CHAPTER 7: THE SVS: OPPORTUNITY, DEMAND, VALUE

“Opportunity and demand trigger activities within the ITIL Service Value System (SVS) and these activities lead to the creation of value. Opportunity and demand are always entering into the system, but the organization does not automatically accept all opportunities or satisfy all demand.”

Opportunities are ways a service provider organisation might be able to add value for stakeholders or somehow improve their own organisation. Organisations will always need to balance the time and resources they allocate to new or changed services against the time and resources they allocate to improvement opportunities. Too much focus on just one area will lead to problems in the longer term. For example, an organisation that only focuses on improving existing services might find itself unprepared for a major change in its market. An organisation that only focuses on new services might find its existing services are neglected and its customer base becomes unhappy.

How do we identify opportunities? This is a crucial question for a service provider organisation. There are many different strategic tools and techniques that can be used to help provide an answer.

One such technique is the ‘blue ocean/red ocean’ approach. A red ocean is defined as an established market with entrenched industry practices and intense competition. A blue ocean is an untapped market space, free of competition, where an organisation can create customers. The blue ocean has the potential to provide rapid growth and large profits. Identifying the ‘blue ocean’ for a service provider organisation can help to identify where resources will be best allocated.

We could reasonably expect our customers to tell us what they want, which creates opportunities, but this isn’t always simple, particularly in the technology market space. What if our customers can’t imagine how technology can help them? As Henry Ford famously said of motor cars, “If I had asked people what they wanted, they would have said faster horses.” For digital or information technology service provider organisations, part of their ongoing service relationship management priorities will be to help their customers imagine the impossible and appreciate how technology can help them.

Equally, not every idea we receive from our customers is a good one. What people believe they want – and what they actually need – can be very different things. If a service provider organisation sees an opportunity but isn’t sure that demand truly exists, it needs to allocate resources very carefully. Agile development describes the use of a minimum viable product (MVP) to provide feedback for future product development. An MVP has just enough features to satisfy early customers and can help to identify any incorrect assumptions that have been made. This reduces the cost and risk associated with the development project. The MVP process can also include carrying out market analysis before any development actually takes place. The MVP will:

•Allow a product hypothesis to be tested;

•Use minimal resources;

•Accelerate learning;

•Get the product or service to customers as soon as possible; and

•Provide an opportunity for feedback for future development.