Deck 5: ITIL Service Capability Service Offerings and Agreements

Question 1

Scenario The IT organization of a manufacturing company is carrying out an annual review of its service portfolio. There is limited budget available for the next year and some projects may be delayed or cancelled. The company has control of most of its IT services, however some are mandated by the company's corporate owners. The following services are under review: Service 1: Web ordering service. This is a new service that will enable the company to fulfill its strategy to sell products on-line and increase its customer base by 20%. Only high-level business requirements have been established so far but. if the project goes ahead, the system will be provided by a supplier using standard applications and technology. A business case has been created which shows the ratio of value-to-cost to be much greater than one. Service 2: Sales office service. The service has grown from a number of separate applications that have been combined into one suite. The technical solution for each application is similar but some use different versions of the same operating system. The applications themselves provide the required utility and support their business outcomes well. There is some overlap in functionality across the set of applications contained in the service suite. Service 3: Finance reporting service. The service is used by the finance department to create statutory reports to fulfill legal obligations. The service is hosted on a legacy system. The cost of supporting the service is increasing gradually and the return obtained from the service is decreasing. Eventually the service will be replaced by the new enterprise resource planning (ERP) service. It is projected that, over the next two years, the ratio of value-to-cost will drop to less than one. Service 4: This is a new ERP service that is being implemented across all companies in the corporate group. It will eventually replace many existing services including the finance reporting service. The service has been approved and chartered, and has a current status of "design". A large number of assets have been allocated to this project. As this service is mandated by the corporate owners, no further decision is required. Refer to Scenario: As part of the service portfolio management team you have been asked to recommend whether investments should be made in these services in the next year. Which of the following options is the BEST set of decisions to make for the services?

A) Service 1 - invest. Charter the service and set up a service design project Service 2 - replace. Set up project to replace the set of applications with a single application designed to support the business outcomes Service 3 - retire. Mark the service for retirement and set up a retirement project. This will make best use of resources and ensure that information is migrated to the ERP service. Service 1 - invest. Charter the service and set up a service design project Service 2 - replace. Set up project to replace the set of applications with a single application designed to support the business outcomes Service 3 - retire. Mark the service for retirement and set up a retirement project. This will make best use of resources and ensure that information is migrated to the ERP service.
B) Service 1 - promote to the service catalogue, project Service 2 - retain. Keep the service and support Service 3 - delay decision. It is likely that this project will use assets that will be allocated review. Allocate resources to the transition stage of the it in its current form service will be retired, but not yet. The retirement elsewhere this year. Reconsider at next annual - promote to the service catalogue, project - retain. Keep the service and support - delay decision. It is likely that this project will use assets that will be allocated review. Allocate resources to the transition stage of the it in its current form service will be retired, but not yet. The retirement elsewhere this year. Reconsider at next annual
C) Service 2 - rationalize. Set up a project to identify the best way of retaining the support of the business outcomes but eliminating the duplication of functionality and supporting components Service 3 - delay decision. It is likely that this service will be retired, but not yet. The retirement project will use assets that will be allocated elsewhere this year. Reconsider at next annual review. - rationalize. Set up a project to identify the best way of retaining the support of the business outcomes but eliminating the duplication of functionality and supporting components - delay decision. It is likely that this service will be retired, but not yet. The retirement project will use assets that will be allocated elsewhere this year. Reconsider at next annual review.
D) Service 1 - promote to the service catalogue. Allocate resources to the transition stage of the project Service 2 - re-factor. Set up project to redesign the applications to concentrate on the core functionality of the service Service 3 - retain. As the service is needed to fulfill legal and statutory compliance it should be retained. - promote to the service catalogue. Allocate resources to the transition stage of the project - re-factor. Set up project to redesign the applications to concentrate on the core functionality of the service - retain. As the service is needed to fulfill legal and statutory compliance it should be retained.

Answer 1

Service 2 - rationalize. Set up a project to identify the best way of retaining the support of the business outcomes but eliminating the duplication of functionality and supporting components Service 3 - delay decision. It is likely that this service will be retired, but not yet. The retirement project will use assets that will be allocated elsewhere this year. Reconsider at next annual review. - rationalize. Set up a project to identify the best way of retaining the support of the business outcomes but eliminating the duplication of functionality and supporting components - delay decision. It is likely that this service will be retired, but not yet. The retirement project will use assets that will be allocated elsewhere this year. Reconsider at next annual review.

