CHAPTER 1
INTRODUCTION
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Introduction1
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
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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
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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.
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CHAPTER 2
KEY CONCEPTS OF SERVICE
MANAGEMENT
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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.
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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.
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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
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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.
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Definition: Organization
A person or a group of people that has its own functions with responsibilities, authorities, and relationships to
achieve its objectives.
Organizations vary in size and complexity, and in their relation to legal entities, from a single person or a team to a
complex network of legal entities united by common objectives, relationships, and authorities.
As societies and economies evolve, the relationships between and within organizations become more complex. Each
organization depends on others in its operation and development. Organizations may hold different roles, depending
on the perspective under discussion. For example, an organization that coordinates adventure vacations can fill the
role of a service provider to a travel agent when it sells a vacation, while simultaneously filling the role of service
consumer when it purchases airport transfers to add to their vacation packages.
2.2.1 Service providers
Key message
When provisioning services, an organization takes on the role of the service provider. The provider can be
external to the consumer’s organization, or they can both be part of the same organization.
In the most traditional views of ITSM, the provider organization is seen as the IT department of a company, and the
other departments or other functional units in the company are regarded as the consumers. This is, however, only
one very simple provider-consumer model. A provider could be selling services on the open market to other
businesses, to individual consumers, or it could be part of a service alliance, collaborating to provide services to
consumer organizations. The key is that the organization in the provider role has a clear understanding of who its
consumers are in a given situation and who the other stakeholders are in the associated service relationships.
The ITIL story: Service providers
Henri: Axle Car Hire acts as a service provider. We provide cars for hire. At the same time,
other organizations, such as mechanics and the companies that we buy our cars from, act as
service providers for Axle.
2.2.2 Service consumers
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Key message
When receiving services, an organization takes on the role of the service consumer.
Service consumer is a generic role that is used to simplify the definition and description of the structure of service
relationships. In practice, there are more specific roles involved in , such as customers, users, service consumption
and s. These roles can be separate or combined.sponsor
Definitions
The role that defines the requirements for a service and takes responsibility for the outcomes of Customer
service consumption.
The role that uses services.User
The role that authorizes budget for service consumption.Sponsor
For example, if a company wishes to purchase mobile phone services for its employees from a wireless carrier (the
service provider), the various consumer roles may be distributed as follows:
The chief information officer (CIO) and key communications team members fill the role of customer when they
analyse the mobile communications requirements of the company’s employees, negotiate the contract with the
wireless carrier and monitor the carrier’s against the contracted requirements.performance
The chief financial officer (CFO) fills the role of the sponsor when they review the proposed service arrangement
and approve the cost of the contract as negotiated.
The employees (including the CIO, CFO, and communications team members) fill the role of users when they
order, receive, and use the mobile phone services as per the agreed contract.
In another example, an individual private consumer of the same wireless carrier (a person using the mobile network)
simultaneously acts as a user, customer, and sponsor.
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The ITIL story: Axle’s service consumers
Su: Our most obvious service consumers are the people and organizations who hire our cars,
visit our offices, and use our website and booking app. For example, Ichika and Faruq are
service consumers, and so is Food for Fuel. They are also our customers.
Radhika: Users are the people who make use of our services. Our car-hire users are the drivers
and passengers in our vehicles.
Marco: Sponsors are the people who authorize budgets. For Axle Car Hire, our sponsors
include Amelia from Food for Fuel, who approves the travel budget even if she doesn’t travel
herself.
Henri: Individual service consumers such as Ichika and Faruq approve their own budgets,
define their requirements for car hire, and drive the cars. Therefore, Ichika and Faruq act as
sponsors, customers, and users. Sometimes, though, they may share the trip with fellow drivers
(friends or family members). In this case, their contracts will include other users.
It is important to identify these roles in service relationships to ensure effective communication and stakeholder
management. Each of these roles may have different, and sometimes even conflicting, expectations from services,
and different definitions of value.
2.2.3 Other stakeholders
A key focus of service management, and of ITIL, is the way that organizations co-create value with their consumers
through service relationships. Beyond the consumer and provider roles, there are usually many other stakeholders
that are important to value creation. Examples include individual employees of the provider organization, partners
and s, investors and shareholders, government organizations such as regulators, and social groups. For the supplier
success, and even the continued existence of an organization, it is important that relationships with all key
stakeholders are understood and managed. If stakeholders are unhappy with what the organization does or how it
does it, the provider’s relationships with its consumers can be in jeopardy.
Products and services create value for stakeholders in a number of ways. Some are quite direct such as the
generation of revenue, while others are more indirect such as employee experience. provides examples of Table 2.1
value for several different types of stakeholder.
Detailed recommendations on the management of value for different stakeholders can be found in other ITIL 4
publications and supplementary materials.
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Table 2.1 Examples of value for different types of stakeholder
Stakeholder Example of value for stakeholder
Service consumers Benefits achieved; costs and risks optimized
Service provider Funding from the consumer; business development; image improvement
Service provider employees Financial and non-financial incentives; career and professional development; sense of
purpose
Society and community Employment; taxes; organizations’ contribution to the development of the community
Charity organizations Financial and non-financial contributions from other organizations
Shareholders Financial benefits, such as dividends; sense of assurance and stability
2.3 Products and services
The central component of service management is, of course, the service. The nature of services will now be
considered, and an outline given of the relationship between a service and a product.
2.3.1 Configuring resources for value creation
Key message
The services that an organization provides are based on one or more of its products. Organizations own or have
access to a variety of s, including people, information and technology, value streams and processes, resource
and partners and suppliers. Products are s of these resources, created by the organization, that configuration
will potentially be valuable for its customers.
Definitions
A means of enabling value co-creation by facilitating outcomes that customers want to achieve, Services
without the customer having to manage specific costs and risks.
A configuration of an organization’s resources designed to offer value for a consumer.Product
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Each product that an organization offers is created with a number of target consumer groups in mind, and the
products will be tailored to appeal to, and meet the needs of, these groups. A product is not exclusive to one
consumer group, and can be used to address the needs of several different groups. For example, a software service
can be offered as a ‘lite’ version, for individual users, or as a more comprehensive corporate version.
Products are typically complex and are not fully visible to the consumer. The portion of a product that the consumer
actually sees does not always represent all of the components that comprise the product and support its delivery.
Organizations define which product components their consumers see, and tailor them to suit their target consumer
groups.
2.3.2 Service offerings
Key message
Service providers present their services to consumers in the form of service offerings, which describe one or
more services based on one or more products.
Definition: Service offering
A formal description of one or more services, designed to address the needs of a target consumer group. A
service offering may include , access to resources, and s.goods service action
Service offerings may include:
goods to be supplied to a consumer (for example, a mobile phone). Goods are supposed to be transferred from the
provider to the consumer, with the consumer taking the responsibility for their future use
access to resources granted or licensed to a consumer under agreed terms and conditions (for example, to the
mobile network, or to the network storage). The resources remain under the provider’s control and can be
accessed by the consumer only during the agreed service consumption period
service actions performed to address a consumer’s needs (for example, user support). These actions are performed
by the service provider according to the agreement with the consumer.
Examples of different types of service offering are shown in .Table 2.2
Services are offered to target consumer groups, and those groups may be either internal or external to the service
provider organization. Different offerings can be created based on the same product, which allows it to be used in
multiple ways to address the needs of different consumer groups. For example, a software service can be offered as
a limited free version, or as a comprehensive paid-for version, based on one product of the service provider.
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Table 2.2 Components of a service offering
Component Description Examples
Goods Supplied to the consumer
Ownership is transferred to the consumer
Consumer takes responsibility for future use
A mobile phone
A physical server
Access to resources Ownership is not transferred to the consumer
Access is granted or licensed to the consumer
under agreed terms and conditions
The consumer can only access the resources
during the agreed consumption period and
according to other agreed service terms
Access to the mobile network, or to
network storage
Service actions Performed by the service provider to address a
consumer’s needs
Performed according to an agreement with the
consumer
User support
Replacement of a piece of
equipment
The ITIL story: Axle’s service offerings
Su: Axle’s service offerings include car hire and the various options we provide to address
different travel needs. These offerings include discounted insurance, a loyalty programme, and
complimentary travel products which include bottled water, tissues, badge holders for parking
permits, and baby seats.
Our consumers are a diverse group and expect different travel experiences. For example, our
corporate consumers don’t usually need baby seats or weekend rates. At the same time, some
individual customers aren’t interested in free airport car collection if they’re only travelling
locally.
All our service offerings include access to our website and booking app.
2.4 Service relationships
To create value, an organization must do more than simply provide a service. It must also cooperate with the
consumers in service relationships.
Key message
Service relationships are established between two or more organizations to co-create value. In a service
relationship, organizations will take on the roles of service providers or service consumers. The two roles are
not mutually exclusive, and organizations typically both provide and consume a number of services at any
given time.
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2.4.1 The service relationship model
When services are delivered by the provider, they create new resources for service consumers, or modify their
existing ones. For example:
a training service improves the skills of the consumer’s employees
a broadband service allows the consumer’s computers to communicate
a car-hire service enables the consumer’s staff to visit clients
a software development service creates a new application for the service consumer.
Figure 2.1 The service relationship model
The service consumer can use its new or modified resources to create its own products to address the needs of
another target consumer group, thus becoming a service provider. These interactions are shown in .Figure 2.1
Definitions
A cooperation between a service provider and service consumer. Service relationships Service relationship
include , service consumption, and .service provision service relationship management
Activities performed by an organization to provide services. Service provision includes:Service provision
management of the provider’s resources, configured to deliver the service
ensuring access to these resources for users
fulfilment of the agreed service actions
service level management and continual improvement.
Service provision may also include the supplying of goods.
Activities performed by an organization to consume services. Service consumption Service consumption
includes:
management of the consumer’s resources needed to use the service
service actions performed by users, including utilizing the provider’s resources, and requesting service
actions to be fulfilled.
Service consumption may also include the receiving (acquiring) of goods.
Joint activities performed by a service provider and a service consumer to Service relationship management
ensure continual value co-creation based on agreed and available service offerings.
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The ITIL story: Axle’s service relationships
Henri: Axle has service relationships with many service providers and consumers, both internal
and external. Some services provided to Axle create new resources for the business, such as car
manufacturers selling cars to us. Other services, such as the work done for us by our internal
car cleaning team, and mechanics outside of Axle, change our existing resources by ensuring
that our cars are clean and functional.
Axle can use these resources in other relationships to provide its own services, in the form of car
hire, to consumers, i.e. our customers.
These are just a few examples of the service relationships that Axle has. The organization as a
whole has many more.
2.5 Value: outcomes, costs, and risks
This section will focus on how an organization in the role of service provider should evaluate what its services
should do and how its services should be provided to meet the needs of consumers.
Key message
Achieving desired outcomes requires resources (and therefore costs) and is often associated with risks. Service
providers help their consumers to achieve outcomes, and in doing so, take on some of the associated risks and
costs (see the definition of service in ). On the other hand, service relationships can introduce new section 2.3.1
risks and costs, and in some cases, can negatively affect some of the intended outcomes, while supporting
others.
Service relationships are perceived as valuable only when they have more positive effects than negative, as depicted
in . Outcomes, and how they influence and are influenced by the other elements, will now be discussed.Figure 2.2
2.5.1 Outcomes
Acting as a service provider, an organization produces s that help its consumers to achieve certain outcomes.output
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Definitions
A tangible or intangible deliverable of an activity.Output
A result for a stakeholder enabled by one or more outputs.Outcome
Figure 2.2 Achieving value: outcomes, costs, and risks
It is important to be clear about the difference between outputs and outcomes. For example, one output of a wedding
photography service may be an album in which selected photos are artfully arranged. The outcome of the service,
however, is the preservation of memories and the ability of the couple and their family and friends to easily recall
those memories by looking at the album.
Depending on the relationship between the provider and the consumer, it can be difficult for the provider to fully
understand the outcomes that the consumer wants to achieve. In some cases they will work together to define the
desired outcomes. For example, s (BRMs) in internal IT or HR departments may business relationship manager
regularly talk with customers and discuss their needs and expectations. In other cases, the consumers articulate their
expectations quite clearly, and the provider expects them to do so, such as when standardized services are offered to
a wide consumer group. This is how mobile operators, broadband service providers, and transport companies usually
operate. Finally, some service providers predict or even create demand for certain outcomes, forming a target group
for their services. This may happen with innovative services addressing needs that consumers were not even aware
of before. Examples of this include social networks or smart home solutions.
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The ITIL story: Outputs and outcomes
Henri: At Axle, our key output is a car that is clean, roadworthy, and well maintained.
Su: For our service consumers, outcomes include travel that is convenient and affordable, and
meets a range of needs. This includes self-drive holidays, client site visits, and travel to see
family and friends.
2.5.2 Costs
Definition: Cost
The amount of money spent on a specific activity or resource.
From the service consumer’s perspective, there are two types of cost involved in service relationships:
costs removed from the consumer by the service (a part of the value proposition). This may include costs of staff,
technology, and other resources, which the consumer does not need to provide
costs imposed on the consumer by the service (the costs of service consumption). The total cost of consuming a
service includes the price charged by the service provider (if applicable), plus other costs such as staff training,
costs of network utilization, procurement, etc. Some consumers describe this as what they have to ‘invest’ to
consume the service.
Both types of cost are considered when the consumer assesses the value which they expect the service to create. To
ensure that the correct decisions are made about the service relationship, it is important that both types of cost are
fully understood.
From the provider’s perspective, a full and correct understanding of the cost of service provision is essential.
Providers need to ensure that services are delivered within budget constraints and meet the financial expectations of
the organization (see ).section 5.1.11
2.5.3 Risks
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Definition: Risk
A possible that could cause harm or loss, or make it more difficult to achieve objectives. Can also be event
defined as uncertainty of outcome, and can be used in the context of measuring the probability of positive
outcomes as well as negative outcomes.
As with costs, there are two types of risk that are of concern to service consumers:
risks removed from a consumer by the service (part of the value proposition). These may include of the failure
consumer’s server hardware or lack of staff availability. In some cases, a service may only reduce a consumer’s
risks, but the consumer may determine that this reduction is sufficient to support the value proposition
risks imposed on a consumer by the service (risks of service consumption). An example of this would be a service
provider ceasing to trade, or experiencing a security breach.
It is the duty of the provider to manage the detailed level of risk on behalf of the consumer (see ). This section 5.1.10
should be handled based on a balance of what matters most to the consumer and to the provider. The consumer
contributes to the reduction of risk through:
actively participating in the definition of the requirements of the service and the clarification of its required
outcomes
clearly communicating the s (CSFs) and constraints that apply to the servicecritical success factor
ensuring the provider has access to the necessary resources of the consumer throughout the service relationship.
2.5.4 Utility and warranty
To evaluate whether a service or service offering will facilitate the outcomes desired by the consumers and therefore
create value for them, the overall and of the service should be assessed.utility warranty
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Definitions
The functionality offered by a product or service to meet a particular need. Utility can be summarized Utility
as ‘what the service does’ and can be used to determine whether a service is ‘fit for purpose’. To have
utility, a service must either support the performance of the consumer or remove constraints from the
consumer. Many services do both.
Assurance that a product or service will meet agreed requirements. Warranty can be summarized Warranty
as ‘how the service performs’ and can be used to determine whether a service is ‘fit for use’. Warranty
often relates to s aligned with the needs of service consumers. This may be based on a formal service level
agreement, or it may be a marketing message or brand image. Warranty typically addresses such areas as
the of the service, its capacity, levels of security and continuity. A service may be said to availability
provide acceptable assurance, or ‘warranty’, if all defined and agreed conditions are met.
The assessment of a service must take into consideration the impact of costs and risks on utility and warranty to
generate a complete picture of the viability of a service.
Both utility and warranty are essential for a service to facilitate its desired outcomes and therefore help create value.
For example, a recreational theme park may offer many exciting rides designed to deliver thrilling experiences for
park visitors (utility), but if a significant number of the rides are frequently unavailable due to mechanical
difficulties, the park is not fulfilling the warranty (it is not fit for use) and the consumers will not receive their
expected value. Likewise, if the rides are always up and running during advertised hours, but they do not have
features that provide the levels of excitement expected by visitors, the utility is not fulfilled, even though the
warranty is sufficient. Again, consumers would not receive the expected value.
The ITIL story: A new supplier (Craig’s Cleaning)
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Su: Axle’s recent customer satisfaction surveys consistently revealed low ratings for car
cleanliness. This hampered our customers’ travel experience and was a contributing factor for
low repeat bookings.
Henri: Axle Car Hire made the decision to outsource the cleaning of all vehicles to a service
provider. Previously, cleaning of our vehicle fleet was performed by an internal department. The
cost and effort to maintain equipment, update rosters, and manage an inflexible workforce were
unsustainable.
It is important to understand that the risk of any task or service is that an outsourcing
organization loses skills and capabilities. However, car cleaning is a service requiring
specialized equipment as well as a flexible and motivated workforce. Continual investment in
this service is something that is not beneficial for Axle.
At face value, outsourcing may appear to cost an organization more than using internal
resources. Initially this may be true; however, over time and correctly managed, outsourcing
services should be beneficial to both the organization and supplier. The benefit for Axle is that
we can concentrate on our core business. After all, we’re not a cleaning company.
Marco: There are always pros and cons to outsourcing. Let’s have a look at the outcomes,
costs, and risks that are introduced and removed.
Pros Cons
Users will be happy with our cars’ cleanliness
Axle will no longer need to maintain its own cleaning
facilities
The risk of cars being damaged during cleaning will be
removed from Axle. This risk will now be with the
supplier and their insurance company
Axle will lose an opportunity to offer car cleaning as a
service
Axle will need to pay the cleaning company
Axle will have a heavy dependency on the external
cleaning company, and their staff will have wide access to
our premises
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Su: By partnering with a specialist cleaning organization, Axle can focus its resources on
providing a better service for our users. It will also help to optimize our costs, increasing value
for the organization.
Craig is the owner of Craig’s Cleaning. Craig is methodical, reliable, and well respected by his staff. With his team,
Craig is keen to contribute to the Axle vision of offering a high-standard travel experience.
Craig: Axle Car Hire decided to outsource its car cleaning service, and Craig’s Cleaning was
chosen to take this on. My organization is now responsible for the cleanliness of the entire Axle
vehicle fleet.
Henri: The service Craig’s Cleaning is providing is only one component of the Axle customer
experience. Clean cars are one output of our overall service, and they contribute directly to the
customers’ travel experience. This helps Axle’s clients to achieve their outcomes.
Su: Craig’s Cleaning is doing a great job! The cars have never been cleaner, and our customer
satisfaction ratings for car cleanliness are steadily on the increase.
Axle and Craig’s Cleaning have worked on a cleaning schedule together, with focus on car cleaning turnaround times
during peak hours. Axle is responsible for providing Craig and his team with timely notice of any changes that can
impact this schedule. For example, Axle may need to expand its cleaning requirements in the light of new service
offerings, such as the one Marco is developing.
Marco: Axle has a goal to become a greener company and help the environment. We would like
Craig’s Cleaning to support us in this goal and aim for the same sustainable growth as us.
2.6 Summary
This chapter has covered the key concepts in service management, in particular the nature of value and value co-
creation, organizations, products, and services. It has explored the often complex relationships between service
providers and consumers, and the various stakeholders involved. The chapter has also covered the key components
of consumer value: benefits, costs, and risks, and how important it is to understand the needs of the customer when
designing and delivering services. These concepts will be built upon over the next few chapters, and guidance
provided on applying them in practical and flexible ways.
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CHAPTER 3
THE FOUR DIMENSIONS OF
SERVICE MANAGEMENT
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The four dimensions of service 3
management
The previous chapter outlined the concepts that are key to service management. The objective of an organization is
to create value for its stakeholders, and this is achieved through the provision and consumption of services. The
ways in which the various components and activities of an organization work together to create this value is
described by the ITIL SVS. However, before this is explored further, the four dimensions of service management
must be introduced. These dimensions are relevant to, and impact upon, all elements of the SVS.
To achieve their desired outcomes and work as effectively as possible, organizations should consider all aspects of
their behaviour. In practice, however, organizations often become too focused on one area of their initiatives and
neglect the others. For example, process improvements may be planned without proper consideration for the people,
partners, and technology involved, or technology solutions can be implemented without due care for the es process
or people they are supposed to support. There are multiple aspects to service management, and none of these are
sufficient to produce the required outcomes when considered in isolation.
Key message
To support a holistic approach to service management, ITIL defines four dimensions that collectively are
critical to the effective and efficient facilitation of value for customers and other stakeholders in the form of
products and services. These are:
organizations and people
information and technology
partners and suppliers
value streams and processes.
These four dimensions represent perspectives which are relevant to the whole SVS, including the entirety of
the service value chain and all ITIL practices. The four dimensions are constrained or influenced by several
external factors that are often beyond the of the SVS.control
The four dimensions, and the relationships between them, are represented in .Figure 3.1
Failing to address all four dimensions properly may result in services becoming undeliverable, or not meeting
expectations of quality or . For example, failing to consider the value streams and processes dimension efficiency
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holistically can lead to wasteful work, duplication of efforts, or worse, work that conflicts with what is being done
elsewhere in the organization. Equally, ignoring the partners and suppliers dimension could mean that outsourced
services are misaligned with the needs of the organization. The four dimensions do not have sharp boundaries and
may overlap. They will sometimes interact in unpredictable ways, depending on the level of complexity and
uncertainty in which an organization operates.
Figure 3.1 The four dimensions of service management
It is important to note that the four dimensions of service management apply to all services being managed, as well
as to the SVS in general. It is therefore essential that these perspectives should be considered for every service, and
that each one should be addressed when managing and improving the SVS at all levels.
An overview of the four dimensions is provided below, and more detailed guidance on addressing the dimensions in
practice can be found in other ITIL 4 publications.
The ITIL story: The four dimensions of service management
Henri: As an IT team, we are responsible for the information and technology at Axle Car Hire.
However, effective IT management is much more than just managing technology. We must also
consider the wider organization and people involved in Axle’s car-hire service, our
relationships with partners and suppliers, and the value streams, processes, and technologies
that we use.
3.1 Organizations and people
The first dimension of service management is organizations and people.
The effectiveness of an organization cannot be assured by a formally established structure or system of authority
alone. The organization also needs a culture that supports its objectives, and the right level of capacity and
competency among its workforce. It is vital that the leaders of the organization champion and advocate values which
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motivate people to work in desirable ways. Ultimately, however, it is the way in which an organization carries out
its work that creates shared values and attitudes, which over time are considered the organization’s culture.
Key message
The complexity of organizations is growing, and it is important to ensure that the way an organization is
structured and managed, as well as its roles, responsibilities, and systems of authority and communication, is
well defined and supports its overall strategy and operating model.
As an example, it is useful to promote a culture of trust and transparency in an organization that encourages its
members to raise and escalate issues and facilitates corrective actions before any issues have an impact on
customers. Adopting the ITIL guiding principles can be a good starting point for establishing a healthy
organizational culture (see ).section 4.3
People (whether customers, employees of suppliers, employees of the service provider, or any other stakeholder in
the service relationship) are a key element in this dimension. Attention should be paid not only to the skills and
competencies of teams or individual members, but also to management and leadership styles, and to communication
and collaboration skills. As practices evolve, people also need to update their skills and competencies. It is
becoming increasingly important for people to understand the interfaces between their specializations and roles and
those of others in the organization, to ensure proper levels of collaboration and coordination. For example, in some
areas of IT (such as software development or user support), there is a growing acknowledgement that everyone
should have a broad general knowledge of the other areas of the organization, combined with a deep specialization
in certain fields.
Every person in the organization should have a clear understanding of their contribution towards creating value for
the organization, its customers, and other stakeholders. Promoting a focus on value creation is an effective method
of breaking down organizational silos.
The organizations and people dimension of a service covers roles and responsibilities, formal organizational
structures, culture, and required staffing and competencies, all of which are related to the creation, delivery, and
improvement of a service.
The ITIL story: Axle’s organization and people
Henri: The organizations and people dimension of Axle’s car-hire services includes my IT team
and other teams within the organization, such as procurement, HR, and facilities.
3.2 Information and technology
The second dimension of service management is information and technology. As with the other three dimensions,
information and technology applies both to service management and to the services being managed.
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Detailed guidance on the role of information and technology in service management can be found in other ITIL
publications.
Key message
When applied to the SVS, the information and technology dimension includes the information and knowledge
necessary for the management of services, as well as the technologies required. It also incorporates the
relationships between different components of the SVS, such as the inputs and outputs of activities and
practices.
The technologies that support service management include, but are not limited to, workflow s, management system
knowledge bases, inventory systems, communication systems, and analytical tools. Service management
increasingly benefits from developments in technology. Artificial intelligence, machine learning, and other cognitive
computing solutions are used at all levels, from strategic planning and portfolio optimization to system monitoring
and user support. The use of mobile platforms, cloud solutions, remote collaboration tools, automated testing, and
deployment solutions has become common practice among service providers.
In the context of a specific , this dimension includes the information created, managed, and used in the IT service
course of service provision and consumption, and the technologies that support and enable that service. The specific
information and technologies depend on the nature of the services being provided and usually cover all levels of IT
architecture, including applications, databases, communication systems, and their integrations. In many areas, IT
services use the latest technology developments, such as blockchain, artificial intelligence, and cognitive computing.
These services provide a business differentiation potential to early adopters, especially in highly competitive
industries. Other technology solutions, such as cloud computing or mobile apps, have become common practice
across many industries globally.
In relation to the information component of this dimension, organizations should consider the following questions:
What information is managed by the services?
What supporting information and knowledge are needed to deliver and manage the services?
How will the information and knowledge assets be protected, managed, archived, and disposed of?
For many services, information management is the primary means of enabling customer value. For example, an HR
service facilitates value creation for its customers by enabling the organization to access and maintain accurate
information about its employees, their employment, and their benefits, without exposure of private information to
unauthorized parties. A network management service facilitates value creation for its users by maintaining and
providing accurate information about an organization’s active network connections and utilization, allowing it to
adjust its network bandwidth capacity. Information is generally the key output of the majority of IT services which
are consumed by business customers.
Another key consideration in this dimension is how information is exchanged between different services and service
components. The information architecture of the various services needs to be well understood and continually
optimized, taking into account such criteria as the availability, , accessibility, timeliness, accuracy, and reliability
relevance of the information provided to users and exchanged between services.
The challenges of information management, such as those presented by security and regulatory compliance
requirements, are also a focus of this dimension. For example, an organization may be subject to the European
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Union’s General Data Protection Regulation (GDPR), which influences its information management policies and
practices. Other industries or countries may have regulations that impose constraints on the collection and
management of data of multinational corporations. For example, in the US the Health Insurance Portability and
Accountability Act of 1996 provides data privacy and security provisions for safeguarding medical information.
Most services nowadays are based on IT, and are heavily dependent on it. When considering a technology for use in
the planning, design, transition, or of a product or service, questions an organization may ask include:operation
Is this technology compatible with the current architecture of the organization and its customers? Do the different
technology products used by the organization and its stakeholders work together? How are emerging
technologies (such as machine learning, artificial intelligence, and ) likely to disrupt the Internet of Things
service or the organization?
Does this technology raise any regulatory or other compliance issues with the organization’s policies and
information security controls, or those of its customers?
Is this a technology that will continue to be viable in the foreseeable future? Is the organization willing to accept
the risk of using aging technology, or of embracing emerging or unproven technology?
Does this technology align with the strategy of the service provider, or its service consumers?
Does the organization have the right skills across its staff and suppliers to support and maintain the technology?
Does this technology have sufficient automation capabilities to ensure it can be efficiently developed, deployed,
and operated?
Does this technology offer additional capabilities that might be leveraged for other products or services?
Does this technology introduce new risks or constraints to the organization (for example, locking it into a specific
vendor)?
The culture of an organization may have a significant impact on the technologies it chooses to use. Some
organizations may have more of an interest in being at the cutting edge of technological advances than others.
Equally the culture of some organizations may be more traditional. One company may be keen to take advantage of
artificial intelligence, while another may barely be ready for advanced data analysis tools.
The nature of the business will also affect the technology it makes use of. For example, a company that does
significant business with government clients may have restrictions on the use of some technologies, or have
significantly higher security concerns that must be addressed. Other industries, such as finance or life sciences, are
also subject to restrictions around their use of technology. For example, they usually cannot use open source and
public services when dealing with sensitive data.
The ITIL story: Axle’s information and technology
Henri: The information and technology dimension of Axle Car Hire represents the information
created and managed by teams. It also includes the technologies that support and enable our
services. Applications and databases such as our booking app and financial system are part of
the information and technology dimension as well.
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Definition: Cloud computing
A model for enabling on-demand network access to a shared pool of configurable computing resources that
can be rapidly provided with minimal management effort or provider interaction.
ITSM in the modern world: cloud computing
ITSM has been focusing on value for users and customers for years, and this focus is usually technology-
agnostic: what matters is not the technology, but the opportunities it creates for the customers. Although for
the most part this is a perfectly acceptable approach, organizations cannot ignore new architectural solutions
and the evolution of technology in general. Cloud computing has become an architectural shift in IT,
introducing new opportunities and risks, and organizations have had to react to it in ways that are most
beneficial for themselves, their customers, and other stakeholders.
Key characteristics of cloud computing include:
on-demand availability (often self-service)
network access (often internet access)
resource pooling (often among multiple organizations)
rapid elasticity (often automatic)
measured service (often from service consumer’s perspective).
In the context of ITSM, cloud computing changes and the distribution of responsibilities service architecture
between service consumers, service providers, and their partners. It especially applies to in-house service
providers, i.e. the organization’s internal IT departments. In a typical situation, adoption of the cloud
computing model:
replaces some infrastructure, previously managed by the service provider, with a partner’s cloud service
decreases or removes the need for infrastructure management expertise and the resources of the service
provider
shifts the focus of service monitoring and control from the in-house infrastructure to a partner’s services
changes the cost structure of the service provider, removing specific capital expenditures and introducing new
operating expenditures and the need to manage them appropriately
introduces higher requirements for network availability and security
introduces new security and compliance risks and requirements, applicable to both the service provider and its
partner providing the cloud service
provides users with opportunities to scale service consumption using self-service via simple standard requests,
or even without any requests.
All these affect multiple service providers’ practices, including, but not limited to:
service level management
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• measurement and reporting
information security management
service continuity management
supplier management
incident management
problem management
service request management
service configuration management.
Another important effect of cloud computing, resulting from the computing resources’ elasticity, is that the
cloud infrastructure may enable significantly faster of new and changed services, thus supporting deployment
high-velocity service delivery. The ability to configure and deploy computing resources with the same speed as
new applications is an important prerequisite for the success of DevOps and similar initiatives. This supports
modern organizations in their need for faster time to market and digitalization of their services.
Considering the influence of cloud computing on organizations, it is important to make decisions about the use
of this model at the strategic level of the organization, involving all levels of stakeholders, from governance to
operations.
