One of the "new" ITIL V3 processes is Service Portfolio Management (SPM). As I was recently delivering a SPM workshop for a large HP customer, it appeared to me that there is not only a lot of interest in this process but also some significant misunderstanding...

Here are some of the incorrect answers when I asked several people what Service Portfolio Management is all about (without giving any upfront indication). SPM is about

1. managing the services provided by an IT organization - at first sight this definition probably makes sense, however the problem is that this definition is not specfic enough. One could read SPM as a synonym for Service Management, which is definitely not the case as we will see later on.
2. managing a service catalog and service level agreements - again a definition that seems right, however managing a service catalog and managing service level agreements is done in other processes that SPM interfaces with.
3. managing an applications portfolio - this is an answer that I got from people with an application development background and who look at services as a piece of software code. The problem here is that applications are an asset that can be used to construct and deliver services with. So with some creativity you can look at application portfolio management (APM) as a component of service portfolio management. Unfortunately APM is not defined within the ITIL V3 glossary...

Now we've seen a couple of incorrect definitions, let's see how Service Portfolio Management is actually defined within the ITIL V3 glossary: "The Process responsible for managing the Service Portfolio. Service Portfolio Management considers Services in terms of the Business value that they provide."

Unfortunately this doesn't help us a lot as the definition basically says that Service Portfolio Management = Managing the Service Portfolio.

Perhaps it would help if we better understand the word Service Portfolio. Here's what the ITIL V3 glossary says: "The complete set of Services that are managed by a Service Provider. The Service Portfolio is used to manage the entire Lifecycle of all Services, and includes three Categories: Service Pipeline (proposed or in Development); Service Catalogue (Live or available for Deployment); and Retired Services."

Now this helped me to understand what a Service Portfolio consists of, however it was still unclear what the added value of SPM really is. So I started to read the ITIL v3 Service Strategy book (yeah, although I read it many times now I still haven't memorized it completely ;-)).

And here's where I found a clear answer: "Service Portfolio Management is for governing investments in service management across the enterprise and managing them for value". So in other words SPM is about assiging investments to develop new services, modify existing services or retire "old" services.

And in order to accomplish this goal, the following activities are periodically executed:

1. Define - inventory services, ensure business cases and validate portfolio data
2. Analyse - maximize portfolio value, align and prioritize and balance supply and demand
3. Approve - finalize proposed portfolio, authorize services and resources
4. Charter - communicate decisions, allocate resources and charter services

So let me stop here. What else would you like to know about Service Portfolio Management?

Best Regards,
Jeroen Bronkhorst

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Posted 03-03-2008 7:25 PM by david spellman