Question 2

Scenario An IT services company provides IT services to many customers. The company has grown rapidly over the last three years and has recognized the need to implement service management processes to ensure that they continue to provide services that meet their customer's needs. A service management implementation project was set up a year ago and most processes are now in place including service level management and service catalogue management. In addition a business relationship manager has been allocated. An opportunity has arisen to engage a new customer, which could lead to a very large contract. Contact has been made with the potential customer and a meeting arranged. This will be the first time that these processes have been used to engage a new customer and the IT service manager wishes to make sure that all concerned are clear of their roles. Refer to Scenario Which one of the following options CORRECTLY assigns the responsibilities to the service level manager, service catalogue manager and the business relationship manager? Responsibilities:

A) Service catalogue manager - 3, 7, 8, 9 Service level manager - 1, 2, 4 Business relationship manager- 5, 6, 10
B) Service catalogue manager - 1, 7 Service level manager - 3, 4, 6, 8, 10 Business relationship manager- 2, 5, 9
C) Service catalogue manager - 1, 8 Service level manager - 2, 3, 5, 9 Business relationship manager- 4, 6, 7, 10
D) Service catalogue manager - 1, 8, 9 Service level manager - 2, 3, 5, 7, 10 Business relationship manager- 4, 6

Answer 2

Service catalogue manager - 1, 8, 9 Service level manager - 2, 3, 5, 7, 10 Business relationship manager- 4, 6

Question 3

Scenario A retail company has enjoyed significant growth in profit over the past year due to negotiating lower buying costs from its suppliers. The organization wishes to reinvest some of this profit to fund a program of change to optimize the use of IT services. They hope this will support revenue growth in the next financial year whilst maintaining profitability. The program consists of two main initiatives: An expansion of the on-line retailing services to offer more functionality Enhancement of the marketing service to allow greater targeting of promotional offers. There are various options for providing these services that involve use of the current infrastructure or the new virtualization technology, which is slowly being deployed across the organization. The board of directors wishes to conduct a financial review over the next 3 months to compare the cost of providing each service. Projected business revenues will allow the return on investment (ROI) of each option to be calculated. This review will provide an input to the IT organization's service portfolio management process, allowing the various investment options to be considered and an informed decision to be made. The organization has a good appreciation of its IT costs along with a mature service catalogue and configuration management system (CMS). Refer to the Scenario. Which one of the following options would be the BEST approach to providing the information for the financial review of the service options?

A) Appoint an IT finance manager to implement budgeting and accounting for IT services. Create a cost model that takes into account direct and indirect costs, as well as fixed and variable costs. Use the cost model to calculate the cost of providing the IT services and provide the information to service portfolio management (SPM).
B) Produce a summary of current costs, apportioning all costs directly to the appropriate service. Any investment in virtualization or new infrastructure should be shared equally between the two services. This creates a baseline for comparison with the anticipated business revenues and ROI that will enable a business case to be developed for each option.
C) Produce a summary of current costs, recognizing that the resources are shared across services. Use service level agreements to understand how the services are used and create a model for the services, ensuring that both current and projected costs are shared appropriately. These costs can then be compared with the cost of outsourcing the service and with the anticipated business revenue.
D) The various options for providing the service, including those requiring investment in new infrastructure, can then be costed. Using the projected revenues supplied, a calculation can establish the ROI for each option. These costs and ROI for each option can then be compared through the service portfolio management process and used as an input to develop a business case for the most advantageous options.

Answer 3

The various options for providing the service, including those requiring investment in new infrastructure, can then be costed. Using the projected revenues supplied, a calculation can establish the ROI for each option. These costs and ROI for each option can then be compared through the service portfolio management process and used as an input to develop a business case for the most advantageous options.

