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ITIL Service Charter – From Strategy to Design in Service Portfolio Management

The ITIL Service Charter is authorization for the design of a new or substantially changed service against which Service Design progress is measured.

As mentioned on numerous occasions, most IT organizations run their daily routine around “core” ITIL processes from the Service Operations part of the service lifecycle: Event Management, Incident Management, Request Fulfillment and functions, Facilities Management, Application Management, and Technical Management. There is nothing wrong with that, but when you have to design a new service, or redesign an existing one, there is literally nothing within Service Operations that can prepare you for that.

Why would you even want new services, and if you do, when and which ones do you need? Answering those questions is the perfect job for the Service Strategy part of the service lifecycle. Need may come from multiple directions: from customers – driven by business demand or strategy, from the market – due to some technological or other industry shifts, or from your own Continual Service Improvement (CSI) process. You can find more information on Choosing four main inputs for the ITIL/ISO 20000 Service Catalogue to avoid bureaucracy.

When the need is identified, we can’t just start designing a new service. Service Design is a very intensive, complex, and time-consuming process, not to mention that the outcome (new service) has to be seamlessly integrated into the operational model, and that operational model will support this new service for years to come.

Service Portfolio contentFigure 1 – Service Portfolio content

According to ITIL, the need for a new (or major change of an existing) service is managed by Service Portfolio Management, as part of the overall Service Strategy. You can find more information on the topic in our following articles: Service Portfolio Management – Services, where do they come from?, and ITIL Service Portfolio Management Process Overview.

Last stage of Service Portfolio Management

Phases of Service Portfolio ManagementFigure 2 – Phases of Service Portfolio Management

Service Portfolio Management is responsible for ensuring that an organization that provides IT services can provide services that meet required business outcomes at appropriate levels of investment (value for money). As mentioned before, Service Design is very resource intensive; therefore, Service Portfolio Management has the crucial role to evaluate, prioritize, and propose new services that will fulfill requirements within the often-limited resources available.

The bridge between Service Strategy and Service Design is called the Service Charter, and it’s introduced with ITIL 2011 as a high-level description of a new or substantially changed service and the approach to build that service. You can think of the Service Charter as a formal authorization carrier for the design of a new or substantially changed service. By being a formal authorization, this means that the Service Charter will contain all relevant information regarding scope, resources and responsibilities, timeline and milestones, deliverables, constraints, and costs.

In general, most of the Service Lifecycle components are run as projects (except Service Operation) using well-established project management practices and standards (e.g., PMO (Project Management Office) – a group or department within a business that defines and maintains standards for project management within the organization), and Service Design is no exception. Such approach enables us to constantly measure outputs against estimates stated in the Service Charter.

If any deviations are found between actual and predicted progress (or costs), Service Portfolio Management is responsible for escalating the situation to the stakeholders. Don’t forget that the project (release of the new service) is ultimately driven by Service Strategy; therefore, it’s up to Service Strategy to notify executives and ask for an executive decision to either increase the level of investment, or discontinue the project and reassess the strategy.

Beating the odds

From my personal experience, most people have trouble grasping the fact that the ITIL Service Lifecycle is not a linear one, even though it looks like it is: from Service Strategy, to Service Design, to Service Transition, to Service Operation…

Each element is heavily dependent on a wide array of others, if not all of them. Even though actions (such as the introduction of a new service) are project driven, project progress must be constantly monitored and reported to stakeholders in order to quickly spot any deviations from estimates.

The Service Charter is one of those documents that will enable official and clear communication between Service Strategy and Service Design, what is expected to be delivered, when, why, who is supposed to do it, and within which budget.

Once Service Design initiates the project of new service implementation, progress is reported back to Service Strategy (more specifically, Service Portfolio Management), which will evaluate the progress and results within the constraints stated in the Service Charter.

As roughly 70% of projects fail to meet the deadlines and budget constraints, Service Portfolio Management, which is ultimately responsible for the introduction of new services, has a special interest in having a formal and relevant document that contains clear expectations and constraints, because when you have to beat the odds – every little bit helps.