IT services: service formula. Part two

In this series of articles Dmitry Kashtanov writes about what kinds of services you can find in the IT field, how they differ and what you should and should not expect from them. He cites the examples of services categories so you can compare them with each other with a greater understanding.

IT services: introduction and basics. Part One.

Part Two

There is a good definition of a service given in ITIL. Official version: service is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks. I will call this definition a service formula.

A professional service provider and all its employees must, above all, focus on outcomes for a customer/consumer. They should understand the perception of such outcomes. A common mistake of a provider is an excessive concentration on the immediate work or results. It does not understand the general outcomes of its work. This error can lead to unfortunate decisions, both at the level of individual employees, and at the level of senior managers.

Works as part of a service provided do not have value in themselves. They are valuable only as a bridge to the results. I really believe that client focus is a key topic that deserves special scrutiny: the way in which people perceive your services is paramount to success.

The concepts of «possession of (specific) costs» and «possession of (specific) risks» are important.

Possession of costs does NOT mean that the service customer does NOT pay. It just does not have to acquire a lot in advance too quickly to get the desired result at the right time. The provider can distribute costs over several customers that will save money for each of them.

Possession of risks means that if something unexpected happens in the process of achieving the results and these results are in jeopardy the customer will not make an extra payment, but the supplier will have to bear any additional costs to achieve the results as agreed or get less money for its services. The latter may take the form of a discount, fine or denial of payment.

As you can see, ownership of both costs and risks means that the provider — not the customer — will have to pay. The difference is that the costs due to the risk materialization occur unpredictably and are not necessary in the general course of service provision.

Read the full article on Megamozg.