Question 4

Scenario A company provides an internet-based gift delivery service which is highly dependent upon IT services provided by the internal IT organization. A year ago the customer payments service that supports the gift ordering website regularly experienced poor availability. The organization hired a service management consultant to assess why the IT services were performing poorly and to rectify the situation. As part of the solution, the consultant implemented service level management and adopted the role of interim service level manager. Service level agreements were negotiated with the business and agreed. The necessary underpinning agreements were negotiated and put in place. Regular monitoring and reporting was implemented. Monthly service review meetings with the business unit managers were established to discuss IT service performance and any issues and improvements. Within a year of the start of the initiative the gift ordering website IT service was performing at 98.7% availability, a significant improvement. This month's service review meeting was attended by the chief executive officer (CEO) after concerns were expressed about the most recent availability figure for the customer payments service, which was 94%. This covered the period which included one of the traditionally most popular gift ordering times. The consultant stated that the poor availability was almost entirely due to an incident that occurred during one of the busiest periods and. as a result, the overall monthly availability percentage was low. Initial investigation has shown that the service desk used the SLA to designate the incident as a 'Priority 2'. This was however lower than the 'Priority 1" the business believed the incident should have been. The subsequent delay in restoration of the service meant some customer orders were lost. The CEO reminded the consultant that a repeat of such an incident would not only have a major effect on monthly revenues but also seriously affect the company's reputation. The consultant agreed that this was unacceptable and committed to review this issue and report back to the CEO. Refer to Scenario

A) The SLM should agree with the business managers to set up a service improvement plan (SIP) to address the issue. Differing views relating to the cause of the low availability mean it should be investigated thoroughly to establish whether the slow restoration of service was due to a lack of understanding by the service desk, incorrect service level targets in the SLA or simply that, owing to the type of failure, restoration was always going to take that length of time. Appropriate action can then be taken to rectify the issue.
B) The issue is with the service desk and its incorrect interpretation of the SLA and failure to escalate the issues. The SLM should agree to set up a SIP for the service desk. The operational level agreement (OLA) with the service desk should be reviewed to ensure that it underpins the SLAs. The SIP should include the retraining of the service desk staff. A complete review of the service desk tools should ensure that they can be used to prioritize incidents correctly by passing through targets agreed into the priority matrix of the toolset.
C) The issue is clearly a breakdown in understanding regarding the critical business periods and the matching of these to the availability targets in the SLAs. The SLM should agree with the business managers to set up a SIP to investigate the issue. The SLAs should be reviewed with the business to ensure that they match with the business needs and, if necessary are updated. Review and update any underpinning agreements as necessary to ensure that they support the targets in the SLAs.
D) The SLM should conduct an investigation by reviewing incidents and problems. Ask the IT service desk and support staff what ideas they have to resolve the issue. Review the impact on all other SLAs. OLAs contracts and procedures. Review the maturity associated with the service level management process and take steps to improve this process if necessary. Create a SIP with an associated business case for presentation to the chief executive officer (CEO).

Question 5

Scenario A travel company specializes in providing complete holiday packages to meet customer requirements. There have been instances over the past year where the business has been unable to process holiday bookings due to failure of the IT services. Sales have been lost and the failure has been raised at board level. The IT director has assured the board that the situation will be rectified. Most holiday bookings are made either by telephone via the company's call centre or through a dedicated website. Both interface with the same back-end booking-processing service. Apart from the call centre and website, the main business services map onto organizational departments and cover: marketing, finance, business operations and central administration. After some initial investigation within the IT organization, it is clear that the intermittent failures, which were related to a lack of capacity, have occurred during exceptional peak holiday booking periods. The IT organization is not certain when or if these are going to occur in the future. Some booking periods are predictable, such as those associated with promotional offers. Other patterns are totally unpredictable as they often coincide with bad weather being experienced where customers live. You have been asked how the activities of demand management, based on ITIL practices, can be used to address this issue. Refer to Scenario Which one of the following options is the BEST set of actions required to resolve the issue?

