PrepAway - Latest Free Exam Questions & Answers

What are the three Service Provider business models?

What are the three Service Provider business models?

PrepAway - Latest Free Exam Questions & Answers

A.
Internal Service provider, External Service provider, Shared Service Provider

B.
Internal Service Operations provider, External Service Operations provider, Shared Service
Unit

C.
Internal Service provider, External Service provider, Outsourced 3rd Party

D.
Internal Service provider, Outsourced 3rd party and Off-shore party

3 Comments on “What are the three Service Provider business models?

  1. Michael McNeil says:

    Page 41 ITIL3 Service Strategy

    It is necessary to distinguish between different types of
    service providers. While most aspects of service
    management apply equally to all types of service
    providers, others such as customers, contracts,
    competition, market spaces, revenue and strategy take on
    different meanings depending on the type. There are three
    archetypes of business models service providers:
    ■ Type I – internal service provider
    ■ Type II – shared services unit
    ■ Type III – external service provider

  2. Michael McNeil says:

    FYI, a shared service provider and a shared service unit seem to be the same thing. ITIL made a boobo here. These terms are lacking consisting in the ITIL3 Service Strategy book.

    Perspective – describes a vision and direction. A
    strategic perspective articulates the business
    philosophy of interacting with the customer or the
    manner in which services are provided. For example, a
    shared service provider (Type II) for a global law firm
    may adopt the strategic perspective of, ‘We will be a
    best-in-class service provider for our law firm’. The CIO
    determined that his business most values a certain
    type of service provider. By setting a perspective of
    competing against other industry-specific providers he
    not only narrows the field of competing alternatives,
    but also cements his own distinctiveness in the minds
    of his customers (

  3. Michael McNeil says:

    Service Strategy defines three broad types of Service
    Providers with whom a customer is likely to engage in
    accessing services.
     Type I – Internal Service Provider
    Type I providers are typically business functions
    embedded within the business units they serve. The
    business units themselves may be part of a larger
    enterprise or parent organization. Business functions
    such as finance, administration, logistics, human
    resources and IT provide services required by various
    parts of the business. They are funded by overheads
    and are required to operate strictly within the
    mandates of the business. Type I providers have the
    benefit of tight coupling with their owner-customers,
    avoiding certain costs and risks associated with
    conducting business with external parties.
     Type II – Shared Service Provider
    Business functions such as finance, IT, human resources
    and logistics are not always at the core of an
    organization’s competitive advantage. Hence, they
    need not be maintained at the corporate level where
    they demand the attention of the chief executive’s
    team. Instead, the services of such shared functions are
    consolidated into an autonomous special unit called a
    shared services unit (SSU). This model allows a more
    devolved governing structure under which an SSU can
    focus on serving business units as direct customers.
    SSUs can create, grow and sustain an internal market
    for their services and model themselves along the lines
    of service providers in the open market. Like corporate
    business functions, they can leverage opportunities
    across the enterprise and spread their costs and risks
    across a wider base.
     Type III – External Service Provider
    Type III providers can offer competitive prices and drive
    down unit costs by consolidating demand. Certain
    business strategies are not adequately served by
    internal Service Providers such as Type I and Type II.
    Customers may pursue sourcing strategies requiring
    services from external providers. The motivation may
    be access to knowledge, experience, scale, scope,
    capabilities and resources that are either beyond the
    reach of the organization or outside the scope of a
    carefully considered investment portfolio. Business
    strategies often require reductions in the asset base,
    fixed costs, operational risks or the redeployment of
    financial assets. Competitive business environments
    often require customers to have flexible and lean
    structures. In such cases it is better to buy services
    rather than own and operate the assets necessary to
    execute certain business functions and processes. For
    such customers, Type III is the best choice for a given
    set of services.


Leave a Reply