The aim of IT Service Management (ITSM) is to convert the tasks, activities, and responsibilities of IT teams into standardized, reproducible, and, if possible, automated services. Many ITSM teams use the process toolbox provided by the ITIL framework.
One of these practices is Service Portfolio Management. According to ITIL, the purpose of this practice is to ensure that an organization has the right mix of programs, projects, products, and services to execute its organizational strategy given financial and resource limitations.
So far, it’s a bit abstract and technical. Let's shed some light on what this actually means.
The contribution to business goals
Let's try to put it a little more concisely: Service Portfolio Management manages investments within the Service Management framework in a dynamic way and in this context describes all services so that their business benefit is clear. The scope of IT services is therefore viewed and treated as a portfolio.
The Portfolio Manager assesses ideas and requirements based on economic and strategic aspects. It's about making sure the investments in IT Service Management contribute the highest possible value to the company's goals.
In this way, Service Portfolio Management creates transparency and visibility into how IT services support business goals and strategy. In other words, bridging ITSM and business management.
Scope of the service portfolio
The service portfolio includes all services that the ITSM teams plan, actively provide or have discontinued. The complete life cycle of the services is mapped - from concept to development and provision to processing. The service portfolio itself is made up of three components:
- The service pipeline concerns the services or service changes that do not currently exist. Either they only exist as plans or are still in development.
- The service catalog systematically displays all currently available services. These are the active, developed services currently available to customers.
- Finally, the portfolio also includes services that are approaching the end of their life cycle and are being wound down before they are finally suspended.
The prioritization of services
One of the central tasks of the portfolio owner is what is known as service design. How does the process work?
In collaboration with the service customers and the ITSM team, the portfolio owner analyzes and identifies the need for new services or service changes and defines the requirements for them. Using Change Management, the portfolio owner will begin to include the innovation or change into the portfolio; thus initiating service design.
As the life cycle progresses, the Portfolio Manager subjects the portfolio to continuous monitoring with regard to its practical suitability and contribution to the corporate strategy. They act as the owner who continually reviews and maintains the portfolio.
Portfolio management as a bridge to corporate strategy
A Portfolio Manager's main responsibilities include prioritizing service changes and new services. As mentioned, portfolio management acts as a bridge to corporate strategy and thus to organizational management.
The central question is: What makes a significant contribution to the corporate strategy, i.e. brings high-level benefits for customers and for the company - with relatively little effort and low costs?
An example: The Portfolio Manager identifies, among other things, the need for a new IT service that better supports employees working from home.
This has great strategic value: Organizations must increasingly focus on workplace flexibility because, as an essential component of a modern employee experience, it increases employee satisfaction and their loyalty to the company.
What about the implementation and operation costs? These factors ultimately determine the priority to incorporate this service. With these considerations, the new service is not just a “quick win”, but a lasting contribution to the company’s strategic goal to better promote distributed teams and a modern employee experience.
Other service ideas or portfolio changes may contribute less value to the organizational strategy or may be costly to implement, or both. These will be given lower priority or rejected entirely unless very good new reasons arise for their implementation.
With the help of a visual matrix, the Portfolio Manager can make their assessments transparent and coordinate them together with the ITSM team and company management.
Make complex connections visible and use them as a basis for the right decisions
Hopefully, the essential contribution of Service Portfolio Management is clear: The goal is to help complex relationships and dependencies become visible and to make good, sensible decisions on this basis.
With this in mind, the Portfolio Manager examines customer benefits, strategy, investment costs, emerging new opportunities, and risks, to show how IT Service Management services can best support the organizational goals while keeping the customer at the center of activities.
Atlassian tools for professional ITSM teams
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Would you like to learn more about Jira Service Management? Our team can show you some key use cases and practices in an in-person demo. Or do you simply want to know more about the transformation towards professional (IT) Service Management? Then get in touch with us! Our current handbook on Incident Management also offers valuable tips, which you can now download free of charge.