3.3 Partners and suppliers
The third dimension of service management is partners and suppliers. Every organization and every service depend
to some extent on services provided by other organizations.
Key message
The partners and suppliers dimension encompasses an organization’s relationships with other organizations
that are involved in the design, development, deployment, delivery, support, and/or continual improvement of
services. It also incorporates contracts and other agreements between the organization and its partners or
suppliers.
Relationships between organizations may involve various levels of integration and formality. This ranges from
formal contracts with clear separation of responsibilities, to flexible s where parties share common partnership
goals and risks, and collaborate to achieve desired outcomes. Some relationship examples are shown in . Table 3.1
Note that the forms of cooperation described are not fixed but exist as a spectrum. An organization acting as a
service provider will have a position on this spectrum, which will vary depending on its strategy and objectives for
customer relationships. Likewise, when an organization acts as a service consumer, the role it takes on will depend
on its strategy and objectives for and supplier management. When it comes to using partners and suppliers, sourcing
an organization’s strategy should be based on its goals, culture, and business environment. For example, some
organizations may believe that they will be best served by focusing their attention on developing certain core
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competencies, using partners and suppliers to provide other needs. Other organizations may choose to rely as much
as possible on their own resources, using partners and suppliers as little as possible. There are, of course, many
variations between these two opposite approaches.
Table 3.1 Relationships between organizations
One method an organization may use to address the partners and suppliers dimension is service integration and
management. This involves the use of a specially established integrator to ensure that service relationships are
properly coordinated. Service integration and management may be kept within the organization, but can also be
delegated to a trusted partner.
Factors that may influence an organization’s strategy when using suppliers include:
Some organizations may prefer to focus on their core competency and to outsource non-core Strategic focus
supporting functions to third parties; others may prefer to stay as self-sufficient as possible, retaining full control
over all important functions.
Some organizations have a historical preference for one approach over another. Longstanding Corporate culture
cultural bias is difficult to change without compelling reasons.
If a required resource or skillset is in short supply, it may be difficult for the service provider to Resource scarcity
acquire what is needed without engaging a supplier.
A decision may be influenced by whether the service provider believes that it is more economical to Cost concerns
source a particular requirement from a supplier.
The service provider may believe that it is less risky to use a supplier that already has Subject matter expertise
expertise in a required area, rather than trying to develop and maintain the subject matter expertise in house.
Government regulation or , industry codes of conduct, and social, political or legal External constraints policy
constraints may impact an organization’s supplier strategy.
Customer activity or demand for services may be seasonal or demonstrate high degrees of Demand patterns
variability. These patterns may impact the extent to which organizations use external service providers to cope
with variable demand.
The last decade has seen an explosion in companies that offer technical resources (infrastructure) or capabilities
(platforms, software) ‘as a service’. These companies bundle goods and services into a single product offering that
can be consumed as a utility, and is typically accounted for as operating expenditure. This frees companies from
investing in costly infrastructure and software assets that need to be accounted for as capital expenditure.
The ITIL story: Axle’s partners and suppliers
Henri: The partners and suppliers dimension for Axle includes suppliers such as Go Go Gas
and Craig’s Cleaning, as well as internet service providers and developers.
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3.4 Value streams and processes
The fourth dimension of service management is value streams and processes. Like the other dimensions, this
dimension is applicable to both the SVS in general, and to specific products and services. In both contexts it defines
the activities, workflows, controls, and s needed to achieve agreed objectives.procedure
Key message
Applied to the organization and its SVS, the value streams and processes dimension is concerned with how the
various parts of the organization work in an integrated and coordinated way to enable value creation through
products and services. The dimension focuses on what activities the organization undertakes and how they are
organized, as well as how the organization ensures that it is enabling value creation for all stakeholders
efficiently and effectively.
ITIL gives organizations acting as service providers an operating model that covers all the key activities required to
manage products and services effectively. This is referred to as the ITIL service value chain (see ).section 4.5
The service value chain operating model is generic and in practice it can follow different patterns. These patterns
within the value chain operation are called value streams.
3.4.1 Value streams for service management
Key message
A value stream is a series of steps that an organization uses to create and deliver products and services to a
service consumer. A value stream is a combination of the organization’s value chain activities (see section 4.5
for more details on value chain activities and for examples of value streams).Appendix A
Definition: Value stream
A series of steps an organization undertakes to create and deliver products and services to consumers.
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Identifying and understanding the various value streams an organization has is critical to improving its overall
performance. Structuring the organization’s activities in the form of value streams allows it to have a clear picture of
what it delivers and how, and to make continual improvements to its services.
Organizations should examine how they perform work and map all the value streams they can identify. This will
enable them to analyse their current state and identify any barriers to workflow and non-value-adding activities, i.e.
waste. Wasteful activities should be eliminated to increase productivity.
Opportunities to increase value-adding activities can be found across the service value chain. These may be new
activities or modifications to existing ones, which can make the organization more productive. Value stream
optimization may include process automation or adoption of emerging technologies and ways of working to gain
efficiencies or enhance user experience.
Value streams should be defined by organizations for each of their products and services. Depending on the
organization’s strategy, value streams can be redefined to react to changing demand and other circumstances, or
remain stable for a significant amount of time. In any case, they should be continually improved to ensure that the
organization achieves its objectives in an optimal way. Value stream mapping is described in more detail in other
ITIL 4 publications.
3.4.2 Processes
Key message
A process is a set of activities that transform inputs to outputs. Processes describe what is done to accomplish
an objective, and well-defined processes can improve productivity within and across organizations. They are
usually detailed in procedures, which outline who is involved in the process, and s, which work instruction
explain how they are carried out.
Definition: Process
A set of interrelated or interacting activities that transform inputs into outputs. Processes define the sequence
of activities and their dependencies.
When applied to products and services, this dimension helps to answer the following questions, critical to service
design, delivery, and improvement:
What is the generic delivery model for the service, and how does the service work?
What are the value streams involved in delivering the agreed outputs of the service?
Who, or what, performs the required service actions?
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Specific answers to these questions will vary depending on the nature and architecture of the service.
The ITIL story: Axle’s value streams and processes
Radhika: The value streams and processes dimension represents the series of activities that are
carried out within Axle. Value streams help Axle to identify wasteful activity and remove
obstacles that hinder the organization’s productivity.
3.5 External factors
Service providers do not operate in isolation. They are affected by many external factors, and work in dynamic and
complex environments that can exhibit high degrees of volatility and uncertainty and impose constraints on how the
service provider can work. To analyse these external factors, frameworks such as the PESTLE (or PESTEL) model
are used. PESTLE is an acronym for the political, economic, social, technological, legal, and environmental factors
that constrain or influence how a service provider operates.
Collectively, these factors influence how organizations configure their resources and address the four dimensions of
service management. For example:
Government and societal attitudes towards environmentally friendly products and services may result in the
organization investing more in tools and technologies that meet external expectations. An organization may
choose to partner with other organizations (or source services from external providers) who can demonstrate
environmentally friendly credentials. For example, some companies publish product environmental reports that
describe their products’ performance against their policies around climate change, safer materials, and other
resources.
Economic and societal factors may influence organizations to create several versions of the same product to address
various consumer groups that show different buying patterns. One example is music and video streaming
services, many of which have a free tier (with advertising), a premium tier (without advertising), and in some
cases a ‘family plan’ that allows multiple individual profiles under one paid-for account.
Data protection laws or regulations (like GDPR) have changed how companies must collect, process, access, and
store customer data, as well as how they work with external partners and suppliers.
3.6 Summary
The four dimensions represent a holistic approach to service management, and organizations should ensure that
there is a balance of focus between each dimension. The impact of external factors on the four dimensions should
also be considered. All four dimensions and the external factors that affect them should be addressed as they evolve,
considering emerging trends and opportunities. It is essential that an organization’s SVS is considered from all four
dimensions, as the failure to adequately address or account for one dimension, or an external factor, can lead to sub-
optimal products and services.
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The ITIL story: Balancing the four dimensions
Marco: To make Axle’s services as effective as possible, we use the best combination of our
people, our teams, our value streams, and our ways of working. We now engage a blended
approach to service management, incorporating DevOps, Design Thinking, and Agile into
product development. We also use new technologies such as robotics, AI, and machine learning,
striving to be efficient and Lean, and to automate wherever possible.
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CHAPTER 4
THE ITIL SERVICE VALUE
SYSTEM
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The ITIL service value system4
4.1 Service value system overview
For service management to function properly, it needs to work as a system. The ITIL SVS describes the inputs to
this system (opportunity and demand), the elements of this system (organizational governance, service management,
continual improvement, and the organization’s capabilities and resources), and the outputs (achievement of
organizational objectives and value for the organization, its customers, and other stakeholders).
Key message
The ITIL SVS describes how all the components and activities of the organization work together as a system to
enable value creation. Each organization’s SVS has interfaces with other organizations, forming an ecosystem
that can in turn facilitate value for those organizations, their customers, and other stakeholders.
The key inputs to the SVS are opportunity and demand. Opportunities represent options or possibilities to add value
for stakeholders or otherwise improve the organization. Demand is the need or desire for products and services
among internal and external consumers. The outcome of the SVS is value, that is, the perceived benefits, usefulness,
and importance of something. The ITIL SVS can enable the creation of many different types of value for a wide
group of stakeholders.
The ITIL SVS includes the following components:
Recommendations that can guide an organization in all circumstances, regardless of changes in Guiding principles
its goals, strategies, type of work, or management structure.
The means by which an organization is directed and controlled.Governance
A set of interconnected activities that an organization performs to deliver a valuable product Service value chain
or service to its consumers and to facilitate value realization.
Sets of organizational resources designed for performing work or accomplishing an objective.Practices
A recurring organizational activity performed at all levels to ensure that an organization’s Continual improvement
performance continually meets stakeholders’ expectations. ITIL 4 supports continual improvement with the ITIL
continual improvement model.
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The purpose of the SVS is to ensure that the organization continually co-creates value with all stakeholders through
the use and management of products and services. The structure of the SVS is shown in . The left side of Figure 4.1
the figure shows opportunity and demand feeding into the SVS from both internal and external sources. The right
side shows value created for the organization, its customers, and other stakeholders.
Figure 4.1 The ITIL service value system
The ITIL SVS describes how all the components and activities of the organization work together as a system to
enable value creation. These components and activities, together with the organization’s resources, can be
configured and reconfigured in multiple combinations in a flexible way as circumstances change, but this requires
the integration and coordination of activities, practices, teams, authorities and responsibilities, and all parties to be
truly effective.
One of the biggest challenges an organization can face when trying to work effectively and efficiently with a shared
, or to become more Agile and resilient, is the presence of organizational silos. Organizational silos can form vision
in many ways and for many different reasons. Silos can be resistant to change and can prevent easy access to the
information and specialized expertise that exists across the organization, which can in turn reduce efficiency and
increase both cost and risk. Silos also make it more difficult for communication or collaboration to occur across
different groups.
A siloed organization cannot act quickly to take advantage of opportunities or to optimize the use of resources
across the organization. It is often unable to make effective decisions about changes, due to limited visibility and
many hidden agendas. Practices can also become silos. Many organizations have implemented practices such as
organizational change management or incident management without clear interfaces with other practices. All
practices should have multiple interfaces with one another. The exchange of information between practices should
be triggered at key points in the workflow, and is essential to the proper functioning of the organization.
The architecture of the ITIL SVS specifically enables flexibility and discourages siloed working. The service value
chain activities and the practices in the SVS do not form a fixed, rigid structure. Rather, they can be combined in
multiple value streams to address the needs of the organization in a variety of scenarios. This publication provides
examples of service value streams, but none of them are definite or prescriptive. Organizations should be able to
define and redefine their value streams in a flexible, yet safe and efficient manner. This requires continual
improvement activity to be carried out at all levels of the organization; the ITIL continual improvement model helps
to structure this activity. Finally, the continual improvement and overall operation of an organization are shaped by
the ITIL guiding principles. The guiding principles create a foundation for a shared culture across the organization,
thus supporting collaboration and cooperation within and between the teams, and removing the need for constraints
and controls previously provided by silos.
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With these components, the ITIL SVS supports many work approaches, such as Agile, DevOps and Lean (see
), as well as traditional process and project management, with a flexible value-oriented operating model.Glossary
An organization can take any number of forms, including, but not limited to, sole trader, company, corporation,
firm, enterprise, authority, partnership, charity or institution, or any part or combination thereof, whether
incorporated or not, and be either public or private. This means that the scope of the SVS can be a whole
organization or a smaller subset of that organization. To achieve the maximum value from the SVS and to properly
address the issue of organizational silos, it is preferable to include the whole organization in the scope rather than a
subset.
The rest of this chapter will explore each element of the SVS.
Organizational agility and organizational resilience
For an organization to be successful, it must achieve organizational agility to support internal changes, and
to withstand and even thrive in changing external circumstances. The organization organizational resilience
must also be considered as part of a larger ecosystem of organizations, all delivering, coordinating, and
consuming products and services.
Organizational agility is the ability of an organization to move and adapt quickly, flexibly, and decisively to
support internal changes. These might include changes to the scope of the organization, mergers and
acquisitions, changing organizational practices, or technologies requiring different skills or organizational
structure and changes to relationships with partners and suppliers.
Organizational resilience is the ability of an organization to anticipate, prepare for, respond to, and adapt to
both incremental changes and sudden disruptions from an external perspective. External influences could be
political, economic, social, technological, legal or environmental. Resilience cannot be achieved without a
common understanding of the organization’s priorities and objectives, which sets the direction and promotes
alignment even as external circumstances change.
The ITIL SVS provides the means to achieve organizational agility and resilience and to facilitate the adoption
of a strong unified direction, focused on value and understood by everyone in the organization. It also enables
continual improvement throughout the organization.
4.2 Opportunity, demand, and value
Key message
Opportunity and demand trigger activities within the ITIL SVS, and these activities lead to the creation of
value. Opportunity and demand are always entering into the system, but the organization does not
automatically accept all opportunities or satisfy all demand.
Opportunity represents options or possibilities to add value for stakeholders or otherwise improve the organization.
There may not be demand for these opportunities yet, but they can still trigger work within the system.
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Organizations should prioritize new or changed services with opportunities for improvement to ensure their
resources are correctly allocated.
Demand represents the need or desire for products and services from internal and s. A definition external customer
of value, and what constitutes value for different stakeholders, can be found in .Chapter 2
4.3 The ITIL guiding principles
Key message
A guiding principle is a recommendation that guides an organization in all circumstances, regardless of
changes in its goals, strategies, type of work, or management structure. A guiding principle is universal and
enduring.
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Table 4.1 Overview of the guiding principles
Guiding principle Description
Focus on value Everything that the organization does needs to map, directly or indirectly,
to value for the stakeholders.
The focus on value principle encompasses many perspectives, including
the experience of customers and users.
Start where you are Do not start from scratch and build something new without considering
what is already available to be leveraged. There is likely to be a great deal
in the current services, processes, programmes, s, and people that project
can be used to create the desired outcome.
The current state should be investigated and observed directly to make sure
it is fully understood.
Progress iteratively with feedback Do not attempt to do everything at once. Even huge initiatives must be
accomplished iteratively.
By organizing work into smaller, manageable sections that can be executed
and completed in a timely manner, it is easier to maintain a sharper focus
on each effort.
Using feedback before, throughout, and after each iteration will ensure that
actions are focused and appropriate, even if circumstances change.
Collaborate and promote visibility Working together across boundaries produces results that have greater buy-
in, more relevance to objectives, and increased likelihood of long-term
success.
Achieving objectives requires information, understanding, and trust. Work
and consequences should be made visible, hidden agendas avoided, and
information shared to the greatest degree possible.
Think and work holistically No service, or element used to provide a service, stands alone. The
outcomes achieved by the service provider and service consumer will
suffer unless the organization works on the service as a whole, not just on
its parts.
Results are delivered to internal and external customers through the
effective and efficient management and dynamic integration of
information, technology, organization, people, practices, partners, and
agreements, which should all be coordinated to provide a defined value.
Keep it simple and practical If a process, service, action or fails to provide value or produce a metric
useful outcome, eliminate it. In a process or procedure, use the minimum
number of steps necessary to accomplish the objective(s). Always use
outcome-based thinking to produce practical solutions that deliver results.
Optimize and automate Resources of all types, particularly HR, should be used to their best effect.
Eliminate anything that is truly wasteful and use technology to achieve
whatever it is capable of. Human intervention should only happen where it
really contributes value.
The guiding principles defined here embody the core messages of ITIL and of service management in general,
supporting successful actions and good decisions of all types and at all levels. They can be used to guide
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organizations in their work as they adopt a service management approach and adapt ITIL guidance to their own
specific needs and circumstances. The guiding principles encourage and support organizations in continual
improvement at all levels.
These principles are also reflected in many other frameworks, methods, s, philosophies, and/or bodies of standard
knowledge, such as Lean, Agile, DevOps, and COBIT. This allows organizations to effectively integrate the use of
multiple methods into an overall approach to service management.
The guiding principles are applicable to practically any initiative and to all relationships with stakeholder groups.
For example, the first principle, focus on value, can (and should) be applied not only to service consumers, but to all
relevant stakeholders and their respective definitions of value.
Table 4.1 provides a high-level introduction to the guiding principles. Additional details for each principle are
presented later in this chapter.
ITIL, Agile, and DevOps
Agile methods, when applied to software development, focus on the delivery of incremental changes to
software products while responding to the changing (or evolving) needs of users. They foster a culture of
continual learning, flexibility, and willingness to try new approaches and adapt to rapidly changing needs.
Agile ways of working include techniques such as timeboxing work, self-organizing and cross-functional
teams, and ongoing collaboration and communication with customers and users.
Agile software development teams often focus on the rapid delivery of product increments at the expense of a
more holistic view that considers the operability, reliability, and of these products in a maintainability live
. Similarly, continual learning and improvement initiatives can focus on bettering the articulation environment
and prioritization of user needs, or streamlining the procedures to develop, test, and deploy working software.
While these initiatives can provide valuable outcomes, they also run the risk of being out of sync with other
initiatives at a service level.
Just as Agile techniques provide service organizations with a flow of product and software increments, ITIL
can also provide software development organizations with a wider perspective and language with which to
engage other service teams. Adopting Agile without ITIL can lead to higher costs over time, such as the costs
of adopting different technologies and architectures, and costs to release, operate, and maintain software
increments. Similarly, implementing ITIL without Agile techniques can risk losing focus on value for
customers and users, creating slow-moving and highly centralized bureaucracies.
When Agile and ITIL are adopted together, software development and service management can progress at a
similar cadence, share a common terminology, and ensure that the organization continues to co-create value
with all its stakeholders. Some of the ways in which ITIL and Agile can work together include:
streamlining practices such as change enablement
establishing procedures to incorporate and prioritize the management of unplanned interruptions ( s), incident
and to investigate the causes of failure
separating interactions, if necessary, between ‘systems of record’ (e.g. the configuration management
) needed to manage services from ‘systems of engagement’ (e.g. collaboration tools) used by database
software development teams.
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DevOps methods build on Agile software development and service management techniques by emphasizing
close collaboration between the roles of software development and technical operations. Using high degrees of
automation to free up the time of skilled professionals so that they can focus on value-adding activities,
DevOps is able to shine a light on aspects such as operability, reliability, and maintainability of software
products that can assist in the management of services. Cultural aspects that DevOps practitioners advocate
can, and should, be extended across the value stream and all service value chain activities so that product and
service teams are aligned with the same goals and use the same methods.
It is often said that DevOps combines software development techniques (Agile), good governance and a
holistic approach to value co-creation (ITIL), and an obsession with learning about and improving the way in
which value is generated (Lean). As such, the adoption of DevOps methods presents further opportunities to
improve the way in which software products are developed and managed, such as:
creating fast s from delivery and support to software development and technology operationsfeedback loop
streamlining value chain activities and value streams so that demand for work can be quickly converted to
value for multiple stakeholders
differentiating deployment management from release management
advocating a ‘systems view’ that emphasizes close collaboration between enterprise governance, service
teams, software development, and technology operations.
4.3.1 Focus on value
Key message
All activities conducted by the organization should link back, directly or indirectly, to value for itself, its
customers, and other stakeholders.
This section is mostly focused on the creation of value for service consumers. However, a service also contributes to
value for the organization and other stakeholders. This value may come in various forms, such as revenue, customer
loyalty, lower cost, or growth opportunities. The following recommendations can be adapted to address various
stakeholder groups and the value that is created for them by the organization.
Who is the service consumer?4.3.1.1
When focusing on value, the first step is to know who is being served. In each situation the service provider must,
therefore, determine who the service consumer is and who the key stakeholders are (for example, customers, users,
or sponsors; see for more details). In doing this, the service provider should consider who will receive section 2.2
value from what is being delivered or improved.
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The ITIL story: Axle’s new technology
Axle is considering introducing several pieces of new technology into their cars. In the following sections the
Axle team looks at what new technology could be introduced and uses the ITIL guiding principles to help
decide on the best course of action.
Su: One aspect of our service we are considering is the collection and return of vehicles. This
process remains very manual. Some of our regional depots continue to use paper-based forms to
register customers. Customers don’t want to waste time completing forms for identification
when this information has already been provided during the online booking process.
To improve the customer identification process, Axle could use biometric technology to identify
our customers.
Marco: Biometric technology uses scanned graphical data for personal identification. It’s fast
and reliable, and widely used in other industries. For example, the airline industry is using it for
security screening, check-in, and even for aircraft boarding. We could use fingerprint or facial
recognition scans to quickly identify our customers, and automate the car collection and return
process.
Radhika: We need to be mindful of regulations such as GDPR and the possible risks to data
security this technology could bring.
Marco: Axle also wants to trial automated identification of damage to returned vehicles,
including scratches, dents, and broken lights. Potentially the technology could even identify fuel
levels. This would automate the calculation of any fuel charges incurred by our customers,
which is also a manual process.
Su: Our customers want simplicity and speed while maintaining comfort and safety on the road.
Biometric technology and car scanning would be a source of opportunity to meet evolving
customer demands.
Marco: Our services already rely on technology, and the intelligence of smartphones and
personal devices to meet customer needs and expectations. The adoption of biometric
technology is a natural progression. Anyone who can access their phone with a thumbprint or
facial recognition will be comfortable and confident using the same technology to collect or
return a car.
Henri: We can’t make the mistake of trying to implement every innovation at once, even if they
all sound like the ideal solution for Axle Car Hire. We need a framework in place to make sure
value is realized, and to govern our decisions. It’s also important that none of our existing
customers are disadvantaged, even as we venture into new surroundings. For example, not all
our customers are tech-savvy. This is especially true for our elderly customers, who represent a
large percentage of our customer base for leisure travel. We also need to balance innovation
with existing operational demands.
The consumer’s perspectives of value4.3.1.2
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Next the service provider must understand what is truly of value to the service consumer. The service provider needs
to know:
why the consumer uses the services
what the services help them to do
how the services help them achieve their goals
the role of cost/financial consequences for the service consumer
the risks involved for the service consumer.
Value can come in many forms, such as increased productivity, reduced negative impact, reduced costs, the ability
to pursue new markets, or a better competitive position. Value for the service consumer:
is defined by their own needs
is achieved through the support of intended outcomes and optimization of the service consumer’s costs and risks
changes over time and in different circumstances.
The customer experience4.3.1.3
An important element of value is the experience that service consumers have when they interact with the service and
the service provider. This is frequently called customer experience (CX) or e (UX) depending on the user experienc
adopted definitions, and it must be actively managed.
CX can be defined as the entirety of the interactions a customer has with an organization and its products. This
experience can determine how the customer feels about the organization and its products and services.
CX is both objective and subjective. For example, when a customer orders a product and receives what they ordered
at the promised price and in the promised delivery time, the success of this aspect of their experience is objectively
measurable. On the other hand, if they don’t like the style or layout of the website they are ordering from, this is
subjective. Another customer might really enjoy the design.
Applying the principle4.3.1.4
To apply this principle successfully, consider this advice:
Understand their expected outcomes, how each service Know how service consumers use each service
contributes to these, and how the service consumers perceive the service provider. Collect feedback on value on
an ongoing basis, not just at the beginning of the service relationship.
Teach staff to be aware of who their customers are and to understand Encourage a focus on value among all staff
CX.
The organization Focus on value during normal operational activity as well as during improvement initiatives
as a whole contributes to the value that the customer perceives, and so everybody within the organization must
maximize the value they create. The creation of value should not be left only to the people working on exciting
projects and new things.
Everybody involved in an improvement Include focus on value in every step of any improvement initiative
initiative needs to understand what outcomes the initiative is trying to facilitate, how its value will be measured,
and how they should be contributing to the co-creation of that value.
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The ITIL story: Focus on value
Radhika: When Axle expanded to the Asia-Pacific region, we undertook research focused on
customers travelling outside their native countries. The results found that American and
European customers travelling to these areas had concerns around unfamiliar road rules and
safety.
Marco: Axle is introducing a certified, third-party driver assistance system called Axle Aware.
The system checks external surroundings and internal conditions in the car. It includes cameras
to monitor the area around the car, and an artificial intelligence program with local road rules.
It can even let the driver know when fatigue is starting to set in.
The system will alert the driver to approaching dangers and potential road rule breaches. For
example, in Australia, local road rules dictate that drivers are required to give a minimum of 1
metre when passing cyclists at a speed of 60 km/h or less, or 1.5 metres when the speed is more
than 60 km/h.
Su: Many visiting tourists will be mostly focused on driving on the correct side of the road and
won’t know about this rule, but the Axle Aware system does!
Marco: Studies have shown that systems such as this significantly decrease accident rates and
serious injuries.
Su: This means that the value to our consumers is a safer travel experience. It will be cheaper
too, as they will have fewer penalties for breaking rules they are not familiar with!
Henri: The value for Axle Car Hire is improved customer satisfaction, reduced repair costs and
lower insurance premiums.
Marco: This type of innovation will also provide additional value for some of our partners and
suppliers.
Radhika: For example, we’ve updated our contract with our fleet maintenance partner.
Maintenance will now include Axle Aware. The value to our maintenance partner is the
additional revenue.
4.3.2 Start where you are
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Key message
In the process of eliminating old, unsuccessful methods or services and creating something better, there can be
great temptation to remove what has been done in the past and build something completely new. This is rarely
necessary, or a wise decision. This approach can be extremely wasteful, not only in terms of time, but also in
terms of the loss of existing services, processes, people, and tools that could have significant value in the
improvement effort. Do not start over without first considering what is already available to be leveraged.
The ITIL story: Axle’s booking app
Marco: The Axle booking app was first developed two years ago. The app is no longer meeting
business requirements. It can’t cater for the advances in technology we’re using now, such as
the biometric system and the driver assistance system.
For example, we need our app to have the capability to scan and validate our customers’
fingerprints and facial images. The current coding simply can’t support that. We need a new
app!
Assess where you are4.3.2.1
Services and methods already in place should be measured and/or observed directly to properly understand their
current state and what can be re-used from them. Decisions on how to proceed should be based on information that
is as accurate as possible. Within organizations there is frequently a discrepancy between reports and reality. This is
due to the difficulty of accurately measuring certain data, or the unintentional bias or distortion of data that is
produced through reports. Getting data from the source helps to avoid assumptions which, if proven to be
unfounded, can be disastrous to timelines, budgets, and the quality of results.
Those observing an activity should not be afraid to ask what may seem to be stupid questions. It can sometimes be
beneficial for a person with little or no prior knowledge of the service to be part of the observation, as they have no
preconceptions of the service, and may spot things that those more closely involved with it would miss.
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•The ITIL story: Assessing the current state
Henri: Everyone likes the idea of a new app, and IT is keen to start gathering user requirements
so that we can start development. However, before we develop an entirely new app, let’s assess
the current state of the app we have to see if there’s any functionality we can re-use.
The current process for booking a car meets basic requirements, and doesn’t need to change.
We just need additional functionality. For example, the process for recording, storing, and
calculating points for our loyalty programme won’t change.
We should also consider the limits of the technology that our customers use. If we want to
introduce biometric data recognition, users will need to have modern devices. I am not sure they
all do, so we should investigate constraints and opportunities here.
Marco: Our current booking app is working well. Incident data indicates that customers make
very few s to the service desk. This indicates that the current functionality is fit for use and call
meets customer requirements.
Henri: However, our focus groups indicate that customers avoid using the app because it’s slow
and difficult to use. Previously, upgrades focused on technology, not the requirements of our
customers. We didn’t have the flexibility to easily configure functionality to match new and
changing service offerings. So the reliability and usability of the booking app can’t be assessed
solely using the data from incidents logged.
We need to confirm these findings with other research.
The role of measurement4.3.2.2
The use of measurement is important to this principle. It should, however, support but not replace what is observed,
as over-reliance on data analytics and reporting can unintentionally introduce biases and risks in decision-making.
Organizations should consider a variety of techniques to develop knowledge of the environments in which they
work. Although it is true that some things can only be understood through measuring their effect (for example,
natural phenomena such as the wind), direct observation should always be the preferred option. Too often existing
data is used with no consideration of direct personal investigation.
It should be noted that the act of measuring can sometimes affect the results, making them inaccurate. For example,
if a knows it is being monitored on length of time spent on the phone, it might focus too much on service desk
minimizing customer engagement (thus leading to good reports), rather than actually helping users resolve issues to
their satisfaction. People are very creative in finding ways to meet the metrics they are measured against. Therefore,
metrics need to be meaningful and directly relate to the desired outcome.
When a measure becomes a target, it ceases to be a good measure Goodhart’s Law
Applying the principle4.3.2.3
Having a proper understanding of the current state of services and methods is important to selecting which elements
to re-use, alter, or build upon. To apply this principle successfully, consider this advice:
Look at what exists as objectively as possible, using the customer or the desired outcome as the starting point. Are
the elements of the current state fit for purpose and fit for use? There are likely to be many elements of the
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current services, practices, projects, and skills that can be used to create the desired future state, provided the
people making this judgement are objective.
When examples of successful practices or services are found in the current state, determine if and how these can be
replicated or expanded upon to achieve the desired state. In many, if not most, cases, leveraging what already
exists will reduce the amount of work needed to transition from the current state to the desired state. There
should be a focus on learning and improvement, not just replication and expansion.
Apply your risk management skills. There are risks associated with re-using existing practices and processes, such
as the continuation of old behaviours that are damaging to the service. There are also risks associated with
putting something new in place, such as new procedures not being performed correctly. These should be
considered as part of the decision-making process, and the risks of making or not making a change evaluated to
decide on the best course of action.
Recognize that sometimes nothing from the current state can be re-used. Regardless of how desirable it may be to
re-use, repurpose and recycle, or even upcycle, there will be times when the only way to achieve the desired
result is to start over entirely. It should be noted, however, that these situations are very rare.
4.3.3 Progress iteratively with feedback
Key message
Resist the temptation to do everything at once. Even huge initiatives must be accomplished iteratively. By
organizing work into smaller, manageable sections that can be executed and completed in a timely manner, the
focus on each effort will be sharper and easier to maintain.
