Introduction
- Challenges in managing service demand
- Demand Management (DM) is a vital aspect of service management.
- It aligns supply with demand and aims to predict demand as closely as possible and, if possible, even regulate it.
- Badly managed demand represents a risk for service providers.
- Too much capacity, results in costs that do not yield value.
- Inadequate capacity, however, affects the service quality and limits service growth.
- Challenges in managing service demand
- Service Level Agreement (SLA), demand prognosis, planning and strict coordination with the customer can reduce demand-related uncertainty, but they cannot eliminate it altogether.
- Service management must deal with the additional problem of synchronous production and consumption.
- Service Operation is impossible without the existence of a demand that consumes the output.
- It is a pull-system, in which consumption cycles stimulate the production cycles .
- Challenges in managing service demand
- Unlike goods, services cannot be manufactured in advance and stocked in a finished goods inventory in anticipation of demand.
- The productivity capacity of resources available to a service is adjusted according to demand forecasts and patterns.
- Activity-based demand management
- Business processes are the primary source of demand services.
- Patterns of Business Activity (PBAs) influence demand patterns as seen by the service providers
- It is extremely important to study the customer’s business to identify, analyze and codify such patterns to provide sufficient basis for capacity management.
Activities, methods and techniques
- Core services and supporting services
- Core services deliver the basic outcomes desired by the customer. They represent the value that customers want and for which they are willing to pay.
- Core services anchor the value-proposition for the customer and provide a basis for their continued utilization and satisfaction.
- Supporting services either enable or enhance the value proposition. Enabling services are basic factors and enhancing services are excitement factors.
- Developing a differentiated offering
- The packing of core and supporting services is an essential aspect of market strategy.
- Service providers should thoroughly analyze the prevailing conditions in their business environment, the needs of the customer segments or types they serve, and the alternatives that are available to those customers.
- The decisions are strategic because they hold a long-term view for maintaining value for customers even as industry practices, norms, technologies and regulation change.
- Developing a differentiated offering
- Bundling of supporting services with core services has implications for the design and operation of services.
- Decisions have to made whether to standardize on the core or the supporting services.
- Service providers must focus on the effective delivery of value through core services, whilst at the same time keeping an eye on the supporting services.
- Some supporting services, such as the service desk or technical support, are generally bundled but can also be offered separately.
- Developing a differentiated offering
- These strategic decisions can have a major impact on the service provider’s success at the portfolio level.
- Important primarily to service providers who supply multiple organizations or business units (BUs) while at the same time being forced to reduce costs in order to preserve the competitiveness of their portfolio.
- Services packages
- A service packageis a detailed description of an IT service that is available to be delivered to customers. A service package includes a Service Level Package (SLP) and one more core services and supporting services.
- A Service Level Package (SLP)is a defined level of utility and warranty for a particular Service Package. Each SLP is designed to meet the needs of a particular Pattern of Business Activity.
- A Core Service Package (CSP)is a detailed description of a core service that may be shared by two or more Service Level Package.
- Services packages
- A Line of Service (LOS) is a core service or supporting service that has multiple Service Level Packages. A Line of Service is managed by a Product Manager and each Service Level Package is designed to support a particular market segment.
- Combinations of CSPs and SLPs are used to serve customer segments with differentiated values.
- CSP and SLP are loosely bundled to enable local optimization and maintain the service catalogue’s efficiency as a whole
- Services packages
- Advantage of CSPs is that they provide for strict control of core services used by all BUs. It controls complexity and assures the business outcome.
- Every BU can develop SLPs on the basis of applications and processes that serve their own market spaces.
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