Episode 13: ITIL service strategy explained

Understanding ITIL service strategy in technology procurement

ITIL service strategy is the first and most important layer in designing any effective IT service. This stage sets the foundation for everything that follows. Skipping it often leads to problems later, so taking time to define the strategy properly is crucial.

The service strategy phase focuses on the key elements that shape successful technology procurement and help organisations build services that work in the real world.

Service portfolio management

Service strategy starts with understanding the scope of the service being bought or delivered. Service portfolio management focuses on defining the individual components that make up the service, how they fit together, and how they might evolve over time.

Getting this structure right means the service can be adapted more easily in the future. Clear portfolio items give buyers a practical way to plan change, manage expectations, and build flexibility into long-term agreements.

Financial management

The financial side of service strategy is especially important for procurement work. This involves understanding the overall budget, how the service will be charged, and how internal recharge processes will work.

Once that picture is clear, it becomes easier to shape conversations with suppliers. Decisions around fixed pricing, unit-based charging, or other commercial models all depend on this financial groundwork. When done properly, the charging structure reflects real usage and supports a healthier supplier relationship.

Demand management

Demand management is the tricky part, and it is rare for organisations to get it exactly right. This is about forecasting how the service will be used over time. For example, if the service is priced per user, how many users will there be in the future?

While no one has a crystal ball, asking stakeholders the right questions creates a more realistic view of demand. That forecast becomes the basis for longer-term contracting, flexible commercial structures, and a service model that can scale. Even imperfect forecasting is better than none.

Business relationship management

The final part of service strategy is the softer side, known as business relationship management. This focuses on how the service will connect with the people who depend on it day to day.

Identifying the main stakeholders, understanding who represents the users, and ensuring there is a clear governance approach all matter. Strong relationships give suppliers and internal teams a way to collaborate, anticipate issues, and handle change effectively. Without those relationships, the service is far more likely to struggle.

Building the foundations of a successful service

A solid service strategy does not need to be complicated. If the scope is clear, the financial model understood, the demand forecast explored, and the relationships defined, organisations have everything they need to design a service that will work in the real world.

For organisations looking to improve how they approach service strategy in technology procurement, get in touch.