Improvement iterations can be sequential or simultaneous, based on the requirements of the improvement and what
resources are available. Each individual iteration should be both manageable and managed, ensuring that tangible
results are returned in a timely manner and built upon to create further improvement.
A major improvement initiative or programme may be organized into several significant improvement initiatives,
and each of these may, in turn, comprise smaller improvement efforts. The overall initiative or programme, as well
as its component iterations, must be continually re-evaluated and potentially revised to reflect any changes in
circumstances and ensure that the focus on value has not been lost. This re-evaluation should make use of a wide
range of feedback channels and methods to ensure that the of the initiative and its progress are properly status
understood.
The role of feedback4.3.3.1
Whether working to improve a service, group of services, practice, process, technical environment, or other service
management element, no improvement iteration occurs in a vacuum. While the iteration is being undertaken,
circumstances can change and new priorities can arise, and the need for the iteration may be altered or even
eliminated. Seeking and using feedback before, throughout, and after each iteration will ensure that actions are
focused and appropriate, even in changing circumstances.
A feedback loop is a term commonly used to refer to a situation where part of the output of an activity is used for
new input. In a well-functioning organization, feedback is actively collected and processed along the value chain.
Well-constructed feedback mechanisms facilitate understanding of:
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• end user and customer perception of the value created
the efficiency and of value chain activitieseffectiveness
the effectiveness of service governance as well as management controls
the interfaces between the organization and its partner and supplier network
the demand for products and services.
Once received, feedback can be analysed to identify improvement opportunities, risks, and issues.
Iteration and feedback together4.3.3.2
Working in a timeboxed, iterative manner with feedback loops embedded into the process allows for:
greater flexibility
faster responses to customer and business needs
the ability to discover and respond to failure earlier
an overall improvement in quality.
Having appropriate feedback loops between the participants of an activity gives them a better understanding of
where their work comes from, where their outputs go, and how their actions and outputs affect the outcomes, which
in turn enables them to make better decisions.
The ITIL story: Progress iteratively
Marco: It’s now been three months since Axle released the first iteration of its new app. We
began by making it available solely to trusted VIP customers. We worked with their feedback to
refine the booking process.
Radhika: We learned that the app needed to be flexible so we could make changes easily based
on rapidly evolving customer requirements. For example, our business customers wanted the
app to automatically record distance travelled. Working with our product team, we were easily
able to add this functionality.
Su: The app is now easily configurable, allowing Axle to quickly add new functions and features
based on customer feedback.
Applying the principle4.3.3.3
To apply this principle successfully, consider this advice:
Sometimes the greatest enemy to progressing iteratively is the desire Comprehend the whole, but do something
to understand and account for everything. This can lead to what is sometimes called ‘analysis paralysis’, in which
so much time is spent analysing the situation that nothing ever gets done about it. Understanding the big picture
is important, but so is making progress.
Change is happening constantly, so it is very The ecosystem is constantly changing, so feedback is essential
important to seek and use feedback at all times and at all levels.
Just because an iteration is small enough to be done quickly does not mean that it Fast does not mean incomplete
should not include all the elements necessary for success. Any iteration should be produced in line with the
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concept of the . A minimum viable product is a version of the final product which minimum viable product
allows the maximum amount of validated learning with the least effort.
4.3.4 Collaborate and promote visibility
Key message
When initiatives involve the right people in the correct roles, efforts benefit from better buy-in, more relevance
(because better information is available for decision-making) and increased likelihood of long-term success.
Creative solutions, enthusiastic contributions, and important perspectives can be obtained from unexpected sources,
so inclusion is generally a better policy than exclusion. Cooperation and collaboration are better than isolated work,
which is frequently referred to as ‘silo activity’. Silos can occur through the behaviour of individuals and teams, but
also through structural causes. This typically happens where functions or business units in an organization are
impeded or unable to collaborate, because their processes, systems, documentation, and communications are
designed to fulfil the needs of only a specific part of the organization. Applying the guiding principle of think and
work holistically (see ) can help organizations to break down barriers between silos of work.section 4.3.5
Recognition of the need for genuine collaboration has been one of the driving factors in the evolution of what is now
known as DevOps. Without effective collaboration, neither Agile, Lean, nor any other ITSM framework or method
will work.
Working together in a way that leads to real accomplishment requires information, understanding, and trust. Work
and its results should be made visible, hidden agendas should be avoided, and information should be shared to the
greatest degree possible. The more people are aware of what is happening and why, the more they will be willing to
help.
When improvement activity occurs in relative silence, or with only a small group being aware of the details,
assumptions and rumours can prevail. Resistance to change will often arise as staff members speculate about what is
changing and how it might impact them.
Whom to collaborate with4.3.4.1
Identifying and managing all the stakeholder groups that an organization deals with is important, as the people and
perspectives necessary for successful collaboration can be sourced within these stakeholder groups. As the name
suggests, a stakeholder is anyone who has a stake in the activities of the organization, including the organization
itself, its customers and/or users, and many others. The scope of stakeholders can be extensive.
The first and most obvious stakeholder group is the customers. The main goal of a service provider is to facilitate
outcomes that its customers are interested in, so the customers have a large stake in the service provider’s ability to
manage services effectively. Some organizations, however, do a poor job of interacting with customers. A service
provider may feel that it is too difficult to get input or feedback from the customer, and that the resulting delays are
a waste of time. Equally, customers may feel that, after they have defined their requirements, the service provider
can be left to deliver the service with no further contact needed. When it comes to the improvement of a service
provider’s practices, the customer may not see any need to be involved at all. In the end, however, the right level of
collaboration with customers will lead to better outcomes for the organization, its customers, and other stakeholders.
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Other examples of stakeholder collaboration include:
developers working with other internal teams to ensure that what is being developed can be operated efficiently and
effectively. Developers should collaborate with technical and non-technical operational teams to make sure that
they are ready, willing, and able to transition the new or changed service into operation, perhaps even
participating in testing. Developers can also work with operations teams to investigate defects ( s) and to problem
develop s or permanent fixes to resolve these defectsworkaround
suppliers collaborating with the organization to define its requirements and brainstorm solutions to customer
problems
relationship managers collaborating with service consumers to achieve a comprehensive understanding of service
consumer needs and priorities
customers collaborating with each other to create a shared understanding of their business issues
internal and external suppliers collaborating with each other to review shared processes and identify opportunities
for optimization and potential automation.
Communication for improvement4.3.4.2
The contribution to improvement of each stakeholder group at each level should be understood; it is also important
to define the most effective methods to engage with them. For example, the contribution to improvement from
customers of a public cloud service may be through a survey or checklist of options for different functionalities. For
an group, the contribution to improvement may come from feedback solicited via a workshop or internal customer
a collaboration tool on the organization’s intranet.
Some contributors may need to be involved at a very detailed level, while others can simply be involved as
reviewers or approvers. Depending on the service and the relationship between the service provider and the service
consumer, the expectations about the level and type of collaboration can vary significantly.
Increasing urgency through visibility4.3.4.3
When stakeholders (whether internal or external) have poor visibility of the workload and progression of work, there
is a risk of creating the impression that the work is not a priority. If an initiative is communicated to a team,
department, or another organization and then is never, or rarely, mentioned again, the perception will be that the
change is not important. Equally, when staff members attempt to prioritize improvement work versus other tasks
that have daily urgency, improvement work may seem to be a low-priority activity unless its importance has been
made transparent and it is supported by the organization’s management.
Insufficient visibility of work leads to poor decision-making, which in turn impacts the organization’s ability to
improve internal capabilities. It will then become difficult to drive improvements as it will not be clear which ones
are likely to have the greatest positive impact on results. To avoid this, the organization needs to perform such
critical analysis activities as:
understanding the flow of work in progress
identifying bottlenecks, as well as excess capacity
uncovering waste.
It is important to involve and address the needs of stakeholders at all levels. Leaders at various levels should also
provide appropriate information relating to the improvement work in their own communications to others. Together,
these actions will serve to reinforce what is being done, why it is being done, and how it relates to the stated vision,
, goals, and objectives of the organization. Determining the type, method, and frequency of such messaging mission
is one of the central activities related to communication.
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The ITIL story: Working collaboratively
Henri: As well as being iterative, our work on the new Axle booking app is also collaborative.
We include many of our teams, such as developers, testers, and support staff, and of course, our
customers and users. This approach enables us to improve our services in a more responsive
and targeted manner, based on feedback.
Applying the principle4.3.4.4
To apply this principle successfully, consider this advice:
It is not necessary, or even always wise, to get consensus from everyone Collaboration does not mean consensus
involved in an initiative before proceeding. Some organizations are so concerned with getting consensus that
they try to make everyone happy and end up either doing nothing or producing something that does not properly
suit anyone’s needs.
In an attempt to bring different stakeholders into the loop, many Communicate in a way the audience can hear
organizations use very traditional methods of communication, or they use the same method for all
communication. Selecting the right method and message for each audience is critical for success.
Making decisions in the absence of data is risky. Decisions should be Decisions can only be made on visible data
made about what data is needed, and therefore what work needs to be made visible. There may be a cost to
collecting data, and the organization must balance that cost against the benefit and intended usage of the data.
4.3.5 Think and work holistically
Key message
No service, practice, process, department, or supplier stands alone. The outputs that the organization delivers
to itself, its customers, and other stakeholders will suffer unless it works in an integrated way to handle its
activities as a whole, rather than as separate parts. All the organization’s activities should be focused on the
delivery of value.
Services are delivered to internal and external service consumers through the coordination and integration of the
four dimensions of service management (see ).Chapter 3
Taking a holistic approach to service management includes establishing an understanding of how all the parts of an
organization work together in an integrated way. It requires end-to-end visibility of how demand is captured and
translated into outcomes. In a complex system, the alteration of one element can impact others and, where possible,
these impacts need to be identified, analysed and planned for.
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The ITIL story: Think and work holistically
Su: Currently, Axle is working on many initiatives. We have a schedule of iterative releases of
our new booking app, as well as our Axle Aware advanced driver assistance system, and the new
biometric scanning for collection and return of vehicles.
Henri: With so much activity, we need to understand the impacts both upstream and
downstream. For example, a decision to expand our booking app with a new functionality would
need to consider any resource constraints for our support teams.
Applying the principle4.3.5.1
To apply this principle successfully, consider this advice:
Different levels of complexity require different heuristics for decision-Recognize the complexity of the systems
making. Applying methods and rules designed for a simple system can be ineffective or even harmful in a
complex system, where relationships between components are complicated and change more frequently.
If the right mechanisms are put in place for all relevant Collaboration is key to thinking and working holistically
stakeholders to collaborate in a timely manner, it will be possible to address any issue holistically without being
unduly delayed.
Draw on Where possible, look for patterns in the needs of and interactions between system elements
knowledge in each area to identify what is essential for success, and which relationships between elements
influence the outcomes. With this information, needs can be anticipated, standards can be set, and a holistic view
point can be achieved.
Where the opportunity and sufficient resources are available, Automation can facilitate working holistically
automation can support end-to-end visibility for the organization and provide an efficient means of integrated
management.
4.3.6 Keep it simple and practical
Key message
Always use the minimum number of steps to accomplish an objective. Outcome-based thinking should be used
to produce practical solutions that deliver valuable outcomes. If a process, service, action, or metric fails to
provide value or produce a useful outcome, then eliminate it. Although this principle may seem obvious, it is
frequently ignored, resulting in overly complex methods of work that rarely maximize outcomes or minimize
cost.
Trying to provide a solution for every exception will often lead to over-complication. When creating a process or a
service, designers need to think about exceptions, but they cannot cover them all. Instead, rules should be designed
that can be used to handle exceptions generally.
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The ITIL story: Keep it simple and practical
Su: Axle’s marketing department has indicated they would like to launch a new end-of-year
promotion. The promotion would include a free upgrade to a luxury vehicle during February
and the chance to win an overseas holiday.
To enter, customers will submit an article titled ‘My Best Driving Holiday Adventure’. The
marketing team will then collect and analyse the customer data and create an app that targets
their travel preferences.
Henri: Our developers are already busy with an implementation schedule for biometric
services. We need speed to market for this functionality. We must prioritize our work based on
the expected value.
Judging what to keep4.3.6.1
When analysing a practice, process, service, metric, or other improvement target, always ask whether it contributes
to value creation.
When designing or improving service management, it is better to start with an uncomplicated approach and then
carefully add controls, activities, or metrics when it is seen that they are truly needed.
Critical to keeping service management simple and practical is understanding exactly how something contributes to
value creation. For example, a step in a process may be perceived by the operational staff involved as a waste of
time. However, from a corporate perspective, the same step may be important for regulatory compliance and
therefore valuable in an indirect, but nevertheless important, way. It is necessary to establish and communicate a
holistic view of the organization’s work so that individual teams or groups can think holistically about how their
work is being influenced by, and in turn influences, others.
The ITIL story: Judging what to keep
Marco: Our original booking app captured a lot of data, such as how long it took a customer to
complete each form in the booking app. But we discovered that the data provided little value for
decision-making. The true value lay in how long the overall booking process took. We refined
the booking app fields and improved its overall speed by removing this data capture function.
Conflicting objectives4.3.6.2
When designing, managing, or operating practices, be mindful of conflicting objectives. For example, the
management of an organization may want to collect a large amount of data to make decisions, whereas the people
who must do the record-keeping may want a simpler process that does not require as much data entry. Through the
application of this and the other guiding principles, the organization should agree on a balance between its
competing objectives. In this example, this could mean that services should only generate data that will truly provide
value to the decision-making process, and record-keeping should be simplified and automated where possible to
maximize value and reduce non-value-adding work.
Applying the principle4.3.6.3
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To apply this principle successfully, consider this advice:
Every activity should contribute to the creation of value.Ensure value
It may seem harder to simplify, but it is often more effective.Simplicity is the ultimate sophistication
Minimizing activities to include only those with value for one or more Do fewer things, but do them better
stakeholders will allow more focus on the quality of those actions.
A process that is too complicated and bureaucratic is a poor use of the Respect the time of the people involved
time of the people involved.
To embed a practice, make sure it is easy to follow.Easier to understand, more likely to adopt
Whether in a project, or when improving daily operations Simplicity is the best route to achieving quick wins
activities, s allow organizations to demonstrate progress and manage stakeholder expectations. quick win
Working in an iterative way with feedback will quickly deliver incremental value at regular intervals.
4.3.7 Optimize and automate
Key message
Organizations must maximize the value of the work carried out by their human and technical resources. The
four dimensions model (outlined in ) provides a holistic view of the various constraints, resource Chapter 3
types, and other areas that should be considered when designing, managing, or operating an organization.
Technology can help organizations to scale up and take on frequent and repetitive tasks, allowing human
resources to be used for more complex decision-making. However, technology should not always be relied
upon without the capability of human intervention, as automation for automation’s sake can increase costs and
reduce organizational robustness and resilience.
Optimization means to make something as effective and useful as it needs to be. Before an activity can be
effectively automated, it should be optimized to whatever degree is possible and reasonable. It is essential that limits
are set on the optimization of services and practices, as they exist within a set of constraints which may include
financial limitations, compliance requirements, time constraints, and resource availability.
The road to optimization4.3.7.1
There are many ways in which practices and services can be optimized. The concepts and practices described in
ITIL, particularly the practices of continual improvement, and measurement and reporting (see and sections 5.1.2
), are essential to this effort. The specific practices an organization uses to improve and optimize performance 5.1.5
may draw upon guidance from ITIL, Lean, DevOps, , and other sources. Regardless of the specific Kanban
techniques, the path to optimization follows these high-level steps:
This includes agreeing the overall Understand and agree the context in which the proposed optimization exists
vision and objectives of the organization.
This will help to understand where it can be improved and Assess the current state of the proposed optimization
which improvement opportunities are likely to produce the biggest positive impact.
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• Agree what the future state and priorities of the organization should be, focusing on simplification and value
This typically also includes standardization of practices and services, which will make it easier to automate or
optimize further at a later point.
Ensure the optimization has the appropriate level of stakeholder engagement and commitment
Use metrics and other feedback to check progress, stay on track, Execute the improvements in an iterative way
and adjust the approach to the optimization as needed.
This will help to identify opportunities to improve methods of Continually monitor the impact of optimization
working.
Using automation4.3.7.2
Automation typically refers to the use of technology to perform a step or series of steps correctly and consistently
with limited or no human intervention. For example, in organizations adopting , it refers to continuous deployment
the automatic and continuous release of code from development through to , and often automatic testing live
occurring in each environment. In its simplest form, however, automation could also mean the standardization and
streamlining of manual tasks, such as defining the rules of part of a process to allow decisions to be made
‘automatically’. Efficiency can be greatly increased by reducing the need for human involvement to stop and
evaluate each part of a process.
Opportunities for automation can be found across the entire organization. Looking for opportunities to automate
standard and repeating tasks can help save the organization costs, reduce human error, and improve employee
experience.
The ITIL story: Optimize and automate
Marco: Axle has started to trial the new biometric technology, and the tests are going well. We’
re keen to implement this technology in all our depots.
Radhika: Before Axle introduced biometrics, there were many manual, paper-based processes.
Axle staff used paper checklists to carry out vehicle damage checks. Their notes then had to be
entered in a database, which was only available on desktop computers. It was not real time or
accessible across other systems.
Su: This work was usually put aside until the end of the day, and details were often lost. We had
to improve the process of data capture before automating.
Radhika: We can automate almost anything. But let’s get the business rules and processes right
first.
Applying the principle4.3.7.3
To apply this principle successfully, consider this advice:
Attempting to automate something that is complex or suboptimal is Simplify and/or optimize before automating
unlikely to achieve the desired outcome. Take time to map out the standard and repeating processes as far as
possible, and streamline where you can (optimize). From there you can start to automate.
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set of metrics. Use the same metrics to define the and measure the achievements. Make sure that the baseline
metrics are outcome-based and focused on value.
When optimizing and automating, it is smart to follow Use the other guiding principles when applying this one
the other principles as well:
Iterative optimization and automation will make progress visible and Progress iteratively with feedback
increase stakeholder buy-in for future iterations.
It is possible for something to be simple, but not optimized, so use these two Keep it simple and practical
principles together when selecting improvements.
Selecting what to optimize and automate and how to do so should be based on what will create Focus on value
the best value for the organization.
The technology already available in the organization may have features and functionalities Start where you are
that are currently untapped or under-utilized. Make use of what is already there to implement opportunities for
optimization and automation quickly and economically.
4.3.8 Principle interaction
As well as being aware of the ITIL guiding principles, it is also important to recognize that they interact with and
depend upon each other. For example, if an organization is committed to progressing iteratively with feedback, it
should also think and work holistically to ensure that each iteration of an improvement includes all the elements
necessary to deliver real results. Similarly, making use of appropriate feedback is key to collaboration, and focusing
on what will truly be valuable to the customer makes it easier to keep things simple and practical.
Organizations should not use just one or two of the principles, but should consider the relevance of each of them and
how they apply together. Not all principles will be critical in every situation, but they should all be reviewed on each
occasion to determine how appropriate they are.
4.4 Governance
4.4.1 Governing bodies and governance
Key message
Every organization is directed by a governing body, i.e. a person or group of people who are accountable at the
highest level for the performance and compliance of the organization. All sizes and types of organization
perform governance activities; the governing body may be a board of directors or executive managers who
take on a separate governance role when they are performing governance activities. The governing body is
accountable for the organization’s compliance with policies and any external regulations.
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Organizational governance is a system by which an organization is directed and controlled. Governance is realized
through the following activities:
The evaluation of the organization, its strategy, portfolios, and relationships with other parties. The Evaluate
governing body evaluates the organization on a regular basis as stakeholders’ needs and external circumstances
evolve.
The governing body assigns responsibility for, and directs the preparation and implementation of, Direct
organizational strategy and policies. Strategies set the direction and prioritization for organizational activity,
future investment, etc. Policies establish the requirements for behaviour across the organization and, where
relevant, suppliers, partners, and other stakeholders.
The governing body monitors the performance of the organization and its practices, products, and Monitor
services. The purpose of this is to ensure that performance is in accordance with policies and direction.
Organizational governance evaluates, directs, and monitors all the organization’s activities, including those of
service management.
4.4.2 Governance in the SVS
The role and position of governance in the ITIL SVS depends on how the SVS is applied in an organization. The
SVS is a universal model that can be applied to an organization as a whole, or to one or more of its units or products.
In the latter case, some organizations delegate authority to perform governance activities at different levels. The
governing body of the organization should retain oversight of this to ensure alignment with the objectives and
priorities of the organization.
In ITIL 4, the guiding principles and continual improvement apply to all components of the SVS, including
governance. In an organization, the governing body can adopt the ITIL guiding principles and adapt them, or define
its own specific set of principles and communicate them across the organization. The governing body should also
have visibility of the outcomes of continual improvement activities and the measurement of value for the
organization and its stakeholders.
Regardless of the scope of the SVS and the positioning of the components, it is crucial to make sure that:
the service value chain and the organization’s practices work in line with the direction given by the governing body
the governing body of the organization, either directly or through delegation of authority, maintains oversight of the
SVS
both the governing body and management at all levels maintain alignment through a clear set of shared principles
and objectives
the governance and management at all levels are continually improved to meet expectations of the stakeholders.
4.5 Service value chain
The central element of the SVS is the service value chain, an operating model which outlines the key activities
required to respond to demand and facilitate value realization through the creation and management of products and
services.
As shown in , the ITIL service value chain includes six value chain activities which lead to the creation of Figure 4.2
products and services and, in turn, value.
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Figure 4.2 The ITIL service value chain
Key message
The six value chain activities are:
plan
improve
engage
design and transition
obtain/build
.deliver and support
These activities represent the steps an organization takes in the creation of value. Each activity transforms
inputs into outputs. These inputs can be demand from outside the value chain or outputs of other activities. All
the activities are interconnected, with each activity receiving and providing triggers for further action.
To convert inputs into outputs, the value chain activities use different combinations of ITIL practices (sets of
resources for performing certain types of work), drawing on internal or resources, processes, skills, and third-party
competencies as required. For example, the engage activity might draw on supplier management, service desk
management, relationship management, and service request management to respond to new demands for products
and services, or information from various stakeholders (see for more information on practices).Chapter 5
Regardless of which practices are deployed, there are some common rules when using the service value chain:
All incoming and outgoing interactions with parties external to the value chain are performed via engage
All new resources are obtained through obtain/build
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Improvements at all levels are initiated and managed via .improve
To carry out a certain task or respond to a particular situation, organizations create service value streams. These are
specific combinations of activities and practices, and each one is designed for a particular scenario. Once designed,
value streams should be subject to continual improvement.
A value stream might, for example, be created for a situation where a user of a service needs an incident to be
resolved. The value stream will be designed specifically to resolve this issue, and will provide a complete guide to
the activities, practices, and roles involved. A more detailed outline of this and other examples of value streams can
be found in .Appendix A
Example of a service value chain, its practices, and value streams
A mobile application development company has a value chain, enabling the full cycle of application
development and management, from business analysis to development, release, and support. The company has
developed a number of practices, supported with specialized resources and techniques:
business analysis
development
testing
release and deployment
support.
Although the high-level steps are universal, different products and clients need different streams of work. For
example:
The development of a new application for a new client starts with initial engagement (pre-sale), then proceeds
to business analysis, prototyping, the drawing up of agreements, development, testing, and eventually to
release and support.
Changing an existing application to meet new requirements of existing clients does not include pre-sale and
involves business analysis, development, testing, and support in a different way.
Fixing an in a live application may be initiated in support, proceed with rolling back to a previous error
stable version ( ), then moves to development, testing, and release of a fix.release
Experiments with new or existing applications to expand the target audience may start with innovation
planning and prototyping, then proceed to development, and eventually to a release for a limited pilot
group of users to test their perception of the changes made.
These are examples of value streams: they combine practices and value chain activities in various ways to
improve products and services and increase potential value for the consumers and the organization.
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ITSM in the modern world: Agile ITSM
For an organization to be successful, it must be able to adapt to changing circumstances while remaining
functional and effective. This might include changes to the products and services it provides and consumes, as
well as changes to its structure and practices. In the modern world, where IT is essential for all organizations,
IT and IT management are expected to be Agile.
For many IT professionals, agility refers to software development and is associated with the Agile Manifesto,
proclaimed in 2001. The manifesto promoted new approaches to software development, and valued customer
experience, collaboration, and rapid changes over detailed planning and documentation, controls, and
requirements. Agile software development methods have been adopted by many companies and software
teams since then, and in many cases have proven to be effective.
Agile software development usually includes:
continually evolving requirements, collected through feedback analysis and direct observation
breaking development work into small increments and iterations
establishing product-based cross-functional teams
visually presenting (Kanban) and regularly discussing (daily stand-ups) work progress
presenting a working (at least, the minimum viable) software to the stakeholders at the end of each iteration.
If applied successfully, Agile software development enables fast responses to the evolving needs of service
consumers. However, in many organizations, Agile software development has not provided the expected
benefits, often due to lack of Agile methods in the other phases of the service . This fragmented agility lifecycle
makes little sense for the organization, as the overall performance of the value chain is defined by that of the
slowest part. A holistic approach to the service value chain should be adopted to make sure that the service
provider is Agile throughout the service lifecycle. This means that agility should become a quality of all
service management dimensions and all service value chain activities.
One of the greatest obstacles to service value chain agility used to be the rigidity of infrastructure solutions. It
could take months to deploy the necessary infrastructure for a new software program, which made all
development agility invisible and irrelevant for the service consumer. This problem has, to a great extent, been
solved as technology has evolved. Virtualization, fast broadband and mobile connections, and cloud computing
have allowed organizations to treat their as a service or as a code, thus providing IT infrastructure
infrastructure changes with a velocity that was previously only possible for software. Once the technical
problem was resolved, Agile methods could be applied to infrastructure configuration and deployment. This
stimulated integration between software and infrastructure teams, and consequently between development and
operations.
Many principles of Agile development can and should be applied to service operations and support.
Operational changes and s can be handled in small iterations by dedicated product or service-service request
focused teams, with constant feedback and high visibility. Daily operational activities can and should be
visible and prioritized together with other tasks. All service management activities can and should continually
provide, collect, and process feedback.
Agility is not a software development feature; it is an important quality of organizations in their entirety. Agile
activities require Agile funding and adjusted financial and compliance controls, Agile resourcing, Agile
contracting, Agile procurement, etc. If being Agile is adopted as a key principle, an organization should be
able to survive and prosper in a constantly changing environment. Applied in a fragmented way, Agile
methods can become a costly and wasteful complication.
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The ITIL story: Value chains and value streams
Henri: At Axle Car Hire, the value chain is the way that our company operates. It has multiple
value streams. Each value stream adopts and adapts the activities of the value chain for
carrying out particular tasks. For example, there is one value stream for innovation, and
another for providing standard services to existing customers.
The value stream for providing standard services to existing customers represents the activities
that are carried out when a customer hires a car. This starts with engagement, when a customer
contacts Axle, and then proceeds to delivery, when they receive a car (although engagement can
still happen at this stage).
Some value chain activities may be ongoing throughout a particular value stream, or may not be
involved at all. In this stream, planning activity is continuous, but design and procurement
activities will typically not be involved. The stream ends with more engagement activities, when
cars are returned by customers, feedback is given, and orders are closed.
Marco: Value chain activities do not have to happen in a particular order. Axle’s innovation
value stream is triggered by opportunity, and then goes to planning, designing, building or
obtaining, transitioning, and finally to delivering. This stream often includes procurement
activities. For example, we procure software and hardware for our biometric solutions.
Henri: We manage value streams for different objectives, combining the value chain activities
and supporting them with practices. Every value stream should be effective and efficient, and
subject to continual improvement.
The following sections outline the value chain activities and define the purpose, inputs, and outputs for each. As
each value stream is made up of a different combination of activities and practices, the inputs and outputs listed will
not always apply, as they are specific to particular value streams. For example, the ‘strategic, tactical, and
operational plans’ output of the plan value chain activity is formed as a result of strategic, tactical, and operational
planning respectively. Each of these levels is likely to involve different resources, have a different planning cycle,
and be triggered by different events. The lists of inputs and outputs given are not prescriptive, and they can and
should be adjusted when organizations design their value streams.
4.5.1 Plan
Key message
The purpose of the plan value chain activity is to ensure a shared understanding of the vision, current status,
and improvement direction for all four dimensions and all products and services across the organization.
The key inputs to this activity are:
policies, requirements, and constraints provided by the organization’s governing body
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• consolidated demands and opportunities provided by engage
value chain performance information, improvement status reports, and improvement initiatives from improve
knowledge and information about new and changed products and services from , and design and transition obtain
/build
knowledge and information about third-party service components from .engage
The key outputs of this activity are:
strategic, tactical, and operational plans
portfolio decisions for design and transition
architectures and policies for design and transition
improvement opportunities for improve
a product and for service portfolio engage
contract and agreement requirements for .engage
4.5.2 Improve
Key message
The purpose of the improve value chain activity is to ensure continual improvement of products, services, and
practices across all value chain activities and the four dimensions of service management.
The key inputs to this value chain activity are:
product and service performance information provided by deliver and support
stakeholders’ feedback provided by engage
performance information and improvement opportunities provided by all value chain activities
knowledge and information about new and changed products and services from , and design and transition obtain
/build
knowledge and information about third-party service components from .engage
The key outputs of this value chain activity are:
improvement initiatives for all value chain activities
value chain performance information for and the governing bodyplan
improvement status reports for all value chain activities
contract and agreement requirements for engage
service performance information for .design and transition
4.5.3 Engage
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Key message
The purpose of the engage value chain activity is to provide a good understanding of stakeholder needs,
transparency, and continual engagement and good relationships with all stakeholders.
The key inputs to this value chain activity are:
a product and service portfolio provided by plan
high-level demand for services and products provided by internal and external customers
detailed requirements for services and products provided by customers
requests and feedback from customers
incidents, service requests, and feedback from users
information on the completion of user support tasks from deliver and support
marketing opportunities from current and potential customers and users
cooperation opportunities and feedback provided by partners and suppliers
contract and agreement requirements from all value chain activities
knowledge and information about new and changed products and services from , and design and transition obtain
/build
knowledge and information about third-party service components from suppliers and partners
product and service performance information from deliver and support
improvement initiatives from improve
improvement status reports from .improve
The key outputs of this value chain activity are:
consolidated demands and opportunities for plan
product and service requirements for ndesign and transitio
user support tasks for deliver and support
improvement opportunities and stakeholders’ feedback for improve
change or project initiation requests for obtain/build
contracts and agreements with external and internal suppliers and partners for , and design and transition obtain
/build
knowledge and information about third-party service components for all value chain activities
service performance reports for customers.
4.5.4 Design and transition
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Key message
The purpose of the design and transition value chain activity is to ensure that products and services continually
meet stakeholder expectations for quality, costs, and time to market.
