ITIL Service Strategy & ITIL Processes

Key takeaways: ITIL service strategy is the first stage of the ITIL service lifecycle, where an IT organization decides which services to offer, to whom, and how to fund, staff, and manage them to align with business objectives.

• What it is: Five processes — strategy management, service portfolio management, IT financial management, demand management, and business relationship management — that turn business needs into a defined, funded service portfolio.

• Why it matters: Without a strategy, IT reacts to whatever arrives; with one, the team commits to a known set of services, measures them, and adjusts investment to what the business actually uses.

• How Jira Service Management helps: Gives the service portfolio a home — a service catalog with request forms, SLAs, and satisfaction surveys for each service, plus the usage and performance data that portfolio and demand management depend on.

ITIL service strategy is the first stage of the ITIL service lifecycle. It’s where an IT organization decides which services it will offer, to which customers, and how it will fund, staff, and manage them — so that IT delivers a defined set of services aligned with business objectives rather than reacting to whatever problems arrive. ITIL (originally the IT Infrastructure Library) is the most widely adopted framework for IT service management.

Service strategy is a term from ITIL v3. ITIL 4 no longer organizes the framework into lifecycle stages, but the same work continues as the “plan” activity of the service value chain and in practices such as strategy management, portfolio management, service financial management, and relationship management. This guide uses the service strategy framing because it’s still how most teams describe the work, and it walks through its five processes, where it sits in the lifecycle, and how to manage it in practice.

5 ITIL service strategy processes

Strategy management

Research is the first step in the strategy management process. Start by assessing your current offerings as an IT org and your unique capabilities. Quick market research can identify opportunities in the broader competitive landscape. Internally, you can learn what needs and constraints exist in your business so that you can offer services that match your organizational goals. This process of aligning IT services to your market and organization is called strategy management. 

There are two outcomes in IT services strategy management. First is the set of services your IT org commits to deliver. This set of services is a blend of your business needs, the market opportunity, and your IT team’s unique skills. The second outcome of strategy management is an implementation plan. For each service you plan to offer, your strategy makes clear which teammates, resources, and processes you will use to get the work done.

Service portfolio management

After strategy management, you’ll have a set of services you can offer which is called your “service portfolio.” Service portfolio management is how your team monitors each of the services and ensures continued alignment with business goals. Service portfolio management is an ongoing process that checks actual service usage against the service strategy. In pursuit of continuous improvement, portfolio management ensures that you have the right mix of services to meet required business outcomes at your current level of investment.

Let’s say an IT org commits to deliver laptop setup, mobile device provisioning, network infrastructure management, and cloud security services. After portfolio management, they’d likely have a service desk set up with four options that customers could choose from. For each of their four services, they’d document a workflow, set SLAs, and start tracking performance of each service request. If one offering overwhelmed the team and another was never used, portfolio management would encourage the adjustment of offerings and resources to better meet business needs.

IT financial management

Once you know what you are offering and how you will measure success, you can progress to IT financial management. In this stage you are determining the value of each of your services and building the financial backing needed to sustainably deliver your services. This process includes budgeting, accounting, and collection so that the organization covers costs and generates profit.

This stage benefits from collaboration with finance and accounting teams. A trained accountant can help you run cost-benefit analysis for each service and arrive at your total spending by service. Once you have an accurate picture of your spending, you can identify opportunities for cost-cutting. Budgeting allocates funds to keep your services running and support your overall service strategy. Collection, or charging, is a process for billing customers for what services they use.

Demand management

Anticipating the demand for your services helps you manage your team and your resources. Demand management is a precursor to capacity management. By analyzing, anticipating, and influencing demand for your services, you can ensure you have the right capacity to deliver services effectively.

Analyzing service usage is best aided by service desk ticket data. Additional data points like network and device usage can be used. Your goal in the analysis stage is to understand current use of services. Progressing to the anticipation stage, you shift your focus to forecasting needs, identifying trends, and making predictions about future usage. One of simplest ways to anticipate needs is to talk with business leaders from around the business. Influencing demand for your services is another powerful tool to limit risks and expenses. Many IT teams influence demand by clearly communicating which services they will and will not offer.

