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Scenario
A retail company has enjoyed significant growth in profit over the past year due to negotiating lower buying costs from its suppliers. The organization wishes to reinvest some of this profit to fund a program of change to optimize the use of IT services. They hope this will support revenue growth in the next financial year whilst maintaining profitability.
The program consists of two main initiatives:
* An expansion of the on-line retailing services to offer more functionality
* Enhancement of the marketing service to allow greater targeting of promotional offers.
There are various options for providing these services that involve use of the current infrastructure or the new virtualization technology, which is slowly being deployed across the organization. The board of directors wishes to conduct a financial review over the next 3 months to compare the cost of providing each service. Projected business revenues will allow the return on investment (ROI) of each option to be calculated. This review will provide an input to the IT organization's service portfolio management process, allowing the various investment options to be considered and an informed decision to be made.
The organization has a good appreciation of its IT costs along with a mature service catalogue and configuration management system (CMS).
Refer to the Scenario.
Which one of the following options would be the BEST approach to providing the information for the financial review of the service options?

• A. Appoint an IT finance manager to implement budgeting and accounting for IT services.
  Create a cost model that takes into account direct and indirect costs, as well as fixed and variable costs.
  Use the cost model to calculate the cost of providing the IT services and provide the information to service portfolio management (SPM).
• B. Produce a summary of current costs, apportioning all costs directly to the appropriate service.
  Any investment in virtualization or new infrastructure should be shared equally between the two services.
  This creates a baseline for comparison with the anticipated business revenues and ROI that will enable a business case to be developed for each option.
• C. Produce a summary of current costs, recognizing that the resources are shared across services.
  The various options for providing the service, including those requiring investment in new infrastructure, can then be costed. Using the projected revenues supplied, a calculation can establish the ROI for each option.
  These costs and ROI for each option can then be compared through the service portfolio management process and used as an input to develop a business case for the most advantageous options.
• D. Produce a summary of current costs, recognizing that the resources are shared across services.
  Use service level agreements to understand how the services are used and create a model for the services, ensuring that both current and projected costs are shared appropriately.
  These costs can then be compared with the cost of outsourcing the service and with the anticipated business revenue.

Scenario
A commercial IT services company has been successful for many years. Its key strategic differentiator has been the provision of new services to meet customers' needs in very short lead times. Recently profits have dipped, forcing senior management to take a look at the lifecycle costs of providing the IT services to their external customers.
The organization has had a service catalogue containing customer and supporting views for some time. It is an essential source of information about the IT services and is used by both the business relationship managers and the IT services teams. Services are designed internally but often transitioned and operated in partnership with other suppliers.
For each service, the service catalogue currently contains:
* A description of the service
* Summary of the service level targets
* The level of support and support details
* Details of the supporting services and components
* Details of services obtained from suppliers
When sales leads are obtained from potential new customers, the requirements are compared with services in the service catalogue and, if no matching service can be found, a project is set up to quickly develop a new service. In the past this has been justified as meeting the needs of the customers, and full business cases were not developed.
A senior service manager has suggested introducing a service portfolio management process and needs to get the support of the IT management team. The management team wishes to know what extra information would be included in a service portfolio over and above what is already in the service catalogue and what value it would be to them.
The company is looking to restrict investment in new resources. Therefore, only a few projects can be authorized in the next budget cycle.
Refer to the Scenario.
Which one of the following sets of statements BEST describes the elements that a service portfolio contains in addition to the elements in a service catalogue, and describes the additional value service portfolio management would bring to the IT services company in resolving their current issues?

• A. The service portfolio will include: resource allocation; support terms and conditions; ordering and request procedures; the value proposition; offerings and packages.
  The service portfolio will show where additional resources will be required to operate new services.
  Service portfolio management will enable the organization to rationalize existing services to optimize the use of resources.
• B. The service portfolio will include: business cases; risks; investment priorities; value propositions.
  The service portfolio will show where resources are used across all stages of the service lifecycle both within the provider and where they have been acquired from suppliers.
  Service portfolio management will improve the organization's ability to compare potential investments and make sound decisions.
• C. The service portfolio will include: ordering and request procedures; service level targets; support terms and conditions; details of services obtained from suppliers.
  The service portfolio will show the resources and capabilities that are needed to improve the services in the service catalogue.
  Service portfolio management will enable the organization to expand the service catalogue to include details of service requests and standard changes, providing a valuable self-help portal to users.
• D. The service portfolio will include: business cases; risks; business outcomes supported; cost and pricing.
  The service portfolio will show the proportion of resources acquired from key suppliers so that the cost of new services can be accurately estimated.
  Creating a service portfolio that includes services in the service pipeline, as well as those in the service catalogue, will enable new services currently being developed to be included in service offerings. This increased visibility of new services extends the range available for new opportunities.