The key inputs to this activity are:
portfolio decisions provided by plan
architectures and policies provided by plan
product and service requirements provided by engage
improvement initiatives provided by improve
improvement status reports from improve
service performance information provided by , and deliver and support improve
service components from obtain/build
knowledge and information about third-party service components from engage
knowledge and information about new and changed products and services from obtain/build
contracts and agreements with external and internal suppliers and partners provided by engage.
The key outputs of this activity are:
requirements and s for specification obtain/build
contract and agreement requirements for engage
new and changed products and services for deliver and support
knowledge and information about new and changed products and services to all value chain activities
performance information and improvement opportunities for . improve
4.5.5 Obtain/build
Key message
The purpose of the obtain/build value chain activity is to ensure that service components are available when
and where they are needed, and meet agreed specifications.
The key inputs to this activity are:
architectures and policies provided by plan
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goods and services provided by external and internal suppliers and partners
requirements and specifications provided by design and transition
improvement initiatives provided by improve
improvement status reports from improve
change or project initiation requests provided by engage
change requests provided by deliver and support
knowledge and information about new and changed products and services from design and transition
knowledge and information about third-party service components from .engage
The key outputs of this activity are:
service components for deliver and support
service components for ndesign and transitio
knowledge and information about new and changed service components to all value chain activities
contract and agreement requirements for engage
performance information and improvement opportunities for .improve
4.5.6 Deliver and support
Key message
The purpose of the deliver and support value chain activity is to ensure that services are delivered and
supported according to agreed specifications and stakeholders’ expectations.
The key inputs to this activity are:
new and changed products and services provided by design and transition
service components provided by obtain/build
improvement initiatives provided by e improv
improvement status reports from improve
user support tasks provided by engage
knowledge and information about new and changed service components and services from , design and transition
and obtain/build
knowledge and information about third-party service components from .engage
The key outputs of this activity are:
services delivered to customers and users
information on the completion of user support tasks for engage
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• product and service performance information for and engage improve
improvement opportunities for improve
contract and agreement requirements for engage
change requests for obtain/build
service performance information for .design and transition
Further details on the service value chain activities can be found in other ITIL 4 publications and supplementary
materials.
4.6 Continual improvement
Continual improvement takes place in all areas of the organization and at all levels, from strategic to operational. To
maximize the effectiveness of services, each person who contributes to the provision of a service should keep
continual improvement in mind, and should always be looking for opportunities to improve.
The continual improvement model applies to the SVS in its entirety, as well as to all of the organization’s products,
services, service components, and relationships. To support continual improvement at all levels, the ITIL SVS
includes:
the ITIL continual improvement model, which provides organizations with a structured approach to implementing
improvements
the improve service value chain activity, which embeds continual improvement into the value chain
the , supporting organizations in their day-to-day improvement efforts.continual improvement practice
The ITIL continual improvement model can be used as a high-level guide to support improvement initiatives. Use of
the model increases the likelihood that ITSM initiatives will be successful, puts a strong focus on customer value,
and ensures that improvement efforts can be linked back to the organization’s vision. The model supports an
iterative approach to improvement, dividing work into manageable pieces with separate goals that can be achieved
incrementally.
Figure 4.3 provides a high-level overview of the ITIL continual improvement model.
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Figure 4.3 The continual improvement model
The ITIL story: Improving Axle
Henri would like Axle to become a greener company and introduce more environmentally friendly practices
into its work. Over the following sections the Axle team uses the steps of the continual improvement model to
implement changes to the organization.
Henri: At Axle we strive for continual improvement at all levels. One of our objectives is to be a
greener business and incorporate sustainable principles into every business decision. My team
is committed to this initiative. As part of our service relationship model, our partners and
suppliers are also involved in this.
It is important to remember that the scope and details of each step of the model will vary significantly based on the
subject and the type of improvement. It should be recognized that this model can serve as a workflow, but it can also
be used simply as a high-level reminder of a sound thought process to ensure improvements are properly managed.
The flow seeks to ensure that improvements are linked to the organization’s goals and are properly prioritized, and
that improvement actions produce sustainable results.
Logic and common sense should always prevail when using the continual improvement model. The steps of this
model do not need to be carried out in a linear fashion, and it may be necessary to re-evaluate and return to a
previous step at some point. Critical judgement should always be applied when using this model.
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4.6.1 Steps of the continual improvement model
This section provides more detail on each step of the continual improvement model. An organization can adjust
these steps to its culture and goals. The model is simple and flexible, and can just as easily be used in an Agile
culture as in a more traditional waterfall culture.
Step 1: What is the vision?4.6.1.1
Key message
Each improvement initiative should support the organization’s goals and objectives. The first step of the
continual improvement model is to define the vision of the initiative. This provides context for all subsequent
decisions and links individual actions to the organization’s vision for the future.
This step focuses on two key areas:
The organization’s vision and objectives need to be translated for the specific business unit, department, team, and
/or individual, so that the context, objectives, and boundaries for any improvement initiative are understood.
A high-level vision for the planned improvement needs to be created.
The work within this step should ensure that:
the high-level direction has been understood
the planned improvement initiative is described and understood in that context
the stakeholders and their roles have been understood
the expected value to be realized is understood and agreed
the role of the person or team responsible for carrying out the improvement is clear in relation to achieving the
organization’s vision.
If this step is skipped, improvements might only be optimized for the people or teams involved rather than the whole
organization, or non-value-adding activities might become the sole focus of improvements.
The ITIL story: What is the vision?
Henri: Axle’s vision is for the business to become one of the top three green car-hire companies
globally. A continual improvement initiative called Axle Green was created for this purpose.
Craig: As a supplier of cleaning services to Axle, I’ll support them in this improvement initiative.
Step 2: Where are we now?4.6.1.2
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Key message
The success of an improvement initiative depends on a clear and accurate understanding of the starting point
and the impact of the initiative. An improvement can be thought of as a journey from Point A to Point B, and
this step clearly defines what Point A looks like. A journey cannot be mapped out if the starting point is not
known.
A key element in this step is a current state assessment. This is an assessment of existing services, including the
users’ perception of value received, people’s competencies and skills, the processes and procedures involved, and/or
the capabilities of the available technological solutions. The organization’s culture, i.e. the prevailing values and
attitudes across all stakeholder groups, also needs to be understood to decide what level of organizational change
management is required.
Current state assessments should be done through objective measurement whenever possible. This will allow for an
accurate understanding of the issues associated with the current state and, once the initiative is implemented, enable
proper measurement of the level of improvement achieved by comparison with the initial state. If a good
measurement system is in place, the information to fulfil this step may already have been provided when the
proposed improvement was initially documented.
If this step is skipped, the current state will not be understood and there will not be an objective baseline
measurement. It will therefore be difficult to track and measure the effectiveness of the improvement activities, as
the new state cannot be compared with a previous state at a later point.
The ITIL story: Where are we now?
Su: We need to understand the baseline. How do we know if we’ve improved, if we don’t know
where we started? Currently, only 5 per cent of the vehicles in our fleet are electric.
Craig: Only 20 per cent of my cleaning products are biodegradable.
Step 3: Where do we want to be?4.6.1.3
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Key message
Just as the previous step (Step 2) describes Point A on the improvement journey, Step 3 outlines what Point B,
the target state for the next step of the journey, should look like. A journey cannot be mapped out if the
destination is not clear.
Based on the results of the first two steps, a gap analysis can be performed, which evaluates the scope and nature of
the distance to be travelled from the starting point to the achievement of the initiative’s vision. It is important to note
that the initial vision of the initiative is aspirational and may never be achieved in full. Improvement is the goal, not
perfection. This step should define one or more prioritized actions along the way to completing the vision for the
improvement, based on what is known at the starting point. Improvement opportunities can be identified and
prioritized based on the gap analysis, and improvement objectives can be set, along with critical success factors
(CSFs) and s (KPIs).key performance indicator
The agreed objectives, CSFs, and KPIs need to follow what is known as the SMART principle. They should be
specific, measurable, achievable, relevant, and time-bound. It is much easier to define the route of the improvement
journey if the exact destination is known. It is important to note that the target state represents progress towards the
vision, not the achievement of the entire vision.
If this step is skipped, the target state will remain unclear. It will be difficult to prepare a satisfactory explanation of
what key stakeholders stand to gain from the improvement initiative, which may result in low support or even
pushback.
The ITIL story: Where do we want to be?
Su: Within five years, we want 50 per cent of our fleet to consist of electric vehicles. The other
half should comply with the strictest ecological requirements for petrol and diesel cars.
Craig: One of my targets is that 90 per cent of my cleaning products will be biodegradable
within the next two years.
Radhika: This is a great initiative. In our IT team, we want to use biodegradable cups. We
would also like Axle to use environmentally friendly light bulbs in all our offices.
Step 4: How do we get there?4.6.1.4
Now that the start and end points of the improvement journey have been defined, a specific route can be agreed.
Based on the understanding of the vision of the improvement and the current and target states, and combining that
knowledge with subject matter expertise, a plan for addressing the challenges of the initiative can be created.
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Key message
The plan for Step 4 can be a straightforward and direct route to completing a single simple improvement, or it
may be more involved. The most effective approach to executing the improvement may not be clear, and it will
sometimes be necessary to design experiments that will test which options have the most potential.
Even if the path to follow is clear, it may be most effective to carry out the work in a series of iterations, each of
which will move the improvement forward part of the way. With each iteration, there is an opportunity to check
progress, re-evaluate the approach, and change direction if appropriate.
If this step is skipped, the execution of the improvement is likely to flounder and fail to achieve what is required of
it. Failed improvements erode confidence and can make it difficult to get support for future improvements.
The ITIL story: How do we get there?
Craig: My plan is to replace our current stocks of cleaning products with biodegradable options
as we run out. Meanwhile, we’ll test new products to find the optimal balance of price and
quality.
Su: Sometimes knowing how you get there is easy, but replacing half of our fleet with electric
cars is a bigger challenge. We don’t want excess cars in our car lots if they’re not being used.
We must also consider specifics and infrastructure in different countries, as well as local
regulations.
Radhika: We’re encouraging the use of ceramic cups over plastic ones. We’re discontinuing the
purchase of plastic cups, and we are buying ceramic cups for all our offices.
Step 5: Take action4.6.1.5
Key message
In Step 5 the plan for the improvement is acted upon. This could involve a traditional waterfall-style approach,
but it could be more appropriate to follow an Agile approach by experimenting, iterating, changing directions,
or even going back to previous steps.
Some improvements take place as part of a big initiative that makes a lot of change, whereas other improvements are
small but significant. In some cases, a larger change is effected through the implementation of multiple smaller
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improvement iterations. Even if the path to complete the improvement seemed clear when it was planned, it is
important to remain open to change throughout the approach. Achieving the desired results is the objective, not rigid
adherence to one view of how to proceed.
During the improvement, there needs to be continual focus on measuring progress towards the vision and managing
risks, as well as ensuring visibility and overall awareness of the initiative. ITIL practices such as organizational
change management ( ), measurement and reporting ( ), risk management ( ) section 5.1.6 section 5.1.5 section 5.1.10
and, of course, continual improvement ( ) are important factors in achieving success in this step.section 5.1.2
Once this step is completed, the work will be at the end point of the journey, resulting in a new current state.
The ITIL story: Take action
Craig: We have started to replace our stocks of cleaning products with biodegradable options.
We’ve found some great new products to use, and even managed to save money by using
cheaper alternatives that don’t compromise on quality.
Su: We have started to phase out some of our older petrol and diesel cars and replace them with
new electric models. We have carried out a thorough check of the petrol and diesel cars we are
keeping to ensure they meet ecological requirements, and will take action to fix this where they
do not.
Radhika: We have brought the new biodegradable cups and environmentally friendly light
bulbs into our offices and started to remove the plastic cups.
Step 6: Did we get there?4.6.1.6
This step involves checking the destination of the journey to be sure that the desired point has been reached.
Key message
Too often, once an improvement plan is set in motion, it is assumed that the expected benefits have been
achieved, and that attention can be redirected to the next initiative. In reality, the path to improvement is filled
with various obstacles, so success must be validated.
For each iteration of the improvement initiative, both the progress (have the original objectives been achieved?) and
the value (are those objectives still relevant?) need to be checked and confirmed. If the desired result has not been
achieved, additional actions to complete the work are selected and undertaken, commonly resulting in a new
iteration.
If this step is skipped, it is hard to be sure whether the desired or promised outcomes were actually achieved, and
any lessons from this iteration, which would support a course correction if needed, will be lost.
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The ITIL story: Did we get there?
Craig: After a few months we managed to hit our target of having 90 per cent of our products
being biodegradable.
Su: The electric cars are being introduced, but for logistical reasons it is proving more difficult
to replace the petrol and diesel cars than we had anticipated. We will need to do this at a faster
pace if we want to hit our five-year target. We may now have to reconsider our target, and
decide whether we should do more to support it, or if it needs to be revised.
Radhika: Our offices now have biodegradable cups and environmentally friendly light bulbs.
Some of the old plastic cups are still being used, but we have stopped purchasing more, so once
they run out they’ll be gone.
Step 7: How do we keep the momentum going?4.6.1.7
Key message
If the improvement has delivered the expected value, the focus of the initiative should shift to marketing these
successes and reinforcing any new methods introduced. This is to ensure that the progress made will not be
lost and to build support and momentum for the next improvements.
The organizational change management and s should be used to embed the knowledge management practice
changes in the organization and ensure that the improvements and changed behaviours are not at risk of reversion.
Leaders and managers should help their teams to truly integrate new work methods into their daily work and
institutionalize new behaviours.
If the expected results of the improvement were not achieved, stakeholders need to be informed of the reasons for
the failure of the initiative. This requires a thorough analysis of the improvement, documenting and communicating
the lessons learned. This should include a description of what can be done differently in the next iteration, based on
the experience gathered. Transparency is important for future efforts, regardless of the results of the current iteration.
If this step is skipped, then it is likely that improvements will remain isolated and independent initiatives, and any
progress made may be lost over time. It may also be difficult to get support for future improvements, and embed
continual improvement in the organization’s culture.
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The ITIL story: How do we keep the momentum going?
Craig: Now that we have hit our target we will monitor any new products we buy to ensure that
they meet our standards of being biodegradable. We will also be on the lookout for any
opportunities to replace our remaining non-biodegradable products with more environmentally
friendly alternatives.
Su: We’ve made a great start on adding new electric vehicles to the Axle fleet, but haven’t hit
our targets yet. Now we need to analyse what has prevented us from reaching our objectives,
record what lessons we have learned, and decide what can be done differently in the future to
make the introduction of electric cars more effective.
Radhika: We will continue to buy ceramic cups and environmentally friendly light bulbs for our
offices. We will also consider further ways to make our offices greener, and run campaigns with
staff members to encourage them to become more environmentally aware.
4.6.2 Continual improvement and the guiding principles
Following the continual improvement model, an organization may significantly benefit from applying the ITIL
guiding principles. All the principles are applicable and relevant at every step of an improvement initiative.
However, some of the guiding principles are especially relevant to specific steps of the continual improvement
model. Following these principles at every step of an improvement increases the chances for success of the steps and
the overall improvement initiative. outlines to which steps of the continual improvement model each of Table 4.2
the guiding principles is particularly relevant, although all principles are applicable to all steps at some level.
Continual improvement is not only an integral part of Lean, but also Agile (retrospectives), DevOps (continual
experimentation and learning, and mastery), and other frameworks. It is one of the key components of the ITIL SVS,
providing, along with the guiding principles, a solid platform for successful service management.
Table 4.2 The steps of the continual improvement model linked to the most relevant ITIL guiding principles
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Continual improvement and the theory of constraints
In an increasingly dynamic business environment, an enterprise’s ability to change quickly, whether in
response to external factors or to disrupt the market, can make the difference between failure and success.
When planning improvements, it is crucial to focus on the work that is the highest priority. According to the
theory of constraints (ToC), the weakest link in the value chain determines the flow and of the throughput
system. The weakest link must be elevated as much as possible (sometimes revealing a new weakest link), and
all the other steps in the value chain must be organized around it.
The weakest link of a value stream can be determined with value stream mapping. This is a Lean practice that
examines the stream, quantifies its waste (for example, a delay), and in so doing, identifies its weakest link. If
the weakest link is the development of information systems, then the application of Agile principles and
practices can improve the quality of, and the speed with which, functionality is developed. This includes the
critical interaction between business and IT in which the required functionality is defined alongside the non-
functional requirements. The ITIL 4 practices that help with this include, among others, software development
and management, business analysis, and relationship management.
If the weakest link is the speed and reliability of deployment, then using DevOps principles, technical practices
and tools can make a significant difference. The ITIL 4 practices that are relevant to this include deployment
management, release management, and organizational change management.
Finally, if the weakest link is the delivery and support of IT services, then IT operations practices and tools can
be used, such as the ITIL 4 practices of incident management, problem management, service desk, and
infrastructure and platform management.
4.7 Practices
A practice is a set of organizational resources designed for performing work or accomplishing an objective. These
resources are grouped into the four dimensions of service management (see ). The ITIL SVS includes Chapter 3
general management, service management, and technical management practices, as described in .Chapter 5
4.8 Summary
The ITIL SVS describes how all the components and activities of the organization work together as a system to
enable value creation. Each organization’s SVS has interfaces with other organizations, forming an ecosystem that
facilitates value creation for the organizations, their customers, and other stakeholders.
The ITIL SVS is a powerful holistic construct for the governance and management of modern products and services
that enables organizations to co-create value with consumers. The SVS includes the service value chain activities
supported by universal and holistic practices that allow the organization to manage demands of all types. These
range from strategic demands that enable the organization to thrive in a competitive landscape, to operational
requests for information, services, or support. Every organization participates in some form of the value chain
activities described here, even when many of them are performed by suppliers and partners. ITIL 4 guidance can be
adapted and adopted to facilitate value, feedback, and continual improvement across the SVS.
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CHAPTER 5
ITIL MANAGEMENT PRACTICES
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ITIL management practices5
The ITIL SVS includes 14 general management practices, 17 service management practices, and three technical
management practices, all of which are subject to the four dimensions of service management (see ).Chapter 3
Key message
In ITIL, a management practice is a set of organizational resources designed for performing work or
accomplishing an objective. The origins of the practices are as follows:
General management practices have been adopted and adapted for service management from general business
management domains.
Service management practices have been developed in service management and ITSM industries.
Technical management practices have been adapted from technology management domains for service
management purposes by expanding or shifting their focus from technology solutions to IT services.
The 34 ITIL management practices are listed in .Table 5.1
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Table 5.1 The ITIL management practices
General management practices Service management practices Technical management practices
Architecture management
Continual improvement
Information security management
Knowledge management
Measurement and reporting
Organizational change management
Portfolio management
Project management
Relationship management
Risk management
Service financial management
Strategy management
Supplier management
Workforce and talent management
Availability management
Business analysis
Capacity and performance management
Change enablement
Incident management
IT asset management
Monitoring and event management
Problem management
Release management
Service catalogue management
Service configuration management
Service continuity management
Service design
Service desk
Service level management
Service request management
Service validation and testing
Deployment management
Infrastructure and platform management
Software development and management
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ITSM in the modern world: high-velocity service delivery
In business innovation and differentiation, speed to market is a key success factor. If an organization takes too
long to implement a new business idea, it is likely to be done faster by someone else. Because of this,
organizations have started demanding shorter time to market from their IT service providers.
For service providers that have always used modern technology, this has not been a big challenge. They have
adopted modern ways of scaling their resources and established appropriate practices for project and product
management, testing, integration, deployment, release, delivery, and support of IT services. These practices
have been documented and have triggered the development of new IT management movements and practices,
such as DevOps. However, for organizations bearing a legacy of old IT architectures and IT management
practices focused on control and cost efficiency, the new business demand has introduced a greater challenge.
The high-velocity service delivery paradigm includes:
focus on fast delivery of new and changed IT services to users
continual analysis of feedback provided for IT services at every stage of their lifecycle
agility in processing the feedback, giving rise to continual and fast improvement of IT services
an end-to-end approach to the service lifecycle, from ideation, through creation and delivery, to consumption
of services
integration of product and service management practices
digitalization of IT infrastructure and adoption of cloud computing
extensive automation of the service delivery chain.
High-velocity service delivery influences all the practices of a service provider, including general management
practices, service management practices, and technical management practices. For example, an organization
aiming to deliver and improve its services faster than others needs to consider:
Agile project management
Agile financial management
product-based organizational structure
adaptive risk management, and audit and compliance management
flexible architecture management
specific architecture technology solutions, such as microservices
complex partner and supplier environments
continual monitoring of technology innovations and experimenting
human-centred design
infrastructure management focused on cloud computing.
Even if only some of the services in a provider’s portfolio need high-velocity delivery, organizational changes
of a significant scale are required to enable this, especially if the organization has a legacy of low-velocity
services, practices, and habits. Moreover, bi-modal IT, where high-velocity service management is combined
with traditional practices, introduces even more complexity and greater challenges. However, for many
modern organizations, high-velocity service delivery is no longer an option but a necessity, and they must
improve their service management practices to respond to this challenge.
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5.1 General management practices
5.1.1 Architecture management
Key message
The purpose of the is to provide an understanding of all the different architecture management practice
elements that make up an organization and how those elements interrelate, enabling the organization to
effectively achieve its current and future objectives. It provides the principles, standards, and tools that enable
an organization to manage complex change in a structured and Agile way.
Just as the modern organization’s environment and ecosystem have become more complex, so have its challenges.
These include not only how to increase efficiency and automation, but also how to better manage the complexity of
the environment and how to achieve organizational agility and resilience. Without the visibility and coordination
made possible by a proper architecture management practice, an organization can become a labyrinth of third-party
contracts, variant processes across different organizational silos, various products and services that have been
needlessly customized for different customers, and a legacy infrastructure. The result is a complex landscape where
any change becomes far more difficult to implement and introduces a much higher risk.
A complete architecture management practice should address all architecture domains: business, service,
information, technology, and environment. For a smaller and less complex organization, the architect can develop a
single integrated architecture.
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Architecture types
Business architecture
The business architecture allows the organization to look at its capabilities in terms of how they align with all
the detailed activities required to create value for the organization and its customers. These are then compared
with the organization’s strategy and a gap analysis of the target state against current capabilities is performed.
Identified gaps between the baseline and target state are prioritized and these capability gaps are addressed
incrementally. A ‘roadmap’ describes the transformation from current to future state to achieve the
organization’s strategy.
Service architecture
Service architecture gives the organization a view of all the services it provides, including interactions between
the services and service models that describe the structure (how the service components fit together) and the
dynamics (activities, flow of resources, and interactions) of each service. A service model can be used as a
template or blueprint for multiple services.
Information systems architecture, including data and applications architectures
The information architecture describes the logical and physical data assets of the organization and the data
management resources. It shows how the information resources are managed and shared for the benefit of the
organization.
Information is a valuable asset for the organization, with actual and measurable value. Information is the basis
for decision-making, so it must always be complete, accurate, and accessible to those who are authorized to
access it. Information systems must therefore be designed and managed with these concepts in mind.
Technology architecture
The technology architecture defines the software and hardware infrastructure needed to support the portfolio of
products and services.
Environmental architecture
The environmental architecture describes the external factors impacting the organization and the drivers for
change, as well as all aspects, types, and levels of environmental control and their management. The
environment includes developmental, technological, business, operational, organizational, political, economic,
legal, regulatory, ecological, and social influences.
Figure 5.1 shows the contribution of architecture management to the service value chain, with the practice being
involved in all value chain activities; however, it is most instrumental in the plan, improve, and design and transition
value chain activities:
The architecture management practice is responsible for developing and maintaining a reference architecture Plan
that describes the current and target architectures for the business, information, data, application, technology, and
environment perspectives. This is used as a basis for all the plan value chain activity.
Many opportunities for improvement are identified through review of the business, service, information, Improve
technical, and environment architectures.
The architecture management practice facilitates the ability to understand the organization’s readiness to Engage
address new or under-served markets and a wider variety of products and services, and more quickly respond to
changing circumstances. The architecture management practice is responsible for assessing the organization’s
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capabilities in terms of how they align with all the detailed activities required to co-create value for the
organization and its customers.
Once a new or changed product or service is approved to be developed, the architecture, Design and transition
design, and build teams will continually evaluate whether the product/service meets the investment objectives.
The architecture management practice is responsible for the service architecture, which describes the structure
(how the service components fit together) and the dynamics (activities, flow of resources, and interactions) of the
service. A service model can be used as a template or blueprint for multiple services and is essential to the design
and transition activity.
The reference architectures (business, service, information, technical, and environmental) facilitate Obtain/build
identification of what products, services, or service components need to be obtained or built.
The reference architectures are used continually as part of the operation, restoration, and Deliver and support
maintenance of products and services.
Figure 5.1 Heat map of the contribution of architecture management to value chain activities
5.1.2 Continual improvement
Key message
The purpose of the continual improvement practice is to align the organization’s practices and services with
changing business needs through the ongoing improvement of products, services, and practices, or any element
involved in the management of products and services.
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Included in the scope of the continual improvement practice is the development of improvement-related methods
and techniques and the propagation of a continual improvement culture across the organization, in alignment with
the organization’s overall strategy. The commitment to and practice of continual improvement must be embedded
into every fibre of the organization. If it is not, there is a real risk that daily operational concerns and major project
work will eclipse continual improvement efforts.
Key activities that are part of continual improvement practices include:
encouraging continual improvement across the organization
securing time and budget for continual improvement
identifying and logging improvement opportunities
assessing and prioritizing improvement opportunities
making s for improvement actionbusiness case
planning and implementing improvements
measuring and evaluating improvement results
coordinating improvement activities across the organization.
There are many methods, models, and techniques that can be employed for making improvements. Different types of
improvement may call for different improvement methods. For example, some improvements may be best organized
into a multi-phase project, while others may be more appropriate as a single quick effort.
The ITIL SVS includes the continual improvement model (see ), which can be applied to any type of Figure 4.3
improvement, from high-level organizational changes to individual services and s (CIs). The configuration item
model is described in .section 4.6
When assessing the current state, there are many techniques that can be employed, such as a strength, weakness,
opportunity, and threat (SWOT) analysis, a balanced scorecard review, internal and external assessments and audits,
or perhaps even a combination of several techniques. Organizations should develop competencies in methodologies
and techniques that will meet their needs.
Approaches to continual improvement can be found in many places. Lean methods provide perspectives on the
elimination of waste. Agile methods focus on making improvements incrementally at a cadence. DevOps methods
work holistically and ensure that improvements are not only designed well, but applied effectively. Although there
are a number of methods available, organizations should not try to formally commit to too many different
approaches. It is a good idea to select a few key methods that are appropriate to the types of improvement the
organization typically handles and to cultivate those methods. In this way, teams will have a shared understanding of
how to work together on improvements to facilitate a greater amount of change at a quicker rate.
This does not mean, however, that the organization should not try new approaches or allow for innovation. Those in
the organization with skills in alternative methods should be encouraged to apply them when it makes sense, and if
this effort is successful, the alternative method may be added to the organization’s repertoire. Older methods may
gradually be d in favour of new ones if better results are achieved.retire
Continual improvement is everyone’s responsibility. Although there may be a group of staff members who focus on
this work full-time, it is critical that everyone in the organization understands that active participation in continual
improvement activities is a core part of their job. To ensure that this is more than a good intention, it is wise to
include contribution to continual improvement in all job descriptions and every employee’s objectives, as well as in
contracts with external suppliers and contractors.
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The highest levels of the organization need to take responsibility for embedding continual improvement into the way
that people think and work. Without their leadership and visible commitment to continual improvement, attitudes,
behaviour, and culture will not evolve to a point where improvements are considered in everything that is done, at
all levels.
Training and other enablement assistance should be provided to staff members to help them feel prepared to
contribute to continual improvement. Although everyone should contribute in some way, there should at least be a
small team dedicated full-time to leading continual improvement efforts and advocating the practice across the
organization. This team can serve as coordinators, guides, and mentors, helping others in the organization to develop
the skills they need and navigating any difficulties that may be encountered.
When third-party suppliers form part of the service landscape, they should also be part of the improvement effort.
When contracting for a supplier’s service, the contract should include details of how they will measure, report on,
and improve their services over the life of the contract. If data will be required from suppliers to operate internal
improvements, that should be specified in the contract as well. Accurate data, carefully analysed and understood, is
the foundation of fact-based decision-making for improvement. The continual improvement practice should be
supported by relevant data sources and data analysis to ensure that each potential improvement is sufficiently
understood and prioritized.
To track and manage improvement ideas from identification through to final action, organizations use a database or
structured document called a continual improvement register (CIR). There can be more than one CIR in an
organization, as multiple CIRs can be maintained on individual, team, departmental, business unit, and
organizational levels. Some organizations maintain a single master CIR, but segment how it is used and by whom at
a more granular level.
Improvement ideas can also initially be captured in other places and through other practices, such as during project
execution or software development activities. In this case, it is important to document for attention the improvement
ideas that come up as part of ongoing continual improvement. As new ideas are documented, CIRs are used to
constantly reprioritize improvement opportunities. The use of CIRs provides additional value because they help to
make things visible. This is not limited to what is currently being done, but also to what is already complete and
what has been set aside for further consideration at a later date.
It does not matter exactly how the information in a CIR is structured, or what the collections of improvement ideas
are called in any given organization. What is important is that improvement ideas are captured, documented,
assessed, prioritized, and appropriately acted upon to ensure that the organization and its services are always being
improved.
The continual improvement practice is integral to the development and maintenance of every other practice as well
as to the complete lifecycle of all services and indeed the SVS itself. That said, there are some practices that make a
special contribution to continual improvement. For example, the organization’s can problem management practice
uncover issues that will be managed through continual improvement. The changes initiated through continual
improvement may fail without the critical contributions of organizational change management. And many
improvement initiatives will use project management practices to organize and manage their execution.
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Figure 5.2 Heat map of the contribution of continual improvement to value chain activities
Figure 5.2 shows the contribution of continual improvement to the service value chain, with the practice being
involved in all value chain activities:
The continual improvement practice is applied to planning activities, methods, and techniques to make sure Plan
they are relevant to the organization’s current objectives and context.
The continual improvement practice is key to this value chain activity. It structures resources and Improve
activities, enabling improvement at all levels of the organization and the SVS.
Each of these value chain activities is Engage, design and transition, obtain/build, and deliver and support
subject to continual improvement, and the continual improvement practice is applied to all of them.
5.1.3 Information security management
Key message
The purpose of the is to protect the information needed by the information security management practice
organization to conduct its business. This includes understanding and managing risks to the , confidentiality
, and availability of information, as well as other aspects of information security such as integrity
authentication (ensuring someone is who they claim to be) and non-repudiation (ensuring that someone can’t
deny that they took an action).
The required security is established by means of policies, processes, behaviours, risk management, and controls,
which must maintain a balance between:
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• Ensuring that security incidents don’t occurPrevention
Rapidly and reliably detecting incidents that can’t be preventedDetection
Recovering from incidents after they are detected.Correction
It is also important to achieve a balance between protecting the organization from harm and allowing it to innovate.
