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1.1 IT service management in the modern world
According to the World Trade Organization, services comprise the largest and most dynamic component of both 1
developed and developing economies. Services are the main way that s create for themselves and organization value
their . Almost all services today are IT-enabled, which means there is tremendous benefit for customers
organizations in creating, expanding, and improving their IT service management .capability
Technology is advancing faster today than ever before. Developments such as , infrastructure as a cloud computing
service (IaaS), machine learning, and blockchain have opened fresh opportunities for value creation, and led to IT
becoming an important business and source of competitive advantage. In turn, this positions IT service driver
management as a key strategic capability.
To ensure that they remain relevant and successful, many organizations are embarking on major transformational
s to exploit these opportunities. While these transformations are often referred to as ‘digital’, they are programme
about more than technology. They are an evolution in the way organizations work, so that they can flourish in the
face of significant and ongoing . Organizations must balance the need for stability and predictability with the change
rising need for operational agility and increased velocity. Information and technology are becoming more
thoroughly integrated with other organizational capabilities, silos are breaking down, and cross-functional teams are
being utilized more widely. is changing to address and support this organizational shift and Service management
ensure opportunities from new technologies, and new ways of working, are maximized.
Service management is evolving, and so is ITIL, the most widely adopted guidance on IT service management
(ITSM) in the world.
1.2 About ITIL 4
ITIL has led the ITSM industry with guidance, training, and certification programmes for more than 30 years. ITIL
4 brings ITIL up to date by re-shaping much of the established ITSM s in the wider context of practice customer
, s, and , as well as embracing new ways of working, such as , experience value stream digital transformation Lean
Agile, and DevOps.
ITIL 4 provides the guidance organizations need to address new service management challenges and utilize the
potential of modern technology. It is designed to ensure a flexible, coordinated and integrated for the system
effective and management of IT-enabled services.governance
1.3 The structure and benefits of the ITIL 4 framework
The key components of the ITIL 4 framework are the ITIL and the four dimensions (SVS)service value system
model.
1.3.1 The ITIL SVS
The ITIL SVS represents how the various components and activities of the organization work together to facilitate
value creation through IT-enabled s. These can be combined in a flexible way, which requires integration and service
coordination to keep the organization consistent. The ITIL SVS facilitates this integration and coordination and
provides a strong, unified, value-focused direction for the organization. The structure of the ITIL SVS is shown in
, and is repeated in , where it is described in more detail.Figure 1.1 Chapter 4
The core components of the ITIL SVS are:
the ITIL service value chain
the ITIL practices
the ITIL guiding principles
governance
continual improvement.
The ITIL service value chain provides an operating for the creation, delivery, and continual improvement of model
services. It is a flexible model that defines six key activities that can be combined in many ways, forming multiple
value streams. The service value chain is flexible enough to be adapted to multiple approaches, including DevOps
and centralized IT, to address the need for multimodal service management. The adaptability of the value chain
enables organizations to react to changing s from their s in the most effective and efficient demand stakeholder
ways.
The flexibility of the service value chain is further enhanced by the ITIL practices. Each ITIL practice supports
multiple service value chain activities, providing a comprehensive and versatile toolset for ITSM practitioners.
Figure 1.1 The service value system
The ITIL guiding principles can be used to guide an organization’s decisions and actions and ensure a shared
understanding and common approach to service management across the organization. The ITIL guiding principles
create the foundation for an organization’s and behaviour from strategic decision-making to day-to-day culture
operations.
The ITIL SVS also includes governance activities that enable organizations to continually align their operations with
the strategic direction set by the governing body.
Every component of the ITIL SVS is supported by continual improvement. ITIL provides organizations with a
simple and practical improvement model to maintain their resilience and agility in a constantly changing
.environment
1.3.2 The four dimensions model
To ensure a holistic approach to service management, ITIL 4 outlines , four dimensions of service management
from which each component of the SVS should be considered. The four dimensions are:
organizations and people
information and technology
partners and suppliers
.value streams and processes
By giving each of the four dimensions an appropriate amount of focus, an organization ensures its SVS remains
balanced and effective. The four dimensions are described in .Chapter 3
The ITIL story: The CIO’s vision for Axle
Henri: These days, the pace of industry change is rapid, with the term ‘Fourth Industrial
Revolution’ now widely used. Companies such as Axle are competing with disruptors that include
driverless cars and car share.
Service expectations have changed since Axle was created 10 years ago. Customers want
immediate access to services via apps and online services. Axle’s booking app is out of date, and
our technology isn’t keeping pace with changes in our service offerings.
My vision for Axle is that we become the most recognized car-hire brand in the world. We’ll
continue to offer outstanding customer service while maintaining competitive car-hire rates. After
all, Axle is now about more than just hiring a vehicle. We must focus on our customers’ whole
travel experience.
