The first level is "service offerings to market rationalization".
- Identify and validate market demand .
Ideally this comes in the form of an IT Strategy document that was developed using the company's Business Strategy as the primary input. The Business Strategy should represent each of the organization's business units.
Leveraging these three things - a.) the IT Strategy document; b.) operational experience supporting the organization's business units; and c.) industry trends - each IT functional manager should be accountable for extrapolating out their specific service offerings and capacity estimates.
- Define v1.0 of the service offerings that are expected to deliver the range of results that align to the market demand
- Validate the v1.0 service levels range of options with the market
- Make modifications to the range of service offerings based on the output of step 3
- Using the each service level as the design specification, architect/engineer the service delivery operations. My recommendation is to break this out into the critical processes and activities that are required to attain and sustain each specific service offering's service level targets, and then weave the appropriate roles and responsibilities and technology architectures into that framework. By doing this, you have positioned yourself to do activities based costing and budgeting which in my experience is the heart of high performance service delivery operations.
Although this design process should have a service offering focus, it will be important to pull up to an aggregated view in order to take advantage of all possible economies of scale relative to technology, process and people throughout the range of service offerings.
- With the above step completed for each service offering, you now have all the cost drivers and associated capacity estimates to calculate unit cost for each service. You should have a cost model that supports the allocation of cost and capacity to predefined allocation targets where the allocation targets represent each unique service offering.
- With the unit price for each service offering now available, you have all the ingredients for a true menu just like you get at any restaurant (except for the lamination, coffee stains and germs of who knows how many people). The menu lists the service offerings each with brief description along with its unit price. In this step I recommend that you take that "menu" back to the market and do another level of validation. You should expect minor tweaks here and there but nothing significant. If you do completely miss the mark with the market at this validation point, then it is a good indication that you weren't thorough enough in the "service offerings to market rationalization" process.
When your "service delivery operations to service level rationalization" process becomes very mature, you can rationalize any future investments or proposed change through a "what if" modeling and analytics process. This level of decision support significantly accelerates efficiencies at every level of operations. But that is a post for another day.