A) Identify the pattern of customer enquiries for holiday bookings and the resulting volume, frequency and location of staff activity. Document these as patterns of business activity (PBA) Gain an understanding of the different roles that are performed by staff from all business units and how these relate to the PBA for all business processes. Use this information to identify any shortfall in capacity and create cost estimates of additional resource required to enable the IT services to meet the PBA. Recommend that, where PBA are very predictable, investment should be made in additional resource. Where PBA are unpredictable, the risks associated with railing to meet demand should be discussed with the business managers, and mitigation actions agreed.
B) Identify the pattern of customer enquiries for holiday bookings and the resulting volume, frequency and location of staff activity. Document these as PBA. Gain an understanding of the different roles that are performed by the call centre staff and how these relate to the PBA for the call centre business processes. Discuss the risks associated with failing to meet demand with the business managers. Reach agreement on how to avoid a repeat of the IT failures caused by demand at busy periods.
C) Identify and understand the PBA resulting from metrics of all the IT services. Ensure that the volume, frequency and location of service use is taken into account. Gain an understanding of how the PBA relate to the use of the IT assets especially the hardware and software that may be the cause of the IT failures. Once these activities have been completed, the PBA will be used to plan and implement sufficient capacity to meet all demand at all times. Discuss the risks associated with failing to meet demand with capacity management and technical staff. Reach agreement on how to avoid a repeat of the IT failures caused by demand at busy periods.
D) Immediately implement demand management, document the process and allocate roles and responsibilities. The demand manager should initiate an activity to identify and understand user profiles resulting from business use of the IT services. Code the user profiles linking them to the associated business roles. Match the user profiles to the IT services and analyze any shortfall in capacity required to meet the business objectives. Create a business case for the additional resource required to exceed the business demand for the IT services to account for unpredictable business activity. Work with service portfolio management and financial management to agree on the approval of the investment and initiate the project to acquire all the additional resources.

Question 6

Refer to Scenario An IT services company has been providing hosted and managed IT services to a number of major customers for over 20 years. It has invested heavily in ITIL-based service management processes over the last five years, which has resulted in an increase in the quality of the IT services and an increase in customer satisfaction with the services. This activity has led to a significant growth in the number of customers that the company serves. The company has implemented all of the service design, service transition and service operation processes to some extent, and is now developing other processes based on ITIL service strategy. As a result of this latest activity they have recognized that their existing service management tool is limited in its ability to support several existing processes, and all of the planned new ones. The supplier of the existing tool is reducing its investment in future development of the tool and is, therefore, unwilling to commit to any additional new facilities or functionality. This has now become an issue for the company and, as a result, they are looking to replace the existing tool with a more comprehensive alternative. The company plans to develop a requirements specification for the replacement tool and is redwing the areas that need to be considered, including its deployment throughout the organization. The budget for the new tool is limited, therefore it is essential that the new tool can be implemented and used as quickly as possible in order to obtain maximum return on investment (ROI). Which one of the following options provides the BEST description of the areas that should be addressed by the requirements specification for the new tool?

A) The usability and functionality of the new tool The ability to customize the tool to the organization's requirements The planned use of the tool within the organization, together with the number of customers and users of the services and their geographical locations The plans for the deployment and the associated documentation needed for the tool.
B) The utility and warranty of the new tool The conformance of the tool to international open standards The planned use of the tool within the organization, together with the type and number of licenses required for its deployment The timing of the deployment and the associated tool training and education.
C) The utility and warranty, and service acceptance criteria of the new tool The number of potential users of the tool together with the number of licenses and their geographical locations required for its deployment The timing of the deployment and the associated tool documentation.
D) The ability to migrate data from existing tools and to integrate with other tools The type and timing of the deployment and the associated tool training and education.

Question 7

Scenario A commercial IT services company has been successful for many years. Its key strategic differentiator has been the provision of new services to meet customers' needs in very short lead times. Recently profits have dipped, forcing senior management to take a look at the lifecycle costs of providing the IT services to their external customers. The organization has had a service catalogue containing customer and supporting views for some time. It is an essential source of information about the IT services and is used by both the business relationship managers and the IT services teams. Services are designed internally but often transitioned and operated in partnership with other suppliers. For each service, the service catalogue currently contains: A description of the service Summary of the service level targets The level of support and support details Details of the supporting services and components Details of services obtained from suppliers When sales leads are obtained from potential new customers, the requirements are compared with services in the service catalogue and, if no matching service can be found, a project is set up to quickly develop a new service. In the past this has been justified as meeting the needs of the customers, and full business cases were not developed. A senior service manager has suggested introducing a service portfolio management process and needs to get the support of the IT management team. The management team wishes to know what extra information would be included in a service portfolio over and above what is already in the service catalogue and what value it would be to them. The company is looking to restrict investment in new resources. Therefore, only a few projects can be authorized in the next budget cycle. Refer to the Scenario. Which one of the following sets of statements BEST describes the elements that a service portfolio contains in addition to the elements in a service catalogue, and describes the additional value service portfolio management would bring to the IT services company in resolving their current issues?