Information security controls that are too restrictive may do more harm than good, or may be circumvented by
people trying to do work more easily. Information security controls should consider all aspects of the organization
and align with its risk appetite.
Information security management interacts with every other practice. It creates controls that each practice must
consider when planning how work will be done. It also depends on other practices to help protect information.
Information security management must be driven from the most senior level in the organization, based on clearly
understood governance requirements and organizational policies. Most organizations have a dedicated information
security team, which carries out s and defines policies, procedures, and controls. In high-velocity risk assessment
environments, information security is integrated as much as possible into the daily work of development and
operations, shifting the reliance on control of process towards verification of preconditions such as expertise and
integrity.
Information security is critically dependent on the behaviour of people throughout the organization. Staff who have
been trained well and pay attention to information security policies and other controls can help to detect, prevent,
and correct information security incidents. Poorly trained or insufficiently motivated staff can be a major
vulnerability.
Many processes and procedures are required to support information security management. These include:
an information security incident management process
a risk management process
a control review and audit process
an and access management processidentity
event management
procedures for penetration testing, vulnerability scanning, etc.
procedures for managing information security related changes, such as firewall configuration changes.
Figure 5.3 shows the contribution of information security management to the service value chain, with the practice
being involved in all value chain activities:
Information security must be considered in all planning activity and must be built into every practice and Plan
service.
Information security must be considered in all improvement value chain activity to ensure that Improve
vulnerabilities are not introduced when making improvements.
Information security requirements for new and changed services must be understood and captured. All Engage
levels of engagement, from operational to strategic, must support information security and encourage the
behaviours needed. All stakeholders must contribute to information security, including customers, users,
suppliers, etc.
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Figure 5.3 Heat map of the contribution of information security management to value chain activities
Information security must be considered throughout this value chain activity, with effective Design and transition
controls being designed and transitioned into operation. The design and transition of all services must consider
information security aspects as well as all other utility and .warranty requirements
Information security must be built into all components, based on the risk analysis, policies, Obtain/build
procedures, and controls defined by information security management. This applies whether the components are
built internally or procured from suppliers.
Detection and correction of information security incidents must be an integral part of this Deliver and support
value chain activity.
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The ITIL story: Axle’s information security management
Su: Our travel app stores a lot of sensitive data, including customer and credit card details. Our
role is to make sure this data is secure.
Marco: Some of the data is also stored and processed by our partners, who helped us to develop
the app and continue to support the app on our behalf.
Radhika: We use the data to analyse customer demand and the use of our fleet, track the
conditions of our cars, and analyse our customers’ preferences to create tailored offerings.
Su: Our consumers need to know that their data is safe and will not be misused. We regularly
undergo external audits to provide assurance for our stakeholders and to confirm compliance
with national and international regulations.
Henri: As CIO, I make sure everyone who works in and with Axle is aware of the importance of
information security, and follows Axle policies and procedures concerning information security
management.
5.1.4 Knowledge management
Key message
The purpose of the knowledge management practice is to maintain and improve the effective, efficient, and
convenient use of information and knowledge across the organization.
Knowledge is one of the most valuable assets of an organization. The knowledge management practice provides a
structured approach to defining, building, re-using, and sharing knowledge (i.e. information, skills, practices,
solutions, and problems) in various forms. As methods of capturing and sharing knowledge move more towards
digital solutions, the practice of knowledge management becomes even more valuable.
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Figure 5.4 Heat map of the contribution of knowledge management to value chain activities
It is important to understand that ‘knowledge’ is not simply information. Knowledge is the use of information in a
particular context. This needs to be understood with both the user of the knowledge and the relevant situation in
mind. For example, information presented in the form of a 300-page manual is not useful for a service desk analyst
who needs to find a fast solution. A better example of knowledge that is fit for purpose might be a simplified set of
instructions or reference points that allow the analyst to find the relevant content quickly.
Knowledge management aims to ensure that stakeholders get the right information, in the proper format, at the right
level, and at the correct time, according to their access level and other relevant policies. This requires a procedure
for the acquisition of knowledge, including the development, capturing, and harvesting of unstructured knowledge,
whether it is formal and documented or informal and tacit knowledge.
Figure 5.4 shows the contribution of knowledge management to the service value chain, with the practice being
involved in all value chain activities:
Knowledge management helps the organization to make sound portfolio decisions and to define its strategy Plan
and other plans, and supports financial management.
This value chain activity is based on an understanding of the current situation and trends, supported by Improve
historical information. Knowledge management provides context for the assessment of achievements and
improvement planning.
Relationships at all levels, from strategic to operational, are based on an understanding of the context and Engage
history of those relationships. Knowledge management helps to better understand stakeholders.
As with the obtain/build value chain activity, knowledge of the solutions and technologies Design and transition
available, and the re-use of information, can make this value chain activity more effective.
The efficiency of this value chain activity can be significantly improved with sufficient knowledge of Obtain/build
the solutions and technologies available, and through the re-use of information.
Ongoing value chain activity in this area benefits from knowledge management through re-Deliver and support
use of solutions in standard situations and a better understanding of the context of non-standard situations that
require analysis.
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The ITIL story: Axle’s knowledge management
Radhika: Because we’re using an Agile deployment for our app development, we need to make
sure our staff have up-to-date knowledge on new features. Just as importantly, knowledge needs
to be retired when it’s out of date. For example, we recently discovered the printing feature of
our app was not being used by our customers. We removed printing and replaced it with a new
function to send information from the app by email instead. As part of release management, we’
ve already provided updated knowledge articles to our service desk to reflect the change.
Su: Knowledge management is more than just data collection. At Axle, we focus on open
communication and the sharing of knowledge. To promote collaboration and visibility, we make
sure that information, problems, and concerns are openly shared between our teams and
branches.
Henri: But we also need to follow information security policies and make sure that openness
does not mean carelessness.
Marco: We’re testing new systems based on AI to improve our forecasting and decision-making
at all levels, from strategic planning to user support.
5.1.5 Measurement and reporting
Key message
The purpose of the measurement and reporting practice is to support good decision-making and continual
improvement by decreasing the levels of uncertainty. This is achieved through the collection of relevant data
on various managed objects and the valid assessment of this data in an appropriate context. Managed objects
include, but are not limited to, products and services, practices and value chain activities, teams and
individuals, suppliers and partners, and the organization as a whole.
Many of these managed objects are connected, and so are their respective metrics and indicators. For example, to set
clear objectives for measurement and reporting, there is a need to understand organizational goals. These can be
based on a number of areas: profit, growth, competitive advantage, customer retention, operational/public service,
etc. (see the focus on value guiding principle in ). In such cases, it is important to establish a clear section 4.3.1
relationship between high-level and subordinate goals and the objectives that relate to them.
For the set goals, operational critical success factors (CSFs) can be defined. Based on these CSFs, a set of related
key performance indicators (KPIs) can then be agreed upon, against which success can be measured.
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Definitions
A necessary precondition for the achievement of intended results.Critical success factor (CSF)
An important metric used to evaluate the success in meeting an objective.Key performance indicator (KPI)
KPIs and behaviour5.1.5.1
KPIs for individuals can work as a competitive motivator, and this will drive positive results if the KPIs are set to
meet clear business goals. However, target-setting for individuals can also have a negative side, driving
inappropriate or unsuitable behaviours. This typically happens if there is too much focus placed on individual KPIs.
For example, service desk staff might be heavily driven to keep calls short, but this can negatively impact on
customer satisfaction, and even resolution times, if issues are not properly dealt with.
Operational KPIs should ideally be set for teams rather than focusing too closely on individuals. This means that
there can be some flexibility in the targets and behaviours allowed by the team as a whole. Individuals will, of
course, still need some specific guidelines for their performance, but this should be clearly within the goals of the
team and organization, and all targets should be set in the context of providing value for the organization.
Reporting5.1.5.2
Data collected as metrics is usually presented in the form of reports or s. It is important to remember that dashboard
reports are intended to support good decision-making, so their content should be relevant to the recipients of the
information and related to the required topic. Reports and dashboards should make it easy for the recipient to see
what needs to be done and then take action. As such, a good report or dashboard should answer two main questions:
how far are we from our targets and what bottlenecks prevent us from achieving better results?
Figure 5.5 shows the contribution of measurement and reporting to the service value chain, with the practice being
involved in all value chain activities:
Measurement and reporting enables strategy and service portfolio decisions by providing details on current Plan
performance of products and services.
Performance is constantly monitored and evaluated to support continual improvement, alignment, and Improve
value creation.
Engagement with stakeholders is based on correct, up-to-date, and sufficient information provided in the Engage
form of dashboards and reports.
Measurement and reporting provides information for management decisions at every stage Design and transition
before going live.
The practice ensures transparency of all development and procurement activities, enabling effective Obtain/build
management and integration with all other value chain activities.
Ongoing management of products and services is based on correct, up-to-date, and sufficient Deliver and support
performance information.
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•Figure 5.5 Heat map of the contribution of measurement and reporting to value chain activities
5.1.6 Organizational change management
Key message
The purpose of the is to ensure that changes in an organization organizational change management practice
are smoothly and successfully implemented, and that lasting benefits are achieved by managing the human
aspects of the changes.
Improvements invariably require people to change the way they work, their behaviour, and sometimes their role.
Regardless of whether the change is to a practice, the structure of the organization, related to technology, or is the
introduction of a new or changed service, people are essential to the success of the change. The organizational
change management practice aims to ensure that everyone affected by the change accepts and supports it. This is
achieved by removing or reducing resistance to the change, eliminating or addressing adverse impacts, and
providing training, awareness, and other means of ensuring a successful transition to the changed state.
Organizational change management contributes to every part of the SVS, wherever the cooperation, participation,
and enthusiasm of the people involved are required. For an improvement initiative to be successful, no matter what
the level or scope of the change is, there are certain elements that are essential to addressing the human factor.
Organizational change management must ensure that the following are established and maintained throughout the
change:
To gain support, the objectives of the change must be clear and make sense to the Clear and relevant objectives
stakeholders, based on the context of the organization. The change must be seen to be of real value.
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leaders within the organization. A sponsor is a manager or business leader who will advocate, and can authorize,
the change. Leaders should visibly support and consistently communicate their commitment to the change.
To be successful, a change needs to be made by willing participants. In part, Willing and prepared participants
this willingness will come from the participants being convinced of the importance of the change. In addition, the
more prepared participants feel they are to make the changes asked of them through relevant training, awareness,
and regular communications, the keener they will be to go forward.
Many changes fail because, after some time has passed, people revert to old ways of Sustained improvement
working. Organizational change management seeks to continually reinforce the value of the change through
regular communication, addressing any impacts and consequences of the change, and the support of sponsors and
leaders. The communication of value will be stronger when metrics are used to validate the message.
Activities of organizational change management5.1.6.1
The key activities of effective organizational change management are outlined in .Table 5.2
Table 5.2 Organizational change management activities
Activity Helps to deliver
Creation of a sense of urgency Clear and relevant objectives, willing participants
Stakeholder management Strong and committed participants
Sponsor management Strong and committed leadership
Communication Willing and prepared participants
Empowerment Prepared participants
Resistance management Willing participants
Reinforcement Sustained improvement
The activities of organizational change management interact with those of many other practices, particularly
continual improvement and project management. Other practices with important links to organizational change
management include measurement and reporting, workforce and talent management, and relationship management.
The various audiences affected by the change must be identified and their characteristics defined. Not all people will
respond to the same messaging or be motivated by the same drivers. It is particularly important in organizational
change management to take cultural differences into consideration, whether they are based on geography,
nationality, corporate history, or other factors.
Unlike other practices, accountability for organizational change management cannot be transferred to an external
supplier. Someone within the organization itself must be accountable for organizational change management, even if
the execution of some or most of the organizational change management activities is delegated to other people or
groups including suppliers. External expertise may, however, be sought to supplement the organizational change
management capabilities of an organization. Sometimes organizations struggle with the key skillsets needed for
organizational change management and can benefit from the support and guidance of an external supplier. Even if
external help is used, the overall leadership support must still come from the organization itself.
Figure 5.6 shows the contribution of organizational change management to the service value chain, with the practice
being involved in all value chain activities:
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Figure 5.6 Heat map of the contribution of organizational change management to value chain activities
Decisions regarding change at the portfolio level cause the initiation of organizational change management to Plan
support an approved initiative.
Without proper organizational change management, improvement cannot be sustained.Improve
The organizational change management practice actively engages with stakeholders at all stages of a Engage
change.
Organizational change management is essential for the deployment of a new service or a Design and transition
significant change to an existing one.
Organizational change management ensures engagement and cooperation within and across projects.Obtain/build
Organizational change management continues during live operations and support to ensure Deliver and support
that the change has been adopted and is sustained.
5.1.7 Portfolio management
Key message
The purpose of the is to ensure that the organization has the right mix of portfolio management practice
programmes, projects, products, and services to execute the organization’s strategy within its funding and
resource constraints.
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Portfolio management is a coordinated collection of strategic decisions that together enable the most effective
balance of organizational change and business as usual. Portfolio management achieves this through the following
activities:
Developing and applying a systematic framework to define and deliver a portfolio of products, services,
programmes, and projects in support of specific strategies and objectives.
Clearly defining products and services and linking them to the achievement of agreed outcomes, thus ensuring that
all activities in the service value chain are aligned with value definition and the related CSFs.
Evaluating and prioritizing incoming product, service, or project proposals and other change initiatives, based on
resource constraints, existing commitments, and the organization’s strategy and objectives.
Implementing a strategic investment appraisal and decision-making process based on an understanding of the value,
costs, risks, resource constraints, inter-dependencies, and impact on existing business activities.
Analysing and tracking investments based on the value of products, services, programmes, and projects to the
organization and its customers.
Monitoring the performance of the overall portfolio and proposing adjustments in response to any changes in
organizational priorities.
Reviewing the portfolios in terms of progress, outcomes, costs, risk, benefits, and strategic contribution.
Portfolio management plays an important role in how resources are allocated, deployed, and managed across the
organization. This facilitates the alignment of resources and capabilities with customer outcomes as part of the
strategy execution within the ITIL SVS.
Portfolio management encompasses a number of different portfolios, including the following:
The product/service portfolio is the complete set of products and/or services that are Product/service portfolio
managed by the organization, and it represents the organization’s commitments and investments across all its
customers and market spaces. It also represents current contractual commitments, new product and service
development, and ongoing improvement plans initiated as a result of continual improvement. The portfolio may
also include third-party products and services, which are an integral part of offerings to internal and external
customers.
The project portfolio is used to manage and coordinate projects that have been authorized, Project portfolio
ensuring objectives are met within time and cost constraints and to specification. The project portfolio also
ensures that projects are not duplicated, that they stay within the agreed scope, and that resources are available
for each project. It is the tool used to manage single projects as well as large-scale programmes consisting of
multiple projects.
The customer portfolio is maintained by the organization’s Customer portfolio relationship management
, which provides important input to the portfolio management practice. The customer portfolio is used to practice
record all the organization’s customers and is the relationship manager’s view of the internal and external
customers who receive products and/or services from the organization.
Portfolio management uses the customer portfolio to ensure that the relationship between business outcomes,
customers, and services is well understood. It documents these linkages and is validated with customers through
the relationship management practice.
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•Agile portfolio management
The success of programmes and projects has historically been gauged by the extent to which implementation
has been completed on time and within budget, and has delivered the required outputs, outcomes, and benefits.
In many cases, however, organizations have struggled to demonstrate a return on their investment from
change, and there is an increasing recognition that true success is only possible if the programme or project
was the ‘right’ initiative to implement in the first place. Agile portfolio management takes this further, with an
increased focus on visualizing strategic themes and the ability to reprioritize the portfolio swiftly, increase
workflow, reduce batch sizes of work, and control the length of longer-term development queues.
Traditional portfolio management is focused on top-down planning with work laid out over longer time
periods, but Agile portfolio management takes the concept of build–measure–learn cycles used by individual
Agile teams and applies it on an organization-wide basis. Teams work together, use modular design, and share
findings. This results in tremendous flexibility, which shifts the focus from continuing to execute an inflexible
plan to delivering value and making tangible progress according to business strategy and goals.
Organizations practising Agile portfolio management communicate as much as possible across the business.
They share knowledge and break barriers between organizational silos.
Figure 5.7 Heat map of the contribution of portfolio management to value chain activities
Figure 5.7 shows the contribution of portfolio management to the service value chain, with the practice being
involved in all value chain activities:
Portfolio management provides important information about the status of projects, products, and services Plan
currently in the pipeline or catalogue and what strategic objectives they have been designed to meet, which is
essential for planning. Portfolio management also includes reviewing the portfolios in terms of progress, value
creation, costs, risk, benefits, and strategic contribution.
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• Portfolio management identifies opportunities to improve efficiency and increase collaboration, eliminate Improve
duplication between projects, and identify and mitigate risks. Improvement initiatives are prioritized and if
approved may be added to the relevant portfolio.
When opportunities or demand are identified by the organization, the decisions on how to prioritize these Engage
are made based upon the organization’s strategy plus the risk assessment and resource availability.
Portfolio management is responsible for ensuring Design and transition, obtain/build, and deliver and support
that products and services are clearly defined and linked to the achievement of business outcomes, so that these
value chain activities are aligned with value.
5.1.8 Project management
Key message
The purpose of the is to ensure that all projects in the organization are project management practice
successfully delivered. This is achieved by planning, delegating, monitoring, and maintaining control of all
aspects of a project, and keeping the motivation of the people involved.
Projects are one of the means by which significant changes are introduced to an organization, and they can be
defined as temporary structures that are created for the purpose of delivering one or more outputs (or products)
according to an agreed business case. They may be a stand-alone initiative or part of a larger programme, together
with other interrelated projects, for more complex pieces of transformation. However, even stand-alone projects
should be considered in the context of the organization’s project portfolio.
There are different approaches to the way in which projects are delivered, with the waterfall and Agile methods
being the most common:
The works well in environments where the requirements are known upfront (and unlikely to waterfall method
significantly change), and where definition of the work is more important than the speed of delivery.
The Agile method works best where requirements are uncertain and likely to evolve rapidly over time (for example,
as business needs and priorities change), and where speed of delivery is often prioritized over the definition of
precise requirements.
Successful project management is important as the organization must balance its need to:
maintain current business operations effectively and efficiently
transform those business operations to change, survive, and compete in the market place
continually improve its products and services.
This balance between projects and ‘business as usual’ can potentially impact a number of areas, including resources
(people, assets, finances), service levels, customer relationships, and productivity, and so the organization’s capacity
and capability must be considered as part of its project management approach.
Projects depend on the behaviour of people both within the project team and the wider organization. The best project
plan amounts to very little if the right people are not involved at the right time. The relationship between the project
and the organization also needs to be considered, as many project team members will be seconded from business
operations on a full- or part-time basis.
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Figure 5.8 shows the contribution of project management to the service value chain, with the practice being involved
in all value chain activities:
Project management supports strategic and tactical planning with methods and tools.Plan
Many improvement initiatives are large and complex, so project management is the relevant practice to Improve
manage them.
Stakeholder engagement is a key element in the successful delivery of any project. Project management Engage
provides the organization with stakeholder management tools and techniques.
Design of a practice or service can be managed as a project or an iteration in a larger Design and transition
project; the same applies to some transitions.
Obtaining new resources as well as development and integration is usually performed as a project. Obtain/build
Various project management techniques are applicable to this activity.
The design, transition, and handover to internal or external service consumers for operational Deliver and support
management needs to be well planned and executed to ensure that business as usual is not compromised. The
project management practice ensures this happens.
Figure 5.8 Heat map of the contribution of project management to value chain activities
5.1.9 Relationship management
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Key message
The purpose of the relationship management practice is to establish and nurture the links between the
organization and its stakeholders at strategic and tactical levels. It includes the identification, analysis,
monitoring, and continual improvement of relationships with and between stakeholders.
The relationship management practice ensures that:
stakeholders’ needs and drivers are understood, and products and services are prioritized appropriately
stakeholders’ satisfaction is high and a constructive relationship between the organization and stakeholders is
established and maintained
customers’ priorities for new or changed products and services, in alignment with desired business outcomes, are
effectively established and articulated
any stakeholders’ complaints and s are handled well through a sympathetic (yet formal) processescalation
products and services facilitate value creation for the service consumers as well as for the organization
the organization facilitates value creation for all stakeholders, in line with its strategy and priorities
conflicting stakeholder requirements are mediated appropriately.
Service providers quite naturally focus most of their efforts on their relationships with service consumers (sponsors,
customers, and users). It is a very important stakeholder group; however, organizations should ensure that they
understand and manage their relationships with various stakeholders, both internal and external. The relationship
management practice should apply to all relevant parties. This means that the practice contributes to all service value
chain activities and multiple value streams.
Figure 5.9 shows the contribution of relationship management to the service value chain, with the practice being
involved in all value chain activities:
Relationship management provides information on the requirements and expectations of internal and external Plan
customers. It also assists with strategic assessment and prioritization across portfolios as well as evaluating
current and future market spaces, which are essential aspects of planning.
Relationship management seeks to harmonize and synergize different organizational relationships with Improve
internal and external customers to realize targeted benefits through continual improvement.
Relationship management is the practice responsible for engaging with internal and external customers to Engage
understand their requirements and priorities.
Relationship management plays a key role in coordinating feedback from internal and Design and transition
external customers as part of design. It also ensures that inconvenience and adverse impacts to customers during
transition are prevented or minimized.
Relationship management provides the customer requirements and priorities to help select products, Obtain/build
services or service components to be obtained or built.
Relationship management is responsible for ensuring that a high level of customer Deliver and support
satisfaction and a constructive relationship between the organization and its customers are established and
maintained.
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Figure 5.9 Heat map of the contribution of relationship management to value chain activities
5.1.10 Risk management
Key message
The purpose of the is to ensure that the organization understands and effectively risk management practice
handles risks. Managing risk is essential to ensuring the ongoing sustainability of an organization and creating
value for its customers. Risk management is an integral part of all organizational activities and therefore
central to the organization’s SVS (see for a definition of risk).section 2.5.3
Risk is normally perceived as something to be avoided because of its association with threats, and although this is
generally true, risk is also associated with opportunity. Failure to take opportunities can be a risk in itself. The
opportunity costs of under-served market spaces and unfulfilled demand is a risk to be avoided.
The organization’s portfolio can be mapped to an underlying portfolio of risks to be managed. When service
management is effective, products and services in the and pipeline represent opportunities to service catalogue
create and capture value for customers, the organization, and other stakeholders. Otherwise, those products and
services can represent threats due to the possibility of failure associated with the demand patterns they attract, the
commitments they require, and the costs they generate. Implementing strategy often requires changes to the product
and service portfolio, which means managing associated risks.
Decisions about risk need to be balanced so that the potential benefits are worth more to the organization than the
cost to address the risk. For example, innovation is inherently risky but could provide major benefits in improving
products and services, achieving competitive advantage, and increasing agility and resilience. The ability of the
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organization to limit its exposure to risk will also be of relevance. The aim should be to make an accurate
assessment of the risks in a given situation, and analyse the potential benefits. The risks and opportunities presented
by each course of action should be defined to identify appropriate responses.
For risk management to be effective, risks need to be:
Uncertainties that would affect the achievement of objectives within the context of a particular Identified
organizational activity. These uncertainties must be considered and then described to ensure that there is common
understanding.
The probability, impact, and proximity of individual risks must be estimated so they can be prioritized Assessed
and the overall level of risk (risk exposure) associated with the organizational activity understood.
Appropriate responses to risks must be planned, assigning owners and actionees, and then implemented, Treated
monitored, and controlled.
The following principles apply specifically to the risk management practice:
The organization should ensure that risks are appropriately managed. This does not mean Risk is part of business
that all risks are to be avoided. On the contrary, risk-taking is required to ensure long-term sustainability.
However, risks need to be identified, understood, and assessed against the levels of risk the organization is
willing to take (i.e. the risk appetite), and appropriately managed and monitored.
It is vital that the risk management practice is Risk management must be consistent across the organization
managed holistically to achieve consistency across the whole organization. To ensure effectiveness, there should
be ongoing consultation with stakeholders and appropriate flexibility for different parts of the organization. This
flexibility will allow tailored risk management procedures to be developed so that organizational units and/or
customer-specific circumstances are addressed.
The appropriate culture and behaviours demonstrated Risk management culture and behaviours are important
by all levels of the organization’s personnel are critical and must be embedded as part of the ‘way we do things’.
This will be demonstrated by behaviours and beliefs such as:
understanding that effective risk management is vital for the sustainability of the organization and supports the
achievement of business goals
using proactive risk management behaviours
ensuring transparency and clarity of risk management procedures, roles, responsibilities, and accountabilities
actively encouraging and following up the reporting of risks, incidents, and opportunities
ensuring remuneration structures support desired behaviours (i.e. this should not discourage the reporting of
incidents nor encourage over-reporting)
actively encouraging learning and growth in from the organization’s experiences and the experiences maturity
of other organizations.
ISO 31000:2018 Risk management
These guidelines provide an overall and general perspective of the purpose and principles of risk management.
They are applicable at all levels in any type of organization. ISO 31000 states that ‘the purpose of risk
management is the creation and protection of value’ and that risk management ‘improves performance,
encourages innovation and supports the achievement of objectives’.
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Figure 5.10 Heat map of the contribution of risk management to value chain activities
Figure 5.10 shows the contribution of risk management to the service value chain, with the practice being involved
in all value chain activities:
Risk management provides essential inputs to the organization’s strategy and planning, with a focus on risks Plan
that can drive variability of outcomes. These include:
shifts in customer demand and priorities
legal and regulatory changes
competitors
dependencies on suppliers and partners
technological changes
conflicting stakeholder requirements.
All improvement initiatives should be assessed and continually controlled by risk management. The Improve
practice establishes an important perspective for improvement prioritization, planning, and review.
The risk management practice helps to identify key stakeholders and optimize engagement based on such Engage
information as risk appetite and risk profiles.
Products and services should be designed to address prioritized risks. For example, they Design and transition
should be scalable to support changes in demand over time. For the organization, new or changed services carry
varying levels of risk which should be identified and assessed before the change is approved. If approved, the
risks should be managed as part of the change, including releases, deployments, and projects.
Risk management should inform decisions about the obtaining or building of products, services, or Obtain/build
service components.
Risk management helps to ensure that the ongoing delivery of products and services is Deliver and support
maintained at the agreed level and that all events are managed according to the risks that they introduce.
5.1.11 Service financial management
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Key message
The purpose of the is to support the organization’s strategies and service financial management practice
plans for service management by ensuring that the organization’s financial resources and investments are being
used effectively.
Service financial management supports decision-making by the governing body and management of the organization
regarding where to best allocate financial resources. It provides visibility into the budgeting, costing, and accounting
activities related to the products and services. To be effective in the context of the SVS, this practice needs to be
aligned with the organization’s policies and practices for portfolio management, project management, and
relationship management.
Finance is the common language which allows the organization to communicate effectively with its stakeholders.
Service financial management is responsible for managing the budgeting, costing, accounting, and for the charging
activities of an organization, acting as both service provider and service consumer:
This is an activity focused on predicting and controlling the income and expenditure of money Budgeting/costing
within the organization. Budgeting consists of a periodic negotiation cycle to set budgets and ongoing monitoring
of the current budgets. To accomplish this objective, it focuses on capturing forecasted and actual service
demand. It translates this demand into anticipated operating and project costs used for setting budgets and rates to
ensure adequate funding for products and services. Service-based budgeting seeks to understand the budget and
establish funding models based on the full cost of providing or consuming a service.
This activity enables the organization to account fully for the way its money is spent, allowing it to Accounting
compare forecast vs actual costs and expenditures (particularly the ability to identify usage and costs by
customer, service, and activity/ ). It usually involves accounting systems, including ledgers, charts of cost centre
accounts, and journals.
This activity is required to formally invoice service consumers (usually external) for the services Charging
provided to them. It is important to note that while charging is an optional practice, all services require a funding
model, because all costs need to be adequately funded by an agreed method.
Figure 5.11 shows the contribution of service financial management to the service value chain, with the practice
being involved in all value chain activities:
Plans at all levels need funding based on information, including financial. Service financial management Plan
supports planning with budgets, reports, forecasts, and other relevant information.
All improvements should be prioritized with return on investment in mind. Service financial management Improve
provides tools and information for improvements evaluation and prioritization.
Financial considerations are important for establishing and maintaining service relationships with service Engage
consumers, suppliers, and partners. For some stakeholders (investors, sponsors) the financial aspect of the
relationship is the most important. The practice supports this value chain activity by providing financial
information.
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Figure 5.11 Heat map of the contribution of service financial management to value chain activities
Service financial management helps to keep this activity cost-effective by providing the Design and transition
means for financial planning and control. It also ensures transparency of costs for products and services for the
service provider, accounting for design and transition expenditures.
Obtaining resources of all types is supported by budgeting (to ensure sufficient funding) and Obtain/build
accounting (to ensure transparency and evaluation).
Ongoing operational costs are a significant part of the organization’s expenditures. For Deliver and support
commercial organizations, ongoing service delivery activities are also the source of income. Service financial
management helps to ensure sufficient understanding of both. Charging (if applicable) supports the service
provider and the service consumer in their relationships with billing and reporting.
Evolution of financial management with new technology
Financial management refers to the efficient and effective management of money in the most appropriate
manner to accomplish the financial objectives of the organization. Since its inception, the financial
management discipline has gone through various degrees of change, improvement, and innovation. A key
component of this change has been the emergence of new technology. Many technological developments have
impacted upon financial management, but the three key innovations are the introduction of a greater number of
digital technologies, blockchain, and IT budgets and payment models.
Digital technologies
Major financial institutions are now analysing and using the latest technologies such as the cloud, , big data
analytics, and artificial intelligence (AI) to gain, or even just to maintain, competitive advantage in the market
place. However, new financial organizations are also using these technologies and starting operations without
any legacy IT, , or bureaucratic processes, which means they tend to be more Agile.technical debt
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Big data and analytics are being used by financial organizations to gain deeper insight into, and understanding
of, their customers. The amount of data being captured is phenomenal and requires scalable computing power
to process the data efficiently and cost-effectively. In return, this deeper customer understanding is causing
financial organizations to develop new and innovative products and services. Data is now being referred to as
the ‘new oil’, as organizations are scrambling to capture, analyse, and exploit it.
Blockchain
Another evolution in financial management is happening through a specific innovation called blockchain,
again enabled only through cloud-based services. Initially blockchain was developed to enable the de-
centralized management of crypto-currencies, allowing s to be audited and verified automatically transaction
and inexpensively.
Blockchain technologies are used to manage public digital ledgers. These digital ledgers record transactions
across many globally distributed computers. The distribution of s ensures that each record cannot be record
changed without the alteration of all subsequent records (also known as blocks) and without the consensus of
the entire distributed ledger (also called the network).
