ITIL-SOA practice question 8 of 10

Scenario The IT organization of a manufacturing company is carrying out an annual review of its service portfolio. There is limited budget available…

Full set: 14 questions
Scenario The IT organization of a manufacturing company is carrying out an annual review of its service portfolio. There is limited budget available for the next year and some projects may be delayed or cancelled. The company has control of most of its IT services, however some are mandated by the company's corporate owners. The following services are under review: • Service 1: Web ordering service. This is a new service that will enable the company to fulfill its strategy to sell products on-line and increase its customer base by 20%. Only high-level business requirements have been established so far but. if the project goes ahead, the system will be provided by a supplier using standard applications and technology. A business case has been created which shows the ratio of value-to-cost to be much greater than one. • Service 2: Sales office service. The service has grown from a number of separate applications that have been combined into one suite. The technical solution for each application is similar but some use different versions of the same operating system. The applications themselves provide the required utility and support their business outcomes well. There is some overlap in functionality across the set of applications contained in the service suite. • Service 3: Finance reporting service. The service is used by the finance department to create statutory reports to fulfill legal obligations. The service is hosted on a legacy system. The cost of supporting the service is increasing gradually and the return obtained from the service is decreasing. Eventually the service will be replaced by the new enterprise resource planning (ERP) service. It is projected that, over the next two years, the ratio of value-to-cost will drop to less than one. • Service 4: This is a new ERP service that is being implemented across all companies in the corporate group. It will eventually replace many existing services including the finance reporting service. The service has been approved and chartered, and has a current status of "design". A large number of assets have been allocated to this project. As this service is mandated by the corporate owners, no further decision is required. Refer to Scenario: As part of the service portfolio management team you have been asked to recommend whether investments should be made in these services in the next year. Which of the following options is the BEST set of decisions to make for the services?
Answer options
A: Service 1 - invest. Charter the service and set up a service design project Service 2 - replace. Set up project to replace the set of applications with a single application designed to support the business outcomes Service 3 - retire. Mark the service for retirement and set up a retirement project. This will make best use of resources and ensure that information is migrated to the ERP service.
B: Service 1 - promote to the service catalogue, project Service 2 - retain. Keep the service and support Service 3 - delay decision. It is likely that this project will use assets that will be allocated review. Allocate resources to the transition stage of the it in its current form service will be retired, but not yet. The retirement elsewhere this year. Reconsider at next annual
C: Service 1 - invest. Charter the service and set up a service design project Service 2 - rationalize. Set up a project to identify the best way of retaining the support of the business outcomes but eliminating the duplication of functionality and supporting components Service 3 - delay decision. It is likely that this service will be retired, but not yet. The retirement project will use assets that will be allocated elsewhere this year. Reconsider at next annual review. Correct answer
D: Service 1 - promote to the service catalogue. Allocate resources to the transition stage of the project Service 2 – re-factor. Set up project to redesign the applications to concentrate on the core functionality of the service Service 3 - retain. As the service is needed to fulfill legal and statutory compliance it should be retained.
Correct Answer:
C. Service 1 - invest. Charter the service and set up a service design project Service 2 - rationalize. Set up a project to identify the best way of retaining the support of the business outcomes but eliminating the duplication of functionality and supporting components Service 3 - delay decision. It is likely that this service will be retired, but not yet. The retirement project will use assets that will be allocated elsewhere this year. Reconsider at next annual review.
Explanation

This set of decisions represents the most balanced and strategically sound application of Service Portfolio Management principles. Service 1 (Invest): The service has a strong business case and strategic value. The next logical step in the service lifecycle is to formally charter it and initiate a service design project. Service 2 (Rationalize): The service provides good business value but is inefficient due to functional overlap and varied components. Rationalization is the correct approach to improve efficiency and reduce costs while retaining the service's value, which is more cost-effective than a full replacement. Service 3 (Delay decision): While the service is marked for eventual retirement, it is currently required for legal compliance. Since the replacement ERP service is still in design and the budget is limited, delaying the start of the retirement project is a prudent financial and risk management decision.

Why Incorrect

A: Retiring Service 3 is premature as its replacement is not ready, creating a compliance gap. Replacing Service 2 is an unnecessarily expensive option when it already supports business outcomes well. B: Promoting Service 1 to the service catalogue is incorrect; it must first be designed, built, and transitioned into a live environment. Retaining Service 2 as-is ignores its documented inefficiencies. D: Promoting Service 1 to the catalogue is incorrect. Simply retaining Service 3 ignores its declining value and increasing cost, failing to plan for its eventual, necessary retirement.

References

1. AXELOS, ITIL® Service Strategy, 2011 Edition, TSO (The Stationery Office), pp. 148-151, Section 4.4.5.3 (Analyze). This section explicitly details the analysis phase of Service Portfolio Management, where services are reviewed to determine if they should be "retained, replaced, rationalized or retired." This directly supports the decision to "rationalize" Service 2 to address its inefficiencies while preserving its value. It also underpins the analysis of Service 3 as a candidate for retirement.

2. AXELOS, ITIL® Service Strategy, 2011 Edition, TSO (The Stationery Office), p. 151, Section 4.4.5.5 (Charter). This section describes the 'Charter' activity, which "communicates decisions, allocates resources and charters services." This is the correct next step for Service 1 after its business case has been approved, validating the "invest and charter" decision.

3. AXELOS, ITIL Foundation, ITIL 4 Edition, TSO (The Stationery Office), 2019, p. 101, Section 4.3.3 (Portfolio management). This source defines the service portfolio as including the service pipeline (for new/changed services), service catalogue (for live services), and retired services. This confirms that Service 1, being a new concept, belongs in the pipeline and cannot yet be promoted to the service catalogue.

4. AXELOS, ITIL® Service Strategy, 2011 Edition, TSO (The Stationery Office), p. 141, Section 4.4.4.2 (The service portfolio). This section explains that the service portfolio represents the complete set of services managed by a provider, including those in the pipeline. Portfolio management involves making investment decisions based on value and alignment with business strategy, which justifies investing in the high-value Service 1 and delaying expenditure on the retirement of Service 3 due to budget constraints and dependencies.

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