A) The service portfolio will include: resource allocation; support terms and conditions; ordering and request procedures; the value proposition; offerings and packages. The service portfolio will show where additional resources will be required to operate new services. Service portfolio management will enable the organization to rationalize existing services to optimize the use of resources.
B) The service portfolio will include: business cases; risks; business outcomes supported; cost and pricing. The service portfolio will show the proportion of resources acquired from key suppliers so that the cost of new services can be accurately estimated. Creating a service portfolio that includes services in the service pipeline, as well as those in the service catalogue, will enable new services currently being developed to be included in service offerings. This increased visibility of new services extends the range available for new opportunities.
C) The service portfolio will include: ordering and request procedures; service level targets; support terms and conditions; details of services obtained from suppliers. The service portfolio will show the resources and capabilities that are needed to improve the services in the service catalogue. Service portfolio management will enable the organization to expand the service catalogue to include details of service requests and standard changes, providing a valuable self-help portal to users.
D) The service portfolio will include: business cases; risks; investment priorities; value propositions. The service portfolio will show where resources are used across all stages of the service lifecycle both within the provider and where they have been acquired from suppliers. Service portfolio management will improve the organization's ability to compare potential investments and make sound decisions.

Question 8

Scenario An IT security company provides secure data services to many large financial organizations in several countries. The company has an administrative headquarters in its home country and a data centre in each country of operation. Each data centre obtains support for services from third-party contracts provided by a number of suppliers. All supporting services are scoped and documented, and are aligned to the corporate strategy and the regulations in force in each country. The security services company maintains and regularly reviews a preferred supplier list from which suppliers are selected as required. A service desk function is provided by one of the suppliers. Over the last 10 years, a strong relationship has been built up with the supplier based on the high-quality, consistent service they have provided. The nature of the financial business requires the service desk contract to contain severe penalty clauses that can be enforced if the agreed service levels are not maintained, although these have never been required. A number of complaints have been received from a new banking customer highlighting that, over the previous three months, the level of service provided by the service desk in the management and handling of incidents has been inconsistent, and many incidents have not been resolved in line with agreed targets. The IT security company has a service level manager who has performed the role for many years. Recently, a new supplier management process was implemented and a supplier manager appointed. Some confusion has arisen over how, and by whom, the recent complaints should be dealt with. Refer to the Scenario. You have been asked to resolve the confusion over the service level manager and supplier manager roles. Which one of the following options BEST represents the correct division of responsibilities and will also address the current complaints regarding the service desk supplier?

A) Service level manager: Apologize to the customer and compensate them financially for the poor service levels. Assure them that, under the terms and conditions of the contract, a review with the service desk will be carried out and that the supplier will be strictly monitored against agreed targets and penalties imposed, potentially leading to contract termination. Carry out a risk analysis of the supplier and their contract. Supplier manager: Log the complaints. Set up a review of the supplier and the service desk function. Invoke the contract's penalty clause to recover compensation from the supplier. Increase the supplier's risk rating. Initiate a service improvement plan in conjunction with continual service improvement.
B) Service level manager: Log the complaints. Inform the customer that the complaints will be reviewed as a matter of urgency. Collect evidence of failures and pass to the supplier manager. Ensure that the complaints are dealt with efficiently and effectively and improvements are initiated where appropriate. Keep the customer informed of both progress and outcome. Supplier manager: Arrange a meeting with service desk supplier to investigate the complaints. Review performance of the supplier for all the services they deliver to the company's customers. Report findings back to service level manager.
C) Service level manager: Log the complaints. Inform the customer that the complaints will be discussed with the supplier at the next scheduled review meeting. Assure the customer that the contractual disputes process will be invoked to ensure that the complaints are dealt with in an efficient and effective manner. Inform the customer of the actions taken. Supplier manager: Discuss the complaints with the supplier at the next review meeting Initiate the dispute process with the supplier. Carry out a risk analysis of the supplier and their contract.
D) Service level manager: Inform the customer that the complaints will be reviewed as a matter of urgency. Assure the customer that a disputes process is in place to ensure that the complaints are dealt with in an efficient and effective manner. Inform the customer that they will be updated on the outcome. Review performance of the supplier for all the services they deliver to the company's customers. Supplier manager: Log the complaints. Quickly arrange a meeting with service desk supplier to investigate the complaints. If necessary, initiate the dispute process.