Global financial institutions are researching how this blockchain technology can provide them with
competitive advantage by streamlining back-office functions and reducing settlement rates for banking
transactions. New financial organizations are investigating blockchain to deliver alternative banking functions
at a fraction of the cost and overheads of traditional banks.
IT budgets and payment models
The emergence of new technology has not just affected financial organizations, but also the way that every
organization manages its IT services from a financial perspective. Much of the current wave of technological
evolution has been enabled by cloud computing, and this seems likely to continue for the foreseeable future.
This has led to a major change in how IT services are obtained, funded, and paid for by organizations.
Traditionally, IT resources were obtained using upfront capital expenditure (CAPEX). However, under the
cloud model, the provision of IT infrastructure, platforms, and software is provided ‘as a service’. This model
generally uses subscription-based or pay-as-you-use charging mechanisms which are paid for out of
operational expenditure (OPEX).
Another area that has seen change is the organization’s approach to setting and managing IT budgets. Flexible
IT budgets are required to meet the costs of scaling cloud-based services in an Agile and on-demand way.
Fixed IT budgets, often forecast months in advance, struggle to account for the scaling of IT resources in this
way.
Procurement rules within organizations are also having to change. There remains a place for fixed-price IT
projects and services; however, cloud-based digital services are generally sold under a variable-price model, i.
e. the more you use and consume, the more you pay, and vice versa. Therefore, those organizations that have
not updated their procurement rules to allow them to buy variable-priced IT resources will face a large self-
made barrier preventing them from using cloud-based digital services. To be as effective as possible,
organizations must update their policies and educate their staff to ensure that they can purchase IT under a
variable-priced model.
5.1.12 Strategy management
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Key message
The purpose of the is to formulate the goals of the organization and adopt the strategy management practice
courses of action and allocation of resources necessary for achieving those goals. Strategy management
establishes the organization’s direction, focuses effort, defines or clarifies the organization’s priorities, and
provides consistency or guidance in response to the environment.
The starting point for strategy management is to understand the context of the organization and define the desired
outcomes. The strategy of the organization establishes criteria and mechanisms that help to decide how to best
prioritize resources, capabilities, and investment to achieve those outcomes, while the practice ensures that the
strategy is defined, agreed, maintained, and achieved.
The objectives of strategy management are to:
analyse the environment in which the organization exists to identify opportunities that will benefit the organization
identify constraints that might prevent the achievement of business outcomes and define how those constraints
could be removed or their effects reduced
decide and agree the organization’s perspective and direction with relevant stakeholders, including its vision,
mission, and principles
establish the perspective and position of the organization relative to its customers and competitors. This includes
defining which services and products will be delivered to which market spaces and how to maintain competitive
advantage
ensure that the strategy has been translated into tactical and operational plans for each organizational unit that is
expected to deliver on the strategy
ensure the strategy is implemented through execution of the strategic plans and coordination of efforts at the
strategic, tactical, and operational levels
manage changes to the strategies and related documents, ensuring that strategies keep pace with changes to internal
and external environments and other relevant factors.
Strategy management is often seen as the responsibility of the senior management and governing body of an
organization. It enables them to set the objectives of the organization, to specify how the organization will meet
those objectives, and to prioritize the investments that are required to meet them. However, in today’s complex, fast-
changing environment, traditional strategy practices, based on careful deliberation, extensive research, and scenario
planning, are also evolving. Strategy is becoming more fluid and there is an increased focus on establishing the
essential purpose and principles of an organization, which can serve as the guiding direction for all its actions, even
as circumstances change. For example, a Lean strategy process can be used to balance the extremes of rigid planning
and uncontrolled experimentation. The strategy provides the overall direction and alignment of the organization,
serving as both a screen that innovative ideas must pass and a basis for evaluating the success of the SVS. It
encourages employees to be creative, while ensuring that they are in harmony with the organization and pursue only
valuable opportunities.
Strategy must enable value creation for the organization. A good business model describes the means of fulfilling an
organization’s objectives. The strategy of the organization should include some way to make its services and
products uniquely valuable to its customers; it must therefore define the organization’s approach for delivering
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better value. The need for a strategy is not limited to larger organizations; it is just as important for smaller ones,
allowing them to have a clear perspective, positioning, and plans to ensure that they remain relevant to their
customers.
Customers want solutions that break through performance barriers and achieve higher-quality outcomes with little or
no increase in cost. Such solutions are usually made available through innovative products and services. The
strategy should balance the organization’s need to deliver both efficient and effective operations with innovation and
future-focused activities.
The value of products and services from either the customer’s or the organization’s perspective may alter over time
due to changing conditions, events, or other factors outside an organization’s control. Strategy management ensures
a carefully considered approach to the organization’s relationships with customers, as well as both agility and
resilience in dealing with the variations in value that define those relationships.
A high-performance strategy is one that enables an organization to consistently outperform competing alternatives
over time, across business cycles, during industry disruptions, and when changes in leadership occur. It should be
focused on what needs to be done across the organization to facilitate value creation.
Figure 5.12 shows the contribution of strategy management to the service value chain, with the practice being
involved in all value chain activities:
Strategy management ensures that the organization’s strategy has been translated into tactical and operational Plan
plans for each organizational unit that is expected to deliver on the strategy.
Figure 5.12 Heat map of the contribution of strategy management to value chain activities
Strategy management provides strategy and objectives to be used to prioritize and evaluate improvements.Improve
When opportunities or demand are identified by the organization, the decisions about how to prioritize Engage
these are based upon the organization’s strategy plus the risk assessment and resource availability.
Strategy management ensures the strategy is Design and transition, obtain/build, and deliver and support
implemented through execution of the strategic plans in coordination with these activities. It also provides
feedback to enable the measurement and evaluation of products and services during design and transition.
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5.1.13 Supplier management
Key message
The purpose of the is to ensure that the organization’s suppliers and their supplier management practice
performances are managed appropriately to support the seamless provision of quality products and services.
This includes creating closer, more collaborative relationships with key suppliers to uncover and realize new
value and reduce the risk of failure.
Activities that are central to the practice include:
This should be across all products, Creating a single point of visibility and control to ensure consistency
services, service components, and procedures provided or operated by internal and external suppliers, including
customers acting as suppliers.
Maintaining a supplier strategy, policy, and contract management information
Agreements need to be aligned with business needs and Negotiating and agreeing contracts and arrangements
service targets. Contracts with external suppliers might need to be negotiated or agreed through the legal,
procurement, commercial, or contracts functions of the organization. For an internal supplier there will need to
be an internal agreement.
This should be done when planning, Managing relationships and contracts with internal and external suppliers
designing, building, orchestrating, transitioning, and operating products and services, working closely with
procurement and performance management.
Supplier performance should be monitored to ensure that they meet the terms, Managing supplier performance
conditions, and targets of their contracts and agreements, while aiming to increase the value for money obtained
from suppliers and the products/services they provide.
Sourcing, supplier strategy, and relationships5.1.13.1
The supplier strategy, sometimes called the sourcing strategy, defines the organization’s plan for how it will
leverage the contribution of suppliers in the achievement of its overall service management strategy.
Some organizations may adopt a strategy that dictates the use of suppliers only in very specific and limited
circumstances, while another organization may choose to make extensive use of suppliers in product and service
provision. A successful sourcing strategy requires a thorough understanding of an organization’s objectives, the
resources required to deliver that strategy, the environmental (e.g. market) factors, and the risks associated with
implementing specific approaches.
There are different types of supplier relationship between an organization and its suppliers that need to be
considered as part of the organization’s sourcing strategy. These include:
The products or services are developed and/or delivered internally by the organization.Insourcing
The process of having external suppliers provide products and services that were previously provided Outsourcing
internally. Outsourcing involves substitution, i.e. the replacement of internal capability by that of the supplier.
Procurement of a product or service from one supplier. This can either be a single Single source or partnership
supplier who supplies all services directly or an external service integrator who manages the relationships with
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all suppliers and integrates their services on behalf of the organization. These close relationships (and the mutual
interdependence they create) foster high quality, reliability, short lead times, and cooperative action.
Procurement of a product or service from more than one independent supplier. These products and Multi-sourcing
services can be combined to form new services which the organization can provide to internal and external
customers. As organizations place more focus on increased specialization and compartmentalization of
capabilities to increase agility, multi-sourcing is increasingly a preferred option. Traditionally organizations have
managed these suppliers separately across different parts of the organization, but there is a move towards
developing an internal service integration capability or selecting an external service integrator.
Individual suppliers can provide support services and products that independently have a relatively minor and fairly
indirect role in value generation, but collectively make a much more direct and important contribution to this and the
implementation of the organization’s strategy.
Evaluation and selection of suppliers5.1.13.2
The organization should evaluate and select suppliers based on:
The value of the service to the business, provided by the supplierImportance and impact
The risks associated with using the serviceRisk
The cost of the service and its provision.Costs
Other important factors in evaluating and selecting suppliers include the willingness or feasibility of a supplier to
customize its offerings or work cooperatively in a multi-supplier environment; the level of influence of the
organization or service integrator on the supplier’s performance; and the degree of dependence of one supplier on
other suppliers.
Activities5.1.13.3
Activities of the supplier management practice include:
The purpose of this activity is to understand new or changed service requirements and review Supplier planning
relevant enterprise documentation to develop a sourcing strategy and supplier management plan, working in
conjunction with other practices such as business analysis, portfolio management, service design, and service
level management.
The purpose of this activity is to identify, evaluate, and select suppliers for Evaluation of suppliers and contracts
the delivery of new or changed business services.
The purpose of this activity is to develop, negotiate, review, update, finalize, Supplier and contract negotiation
and award supplier contracts. The failure of negotiations will trigger a new contract, an updated contract, or a
contract termination.
This procedure aims to categorize suppliers on a periodic basis and after the awarding of Supplier categorization
new or updated contracts. Commonly used categories include strategic, tactical, and commodity suppliers.
The purpose of this activity is to ensure that the organization obtains value Supplier and contract management
for money and the delivery of the agreed performance of the supplier against the contract and targets.
The purpose of this activity is to manage warranty requirements or clauses and make Warranty management
warranty claims when a warranty issue arises, in conjunction with performance management.
This activity includes the setup and continuous tracking of operational measures that Performance management
have been mutually agreed with internal and external suppliers. It focuses on the key measures, which can then
be consolidated on a supplier scorecard. Monitoring will allow for the identification of systemic problems and
improvement opportunities and provide a basis for reporting.
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• This procedure aims to manage contract renewals and terminations, which are Contract renewal or termination
triggered by either specific or periodic reviews of supplier performance.
Service integration5.1.13.4
Service integration is responsible for coordinating or orchestrating all the suppliers involved in the development and
delivery of products and services. It focuses on the end-to-end provision of service, ensuring control of all interfaces
and outcomes from suppliers, and facilitating collaboration between suppliers. An organization can either perform
the role of service integrator itself, or use a third-party service integrator. It is possible to develop a hybrid model,
where the organization is responsible for some of the service integration function and augments that capability with
that of an external service integrator. The service integration function can also be operated by a lead supplier. The
service integrator is also responsible for assurance; this includes performance management and reporting, defining
roles and responsibilities, maintaining relationships across all parties, and heading regular forums and steering
committees to address issues, agree priorities, and make decisions.
Figure 5.13 Heat map of the contribution of supplier management to value chain activities
Figure 5.13 shows the contribution of supplier management to the service value chain, with the practice being
involved in all value chain activities:
Supplier management provides the organization’s approved sourcing strategy and plan.Plan
The practice identifies opportunities for improvement with existing suppliers, is involved in the selection Improve
of new suppliers, and provides ongoing supplier performance management.
Supplier management is responsible for engaging with all suppliers and for the evaluation and selection of Engage
suppliers; for negotiating and agreeing contracts and agreements; and for ongoing management of supplier
relationships.
Supplier management is responsible for defining requirements for contracts and agreements Design and transition
related to new or changed products or services, in alignment with the organization’s needs and service targets.
Supplier management supports the procurement or obtaining of products, services, and service Obtain/build
components from third parties.
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• Supplier performance for live services is managed by this practice to ensure that suppliers Deliver and support
meet the terms, conditions, and targets of their contracts and agreements.
The ITIL story: Axle’s supplier management
Marco: I’ve been assigned to the supplier management role at Axle. This means I’ll be
managing the monthly governance forums with our suppliers to track their service performance
as outlined in their s. I’ll make sure the contractual obligations of our service level agreement
suppliers are in line with Axle Car Hire business outcomes.
Radhika: For example, we promise our customers that the cars will always be clean. We used
to have our cars cleaned weekly, but to meet the new service promise, Craig’s Cleaning will
clean the cars each time they’re returned to the lot.
Henri: Axle’s services depend on multiple partners and suppliers. We work with car dealers and
manufacturers, tyre manufacturers, cleaners, and roadside assistance providers. We also have
Axle agents who promote our offerings, and partners in a loyalty programme who provide their
services to our clients on special terms.
Radhika: We use many partners’ and suppliers’ services for our IT systems as well. This
supports Axle’s work on many levels, from internet access to software development.
Marco: Greater digitalization at Axle means more opportunity to build IT into our service
offerings. The Axle app makes it possible to book and pay for car hire via personal devices. The
Axle Aware system is installed in every car and is supported by IT and our partners. Fleet
maintenance is planned based on the hire history of our vehicles, and controlled by our IT
systems.
Henri: Because of this, Axle’s business is now heavily dependent on IT and non-IT suppliers.
Integrating and coordinating these services is part of supplier management. We expect our
suppliers to provide a consistent level of quality for Axle and our customers.
5.1.14 Workforce and talent management
Key message
The purpose of the is to ensure that the organization has the workforce and talent management practice
right people with the appropriate skills and knowledge and in the correct roles to support its business
objectives. The practice covers a broad set of activities focused on successfully engaging with the organization’
s employees and people resources, including planning, recruitment, onboarding, learning and development,
performance measurement, and succession planning.
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Workforce and talent management plays a critical role in establishing by helping organizational velocity
organizations to proactively understand and forecast future demand for services. It also ensures that the right people
with the necessary competencies are available at the right time to deliver the services required.
Achieving this objective reduces backlogs, improves quality, avoids rework caused by defects, and reduces wait
time while also closing knowledge and skills gaps. As organizations transform their practices and automation and
organizational capabilities to support the digital economy and improve speed to market, having the right talent
becomes critical.
Workforce and talent management enables organizations, leaders, and managers to focus on creating an effective
and actionable people strategy, and to execute that strategy at various levels within the organization. A good strategy
should support the identification of roles and associated knowledge, as well as the skills and attitudes needed to keep
an organization running day to day. It should also address the emerging technologies and leadership and
organizational change capabilities required to position the organization for future growth.
The idea of managing and developing an organization’s workforce and talent is not new. However, with the
increased use of third-party suppliers and the rapid adoption of automation for repeatable work, traditional roles are
changing dramatically. Because of this, workforce and talent management should be the responsibility of leaders
and managers at every level throughout the organization.
Definitions
The speed, effectiveness, and efficiency with which an organization operates. Organizational velocity
Organizational velocity influences time to market, quality, safety, costs, and risks.
The combination of observable and measurable knowledge, skills, abilities, and attitudes that Competencies
contribute to enhanced employee performance and ultimately result in organizational success.
A developed proficiency or dexterity in thought, verbal communication, or physical action.Skills
The power or aptitude to perform physical or mental activities related to a profession or trade.Ability
The understanding of facts or information acquired by a person through experience or education; Knowledge
the theoretical or practical understanding of a subject.
A set of emotions, beliefs, and behaviours towards a particular object, person, thing, or event.Attitude
Workforce and talent management activities5.1.14.1
The activities of this practice cover a broad range of areas and are performed by a variety of roles for specific
purposes, including:
Translating the organization’s strategy and objectives into desired organizational capabilities, Workforce planning
and then into competencies and roles.
The acquisition of new employees and contractors to fill identified gaps related to desired capabilities.Recruitment
The delivery of regular performance measurement and assessments against Performance measurement
established job roles based on pre-defined competencies.
An employee’s use of published job roles and competency frameworks to proactively plan Personal development
personal growth and advancement.
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• Targeted education and experiential learning opportunities using various formal and Learning and development
non-formal methods.
Formal mentoring, engagement, and succession planning activities provided Mentoring and succession planning
by leadership.
Figure 5.14 presents the activities of workforce and talent management.
Figure 5.14 Workforce and talent management activities
Figure 5.15 shows the contribution of workforce and talent management to the service value chain, with the practice
being involved in all value chain activities; however, it is a primary focus of plan and improve activities:
Workforce planning is a specific output of this value chain activity, as leadership and management evaluate Plan
their current organizational capabilities in relation to future requirements for the organization’s resources, as well
as the products and services defined within the service portfolio.
All improvements require sufficiently skilled and motivated people. The workforce and talent Improve
management practice ensures understanding and fulfilment of these requirements.
Workforce and talent management is closely linked to this value chain activity. It works with practices Engage
such as relationship management, service request management, and service desk to understand and forecast
changing service demand requirements, and how this will impact and direct workforce planning and talent
management activities.
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• Talent management is important to this value chain activity. Specific focus is given to Design and transition
knowledge, skills, and abilities related to systems and design thinking.
Talent management focuses specifically on knowledge, skills, and abilities related to collaboration, Obtain/build
customer focus, quality, speed, and cost management.
Specific focus by talent management is given to knowledge, skills, and abilities related to Deliver and support
customer service, performance management, and customer interactions and relationships.
Figure 5.15 Heat map of the contribution of workforce and talent management to value chain activities
5.2 Service management practices
5.2.1 Availability management
Key message
The purpose of the is to ensure that services deliver agreed levels of availability management practice
availability to meet the needs of customers and users.
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Definition: Availability
The ability of an IT service or other configuration item to perform its agreed function when required.
Availability management activities include:
negotiating and agreeing achievable targets for availability
designing infrastructure and applications that can deliver required availability levels
ensuring that services and components are able to collect the data required to measure availability
monitoring, analysing, and reporting on availability
planning improvements to availability.
In the simplest terms, the availability of a service depends on how frequently the service fails, and how quickly it
recovers after a failure. These are often expressed as and (MTBF)mean time between failures mean time to
: (MTRS)restore service
MTBF measures how frequently the service fails. For example, a service with a MTBF of four weeks fails, on
average, 13 times each year.
MTRS measures how quickly service is restored after a failure. For example, a service with a MTRS of four hours
will, on average, fully recover from failure in four hours. This does not mean that service will always be restored
in four hours, as MTRS is an average over many incidents.
Older services were often designed with very high MTBF, so that they would fail infrequently. More recently there
has been a shift towards optimizing service design to minimize MTRS, so that services can be recovered very
quickly. The most effective way to do this is to design anti-fragile solutions, which recover automatically and very
quickly, with virtually no business impact. For some services, even a very short failure can be catastrophic, and for
these it is more important to focus on increasing MTBF.
The way that availability is defined must be appropriate for each service. It is important to understand users’ and
customers’ views on availability and to define appropriate metrics, reports, and dashboards. Many organizations
calculate percentage availability based on MTBF and MTRS, but these percentage figures rarely match customers’
experience, and are not appropriate for most services. Other things that should be considered include:
which vital business functions are affected by different application failures
at what point is slow performance so bad that the service is effectively unusable
when does the service need to be available, and when can the service provider carry out maintenance activities.
Measurements that work well for some services include:
Calculated by multiplying incident duration by the number of users impacted, or by adding User outage minutes
up the number of minutes each user is affected. This works well for services that directly support user
productivity; for example, an email service.
Calculated by subtracting the number of transactions from the number expected to Number of lost transactions
have happened during the time period. This works well for services that support transaction-based business
processes, such as manufacturing support.
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• Calculated by measuring how business productivity was impacted by the failures of Lost business value
supporting services. This is easily understood by customers and can be useful for planning investment in
improved availability. However, it can be difficult to identify which lost business value was caused by IT service
failures and which had other causes.
Service availability is one of the most important and visible characteristics of services, and has a User satisfaction
great influence on user satisfaction. It is important to make sure that users are satisfied with service availability in
addition to meeting formally agreed availability targets.
Figure 5.16 Heat map of the contribution of availability management to value chain activities
Most organizations do not have dedicated availability management staff. The activities needed are often distributed
around the organization. Some organizations include availability management activities as part of risk management,
while others combine it with service continuity management or with capacity and performance management. Some
organizations have site reliability engineers (SREs) who manage and improve the availability of specific products or
services.
A process is needed for the regular testing of failover and recovery mechanisms. Many organizations also have a
process for calculating and reporting availability metrics; however, availability management is driven as much by
culture, experience, and knowledge as by following procedures.
Figure 5.16 shows the contribution of availability management to the service value chain, with the practice being
involved in all value chain activities:
Availability management must be considered in service portfolio decisions and when setting goals and Plan
direction for services and practices.
When planning and making improvements, availability management ensures that services are not Improve
degraded.
Availability requirements for new and changed services must be understood and captured.Engage
New and changed services must be designed to meet availability targets and testing of Design and transition
availability controls is needed during transition.
Availability is a consideration when building components or obtaining them from third parties.Obtain/build
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• This activity includes measurement of availability and reacting to events which might affect Deliver and support
the ability to meet availability targets.
5.2.2 Business analysis
Key message
The purpose of the is to analyse a business or some element of it, define its business analysis practice
associated needs, and recommend solutions to address these needs and/or solve a business problem, which
must facilitate value creation for stakeholders. Business analysis enables an organization to communicate its
needs in a meaningful way, express the rationale for change, and design and describe solutions that enable
value creation in alignment with the organization’s objectives.
Analysis and solutions should be approached in a holistic way that includes consideration of processes,
organizational change, technology, information, policies, and strategic planning. The work of business analysis is
performed primarily by business analysts (BAs), although others may contribute.
In IT, business analysis practices are frequently applied in software development projects, but they are also
appropriate to higher-level architectures, services, and the organization’s service value system (SVS) in general. To
restrict the application of business analysis to software development alone is to run the risk of developing
incomplete solutions.
The key activities associated with business analysis are:
analysing business s, business processes, services, or architectures in the changing internal and external system
context
identifying and prioritizing parts of the SVS, and products and services that require improvement, as well as
opportunities for innovation
evaluating and proposing actions that can be taken to create the desired improvement. Actions may include not only
IT system changes, but also process changes, alterations to organizational structure, and staff development
documenting the business requirements for the supporting services to enable the desired improvements
recommending solutions following analysis of the gathered requirements and validating these with stakeholders.
Business requirements can be utility-focused or warranty-focused.
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Definitions
Typically non-functional requirements captured as inputs from key stakeholders Warranty requirements
and other practices. Organizations should aim to manage a library of pre-defined warranty acceptance
for use in practices such as project management and software development and management.criteria
Functional requirements which have been defined by the customer and are unique to a Utility requirements
specific product.
Business analysis should ensure the most efficient and comprehensive achievement of these activities, but not make
the error of analysis without intent of subsequent action. An organization should not attempt to analyse an issue so
deeply or for so long that a timely solution cannot be achieved, or try to solve every problem with a single, massive
initiative that fails to facilitate value creation in enough time to be of practical use. The processes associated with
this practice should guard against these mistakes.
The scope of work for the business analysis practice includes using and evaluating information from operations and
support to build knowledge of how the services and practices are performing in the live environment. This
knowledge will not only help to identify areas for improvement in the current service design, but also reveal lessons
learned that will improve future designs.
The role of business analysis may be defined differently from organization to organization, but it is a recognized
discipline with a specific set of skills. Business analysis requires not only critical thinking and evaluation, but also
listening, communication, and facilitation skills, the ability to analyse and document business processes and use case
s, and perform data analysis and .modelling
When the system or service being analysed crosses many organizational boundaries, it is important that the various
business units involved adopt a partner relationship to ensure a holistic analysis and comprehensive solution
proposal. If compromises are needed from one or more of these units, a collaborative, partner-like relationship will
facilitate a solution that will provide value for all the parties.
Without the right information, business analysis cannot be successful, and to be effective, it needs access to all
information related to the area under analysis. For business processes, for example, business analysts will need
access to all process documentation, including process flows, procedures and work instructions, policies, and
process metrics. They may need to interview not only the person responsible for the business process, but also those
who participate in each part of the process to compile a clear view of the process and the related issues.
The technologies deployed usually include whatever system the organization uses to gather and document
requirements, as well as project management systems and reporting tools for gathering and processing data and
information for analysis. Other technologies that can be of assistance when presenting the results of analysis are
visual modelling and mapping tools and features of many of the typical office productivity suites such as
spreadsheets, presentation software, and word processing.
As with all practices, business analysis cannot ensure successful solutions in isolation. For example, strategy
management practices provide high-level guidance to business analysis, which then directs analysis and solution
recommendations. In turn, the recommendations from business analysis can influence technical and other strategies.
To ensure the participation of the right parties, business analysis relies on relationship management. Furthermore,
the natural progression through the service value chain requires interaction between business analysis activities and
those from service design, software development and management, measurement and reporting, and many others.
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Figure 5.17 shows the contribution of business analysis to the service value chain, with the practice being involved
in all value chain activities:
Business analysis contributes to strategic decision-making on what will be done and how.Plan
All levels of evaluation and improvement benefit from business analysis, which is particularly applicable Improve
at strategic and tactical levels.
Business analysis is key to the gathering of requirements during this value chain activity.Engage
Gathering, prioritization, and analysis of accurate requirements can help ensure that a high-Design and transition
quality solution is designed and progressed to operation.
Business analysis skills are integral to the definition of an agreed solution.Obtain/build
Data from the ongoing delivery of a service can be part of business analysis activities when Deliver and support
designing changes to the service, as well as when looking for opportunities for continual improvement.
Figure 5.17 Heat map of the contribution of business analysis to value chain activities
5.2.3 Capacity and performance management
Key message
The purpose of the is to ensure that services achieve capacity and performance management practice
agreed and expected performance, satisfying current and future demand in a cost-effective way.
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Definition: Performance
A measure of what is achieved or delivered by a system, person, team, practice, or service.
Service performance is usually associated with the number of service actions performed in a timeframe and the time
required to fulfil a service action at a given level of demand. Service performance depends on service capacity,
which is defined as the maximum throughput that a CI or service can deliver. Specific metrics for capacity and
performance depend on the technology and business nature of the service or CI.
The capacity and performance management practice usually deals with service performance and the performance of
the supporting resources on which it depends, such as infrastructure, applications, and third-party services. In many
organizations, the capacity and performance management practice also covers the capacity and performance of the
personnel.
The capacity and performance management practice includes the following activities:
service performance and capacity analysis:
research and monitoring of the current service performance
capacity and performance modelling
service performance and :capacity planning
capacity requirements analysis
demand forecasting and resource planning
performance improvement planning.
Service performance is an important aspect of the expectations and requirements of customers and users, and
therefore significantly contributes to their satisfaction with the services they use and the value they perceive.
Capacity and performance analysis and planning contributes to service planning and building, as well as to ongoing
service delivery, evaluation, and improvement. An understanding of capacity and performance models and patterns
helps to forecast demand and to deal with incidents and defects.
Figure 5.18 shows the contribution of capacity and performance management to the service value chain, with the
practice being involved in all service value chain activities:
Capacity and performance management supports tactical and operational planning with information about Plan
actual demand and performance, and with modelling and forecasting tools and methods.
Improvements are identified and driven by performance information provided by this practice.Improve
Customers’ and users’ expectations are managed and supported by information about performance and Engage
capacity constraints and capabilities.
Capacity and performance management is essential for product and service design: it helps Design and transition
to ensure that new and changed services are designed for optimum performance, capacity, and scalability.
Capacity and performance management helps to ensure that components and services being obtained Obtain/build
or built meet performance needs of the organization.
Services and service components are supported and tested by performance and capacity Deliver and support
targets, metrics and measurement, and reporting targets and tools.
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Figure 5.18 Heat map of the contribution of capacity and performance management to value chain activities
5.2.4 Change enablement
Key message
The purpose of the is to maximize the number of successful service and product change enablement practice
changes by ensuring that risks have been properly assessed, authorizing changes to proceed, and managing the
.change schedule
Definition: Change
The addition, modification, or removal of anything that could have a direct or indirect effect on services.
The scope of change enablement is defined by each organization. It will typically include all IT infrastructure,
applications, documentation, processes, supplier relationships, and anything else that might directly or indirectly
impact a product or service.
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It is important to distinguish change enablement from organizational change management. Organizational change
management manages the people aspects of changes to ensure that improvements and organizational transformation
initiatives are implemented successfully. Change enablement is usually focused on changes in products and services.
Change enablement must balance the need to make beneficial changes that will deliver additional value with the
need to protect customers and users from the adverse effect of changes. All changes should be assessed by people
who are able to understand the risks and the expected benefits; the changes must then be authorized before they are
deployed. This assessment, however, should not introduce unnecessary delay.
The person or group who authorizes a change is known as a . It is essential that the correct change change authority
authority is assigned to each type of change to ensure that change enablement is both efficient and effective. In high-
velocity organizations, it is a common practice to decentralize change approval, making the peer review a top
predictor of high performance.
There are three types of change that are each managed in different ways:
These are low-risk, pre-authorized changes that are well understood and fully documented, and Standard changes
can be implemented without needing additional authorization. They are often initiated as service requests, but
may also be operational changes. When the procedure for a is created or modified, there should standard change
be a full risk assessment and authorization as for any other change. This risk assessment does not need to be
repeated each time the standard change is implemented; it only needs to be done if there is a modification to the
way it is carried out.
These are changes that need to be scheduled, assessed, and authorized following a process. Normal changes
s based on the type of change determine the roles for assessment and authorization. Some normal Change model
changes are low risk, and the change authority for these is usually someone who can make rapid decisions, often
using automation to speed up the change. Other normal changes are very major and the change authority could be
as high as the management board (or equivalent). Initiation of a normal change is triggered by the creation of a
change request. This may be created manually, but organizations that have an automated pipeline for continuous
and continuous deployment often automate most steps of the change enablement process.integration
These are changes that must be implemented as soon as possible; for example, to resolve an Emergency changes
incident or implement a security patch. s are not typically included in a change schedule, and Emergency change
the process for assessment and authorization is expedited to ensure they can be implemented quickly. As far as
possible, emergency changes should be subject to the same testing, assessment, and authorization as normal
changes, but it may be acceptable to defer some documentation until after the change has been implemented, and
sometimes it will be necessary to implement the change with less testing due to time constraints. There may also
be a separate change authority for emergency changes, typically including a small number of senior managers
who understand the business risks involved.
The change schedule is used to help plan changes, assist in communication, avoid conflicts, and assign resources. It
can also be used after changes have been deployed to provide information needed for incident management, problem
management, and improvement planning. Regardless of who the change authority is, they may need to communicate
widely across the organization. Risk assessment, for instance, may require them to gather input from many people
with specialist knowledge. Additionally, there is usually a need to communicate information about the change to
ensure people are fully prepared before the change is deployed.
