IT Service Management

Service Asset and Value Creation


The theory

Resources and capabilities are the assets that the service provider uses to create the value to the customer. Resources are the inputs that are directly applied into the production, where as capabilities are the service provider's ability to transform the resources into value to the customer. The resources are tangible in nature that a service provider purchases in the form of financial capital, infrastructure, applications, information and people. The capabilities intangible assets derived from experience and knowledge and often embedded into organisational structures, people, processes, systems and technology. The capabilities can only be developed over time.

Business units and Service Units- A business unit is simply a bundle of assets intended to create value to the customers in the form of goods and services. The customers pay for the value they recieve and the business unit ensures that they get the adequate returns. The relationship is good as long as customer receives the value and business unit recovers the cost or obtain profits.

Service units are like bussiness units but specialize in creating value to the customers in the form of services. They tend to create the service bundles in line with the customer needs. In many cases, the business units and service units are the part of the same organisation, unless the case of out-sourcing; where the service unit is usually the out-sourcing company.

i-Pupil Response:

The XYZ Co has the capability to design and develop the mobile email service, but in order to meet the demand, they should be performing demand and supply assessment to ensure that adequate resources are made available on the day one. They may require additional Service Desk agents or are able to control the demand by processing the new orders for service uptakes in batches (i.e. shaping user behaviour). But they need to first do the assessment.

The service provider may require more resources, even though have the distinctive capability to provide the service.

Scenario: Value Creation

Delivering Service Levels on target - The outsourcing service provider had known issues in past relating to poor performance of the service levels and have breeched them constantly. As a result, they paid heavy penalties each month. On the other hand, the customer was un-happy. The service provider initiated a service improvement programme, took actions to improve performance and achieved the missed targets consistantly and even exceeded them. However, the customer remained un-happy and was deciding to move away from this out-sourcer once the contract expires. What was the cause?


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