IT services: Materiel. Part 2. Service Formula

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There is a good definition of service given at ITIL. Official translation : service / service is the provision of value to customers by assisting them in obtaining the final results that customers want to achieve without ownership of specific costs and risks.
I will call this definition the “formula” of service .

For example, a taxi schematically the formula looks like this:

All elements indicated in the picture are integral parts of the value of the service . A simplified version of the formula: "Nishtyaki without a headache!".

You must understand all the components of value if you intend to manage the service and / or design and create it.
A professional service provider and all its employees are obliged, first of all, to focus on the final results for the customer / consumer. It is necessary to understand how he formulates them for himself. A common mistake of the supplier is an excessive concentration on direct work or on results. He does not imagine for what end results they are needed. This error can lead to unsuccessful decisions, both at the level of individual employees and at the level of managers.
Work within the framework of the service provided does not carry value in itself. They are valuable only as a bridge to results. I really consider the topic of customer focus key and deserving of a separate careful consideration: how people perceive your services is a paramount success factor .

The concepts of ownership of (specific) costs and ownership of specific risks are important .
Cost ownership does NOT mean that the customer does NOT pay. He simply does not have to acquire a large amount of everything in advance in order to quickly get the desired result at the right time. The supplier can distribute the costs to several customers, which will save money for each of them individually.

Possession of risks means that if something unexpected happened in the process of achieving results and their achievement is at risk, the customer will not pay extra, but the supplier will have to either bear the additional costs so that the results are achieved, as agreed, or receive less money for the service. The latter may take the form of a discount, a fine or a refusal to pay.

As you can see, both cost ownership and risk ownership mean that the supplier will have to pay, not the customer. The difference is that costs due to the materialization of risks occur unpredictably and are not necessary costs for the provision of services under normal conditions.

Cost ownershipimplies only those costs that cannot be avoided to provide quality service. These are:
  • capital costs that must be incurred in order to be able to provide services, and independent of the number of services provided, for example, buying a car;
  • operational costs that have to be borne in the process of providing services, and which usually increase in proportion to the number of services provided, such as the purchase of fuel.

By the degree of ownership of the risks and costs of the service, one can compare with each other and I will write about more specific examples in one of the following articles.

The concept of "galvanic isolation" , in the picture explaining the formula of the service, I outlined for a reason. With a high-quality “simple” service, the consumer simply forgets and does not think about such costs and risks, and he will never be reminded of them. We will talk about exceptions in more complex cases further. Also, instead of “galvanic isolation”, you can imagine a filter: the customer receives “filtered”, “refined” results, without all that is superfluous.

We illustrate the service formula also with the example of the “Taxi” service, but in more detail and in the form of a table:

We will talk about secondary benefits and why you need to think about them separately in one of the following articles.

You have probably already noticed that the risks of the Taxi service do not pass without leaving a trace for the consumer. If the taxi driver was stopped by the traffic police when you were driving to an important meeting, then you will be late for it anyway, which could negatively affect your career / business.

This is an important point in the “galvanic isolation” - the supplier’s liability is limited, usually at the cost of the service. There are risks that a taxi driver will not own for the simple reason that he cannot manage them in principle. Manage such risks should be the consumer. A taxi driver will not call a taxi or sit in it in advance for the consumer.

Limited liability gives an important positive consequence - it allows you to keep the price of the service at an acceptable level. Responsible consumers should not pay for less responsible ones ... This does not mean that a taxi driver should not help call another taxi, for example, or in any other way help to get out of a difficult situation. But he should not compensate for the negative effect on his career. Everyone is engaged and manages his own business. This may sound harsh, but it is again important for building correct expectations.

In general, the level of “risk ownership” can be adjusted by the supplier, and options with increased responsibility can be implemented. But usually, such options also mean greater participation in the benefits derived from the results of the service. Outsourcing Professional Body of Knowledge (OPBoK) has a concept such as a continuum of business relationships. This concept indicates that the supplier does not take risks of not achieving business results only within the framework of strategic alliances or joint ventures.

Exercise A2:

  1. Give other examples of costs and risks that a taxi service provider has.
  2. Fill in the table above for the cafe service
  3. Fill in the table for one of the services in which you are participating.
  4. Fill in the table for the service "work for the employer".
  5. Who, in your opinion, should be involved in building the right expectations for the service?


  1. ITIL 2011. Service Strategy.
  2. The official Russian-language glossary of ITIL 2011 .
  3. Outsourcing Professional Body of Knowledge v9.02. Section 1.2.1 "Continuum of Business Relationships".

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