Figure 5.19 shows the contribution of change enablement to the service value chain, with the practice being
involved in all value chain activities:
Changes to product and service portfolios, policies, and practices all require a certain level of control, and the Plan
change enablement practice is used to provide it.
Many improvements will require changes to be made, and these should be assessed and authorized in the Improve
same way as all other changes.
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• Customers and users may need to be consulted or informed about changes, depending on the nature of the Engage
change.
Many changes are initiated as a result of new or changed services. Change enablement Design and transition
activity is a major contributor to transition.
Changes to components are subject to change enablement, whether they are built in house or Obtain/build
obtained from suppliers.
Changes may have an impact on delivery and support, and information about changes must Deliver and support
be communicated to personnel who carry out this value chain activity. These people may also play a part in
assessing and authorizing changes.
Figure 5.19 Heat map of the contribution of change enablement to value chain activities
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The ITIL story: Change enablement
Henri: The car hire market is developing faster than ever. To make sure that Axle meets
customer demands and capitalizes on opportunities, we need to have speed-to-market and to
experiment with new ideas. Our new service offerings will see a lot of change at Axle. Some
teams will need to double, while others may reduce. We need to bring everyone at Axle on board.
Radhika: The change enablement practice at Axle makes sure that our services achieve the
right balance of flexibility and reliability.
Marco: Some of our processes are highly automated and designed for the fast deployment of
changes. These are perfect for changes to our booking app and some of our IT systems.
Su: In other cases, such as when we update our vehicles, we use a mix of manual and automated
testing. For example, the Axle Aware road monitoring and safety system requires consultation
and approval before we can update it.
Marco: Systems such as Axle Aware can’t be altered like the booking app. The priority for those
changes is that we act safely and comply with appropriate regulations. That’s more important
than time to market.
5.2.5 Incident management
Key message
The purpose of the incident management practice is to minimize the negative impact of incidents by restoring
normal service operation as quickly as possible.
Definition: Incident
An unplanned interruption to a service or reduction in the quality of a service.
Incident management can have an enormous impact on customer and user satisfaction, and on how customers and
users perceive the service provider. Every incident should be logged and managed to ensure that it is resolved in a
time that meets the expectations of the customer and user. Target resolution times are agreed, documented, and
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communicated to ensure that expectations are realistic. Incidents are prioritized based on an agreed classification to
ensure that incidents with the highest business impact are resolved first.
Organizations should design their incident management practice to provide appropriate management and resource
allocation to different types of incident. Incidents with a low impact must be managed efficiently to ensure that they
do not consume too many resources. Incidents with a larger impact may require more resources and more complex
management. There are usually separate processes for managing s, and for managing information major incident
security incidents.
Information about incidents should be stored in incident records in a suitable tool. Ideally, this tool should also
provide links to related CIs, changes, problems, s, and other knowledge to enable quick and efficient known error
diagnosis and . Modern IT service management tools can provide automated matching of incidents to other recovery
incidents, problems, or known errors, and can even provide intelligent analysis of incident data to generate
recommendations for helping with future incidents.
It is important that people working on an incident provide good-quality updates in a timely fashion. These updates
should include information about symptoms, business impact, CIs affected, actions completed, and actions planned.
Each of these should have a timestamp and information about the people involved, so that the people involved or
interested can be kept informed. There may also be a need for good collaboration tools so that people working on an
incident can collaborate effectively.
Incidents may be diagnosed and resolved by people in many different groups, depending on the complexity of the
issue or the incident type. All of these groups need to understand the incident management process, and how their
contribution to this helps to manage the value, outcomes, costs, and risks of the services provided:
Some incidents will be resolved by the users themselves, using self-help. Use of specific self-help records should
be captured for use in measurement and improvement activities.
Some incidents will be resolved by the service desk.
More complex incidents will usually be escalated to a for . Typically, the routing is based support team resolution
on the incident category, which should help to identify the correct team.
Incidents can be escalated to suppliers or partners, who offer support for their products and services.
The most complex incidents, and all major incidents, often require a temporary team to work together to identify
the resolution. This team may include representatives of many stakeholders, including the service provider,
suppliers, users, etc.
In some extreme cases, may be invoked to resolve an incident. Disaster recovery is disaster recovery plans
described in the ( ).service continuity management practice section 5.2.12
Effective incident management often requires a high level of collaboration within and between teams. These teams
may include the service desk, technical support, application support, and vendors. Collaboration can facilitate
information-sharing and learning, as well as helping to solve the incident more efficiently and effectively.
Tip
Some organizations use a technique called swarming to help manage incidents. This involves many different
stakeholders working together initially, until it becomes clear which of them is best placed to continue and
which can move on to other tasks.
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Third-party products and services that are used as components of a service require support agreements which align
the obligations of the supplier with the commitments made by the service provider to customers. Incident
management may require frequent interaction with these suppliers, and routine management of this aspect of
supplier contracts is often part of the incident management practice. A supplier can also act as a service desk,
logging and managing all incidents and escalating them to subject matter experts or other parties as required.
There should be a formal process for logging and managing incidents. This process does not usually include detailed
procedures for how to diagnose, investigate, and resolve incidents, but can provide techniques for making
investigation and diagnosis more efficient. There may be scripts for collecting information from users during initial
contact, and this may lead directly to diagnosis and resolution of simple incidents. Investigation of more
complicated incidents often requires knowledge and expertise, rather than procedural steps.
Dealing with incidents is possible in every value chain activity, though the most visible (due to effect on users) are
incidents in an operational environment.
Figure 5.20 shows the contribution of incident management to the service value chain, with the practice being
applied mainly to the engage, and deliver and support value chain activities. Except for plan, other activities may use
information about incidents to help set priorities:
Incident records are a key input to planning activities at a tactical and operational level.Plan
Incident records are a key input to improvement activities, and are prioritized both in terms of incident Improve
frequency and severity.
Incidents are visible to users, and significant incidents are also visible to customers. Good incident Engage
management requires regular communication to understand the issues, set expectations, provide status updates,
and agree that the issue has been resolved so the incident can be closed.
Incidents may occur in s, as well as during service release and Design and transition test environment
deployment. The practice ensures these incidents are resolved in a timely and controlled manner.
Incidents may occur in s. Incident management practice ensures these Obtain/build development environment
incidents are resolved in a timely and controlled manner.
Incident management makes a significant contribution to support. This value chain activity Deliver and support
includes resolving incidents and problems.
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Figure 5.20 Heat map of the contribution of incident management to value chain activities
The ITIL story: Axle’s incident management
Radhika: Axle faces many potential IT and non-IT incidents. Cars can break down, road
accidents might occur, or our customers might face challenges with unfamiliar road rules.
Marco: A car booking can be affected by an error in our app, or by a user getting lost due to a
navigation error with our software. When incidents occur, we have to be ready to restore
normal services as soon as possible. We also have to make sure our team knows how and when
to switch from pre-defined recovery procedures to swarming and collective analysis.
Radhika: We also make sure that such cases are followed by investigation and improvements.
Henri: Axle has developed clear processes for all types of incidents, with workarounds
available for cases that happen frequently, such as a tyre puncture or loss of internet
connectivity.
Radhika: Our teams work together with our suppliers and partners to ensure fast and effective
incident response. We develop and test recovery procedures together with the partners involved
in any incidents we experience.
5.2.6 IT asset management
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Key message
The purpose of the is to plan and manage the full lifecycle of all s, to IT asset management practice IT asset
help the organization:
maximize value
control costs
manage risks
support decision-making about purchase, re-use, retirement, and disposal of assets
meet regulatory and contractual requirements.
Definition: IT asset
Any financially valuable component that can contribute to the delivery of an IT product or service.
The scope of IT asset management typically includes all software, hardware, networking, cloud services, and client
devices. In some cases, it may also include non-IT assets such as buildings or information where these have a
financial value and are required to deliver an IT service. IT asset management can include operational technology
(OT), including devices that are part of the Internet of Things. These are typically devices that were not traditionally
thought of as IT assets, but that now include embedded computing capability and network connectivity.
Types of asset management
Asset management is a well-established practice that includes the acquisition, operation, care, and disposal of
organizational assets, particularly critical infrastructure.
IT asset management (ITAM) is a sub-practice of asset management that is specifically aimed at managing the
lifecycles and total costs of IT equipment and infrastructure.
Software asset management (SAM) is the infrastructure and process necessary for the effective management,
control, and protection of the software assets within an organization, throughout all stages of their lifecycles.
Understanding the cost and value of assets is essential to also comprehending the cost and value of products and
services, and is therefore an important underpinning factor in everything the service provider does. IT asset
management contributes to the visibility of assets and their value, which is a key element to successful service
management as well as being useful to other practices.
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IT asset management requires accurate inventory information, which it keeps in an . This information asset register
can be gathered in an audit, but it is much better to capture it as part of the processes that change the status of assets,
for example, when new hardware is delivered, or when a new instance of a cloud service is requested. If IT asset
management has good interfaces with other practices, including service configuration management, incident
management, change enablement, and deployment management, then the asset status information can be maintained
with less effort. Audits are still needed, but these can be less frequent, and may be easier to do when there is already
an accurate asset register.
IT asset management helps to optimize the use of valuable resources. For example, the number of spare computers
an organization requires can be calculated based on service level agreement commitments, the measured
performance of service requests, and demand predictions from capacity and performance management.
Some organizations discover a need for IT asset management after a software vendor requests an audit of licence
use. This can be very stressful if the required information has not been maintained, and can lead to significant costs,
both in carrying out the audit and then paying any additional licence costs that are identified. It is much cheaper and
easier to simply maintain information about software licence use as part of normal IT asset management activity,
and to provide this in response to any vendor requests. Software runs on hardware, so the management of software
and hardware assets should be combined to ensure that all licences are properly managed. For the same reason, the
management of cloud-based assets should also be included.
The cost of cloud services can easily get out of control if the organization does not manage these in the same way as
other IT assets. Each individual use of a cloud service may be relatively cheap, but by spending in small amounts it
is easy to consume much more resource than was planned, leaving the organization with a correspondingly large
bill. Again, good IT asset management can help to control this.
The activities and requirements of IT asset management will vary for different types of asset:
Hardware assets must be labelled for clear identification. It is important to know where they are and to help protect
them from theft, damage, and data leakage. They may need special handling when they are re-used or
decommissioned; for example, erasure or shredding of disk drives depends on information security requirements.
Hardware assets may also be subject to regulatory requirements, such as the EU Waste Electrical and Electronic
Equipment Directive.
Software assets must be protected from unlawful copying, which could result in unlicensed use. The organization
must ensure that licence terms are adhered to and that licences are only re-used in ways that are allowed under
the contract. It is important to retain verified proof of purchase and entitlement to run the software. It is very easy
to lose software licences when equipment is decommissioned, so it is important that the IT asset management
process recovers these licences and makes them available for re-use where appropriate.
Cloud-based assets must be assigned to specific products or groups so that costs can be managed. Funding must be
managed so that the organization has the flexibility to invoke new instances of cloud use when needed, and to
remove instances that are not needed, without the risk of uncontrolled costs. Contractual arrangements must be
understood and adhered to, in the same way as for software licences.
Client assets must be assigned to individuals who take responsibility for their care. Processes are needed to manage
lost or stolen devices, and tools may be needed to erase sensitive data from them or otherwise ensure that this
data is not lost or stolen with the device.
In all cases, the organization needs to ensure that the full lifecycle of each asset is managed. This includes managing
asset provisioning; receiving, decommissioning, and return; hardware disposal; software re-use; leasing
management; and potentially many other activities.
IT asset management maintains information about the assets, their costs, and related contracts. Therefore, the IT
asset register is often combined (or federated) with the information stored in a configuration management system
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. If the two are separate then it is important that assets can be mapped between them, usually by use of a (CMS)
standard naming convention. It may also be necessary to combine (or federate) the IT asset register with systems
used to manage other financial assets, or with systems used to manage suppliers.
In some organizations there is a centralized team responsible for IT asset management. This team may also be
responsible for configuration management. In other organizations, each technical team may be responsible for
management of the IT assets they support; for example, the storage team could manage storage assets while the
networking team manages network assets. Each organization must consider its own context and culture to choose
the appropriate level of centralization. However, having some central roles helps to ensure asset data quality and the
development of expertise on specific aspects such as software licensing and inventory systems.
IT asset management typically includes the following activities:
Define, populate, and maintain the asset register in terms of structure and content, and the storage facilities for
assets and related media
Control the asset lifecycle in collaboration with other practices (for example, upgrading obsolete software or
onboarding new staff members with a laptop and mobile phone) and record all changes to assets (status, location,
characteristics, assignment, etc.)
Provide current and historical data, reports, and support to other practices about IT assets
Audit assets, related media, and conformity (particularly with regulations, and licence terms and conditions) and
drive corrective and preventive improvements to deal with detected issues.
Figure 5.21 shows the contribution of IT asset management to the service value chain, with the practice being
applied mainly to the design and transition, and obtain/build value chain activities:
Most policies and guidance for IT asset management comes from the service financial management practice. Plan
Some asset management policies are driven by governance and some are driven by other practices, such as
information security management. IT asset management can be considered a strategic practice that helps the
organization to understand and manage cost and value.
This value chain activity must consider the impact on IT assets, and some improvements will directly Improve
involve IT asset management in helping to understand and manage costs.
There may be some demand for IT asset management from stakeholders. For example, a user may report a Engage
lost or stolen mobile phone, or a customer may require reports on the value of IT assets.
This value chain activity changes the status of IT assets, and so drives most IT asset Design and transition
management activity.
IT asset management supports asset procurement to ensure that assets are traceable from the Obtain/build
beginning of their lifecycle.
IT asset management helps to locate IT assets, trace their movements, and control their status Deliver and support
in the organization.
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Figure 5.21 Heat map of the contribution of IT asset management to value chain activities
5.2.7 Monitoring and event management
Key message
The purpose of the is to systematically observe services and monitoring and event management practice
service components, and record and report selected changes of state identified as events. This practice
identifies and prioritizes infrastructure, services, business processes, and information security events; it also
establishes the appropriate response to those events, and conditions that indicate potential faults or incidents.
Definition: Event
Any change of state that has significance for the management of a service or other configuration item (CI).
Events are typically recognized through notifications created by an IT service, CI, or monitoring tool.
The monitoring and event management practice manages events throughout their lifecycle to prevent, minimize, or
eliminate their negative impact on the business.
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The monitoring part of the practice focuses on the systematic observation of services and the CIs that underpin
services to detect conditions of potential significance. Monitoring should be performed in a highly automated
manner, and can be done actively or passively. The event management part focuses on recording and managing
those monitored changes of state that are defined by the organization as an event, determining their significance, and
identifying and initiating the correct control action to manage them. Frequently the correct control action will be to
initiate another practice, but sometimes it will be to take no action other than to continue monitoring the situation.
Monitoring is necessary for event management to take place, but not all monitoring results in the detection of an
event.
Not all events have the same significance or require the same response. Events are often classified as informational,
warning, and exceptions. Informational events do not require action at the time they are identified, but analysing the
data gathered from them at a later date may uncover desirable, proactive steps that can be beneficial to the service.
Warning events allow action to be taken before any negative impact is actually experienced by the business, whereas
exception events indicate that a breach to an established norm has been identified (for example, to a service level
agreement). Exception events require action, even though business impact may not yet have been experienced.
The processes and procedures needed in the monitoring and event management practice must address these key
activities and more:
identifying what services, systems, CIs, or other service components should be monitored, and establishing the
monitoring strategy
implementing and maintaining monitoring, leveraging both the native monitoring features of the elements being
observed as well as the use of designed-for-purpose monitoring tools
establishing and maintaining thresholds and other criteria for determining which changes of state will be treated as
events, and choosing criteria to define each type of event (informational, warning, or exception)
establishing and maintaining policies for how each type of detected event should be handled to ensure proper
management
implementing processes and automations required to operationalize the defined thresholds, criteria, and policies.
This practice is highly interactive with other practices participating in the service value chain. For example, some
events will indicate a current issue that qualifies as an incident. In this case, the correct control action will be to
initiate activity in the incident management practice. Repeated events showing performance outside of desired levels
may be evidence of a potential problem, which would initiate activity in the problem management practice. For
some events, the correct response is to initiate a change, engaging the change enablement practice.
Although the work of this practice, once put in place, is highly automated, human intervention is still required, and
is in fact essential. For the definition of monitoring strategies and specific thresholds and assessment criteria, it can
help to bring in a broad range of perspectives, including infrastructure, applications, s, service level service owner
management, and representation from the warranty-related practices. Remember that the starting point for this
practice is likely to be simple, setting the stage for a later increase in complexity, so it is important that the
expectations of participants are managed.
Organizations and people are also critical to providing an appropriate response to monitored data and events, in
alignment with policies and organizational priorities. Roles and responsibilities must be clearly defined, and each
person or group must have easy, timely access to the information needed to perform their role.
Automation is key to successful monitoring and event management. Some service components come equipped with
built-in monitoring and reporting capabilities that can be configured to meet the needs of the practice, but sometimes
it is necessary to implement and configure purpose-built monitoring tools. The monitoring itself can be either active
or passive. In active monitoring, tools will poll key CIs, looking at their status to generate alerts when an exception
condition is identified. In passive monitoring, the CI itself generates the operational alerts.
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Automated tools should also be used for the correlation of events. These features may be provided by monitoring
tools or other tools such as ITSM workflow systems. There can be a huge volume of data generated by this practice,
but without clear policies and strategies on how to limit, filter, and use this data, it will be of no value.
If third parties are providing products or services in the overall service architecture, they should also supply
expertise in the monitoring and reporting capabilities of their offerings. Leveraging this expertise can save time
when trying to operationalize monitoring and event management strategies and workflows. If some IT functions,
such as infrastructure management, are partially or wholly outsourced to a supplier, they may be reluctant to expose
monitoring or event data related to the elements they manage. Don’t ask for data that is not truly needed, but if data
is required, make sure that the provision of that data is explicitly part of the contract for the supplier’s services.
Figure 5.22 shows the contribution of monitoring and event management to the service value chain, with the
practice being involved in all value chain activities except plan:
The monitoring and event management practice is essential to the close observation of the environment to Improve
evaluate and proactively improve its health and stability.
Monitoring and event management may be the source of internal engagement for action.Engage
Monitoring data informs design decisions. Monitoring is an essential component of Design and transition
transition: it provides information about the transition success in all environments.
Monitoring and event management supports development environments, ensuring their transparency Obtain/build
and manageability.
The practice guides how the organization manages internal support of identified events, Deliver and support
initiating other practices as appropriate.
Figure 5.22 Heat map of the contribution of monitoring and event management to value chain activities
5.2.8 Problem management
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Key message
The purpose of the problem management practice is to reduce the likelihood and impact of incidents by
identifying actual and potential causes of incidents, and managing workarounds and known errors.
Definitions
A cause, or potential cause, of one or more incidents.Problem
A problem that has been analysed but has not been resolved.Known error
Figure 5.23 The phases of problem management
Every service has errors, flaws, or vulnerabilities that may cause incidents. They may include errors in any of the
four dimensions of service management. Many errors are identified and resolved before a service goes live.
However, some remain unidentified or unresolved, and may be a risk to live services. In ITIL, these errors are called
problems and they are addressed by the problem management practice.
Problems are related to incidents, but should be distinguished as they are managed in different ways:
Incidents have an impact on users or business processes, and must be resolved so that normal business activity can
take place.
Problems are the causes of incidents. They require investigation and analysis to identify the causes, develop
workarounds, and recommend longer-term resolution. This reduces the number and impact of future incidents.
Problem management involves three distinct phases, as shown in .Figure 5.23
Problem identification activities identify and log problems. These include:
performing trend analysis of incident records
detection of duplicate and recurring issues by users, service desk, and technical support staff
during major incident management, identifying a risk that an incident could recur
analysing information received from suppliers and partners
analysing information received from internal software developers, test teams, and project teams.
Other sources of information can also lead to problems being identified.
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Problem control activities include problem analysis, and documenting workarounds and known errors.
Problems are prioritized for analysis based on the risk that they pose, and are managed as risks based on their
potential impact and probability. It is not essential to analyse every problem; it can be more valuable to make
significant progress on the highest-priority problems than to investigate every minor problem that the organization is
aware of.
Incidents typically have many interrelated causes, and the relationships between them can be complex. Problem
control should consider all contributory causes, including causes that contributed to the duration and impact of
incidents, as well as those that led to the incidents happening. It is important to analyse problems from the
perspective of all four dimensions of service management. For example, an incident that was caused by inaccurate
documentation may require not only a correction to that documentation but also training and awareness for support
personnel, suppliers, and users.
When a problem cannot be resolved quickly, it is often useful to find and document a workaround for future
incidents, based on an understanding of the problem. Workarounds are documented in problem records. This can be
done at any stage; it doesn’t need to wait for analysis to be complete. If a workaround has been documented early in
problem control, then this should be reviewed and improved after problem analysis has been completed.
Definition: Workaround
A solution that reduces or eliminates the impact of an incident or problem for which a full resolution is not yet
available. Some workarounds reduce the likelihood of incidents.
An effective incident workaround can become a permanent way of dealing with some problems when resolving the
problem is not viable or cost-effective. In this case, the problem remains in the known error status, and the
documented workaround is applied should related incidents occur. Every documented workaround should include a
clear definition of the symptoms to which it applies. In some cases, workaround application can be automated.
For other problems, a way to fix the error should be found. This is a part of . Error control activities error control
manage known errors, which are problems where initial analysis has been completed; it usually means that faulty
components have been identified. Error control also includes identification of potential permanent solutions which
may result in a change request for implementation of a solution, but only if this can be justified in terms of cost,
risks, and benefits.
Error control regularly re-assesses the status of known errors that have not been resolved, including overall impact
on customers, availability and cost of permanent resolutions, and effectiveness of workarounds. The effectiveness of
workarounds should be evaluated each time a workaround is used, as the workaround may be improved based on the
assessment.
Problem management activities are very closely related to incident management. The practices need to be designed
to work together within the value chain. Activities from these two practices may complement each other (for
example, identifying the causes of an incident is a problem management activity that may lead to incident
resolution), but they may also conflict (for example, investigating the cause of an incident may delay actions needed
to restore service).
Examples of interfaces between problem management, risk management, change enablement, knowledge
management, and continual improvement are as follows:
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• Problem management activities can be organized as a specific case of risk management: they aim to identify,
assess, and control risks in any of the four dimensions of service management. It is useful to adopt risk
management tools and techniques for problem management.
Implementation of problem resolution is often outside the scope of problem management. Problem management
typically initiates resolution via change enablement and participates in the ; post-implementation review
however, approving and implementing changes is out of scope for the problem management practice.
Output from the problem management practice includes information and documentation concerning workarounds
and known errors. In addition, problem management may utilize information in a knowledge management system
to investigate, diagnose, and resolve problems.
Problem management activities can identify improvement opportunities in all four dimensions of service
management. Solutions can in some cases be treated as improvement opportunities, so they are included in a
continual improvement register (CIR), and continual improvement techniques are used to prioritize and manage
them, sometimes as part of a product backlog.
Many problem management activities rely on the knowledge and experience of staff, rather than on following
detailed procedures. People responsible for diagnosing problems often need the ability to understand complex
systems, and to think about how different failures might have occurred. Developing this combination of analytical
and creative ability requires mentoring and time, as well as suitable training.
The ITIL story: Axle’s problem management
Henri: Axle participates in feedback programmes with all our car manufacturers. We share
maintenance and repair data with them to help them to continually improve their services. In
return, they alert us to any potential problems in our vehicles.
Radhika: Recently, we were alerted to a potential problem in our fleet. A car manufacturer had
recalled a popular model in our fleet to fix an error found in the airbag activation system.
Su: Fortunately it was found before Axle experienced any incidents, but there was still the
potential for issues to occur, which meant it was a problem we had to deal with.
Marco: We follow a similar practice for our other systems and services, including all of the IT
components we use.
Radhika: Axle’s incident management practice is one of our most important sources of
information on errors in our systems. Any major incident we experience is followed by an
investigation into the possible causes. Sometimes this will lead us to find and fix errors in the
systems, and we often identify ways to decrease the number of incidents Axle will have in the
future.
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Figure 5.24 Heat map of the contribution of problem management to value chain activities
Problem management is usually focused on errors in operational environments. shows the contribution Figure 5.24
of problem management to the service value chain, with the practice being applied mainly to the improve, and
deliver and support value chain activities:
This is the main focus area for problem management. Effective problem management provides the Improve
understanding needed to reduce the number of incidents and the impact of incidents that can’t be prevented.
Problems that have a significant impact on services will be visible to customers and users. In some cases, Engage
customers may wish to be involved in problem prioritization, and the status and plans for managing problems
should be communicated. Workarounds are often presented to users via a service portal.
Problem management provides information that helps to improve testing and knowledge Design and transition
transfer.
Product defects may be identified by problem management; these are then managed as part of this Obtain/build
value chain activity.
Problem management makes a significant contribution by preventing incident repetition and Deliver and support
supporting timely incident resolution.
5.2.9 Release management
Key message
The purpose of the is to make new and changed services and features available release management practice
for use.
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Definition: Release
A version of a service or other configuration item, or a collection of configuration items, that is made available
for use.
A release may comprise many different infrastructure and application components that work together to deliver new
or changed functionality. It may also include documentation, training (for users or IT staff), updated processes or
tools, and any other components that are required. Each component of a release may be developed by the service
provider or procured from a third party and integrated by the service provider.
Releases can range in size from the very small, involving just one minor changed feature, to the very large,
involving many components that deliver a completely new service. In either case, a release plan will specify the
exact combination of new and changed components to be made available, and the timing for their release.
A release schedule is used to document the timing for releases. This schedule should be negotiated and agreed with
customers and other stakeholders. A release post-implementation review enables learning and improvement, and
helps to ensure that customers are satisfied.
In some environments, almost all of the release management work takes place before deployment, with plans in
place as to exactly which components will be deployed in a particular release. The deployment then makes the new
functionality available.
Figure 5.25 Release management in a traditional/waterfall environment
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Figure 5.26 Release management in an Agile/DevOps environment
Figure 5.25 shows how release management is handled in a traditional/waterfall environment. In these environments
release management and deployment may be combined and executed as a single process.
In an Agile/DevOps environment there can be significant release management activity after deployment. In these
cases, software and infrastructure are typically deployed in many small increments, and release management activity
enables the new functionality at a later point. This may be done as a very small change. shows how Figure 5.26
release management is handled in such an environment.
Release management is often staged, with pilot releases being made available to a small number of users to ensure
that everything is working correctly before the release is given to additional groups. This staged approach can work
with either of the two sequences shown in and . Sometimes a release must be made available to all Figures 5.25 5.26
users at the same time, as when a major restructuring of the underlying shared data is required.
Staging of a release is often achieved using blue/green releases or feature flags:
Blue/green releases use two mirrored s. Users can be switched to an environment that has production environment
been updated with the new functionality by use of network tools that connect them to the correct environment.
Feature flags enable specific features to be released to individual users or groups in a controlled way. The new
functionality is deployed to the production environment without being released. A user configuration setting then
releases the new functionality to individual users (or groups of users) as needed.
In a DevOps environment, release management is often integrated with the continuous integration and continuous
toolchain. The tools of release management may be the responsibility of a dedicated person, but decisions delivery
about the release can be made by the development team. In a more traditional environment, releases are enabled by
the deployment of the components. Each release is described by a release record on an ITSM tool. Release records
are linked to CIs and change records to maintain information about the release.
Components of a release are often provided by third parties. Examples of third-party components include cloud
infrastructure, software as a service components, and third-party support. It is also common to include third-party
software, or open-source software, as part of application development. Release management needs to work across
organizational boundaries to ensure that all components are compatible and to provide a seamless experience for
users. It also needs to consider the impact of changes to third-party components, and to plan for how these will be
released.
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Figure 5.27 Heat map of the contribution of release management to value chain activities
Figure 5.27 shows the contribution of release management to the service value chain, with the practice being
involved in all value chain activities:
Policies, guidance, and timelines for releases are driven by the organizational strategy and service portfolio. Plan
The size, scope, and content of each release should be planned and managed.
New or changed releases may be required to deliver improvements, and these should be planned and Improve
managed in the same way as any other release.
The content and cadence of releases must be designed to match the needs and expectations of customers Engage
and users.
Release management ensures that new or changed services are made available to customers Design and transition
in a controlled way.
Changes to components are normally included in a release, delivered in a controlled way.Obtain/build
Releases may impact on delivery and support. Training, documentation, release notes, known Deliver and support
errors, user guides, support scripts, etc. are provided by this practice to facilitate service restoration.
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The ITIL story: Axle’s release management
Marco: When we release updates to our booking app, we make sure they’re accompanied by
user awareness and marketing campaigns for our users, customers, and teams. We provide
specific training for the service desk and support teams that are internal and external.
Radhika: Some changes may need extra support or the introduction of new components. For
example, Axle Aware was released with a new user manual to explain the system. We also made
sure the Aware system could sync with the Axle booking app before we released it.
Henri: The support given to the new app and Axle Aware has really helped the release of both
of these new offerings, leading to great first impressions and a strong level of adoption amongst
our users and customers, as well as our own teams.
5.2.10 Service catalogue management
Key message
The purpose of the is to provide a single source of consistent service catalogue management practice
information on all services and service offerings, and to ensure that it is available to the relevant audience.
The list of services within the service catalogue represents those which are currently available and is a subset of the
total list of services tracked in the service provider’s service portfolio. Service catalogue management ensures that
service and product descriptions are expressed clearly for the target audience to support stakeholder engagement and
service delivery. The service catalogue may take many forms such as a document, online portal, or a tool that
enables the current list of services to be communicated to the audience.
Service catalogue management activities5.2.10.1
The service catalogue management practice includes an ongoing set of activities related to publishing, editing, and
maintaining service and product descriptions and their related offerings. It provides a view on the scope of what
services are available, and on what terms. The service catalogue management practice is supported by roles such as
the service owner and others responsible for managing, editing, and keeping up to date the list of available services
as they are introduced, changed, or retired.
Tailored views
As described above, the service catalogue enables the creation of value and is used by many different practices
within the service value chain. Because of this, it needs to be flexible regarding what service details and
attributes it presents, based on its intended purpose. As such, organizations may wish to consider providing
different views of the catalogue for different audiences.
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The full list of services within a service catalogue may not be applicable to all customers and/or users. Likewise, the
various attributes of services such as technical specifications, offerings, agreements, and costs are not applicable to
all service consumer types. This means that the service catalogue should be able to provide different views and
levels of detail to different stakeholders. Examples of views include:
Provide information on service offerings that can be requested, and on provisioning details.User views
Provide service level, financial, and service performance data.Customer views
Provide technical, security, and process information for use in service delivery.IT to IT customer views
While multiple views of the service catalogue are possible, the creation of separate or isolated service catalogues
within different technology systems should be avoided if possible as this will promote segregation, variability, and
complexity.
