Service Management is a 'Strategic Asset'?

P 81. in the section 'Develop Strategic Assets (4.3.2)' the authors clearly direct the reader that Service Management the concept is a strategic asset. Service management is a conceptual framework for conducting activities designed to fulfill the objectives of a customer organization. It continues to describe strategic assets as 'dynamic'. That much may be true, but strategic assets are TANGIBLE and subject to the SMART concepts favored by metrics. More plausible examples of strategic assets would include people, services, and information.


I think this is opinion

I think this is opinion and not an error

So what is an error of opinion?

The strategy book introduces a host of new 'opinions', masquerading as guidance. I feel we need to test these opinions. My comment is based upon the common definition of an 'asset', and then the ranking of some as 'strategic' which to me implies they are singularly measurable in some way as to how they support and enable the customer achievement of outcomes. Service Management is an empty bucket. Its the individual and specific activities in the form of good practices and standard operating procedures that are more likely 'strategic assets' - your turn.

Error of opinion?

I agree that opinions need to be tested, but is a list of known errors the place to do so? It is impossible to have opinions, or issue formal guidance for that matter, that could not be questioned at length. Where an opinion has a reasonable logical basis, to actually call that opinion "wrong" (as compared to simply having a different one) would typically require redefining words or taking it out of context in order to challenge the logic behind it.

It's not clear what definition of asset you are using. Assets are not necessarily SMART, certainly not in an accounting sense. Freehold property for example is not time-bound. Information is not a tangible asset, and it's value is notoriously difficult to measure. Nor is it clear what value there is in saying that service management is an empty bucket, yet individual practices and procedures within that bucket are strategic assets. Surely when taking a view of strategic assets, most people would be happier tracking a small number of buckets rather than a large number of items within them? Any given procedure should be subject change without necessitating a change in strategy, which in turn implies a more tactical nature.

I don't think something seen as strategic is necessarily measurable. It might even be the other way around. In comparison, at the most successful people-focused companies (McKinsey, Apple and Google spring to mind) their culture is seen as being a strategic asset. I'm fairly comfortable with a culture embodying the concept of Service Management as being a strategic asset, not just because of the concept itself but also because concepts are readily described and justified in strategic terms. For instance, accounting standards will allow something as vague as culture to be quantified and listed on the balance sheet as goodwill in the course of a financial transaction. Service Management systems themselves could also be capitalised projects, again actually showing up as an asset on the books.

Strategic Assets - Tangible to the Finance folks?

Good points and well taken. We are bombarded with calls from folks who need help deciphering V3. Context, perhaps in the form of an example is vital. The book lacks that context and even a clean definition for a 'strategic asset'. It is my experience that a methodology or belief such as service management has no basis for being tagged an asset. You had to refer to the concept of a service management system to make your point. A system, comprised of people, activities, information and enabling software, clearly qualifies as an asset. This was to my point - context please so we can better understand the difference between the term 'strategic asset' and 'asset'. From which perspective is the term being used... given there is no other place to do this I am thankful for the Skeptic providing us with a forum to discuss both the grammatical known errors, and those that are more theory or opinion based.

The key here is to help readers better understand V3...

Rich Foundation

There is indeed a very rich and established foundation for ITIL's "strategic asset" line of thinking. ITIL describes it in sections 4.3, 4.4 and refers to it in endnote 24 of the Strategy volume.

The last twenty years have given strategic management a model of how organizations compete. Called the “Resource-Based View”, it is regarded as the paradigm of the field. It has deepened management’s understanding on how resources are applied/combined and what makes competitive advantage sustainable. Though the list is very long, the work of Penrose was an early and influential force.

A service organization is more than an administrative unit. It is also a collection of productive resources. A basic assumption of the RBV is that the resources and capabilities underlying production differ across organizations. They are intrinsically different. Some are superior to others. What matters is the organization endowed with superior resources is better able to produce more economically or better satisfy customers.

In reference 24 (Amit and Schoemaker), Strategic Assets is defined as the “set of difficult to trade and imitate, scarce, appropriable and specialized Resources and Capabilities that bestow competitive advantage.” Service Management is comprised of Resources and Capabilities. Hence, it is potentially a strategic asset.


hi folks, thanks for all the great feedback. please also vote on BOKKEs so they will float up or down. Just click the stars. You need to login or register to rate items: sorry for the inconvenience but I'm a little sensitive about vote stacking at the moment :-D


I agree completely.

One of the issues with the way services are defined today is that it views services as a "sector" of the economy (e.g. IT Services) instead of a perspective on how to create a competitive advantage. This is an objection raised by Christian Gronroos in his book Service Management and Marketing: A Customer Relationship Management Approach. Whether directly or indirectly, Services are about creating or enabling a certain competitive advantage.

between opinion and error in best practice there is a continuum


Thankyou for your excellent thoughtful contribution. I agree debating opinion is a "fringe" activity for a BOKKED. I specifically try to exclude it on the submission page. However, there is not a crisp back/white distinction between opinion and error in "best practice" - there is a continuum.

Therefore it is up to the community to decide what is opinion and what is indeed something that should be considered for correction in the BOK. Ultimately the owners of the BOK are the arbiters, but the philosophy of this site (and of Web 2.0 in general) is that the public input is valuable.

So let's do exactly what you did: feed back so as to evolve to a consensus - or at least a "read" of the range of opinions! Please also rate the BOKKEs so the ones we all disagree with or think wrong or trivial will sink. [I will be on the lookout for dummy voting - there's a bit of that going around]

It is not an error

I agree with the Skeptic. This is not an error. Intangible assets have more value these days than what accountants are able to account for on a balance sheet. Think of the capabilities of UPS to ship a parcel from point A to B, any day, any distance at a guaranteed service level, such as before 8:30 am, without prior notice by the customer. Sure it requires scanners, trucks, planes, and all kinds of material handling equipment. By the principles, processes, routing algorithms, and resource allocation systems are all intangible assets. So are the design and location of warehouses and distribution points. Together it represents the core capability of UPS which makes money, dependably. That's why I think the Service Strategy book calls it a strategic asset. This is strategic thinking. Other examples, are the Blackberry service, transatlantic airline routes, and storefronts for third-parties.

B. Dayton

"Strategic Asset" sounds more meaningful

In service organization, core services can be tangible, intangible or both as mentioned in comments provided by others. To have compititive edge organizations have to mature dynamics of their services quality as effectively and efficiently. To achieve this organizational strategy must focus arround these assets. Next level of maturity lead to consider core assets as "Strategic Assets".

I agree that opinions need

I agree that opinions need to be tested. The strategy book introduces a host of new 'opinions', masquerading as guidance. The last twenty years have given strategic management a model of how organizations compete.

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