deliver a valuable product or service to its consumers and to facilitate value realization. It provides an operating model for service providers that covers six key activities, applying practices to continually improve the enabled values.
The ITIL practices are sets of organizational resources designed for performing work or accomplishing an objective. Activities in the service value chain can be based on established practices.
The ITIL guiding principles are recommendations that can guide an organization in all circumstances, regardless of changes in its goals, strategies, type of work, or management structure. The ITIL guiding principles assure that the organization performs in a consistent, effective and efficient way.
Governance is the means by which an organization is directed and controlled. The organization’s governance is based on a consistent set of guiding principles. Governance enables the organization to ensure that its operations are always aligned with its strategy.
Continual improvement is a recurring organizational activity performed at all levels to ensure that an organization’s performance continually meets stakeholders’ expectations.
Using all these components, the service provider can continually improve its services. Continual improvement is a core component of the SVS, as in previous versions of ITIL guidance. It is based on the continual improvement model (Figure 10) and supported by various ITIL practices.
1.1.2 The four dimensions model
In a holistic approach, ITIL 4 covers all four dimensions required for the effective and efficient facilitation of value for customers and other stakeholders in the form of products and services. The SVS should be considered from all of these four dimensions:
■ organizations and people
■ information and technology
■ partners and suppliers
■ value streams and processes
These four dimensions should be managed in an integrated way, balancing their contribution to an effective SVS. The four dimensions are described in more detail in chapter 3.
Figure 2. The four dimensions of service management
2 Key concepts of service management
Learning outcomes:
• Understand the key concepts of service management.
Assessment criteria:
• Recall the definitions of Service management, Customer, User, Sponsor, Service, Utility, Warranty.
• Describe the key concepts of creating value with services: Cost, Value, Organization, Outcome, Output, Risk, Utility, Warranty.
• Describe the key concepts of service relationships: Service offering, Service relationship management, Service provision, Service consumption.
Before describing how ITIL supports organizations to continually improve services and co-create value, the definitions of service management and value need to be clear.
Service management: A set of specialized organizational capabilities for enabling value for customers in the form of services.
The purpose of an organization is to create value for its stakeholders.
Value: The perceived benefits, usefulness and importance of something.
This introduces the following questions:
■ What is the nature of value?
■ What is the nature and scope of the stakeholders involved?
■ How is value creation enabled through services?
■ 2.1 VALUE CO-CREATION
Value can be subjective: the value is determined by the stakeholders.
Organizations increasingly recognize that value is co-created through an active collaboration between stakeholders, including the service providers and service consumers. Each stakeholder receives its own value in the interaction. The relationship between service provider and service consumer is mutually beneficial. An effective service value chain requires collaboration between providers and consumers.
After many years of focusing on operational excellence, the era of customer-focused service excellence has now arrived. Service delivery is increasingly becoming the core element in the economy. People are buying less and less ‘pure’ goods, and suppliers are increasingly packaging supplied goods into a service offering. The support that comes with that service has already revealed itself as a dominant differentiator for the success of organizations. This observation applies to both internal and external services.
In the economy this shift is indicated with Service-Dominant logic (S-D logic), as a successor to the Goods-Dominant logic (G-D logic) in which the transfer of goods played the main role. According to the S-D logic, service is the fundamental basis for all value-sharing1.
G-D logic focuses on value creation in the transfer of goods (value-in-exchange). S-D logic focuses on value creation in the use of resources (value-in-use), where value is co-created by providers and consumers.
■ 2.2 STAKEHOLDERS
There are various stakeholders involved in the co-creation of value: service providers, service consumers, and others. The ITIL 4 guidance is applied to the way organizations can improve their contribution.
Organization: A person or a group of people that has its own functions with responsibilities, authorities, and relationships to achieve its objectives.
An organization can be anything, ranging from a single individual or team, up to a complex set of organizational structures in a network.
2.2.1 Service providers
Service provider is a role performed by an organization in a service relationship to provide services to consumers. A service provider co-creates value with the consumer, by offering services.
Service providers can be external or internal to the consumer’s organization. An internal service provider is part of the same organization as the consumer. External providers often provide their services as a commercial offering to various consumers. The provider-consumer model can be applied to create complex supply chains, service networks, or service ecosystems.
A service provider needs to have a clear understanding of who its consumers are.