Key concepts of service management2
A shared understanding of the key concepts and terminology of ITIL by organizations and individuals is critical to
the effective use of this guidance to address real-world service management challenges. To that end, this chapter
explains some of the most important concepts of service management, including:
the nature of value and value co-creation
organizations, s, service consumers, and other stakeholdersservice provider
s and servicesproduct
sservice relationship
value: , s, and s.outcomes cost risk
These concepts apply to all organizations and services, regardless of their nature and underpinning technology. But
the first thing that must be outlined is the most fundamental question of all: What is ‘service management’?
Definition: Service management
A set of specialized organizational capabilities for enabling value for customers in the form of services.
Developing the specialized organizational capabilities mentioned in the definition requires an understanding of:
the nature of value
the nature and scope of the stakeholders involved
how value creation is enabled through services.
The ITIL story: Axle’s services
Su: At Axle, our service is travel experience. We provide this service to our customers to create
value both for them and for Axle. Service management helps us to realize this value.
The ITIL story: Axle’s customers
Here are three of Axle Car Hire’s frequent customers, whom you will meet as the story unfolds:
Ichika Is a university student on holiday with no fixed plans. She hopes to visit music festivals
as part of her travel experience. Apart from that, her travel is flexible. She is tech-savvy and
quickly adapts to new applications and solutions. She is interested in trying new and exciting
digital services.
Faruq Is recently retired and typically holidays alone. He is thoughtful and enjoys learning
about and adopting new technology. Faruq often makes his travel plans on the go, as his needs
can change, based on personal or health considerations.
Amelia Is the facilities manager at an organic food distribution company called Food for Fuel.
Their head office is in central London, but many Food for Fuel consumers are in regional areas.
This means access by public transport is typically infrequent, unreliable, and expensive.
Consequently, Food for Fuel provides its sales staff with vehicles to enable them to conveniently
and reliably visit existing and potential customers.
2.1 Value and value co-creation
Key message
The purpose of an organization is to create value for stakeholders.
The term ‘value’ is used regularly in service management, and it is a key focus of ITIL 4; it must therefore be
clearly defined.
Definition: Value
The perceived benefits, usefulness, and importance of something.
Inherent in this definition is the understanding that value is subject to the perception of the stakeholders, whether
they be the customers or consumers of a service, or part of the service provider organization(s). Value can be
subjective.
2.1.1 Value co-creation
There was a time when organizations self-identifying as ‘service providers’ saw their role as delivering value to
their customers in much the same way that a package is delivered to a building by a delivery company. This view
treated the relationship between the service provider and the service consumer as mono-directional and distant. The
provider delivers the service and the consumer receives value; the consumer plays no role in the creation of value for
themselves. This fails to take into consideration the highly complex and interdependent service relationships that
exist in reality.
Increasingly, organizations recognize that value is co-created through an active collaboration between providers and
consumers, as well as other organizations that are part of the relevant service relationships. Providers should no
longer attempt to work in isolation to define what will be of value to their customers and s, but actively seek to user
establish mutually beneficial, interactive relationships with their consumers, empowering them to be creative
collaborators in the service value chain. Stakeholders across the service value chain contribute to the definition of
requirements, the design of service solutions and even to the service creation and/or provisioning itself (see section
).4.5
The ITIL story: Value
Marco: We’re planning to release a generous new offering, giving an extra day of car hire with
every booking.
Henri: However, we must remember that value means different things for different people. Axle
has a broad range of customers, and each of them has their own requirements for car hire. We
need to make sure that any changes to our services are actually providing some type of value to
our customers.
Ichika: To me, ‘value’ means freedom of movement. I want my travel to be easy, hassle-free,
and flexible. I opt in to mailing lists and subscriptions when it suits me. I take frequent short
trips and rarely visit the same location twice. An extra day of car hire won’t always suit my
plans.
Faruq: I don’t travel often, so I don’t have my own car. The value of a car-hire service for me is
the on-demand availability of a car that suits my needs. I spend less money on car hire each
year than it would cost me to maintain and run my own car.
Value means it meets my budget. Being retired means I’m flexible, with very few commitments or
deadlines. When I’m on holiday, I only plan a few days ahead. An extra day of car hire offers
real value to me.
Amelia: The value of car hire for my organization, Food for Fuel, is two-fold. First, we need the
ability to reach our customers. Second, we’re keen to lower our costs and risks by hiring cars
instead of running our own fleet.
As a regular customer who books car hire on behalf of my sales reps and staff, I value a
consistent and reliable standard of service. Travel and car hire at Food for Fuel is pre-planned
and typically only requires daily hire. There’s not much value in an extra day of car hire for my
organization.
Henri: We also have to think about how value is created for Axle. The most obvious value we
receive when we hire out our cars is revenue. For our service consumers, value includes easy
access to a vehicle when they need it, without the overall expense of car ownership. In both
cases, we need a combination of the two for the value to be realized. In that way, we co-create
value through our service relationships.
Value will be explored in greater depth later in this chapter. Before that, however, it is important to outline the
various stakeholders who are involved in value co-creation and the language used in ITIL to describe them.
2.2 Organizations, service providers, service consumers, and
other stakeholders
In service management there are many different kinds of stakeholder, each of which must be understood in the
context of the creation of value in the form of services. First, the term ‘organization’ needs to be defined.
