Service relationships: the way to co-create and collaborate with your customers in a digital era

Nowadays many good internal and external service providers recognize that it is necessary not only to provide services but also to cooperate with their customers and vendors to create better value. Basically, it is about the co-creation of value between two or more units or organizations. This cooperation between service providers and their customers is called service relationship.

Service relationship is about the activities between a service provider and a service consumer to ensure continual co-creation of value.

It is necessary to recognize that also a service provider needs to act as a consumer because it is necessary to obtain and configure service components from internal and external teams enabling the service provider to create the service. So, service relationship needs to be managed on both sides of the service provider. With the consumers of the service as well with the vendors of the service components.

This topic is also briefly described within the ITIL 4 best practice. The definition of the service relationship is defined as: “A cooperation between a service provider and service consumer. Service relationships include service provision, service consumption and service relationship management.” ITIL 4 also defines service relationship model which shows interactions between organizations.

Picture: ITIL® 4 Service relationship model.

In the reality, the concept of service relationships is much more complicated than the picture illustrates. For example, a facility organization can rent office space to an IT organization as well as to the financial organization supported by the IT organization. IT organization can also provide IT services to the facility organization. Interactions between organizations are more likely a network or “ecosystem” than the simple sequence of interactions between organizations.

Picture: Network structure of the relationships

Pre-conditions for successful service relationship

In the era of digital transformation, all service providers need to become digital enablers for their consumers. The responsibility of the consumer is to obtain and configure service components from internal and external service providers to be able to create, offer and provide their services. Most consumers believe that it is necessary just to obtain and configure service components from their service providers and they will automatically get the value from these service components. But co-creation of value is the continual process of coordination between the consumer and their service providers, not just a one-time activity to agree on the service contract. It is necessary to manage the service relationship during the service provisioning and consumption all the time.

From the consumer viewpoint, the necessary basis for successful management of the service relationships is to define and manage the following three topics:

  • Service components including vendors’ information (consumed services).
  • Service relationship practice(defined roles, responsibilities, process activities / tasks and implemented supporting tools to support cooperation between service provider and consumers).
  • Service catalogue (services provided by consumer created from the resources of the service components)

This service relationship approach forces to extend the scope of traditional service management practices and processes like relationship management, supplier management, service catalogue management, service level management, continual improvement and many others. We discussed this new approach to multivendor service management in this whitepaper.

The shift from processes and governance to value requires a change of mindset and personal attitude that is not as easy and takes time. To support this shift even more, it is also necessary to use efficient (software) tools built and focused more on the service (value) aspect than on the process aspect like conventional Service Management / ITSM tools do.

Author:Miroslav Hlohovský

Consultant and Trainer who helps companies to deliver better value to their customers. Head of Supervisory Board of itSMF Slovakia.

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