Business relationship management

One of the most refreshing parts of ITIL service strategy is business relationship management. This is where you step back from a focus on your services and refocus on maintaining positive relationships with internal teams, employees, and any other customers you might have. The simplest way to stay focused on relationship management is customer satisfaction data. Many teams are using automated polling features in their service desk software to keep this data top of mind. Setting goals around relationship management can help align the team around positive outcomes.

Another strategy for business relationship management is revisiting the needs and business objectives that originally inspired your service strategy. By talking individually with team and business leaders, you can go one click deeper into their needs and identify adjustments you could make to better serve those needs. While the outcome of these conversations is useful in itself, many IT leaders find that having those conversations strengthens relationships more than simply solving problems.

ITIL service lifecycle

A useful way to learn more about your service strategy is to understand how service strategy fits into the ITIL service lifecycle. ITIL provides guidelines and best practices for implementing a five phase IT service lifecycle: Service strategy, design, transition, operations, and continual improvement. Investment in a strong service strategy provides a solid foundation for the remaining four phases. Image showing the five phases of the ITIL lifecycle. Most competitors show these on a wheel with attempts to convey that Continual service improvement is an ongoing process. Examples:

Service strategy

Service strategy is the identification of what services your IT organization should offer and for what customers. In this foundational phase, you strategize the development, delivery, and management of those services in an efficient and cost-effective manner. Service strategy is executed in five processes: Strategy management, service portfolio management, IT financial management, demand management, and business relationship management.

Service design

Service design is the process of designing new services and improving existing ones. Service design is an exceptionally well documented process that will encourage you to consider the four fundamental components of a healthy service: People, products, partners, and processes. By using the four P’s and eleven service design processes, you can effectively design the services in your service strategy.

Service transition

Service transition is the process of building and deploying services. Service transition is where your service strategy and service design come to life. It’s exciting to spin up the tools and systems needed to execute each of your services. Strong service transition teams use eight ITIL processes to build today’s vision for your services and lay the groundwork for potential changes in the future. Service transition is a process to revisit as you learn, grow, and adapt to changing business needs.

Service operation

The objective of ITIL Service Operation is to make sure that IT services are delivered effectively and efficiently. Teams that have successfully implemented an ITIL service lifecycle spend most of their time here in operations. Service operations handle tickets and user requests, resolve service failures, and perform routine operational work.

Continual service improvement

The goal of continual service improvement is exactly what you might think. This is where you learn from past successes and failures. Four ITIL processes will help you continually improve the effectiveness and efficiency of your services. Starting with a service review, you evaluate your current processes, define improvement initiatives, and commit to monitoring them. With this process, your team can introduce improvements where necessary.

Managing ITIL service strategy processes with Jira Service Management

The service strategy concepts in this article form the foundation of your service lifecycle. To move through this lifecycle, you’ll need tools that support implementing these concepts. Let’s discuss some of the features of Jira Service Management and how they aid in implementation.

Incident and problem management

When things go awry, a tool can bring your IT operations teams together to rapidly respond to and resolve incidents, and continuously learn from them. In Jira Service Management, you can group incidents into problems, fast-track root cause analysis, and record workarounds to minimize the impact of incidents. ITIL is focused on services, and one of the most common services offered is incident management. Tools to aid in the resolution of problems will help your service strategy shine.

Change management

Change is hard. Jira Service Management works to empower your IT operations teams with richer contextual information around changes so they can make better decisions. More than just a change request, a good tool will set up approval workflows, risk assessment, and deployment tracking. We learned that service deployment is about building and changing your services and this is how you manage those changes.

Configuration management

Part of your service strategy is the implementation plan. A tool like Jira Service Management will help you gain visibility into the infrastructure that supports critical applications and services. Understanding these service dependencies will help you minimize risk. By anticipating the downstream impact of changes, your teams can rapidly resolve incidents when they occur.

Request management

A service management tool can coordinate work across teams on a single platform, so your employees and customers quickly get the help they need. You can tailor request forms to each team's unique requirements and consolidate requests from email, chat tools, your service desk, and other channels. SLAs, a knowledge base, and customer feedback tools will help you stay on top of business relationship management and focus on what your team does best.