Question 9

Scenario A large, privately owned company has an internal IT organization that runs most of its IT operations from the head office. There has been a history of confusion about what is required from the services and what has actually been achieved, particularly from a warranty perspective. This has resulted in a strained relationship between the business units and the IT organization. Some service-based agreements exist between IT and the customers, where all levels of response to incidents were set to the same targets. Availability targets have not been reviewed for at least two years. There have been a number of complaints by key customers claiming that the IT staff have been resolving incidents and implementing change requests based on operational ease rather than business priority. This is despite operationally robust processes being in place for incident, change and problem management. A plan has been put in place to improve the level of the IT service delivered to the organization. Retirement of the post-holder meant that the first action was to appoint a new IT director. The opportunity was taken to select a candidate from an external organization, who was committed to the ITIL framework. The new IT director believes that good IT service management practices are essential. The IT director plans to implement many of the service management processes and has already overseen the creation of a basic service catalogue. The IT director is sure that many of the current issues can be rectified through the implementation of service level management (SLM) and has therefore directed that service level agreements (SLA) be introduced for the services provided before moving onto other areas. You have been asked to lead the project to establish SLAs for the IT services. Refer to the Scenario. Which one of the following sequence of activities would be the BEST approach to establishing service levels agreements (SLA) in the organization?

A) Identify all of the services currently delivered using the service catalogue. Define a primarily customer-based approach to implementing service levels agreements (SLAs). Using a pre-prepared pro-forma service level requirements (SLR) template, meet with the appropriate customer representatives to discuss and document their service level requirements. Arrange meetings with the appropriate IT teams, specifically those involved in incident, availability and capacity management, to discuss, document and agree the levels of service required. Draft agreements from these discussions are then reviewed by service operations to ensure that no existing agreements will be compromised and, once this has been confirmed, the SLA is formally reviewed, agreed, and signed by both the customer and IT. The service level targets are then formally communicated, monitored, reported upon and reviewed at the agreed intervals.
B) Identify all the services currently delivered using the service catalogue. Define a primarily service-based approach to implementing service level agreements. Using the service templates already in use, meet with the appropriate customer representatives and, after discussion, produce formal SLRs which document the levels of service that the customer needs. Arrange meetings with the appropriate IT teams, specifically those involved in incident, availability and capacity management, to discuss, document and communicate the levels of service required. From these discussions operational level agreements (OLAs) are then produced. The SLRs and OLAs can be formally monitored, reported upon and reviewed at the agreed intervals.
C) Meet with the IT operations team, specifically, those involved in incident, availability and capacity management, to define what level of service they can offer to the business against each service in the service catalogue. Meet with the appropriate customer representatives to give them a clear understanding of the levels of service IT can offer. Produce and agree an SLA and ensure it is signed by representatives of both parties. Document and agree OLAs with the service operation teams. Ensure all parties understand their responsibilities and enforce penalties for non-compliance. Once both agreements have been signed, all service level targets are then formally monitored and reviewed.
D) Meet with the appropriate business representatives and, after discussion, produce a formal SLA that guarantees the levels of service that the business needs. Arrange meetings with the appropriate IT teams, specifically those involved in incident, availability and capacity management, to inform them of the service levels you have agreed Once these are agreed and signed the OLAs are passed back to the business to demonstrate that IT will support the SLA and to build upon the trust between the two parties.