives")?
A service Portfolio is a collection of services offered by an organization that can deliver value to customers. There are three types in the Service portfolio; each style has its characteristics and suitability.
- Core Services: These are the products or services that help the organizations generate revenue and profit. They form a significant part of the Service portfolio.
- Supportive Services: These are additional services that provide support to core services like strategy development, business process outsourcing, etc.; these also form a significant part of the Service portfolio; however, they don't generate much revenue as compared to core services.
- Embedded Services: These are those services that have been developed with a particular end-user need in mind. They are usually not revenue-generating services, but they can add value to the organization's overall offering.
Service portfolio management is a strategic approach to managing services. It encompasses the entire service lifecycle, from strategy and design through implementation and delivery. Service portfolio managers are responsible for developing strategies that meet customer needs and align with business goals, identifying potential threats or market opportunities, selecting appropriate solutions, negotiating contracts, defining requirements for successful implementation of those solutions, engaging project teams to deliver on these requirements; monitoring ongoing performance of services; advising leaders about emerging trends; making adjustments as necessary to maintain alignment between customers' expectations and organizational priorities.
Service portfolio management aims to create an environment where different types of services can be managed effectively by using various models such as outsourcing or internalization for specific areas like IT Infrastructure Management. The goal is to provide an overall governance framework that helps the organization make informed decisions about which services to offer, how best to deliver them, and when necessary to make changes. Service portfolio management also enables the organization to track performance against defined service levels and customer expectations, thereby ensuring that they are providing value for money.
The objectives of service portfolio management can be classified into seven different categories. These objectives are:
- Identifying the services.
- Prioritizing the services.
- Developing a cost model for each service provided.
- Determining how to allocate resources across services and processes.
- Assessing performance against customer expectations and business needs.
- Implementing corrective actions as needed to ensure desired outcomes are achieved.
- Evaluate the overall performance of service delivery.
By achieving these objectives, an organization can ensure that its service portfolio is aligned with business goals and needs.
Before beginning service portfolio management activities, organizations need to understand their services. This includes understanding what services are being offered, who is offering them, how much it will cost to deliver each service, and what benefits.
Service portfolio management is defining, measuring, and managing services planned for service delivery to customers or other stakeholders. It provides a comprehensive framework for understanding how all business activities contribute to desired outcomes.
The Scope of Service Portfolio Management Services include:
- Meeting customer needs through effective service design, development, implementation, and operation.
- Managing supplier relationships, including contract negotiation, contracting management, performance measurement, and evaluation.
- Optimizing processes by identifying opportunities for improvement and implementing new ways of working.
- Maximizing value through improved financial and non-financial performance measurement and management.
- Understanding how to protect the organization's reputation by demonstrating ethical behavior, upholding legal compliance, and considering environmental impact.
The Scope of service portfolio management: Ensuring that all services are delivered to meet customer expectations is essential for business.
Who Uses Service Portfolio Management?
Service portfolio management is a process for analyzing, improving, and documenting an organization's services. It helps to improve customer service levels by defining what services are available, how they will be delivered, and which ones are more important than others. It can also help pinpoint where organizations may need improvement in their service delivery.
The process ensures that all the services are consistent with business strategy, are organized efficiently to deliver value, and have a clear funding plan. It can also help reduce costs by reducing duplication of effort or providing similar services in different ways throughout an organization's service offerings.
Service Portfolio Management t helps you manage your service offerings. It lets you create, track, and maintain all of your company's services.
- Portfolio Owner: A portfolio owner is responsible for a set of portfolios, programs, or projects. This person typically reports to the portfolio manager and may have responsibilities in project management, risk management, governance, and compliance. The role of the portfolio owner varies depending on the organization's needs, but it can include:
- Monitoring performance against plan.
- Evaluating strategy options.
- Managing risks.
- Recommending changes to strategy.
- Evaluating project proposals.
- Assessing portability of projects and programs across different business areas.
- Portfolio manager: A Portfolio manager in Service Portfolio Management plays an integral role in managing and optimizing service portfolios. The portfolio manager oversees all aspects of the service portfolio management, including but not limited to project planning, resource allocation, risk identification, and mitigation strategies.
- Service Owner: A Service Owner is a member of the service portfolio team responsible for managing and tracking the underlying services within their area. They are responsible for ensuring that all services they own meet defined quality, cost, and performance expectations. The role also includes developing business cases to ensure appropriate funding exists to meet requirements.
- Service Manager: A Service Manager in service portfolio management manages and oversees the process of creating, delivering, and maintaining services. The role has many responsibilities that include:
- Designing and managing service portfolios.
- Ensuring compliance with standards and regulations.
- Assessing risks associated with providing a service to customers.
- Managing customer expectations.
- Managing supplier relationships.
- Ensuring compliance with service level agreements and service desk procedures.
Process owner: Process owners are responsible for the processes in Service Portfolio Management. They have responsibility for planning, designing, and implementing these processes. A process owner is usually a business analyst or project manager who knows how to run a specific group's business process.
A Process Owner is responsible for ensuring that a processor stage in a process remains on schedule and within budget.
- Process Manager: A process manager is an individual who manages the day-to-day operations. They are part of the management team and help oversee and organize everything in their department or group. Process managers work with couples, projects, products, and customers to meet goals on time and under budget.
Benefits of Service Portfolio Management
Service portfolio management is a process that can help your company make better decisions about where to allocate resources. As a result, it will improve the quality of services and reduce costs in the long run. The following are three benefits you'll see when you implement service portfolio management:
- Better Decision-making: With an efficient way to manage your company's services, managers will be able to identify which ones need more attention or investment quickly.
- Increased resource allocation: Service portfolios allow for increased focus on critical areas while eliminating low value-added activities due to their lower profitability. This will lead to decreased costs and increased revenue streams when it comes time for renewal negotiations with suppliers.
- Improved quality: When allocating resources, it's essential to understand how services are interconnected. This will allow for identifying and mitigating any quality risks that may arise.