For the service catalogue to be perceived as useful by the customer organization it must do more than provide a
static platform for publishing information about IT services. Unless the service catalogue enables customer
engagement by supporting discussions related to standard and non-standard service offerings and/or automates
request and order fulfilment processes, the chances of its ongoing adoption as a useful and meaningful resource are
minimal. For this reason, the views of many organizations on the service catalogue are focused on the consumable
or orderable elements of service offerings. These are often called s.request catalogue
Definition: Request catalogue
A view of the service catalogue, providing details on service requests for existing and new services, which is
made available for the user.
Figure 5.28 shows the contribution of service catalogue management to the service value chain, with the practice
being involved in all value chain activities:
The service catalogue enables strategy and service portfolio investment decisions by providing details on Plan
current service scope and offerings.
Service catalogue descriptions and demand patterns are constantly monitored and evaluated to support Improve
continual improvement, alignment, and value creation.
The service catalogue enables strategic, tactical, and operational relationships with customers and users by Engage
enabling and potentially automating various aspects of practices such as relationship management, request
management, and the service desk.
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Figure 5.28 Heat map of the contribution of service catalogue management to value chain activities
The service catalogue ensures both the utility and warranty aspects of services are Design and transition
considered and published, including the , IT service continuity levels, service level information security policy
agreements, and service offerings. Additional activities include the definition and creation of service
descriptions, request models, and views to be published.
Service catalogue management supports this value chain activity by providing service catalogue Obtain/build
views for procurement of components and services.
The service catalogue provides context for how the service will be delivered and supported, Deliver and support
and publishes expectations related to agreements and performance.
5.2.11 Service configuration management
Key message
The purpose of the is to ensure that accurate and reliable service configuration management practice
information about the configuration of services, and the CIs that support them, is available when and where it
is needed. This includes information on how CIs are configured and the relationships between them.
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Definition: Configuration item
Any component that needs to be managed in order to deliver an IT service.
Service configuration management collects and manages information about a wide variety of CIs, typically
including hardware, software, networks, buildings, people, suppliers, and documentation. Services are also treated as
CIs, and configuration management helps the organization to understand how the many CIs that contribute to each
service work together. is a simplified diagram showing how multiple CIs contribute to an IT service.Figure 5.29
Configuration management provides information on the CIs that contribute to each service and their relationships:
how they interact, relate, and depend on each other to create value for customers and users. This includes
information about dependencies between services. This high-level view is often called a service map or service
model, and forms part of the service architecture.
It is important that the effort needed to collect and maintain configuration information is balanced with the value
that the information creates. Maintaining large amounts of detailed information about every component, and its
relationships to other components, can be costly, and may deliver very little value. The requirements for
configuration management must be based on an understanding of the organization’s goals, and how configuration
management contributes to value creation.
The value created by configuration management is indirect, but enables many other practices to work efficiently and
effectively. As such, planning for configuration management should start by understanding who needs the
configuration information, how it will be used, what is the best way for them to obtain it, and who can maintain and
update this information. Sometimes it can be more efficient to simply collect the information when it is needed,
rather than to have it collected in advance and maintained, but on other occasions it is essential to have information
available in a configuration management system (CMS). The type and amount of information recorded for each type
of CI should be based on the value of that information, the cost of maintaining it, and how the information will be
used.
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Figure 5.29 Simplified service model for a typical IT service
Definition: Configuration management system
A set of tools, data, and information that is used to support service configuration management.
Configuration information should be shared in a controlled way. Some information could be sensitive; for example,
it could be useful to someone trying to breach security controls, or it could include personal information about users,
such as phone numbers and home addresses.
Configuration information can be stored and published in a single configuration management database (CMDB) for
the whole organization, but it is more common for it to be distributed across several sources. In either case it is
important to maintain links between s, so that people can see the full set of information they configuration record
need, and how the various CIs work together. Some organizations federate CMDBs to provide an integrated view.
Others may maintain different types of data; for example, having separate data stores for asset management data (see
), configuration details, service catalogue information, and high-level service models.section 5.2.6
Tools that are used to log incidents, problems, and changes need access to configuration records. For example, an
organization trying to identify problems with a service may need to find incidents related to a specific software
version, or model of disk drive. The understanding of the need for this information helps to establish what CI
attributes should be stored for this organization; in this case software versions and disk drive models. To diagnose
incidents, visibility of recent changes to the affected CIs may be needed, so relationships between CIs and changes
must be maintained.
Many organizations use data collection tools to gather detailed configuration information from infrastructure and
applications, and use this to populate a CMS. This can be effective, but can also encourage the collection of too
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much data without sufficient information on relationships, and how the components work together to create a
service. Sometimes configuration information is used to actually create the CI, rather than just to document it. This
approach is used for ‘infrastructure as a code’, where information on the infrastructure is managed in a data
repository and used to automatically configure the environment.
A large organization may have a team that is dedicated to configuration management. In other organizations this
practice can be combined with change enablement, or there can be a team responsible for change, configuration, and
release management. Some organizations apply a distributed model where functional teams take ownership of
updating and maintaining the CIs within their control and oversight.
Configuration management typically needs processes to:
identify new CIs, and add them to the CMS
update configuration data when changes are deployed
verify that configuration records are correct
audit applications and infrastructure to identify any that are not documented.
Figure 5.30 shows the contribution of configuration management to the service value chain, with the practice being
involved in all value chain activities:
Configuration management is used for planning new or changed services.Plan
Configuration management, like every other aspect of service management, should be subject to Improve
measurement and continual improvement. Since the value of configuration management typically comes from
how it facilitates other practices, it is important to understand what use these practices are making of
configuration information, and then identify how this can be improved.
Some stakeholders (partners and suppliers, consumers, regulators, etc.) may require and use configuration Engage
information, or provide their configuration information to the organization.
Configuration management documents how assets work together to create a service. This Design and transition
information is used to support many value chain activities, and is updated as part of the transition activity.
Configuration records may be created during this value chain activity, describing new or changed Obtain/build
services and components. Sometimes configuration records are used to create the code or artefact that is being
built.
Information on CIs is essential to support service restoration. Configuration information is Deliver and support
used to support activities of the incident management and problem management practices.
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Figure 5.30 Heat map of the contribution of service configuration management to value chain activities
5.2.12 Service continuity management
Key message
The purpose of the service continuity management practice is to ensure that the availability and performance of
a service are maintained at sufficient levels in case of a . The practice provides a framework for disaster
building organizational resilience with the capability of producing an effective response that safeguards the
interests of key stakeholders and the organization’s reputation, brand, and value-creating activities.
Service continuity management supports an overall business continuity management (BCM) and planning capability
by ensuring that IT and services can be resumed within required and agreed business timescales following a disaster
or crisis. It is triggered when a service disruption or organizational risk occurs on a scale that is greater than the
organization’s ability to handle it with normal response and recovery practices such as incident and major incident
management. An organizational event of this magnitude is typically referred to as a disaster.
Each organization needs to understand what constitutes a disaster in its own context. Establishing what is meant by a
disaster must be considered and defined prior to a trigger event at both an organizational and on a per-service level
using a . The Business Continuity Institute defines a disaster as:business impact analysis
…a sudden unplanned event that causes great damage or serious loss to an organization. It results in an
organization failing to provide critical business functions for some predetermined minimum period of
time.
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The sources that trigger a disaster response and recovery are varied and complex, as are the number of stakeholders
and the different aspects of potential organizational impact. The complex risk management conditions related to the
examples in make it imperative that the service continuity management practice be thoroughly thought Table 5.3
out, designed for flexibility, and tested on a regular basis to ensure that services can be recovered at a speed
necessary for business survival.
Table 5.3 Examples of disaster sources, stakeholders involved, and organizational impact
Disaster sources Stakeholders involved Organizational impact
Supply chain failure
Terrorism
Weather
Cyber attack
Health emergency
Political or economic event
Technology failure
Public crisis
Employees
Executives
Governing body
Suppliers
IT teams
Customers
Users
Communities
Lost income
Damaged reputation
Loss of competitive advantage
Breach of law, health and safety
regulations
Risk to personal safety
Immediate and long-term loss of
market share
Definitions
The maximum acceptable period of time following a service disruption that (RTO)Recovery time objective
can elapse before the lack of business functionality severely impacts the organization. This represents the
maximum agreed time within which a product or an activity must be resumed, or resources must be
recovered.
The point to which information used by an activity must be restored to (RPO)Recovery point objective
enable the activity to operate on resumption.
A set of clearly defined plans related to how an organization will recover from a Disaster recovery plans
disaster as well as return to a pre-disaster condition, considering the four dimensions of service
management.
A key activity in the practice of service continuity management that Business impact analysis (BIA)
identifies vital business functions (VBFs) and their dependencies. These dependencies may include
suppliers, people, other business processes, and IT services. BIA defines the recovery requirements for IT
services. These requirements include RTOs, RPOs, and minimum target service levels for each IT service.
Service continuity management versus incident management
Service continuity management focuses on those events that the business considers significant enough to be
treated as a disaster. Less significant events will be dealt with as part of incident management or major incident
management. The distinction between disasters, major incidents, and incidents needs to be pre-defined, agreed,
and documented with clear thresholds and triggers for calling the next tier of response and recovery into action
without unnecessary delay and risk.
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As organizations have become increasingly dependent on technology-enabled services, the need for high-availability
solutions has become critical to organizational resilience and competitiveness. Organizations achieve high
availability through a combination of business planning, technical architecture resilience, availability planning,
proactive risk, and information security management, as well as through incident management and problem
management.
Figure 5.31 shows the contribution of service continuity management to the service value chain, with the practice
being involved in all value chain activities:
The organization’s leadership and governing body establish an initial risk appetite for the organization with Plan
defined scope, policies, supplier strategies, and investment in recovery options. Service continuity management
supports this with relevant information about the current continuity status of the organization and with tools and
methods for planning and forecasting.
Service continuity management ensures that continuity plans, measures, and mechanisms are continually Improve
monitored and improved in line with changing internal and external circumstances.
Engagement with various stakeholders to provide assurance with regard to an organization’s readiness for Engage
disasters is supported by this practice.
Service continuity management ensures that products and services are designed and tested Design and transition
according to the organization’s continuity requirements.
Figure 5.31 Heat map of the contribution of service continuity management to value chain activities
Service continuity management ensures that continuity is built into the organization’s services and Obtain/build
components, and that procured components and services meet the organization’s continuity requirements.
Ongoing delivery, operations, and support are performed in accordance with continuity Deliver and support
requirements and policies.
5.2.13 Service design
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Key message
The purpose of the is to design products and services that are fit for purpose, fit for service design practice
use, and that can be delivered by the organization and its ecosystem. This includes planning and organizing
people, partners and suppliers, information, communication, technology, and practices for new or changed
products and services, and the interaction between the organization and its customers.
If products, services, or practices are not designed properly, they will not necessarily fulfil customer needs or
facilitate value creation. If they evolve without proper architecture, interfaces or controls, they are less able to
deliver the overall vision and needs of the organization and its internal and external customers.
Even when a product or service is well designed, delivering a solution that addresses the needs of both the
organization and customer in a cost-effective and resilient way can be difficult. It is therefore important to consider
iterative and incremental approaches to service design, which can ensure that products and services introduced to
live operation can continually adapt in alignment with the evolving needs of the organization and its customers.
In the absence of formalized service design, products and services can be unduly expensive to run and prone to
failure, resulting in resources being wasted and the product or service not being customer-centred or designed
holistically. It is unlikely that any improvement programme will ever be able to achieve what proper design could
have achieved in the first place. Without service design, cost-effective products and services that deliver what
customers need and expect are extremely hard to achieve.
Service design practice should also ensure that the customer’s journey from demand through to value realization is
as pleasant and frictionless as it can be, and delivers the best customer outcome possible. This is achieved by
focusing on customer experience (CX) and user experience (UX).
Adopting and implementing a service design practice focused on CX and UX will:
result in customer-centred products and services that include stakeholders in design activities
consider the entire environment of a product or service
enable projects to estimate the cost, timing, resource requirement, and risks associated with service design more
accurately
result in higher volumes of successful change
make design methods easier for people to adopt and follow
enable service design assets to be shared and re-used across projects and services
increase confidence that the new or changed product or service can be delivered to specification without
unexpectedly affecting other products, services, or stakeholders
ensure that new or changed products and services will be maintainable and cost-effective.
It is important that a holistic, results-driven approach to all aspects of service design is adopted, and that when
changing or amending any of the individual elements of a service design, all other aspects are considered. It is for
this reason that the coordination aspect of service design with the whole organization’s SVS is essential. Designing
and developing a new or changed product or service should not be done in isolation, but should consider the impact
it will have on:
other products and services
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• all relevant parties, including customers and suppliers
the existing architectures
the required technology
the service management practices
the necessary measurements and metrics.
Consideration of these factors will not only ensure that the design addresses the functional elements of the service,
but also that the management and operational requirements are regarded as a fundamental part of the design, and are
not added as an afterthought.
Service design should also be used when the change being made to the product or service is its retirement. Unless
the retirement of a product/service is carefully planned, it could cause unexpected negative effects on customers or
the organization that might otherwise have been avoided.
Not every change to a product or service will require the same level of service design activity. Every change, no
matter how small, will need some degree of design work, but the scale of the activity necessary to ensure success
will vary greatly from one change type to another. Organizations must define what level of design activity is
required for each category of change, and ensure that everyone within the organization is clear on these criteria.
Service design supports products and services that:
are business- and customer-oriented, focused, and driven
are cost-effective
meet the information and physical security requirements of the organization and any external customers
are flexible and adaptable, yet fit for purpose at the point of delivery
can absorb an ever-increasing demand in the volume and speed of change
meet increasing organizational and customer demands for continuous operation
are managed and operated to an acceptable level of risk.
With many pressures on the organization, there can be a temptation to ‘cut corners’ on the coordination of practices
and relevant parties for service design activities, or to ignore them completely. This should be avoided, as
integration and coordination are essential to the overall quality of the products and services that are delivered.
Design thinking5.2.13.1
Design thinking is a practical and human-centred approach that accelerates innovation. It is used by product and
service designers as well as organizations to solve complex problems and find practical, creative solutions that meet
the needs of the organization and its customers. It can be viewed as a complementary approach to Lean and Agile
methodologies. Design thinking draws upon logic, imagination, intuition, and to explore systems thinking
possibilities and to create desired outcomes that benefit customers.
Design thinking includes a series of activities:
Inspiration and empathy, through direct observation of people and how they work or interact with products and
services, as well as identifying how they might interact differently with other solutions.
Ideation, which combines divergent and convergent thinking. Divergent thinking is the ability to offer different,
unique, or variant ideas, while convergent thinking is the ability to find the preferred solution to a given problem.
Divergent thinking ensures that many possible solutions are explored, and convergent thinking narrows these
down to a final preferred solution.
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• Prototyping, where these ideas are tested early, iterated, and refined. A prototype helps to gather feedback and
improve an idea. Prototypes speed up the process of innovation by allowing service designers to better
understand the strengths and weaknesses of new solutions.
Implementation, where the concepts are brought to life. This should be coordinated with all relevant service
management practices and other parties. Agile methodology can be employed to develop and implement the
solution in an iterative way.
Evaluation (in conjunction with other practices, including project management and release management) measures
the actual performance of product or service implementation to ensure acceptance criteria are met, and to find
any opportunities for improvement.
Design thinking is best applied by multi-disciplinary teams; because it balances the perspectives of customers,
technology, the organization, partners, and suppliers, it is highly integrative, aligns well with the organization’s
SVS, and can be a key enabler of digital transformation.
Customer and user experience5.2.13.2
The CX and UX aspects of service design are essential to ensuring products and services deliver the desired value
for customers and the organization. CX design is focused on managing every aspect of the complete CX, including
time, quality, cost, reliability, and effectiveness. UX looks specifically at the ease of use of the product or service
and how the customer interacts with it.
Lean user experience
Lean user experience (Lean UX) design is a mindset, a culture, and a process that embraces Lean–Agile
methods. It implements functionality in minimum viable increments, and determines success by measuring
results against an outcome hypothesis. Lean UX is incredibly useful when working on projects where Agile
development methods are used. The core objective is to focus on obtaining feedback as early as possible so
that it can be used to make quick decisions.
Typical questions for Lean UX might include: Who are the customers of this product/service and what will it
be used for? When is it used and under what circumstances? What will be the most important functionality?
What are the biggest risks?
There may be more than one answer to each question, which creates a greater number of assumptions than it
might be practical to handle. The team will then prioritize these assumptions by the risks they represent to the
organization and its customers.
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Figure 5.32 Heat map of the contribution of service design to value chain activities
Risk identification, assessment, and treatment are key requirements within all design activities; therefore risk
management must be included as an integrated aspect of service design. This will ensure that the risks involved in
the provision of products and services and the operation of practices, technology, and measurement methods are
aligned with organizational risk and impact, because risk management is embedded within all design processes and
activities.
Figure 5.32 shows the contribution of service design to the service value chain, with the practice being involved in
all value chain activities:
The service design practice includes planning and organizing the people, partners and suppliers, information, Plan
communication, technology, and practices for new or changed products and services, and the interaction between
the organization and its customers.
Service design can be used to improve an existing service as well as to create a new service from scratch. Improve
Services can be designed as a minimum viable service, deployed, and then iterated and improved to add further
value based on feedback.
Service design incorporates CX and UX, which are quintessential examples of engagement.Engage
The purpose of service design is to design products and services that are easy to use, Design and transition
desirable, and that can be delivered by the organization.
Service design includes the identification of products, services, and service components that need to Obtain/build
be obtained or built for the new or changed service.
Service design manages the user’s full journey, through operation, restoration, and Deliver and support
maintenance of the service.
5.2.14 Service desk
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Key message
The purpose of the is to capture demand for incident resolution and service requests. It service desk practice
should also be the entry point and single point of contact for the service provider with all of its users.
Service desks provide a clear path for users to report issues, queries, and requests, and have them acknowledged,
classified, owned, and actioned. How this practice is managed and delivered may vary from a physical team of
people on shift work to a distributed mix of people connected virtually, or automated technology and bots. The
function and value remain the same, regardless of the model.
With increased automation and the gradual removal of technical debt, the focus of the service desk is to provide
support for ‘people and business’ rather than simply technical issues. Service desks are increasingly being used to
get various matters arranged, explained, and coordinated, rather than just to get broken technology fixed, and the
service desk has become a vital part of any service operation.
A key point to be understood is that, no matter how efficient the service desk and its people are, there will always be
issues that need escalation and underpinning support from other teams. Support and development teams need to
work in close collaboration with the service desk to present and deliver a ‘joined up’ approach to users and
customers.
The service desk may not need to be highly technical, although some are. However, even if the service desk is fairly
simple, it still plays a vital role in the delivery of services, and must be actively supported by its peer groups. It is
also essential to understand that the service desk has a major influence on user experience and how the service
provider is perceived by the users.
Another key aspect of a good service desk is its practical understanding of the wider business context, the business
processes, and the users. Service desks add value not simply through the transactional acts of, for example, incident
logging, but also by understanding and acting on the business context of this action. The service desk should be the
empathetic and informed link between the service provider and its users.
With increased automation, AI, robotic process automation (RPA), and chatbots, service desks are moving to
provide more self-service logging and resolution directly via online portals and mobile applications. The impact on
service desks is reduced phone contact, less low-level work, and a greater ability to focus on excellent CX when
personal contact is needed.
Service desks provide a variety of channels for access. These include:
phone calls, which can include specialized technology, such as interactive voice response (IVR), conference calls,
voice recognition, and others
service portals and mobile applications, supported by service and request catalogues, and knowledge bases
chat, through live chat and chatbots
email for logging and updating, and for follow-up surveys and confirmations. Unstructured emails can be difficult
to process, but emerging technologies based on AI and machine learning are starting to address this
walk-in service desks are becoming more prevalent in some sectors, e.g. higher education, where there are high
peaks of activity that demand physical presence
text and social media messaging, which are useful for notifications in case of major incidents and for contacting
specific stakeholder groups, but can also be used to allow users to request support
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• public and corporate social media and discussion forums for contacting the service provider and for peer-to-peer
support.
Some service desks have a limited support window where service cover is available (for example, 08.00–20.00,
Monday–Friday). Staff are therefore expected to work in shift patterns to provide consistent support levels.
In some cases, the service desk is a tangible team, working in a single location. A centralized service desk requires
supporting technologies, such as:
intelligent telephony systems, incorporating computer-telephony integration, IVR, and automatic distributioncall
workflow systems for routing and escalation
workforce management and resource planning systems
a knowledge base
call recording and quality control
remote access tools
dashboard and monitoring tools
configuration management systems.
In other cases, a virtual service desk allows agents to work from multiple locations, geographically dispersed. A
virtual service desk requires more sophisticated supporting technology, involving more complex routing and
escalation; these solutions are often cloud-based.
Figure 5.33 Heat map of the contribution of the service desk to value chain activities
Service desk staff require training and competency across a number of broad technical and business areas. In
particular, they need to demonstrate excellent customer service skills such as empathy, incident analysis and
prioritization, effective communication, and emotional intelligence. The key skill is to be able to fully understand
and diagnose a specific incident in terms of business priority, and to take appropriate action to get this resolved,
using available skills, knowledge, people, and processes.
Figure 5.33 shows the contribution of the service desk to the service value chain, with the practice being involved in
all value chain activities except plan:
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• Service desk activities are constantly monitored and evaluated to support continual improvement, Improve
alignment, and value creation. Feedback from users is collected by the service desk to support continual
improvement.
The service desk is the main channel for tactical and operational engagement with users.Engage
The service desk provides a channel for communicating with users about new and changed Design and transition
services. Service desk staff participate in release planning, testing, and early life support.
Service desk staff can be involved in acquiring service components used to fulfil service requests and Obtain/build
resolve incidents.
The service desk is the coordination point for managing incidents and service requests.Deliver and support
5.2.15 Service level management
Key message
The purpose of the is to set clear business-based targets for service levels, service level management practice
and to ensure that delivery of services is properly assessed, monitored, and managed against these targets.
Definition: Service level
One or more metrics that define expected or achieved service quality.
Service level management provides the end-to-end visibility of the organization’s services. To achieve this, service
level management:
establishes a shared view of the services and target service levels with customers
ensures the organization meets the defined service levels through the collection, analysis, storage, and reporting of
the relevant metrics for the identified services
performs service reviews to ensure that the current set of services continues to meet the needs of the organization
and its customers
captures and reports on service issues, including performance against defined service levels.
The skills and competencies for service level management include relationship management, business liaison,
business analysis, and commercial/supplier management. The practice requires pragmatic focus on the whole service
and not simply its constituent parts; for example, simple individual metrics (such as percentage system availability)
should not be taken to represent the whole service.
Service level agreements5.2.15.1
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Definition: Service level agreement
A documented agreement between a service provider and a customer that identifies both services required and
the expected level of service.
Service level agreements (SLAs) have long been used as a tool to measure the performance of services from the
customer’s point of view, and it is important that they are agreed in the wider business context. Using SLAs may
present many challenges; often they do not fully reflect the wider service performance and the user experience.
Some of the key requirements for successful SLAs include:
They must be related to a defined ‘service’ in the service catalogue; otherwise they are simply individual metrics
without a purpose, that do not provide adequate visibility or reflect the service perspective.
They should relate to defined outcomes and not simply operational metrics. This can be achieved with balanced
bundles of metrics, such as customer satisfaction and key business outcomes.
They should reflect an ‘agreement’, i.e. engagement and discussion between the service provider and the service
consumer. It is important to involve all stakeholders, including partners, sponsors, users, and customers.
They must be simply written and easy to understand and use for all parties.
In many cases, using single-system-based metrics as targets can result in misalignment and a disconnect between
service partners regarding the success of the service delivery and the user experience. For example, if an SLA is
based only on the percentage of uptime of a service, it can be deemed to be successful by the provider, yet still miss
out on significant business functionalities and outcomes which are important to the consumer. This is referred to as
the ‘watermelon SLA’ effect.
The watermelon SLA effect
Traditional SLAs have been based on individual activities such as incident resolution times, system availability
(‘99.9’), and volume metrics (e.g. number of incidents or requests handled). Without a business context these
metrics are often meaningless. For example, although a system availability of 99.6% is impressive, this still
needs to align with key business requirements. The system may have an acceptable unavailability of 0.4%, but
if that time falls when there is an important process happening (such as a commercial transaction, an operating
theatre in use, or point-of-sale tills in use), then customer/user satisfaction will be low, regardless of whether
the SLA has been met.
This can be problematic for the service provider if it thinks it is doing a great job (the reports are all green),
when in fact its customers are dissatisfied with the service received and also frustrated that the provider doesn’
t notice this. This is known as the watermelon SLA effect, because like a watermelon, the SLA may appear
green on the outside, but is actually red inside.
Service level management identifies metrics and measures that are a truthful reflection of the customer’s actual
experience and level of satisfaction with the whole service. These will vary across organizations and the only
way to learn what these are is to find out directly from customers.
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Service level management requires focus and effort to engage and listen to the requirements, issues, concerns, and
daily needs of customers:
Engagement is needed to understand and confirm the actual ongoing needs and requirements of customers, not
simply what is interpreted by the service provider or has been agreed several years before.
Listening is important as a relationship-building and trust-building activity, to show customers that they are valued
and understood. This helps to move the provider away from always being in ‘solution mode’ and to build new,
more constructive partnerships.
The activities of engaging and listening provide a great opportunity to build improved relationships and to focus on
what really needs to be delivered. It also gives service delivery staff an experience-based understanding of the day-
to-day work that is done with their technology, enabling them to deliver a more business-focused service.
Service level management involves collating and analysing information from a number of sources, including:
This involves initial listening, discovery, and information capture on which to base Customer engagement
metrics, measurement, and ongoing progress discussions. Consider asking customers some simple open questions
such as:
What does your work involve?
How does technology help you?
What are your key business times, areas, people, and activities?
What differentiates a good day from a bad day for you?
Which of these activities is most important to you?
What are your goals, objectives, and measurements for this year?
What is the best measure of your success?
On what do you base your opinion and evaluation of a service or IT/technology?
How can we help you more?
This is ideally gathered from a number of sources, both formal and informal, including:Customer feedback
These can be from immediate feedback such as follow-up questions to incidents, or from more Surveys
reflective periodic surveys that gauge feedback on the overall service experience. Both are event-based.
These are measures agreed between the service provider and its customer, Key business-related measures
based on what the customer values as important. This could be a bundle of SLA metrics or a very specific
business activity such as a sales transaction, project completion, or operational function such as getting an
ambulance to the site of an accident within x minutes.
These are the low-level indicators of various operational activities and may include system Operational metrics
availability, incident response and fix times, change and request processing times, and system response times.
These can be any business activity that is deemed useful or valuable by the customer and used as Business metrics
a means of gauging the success of the service. These can vary from some simple transactional binary measures
such as ATM or POS terminal availability during business hours (09:00–17:00 daily) or successful completion of
business activities such as passenger check-in.
Once this feedback is gathered and collated for ongoing review, it can be used as input to design suitable
measurement and reporting models and practices.
Figure 5.34 shows the contribution of service level management to the service value chain, with the practice being
applied mainly to the plan and engage activities:
Service level management supports planning of the product and service portfolio and service offerings with Plan
information about the actual service performance and trends.
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• Service feedback from users, as well as requirements from customers, can be a driving force for service Improve
improvement.
Service level management ensures ongoing engagement with customers and users through feedback Engage
processing and continual service review.
The design and development of new and changed services receives input from this practice, Design and transition
both through interaction with customers and as part of the feedback loop in transition.
Service level management provides objectives for components and service performance, as well as Obtain/build
for measurement and reporting capabilities of the products and services.
Service level management communicates service performance objectives to the operations Deliver and support
and support teams and collects their feedback as an input for service improvement.
Figure 5.34 Heat map of the contribution of service level management to value chain activities
The ITIL story: Axle’s service level management
Su: We regularly gather feedback from our customers to analyse their requirements and needs,
and update our service offerings to match their expectations.
Radhika: We can’t put every single customer expectation into our rental agreements, but we
care about all of them and do our best to meet them.
Su: We also monitor the quality of the services provided by our partners and suppliers, such as
the work done for us by Craig’s Cleaning. When doing this, we need to be sure that the quality
of every part of our services meets or exceeds the expectations of our users.
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5.2.16 Service request management
Key message
The purpose of the is to support the agreed quality of a service by service request management practice
handling all pre-defined, user-initiated service requests in an effective and user-friendly manner.
Definition: Service request
A request from a user or a user’s authorized representative that initiates a service action which has been agreed
as a normal part of service delivery.
Each service request may include one or more of the following:
a request for a service delivery action (for example, providing a report or replacing a toner cartridge)
a request for information (for example, how to create a document or what the hours of the office are)
a request for provision of a resource or service (for example, providing a phone or laptop to a user, or providing a
virtual server for a development team)
a request for access to a resource or service (for example, providing access to a file or folder)
feedback, compliments, and complaints (for example, complaints about a new interface or compliments to a support
team).
Fulfilment of service requests may include changes to services or their components; usually these are standard
changes. Service requests are a normal part of service delivery and are not a failure or degradation of service, which
are handled as incidents. Since service requests are pre-defined and pre-agreed as a normal part of service delivery,
they can usually be formalized, with a clear, standard procedure for initiation, approval, fulfilment, and
management. Some service requests have very simple workflows, such as a request for information. Others, such as
the setup of a new employee, may be quite complex and require contributions from many teams and systems for
fulfilment. Regardless of the complexity, the steps to fulfil the request should be well-known and proven. This
allows the service provider to agree times for fulfilment and to provide clear communication of the status of the
request to users.
Some service requests require authorization according to financial, information security, or other policies, while
others may not need any. To be handled successfully, service request management should follow these guidelines:
Service requests and their fulfilment should be standardized and automated to the greatest degree possible.
Policies should be established regarding what service requests will be fulfilled with limited or even no additional
approvals so that fulfilment can be streamlined.
The expectations of users regarding fulfilment times should be clearly set, based on what the organization can
realistically deliver.
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Figure 5.35 Heat map of the contribution of service request management to value chain activities
Opportunities for improvement should be identified and implemented to produce faster fulfilment times and take
advantage of automation.
Policies and workflows should be included for the documenting and redirecting of any requests that are submitted
as service requests, but which should actually be managed as incidents or changes.
Some service requests can be completely fulfilled by automation from submission to closure, allowing for a
complete self-service experience. Examples include client software installation or provision of virtual servers.
Service request management is dependent upon well-designed processes and procedures, which are operationalized
through tracking and automation tools to maximize the efficiency of the practice. Different types of service request
will have different fulfilment workflows, but both efficiency and maintainability will be improved if a limited
number of workflow models are identified. When new service requests need to be added to the service catalogue,
existing workflow models should be leveraged whenever possible.
Figure 5.35 shows the contribution of service request management to the service value chain, with the practice being
involved in all service value chain activities except the plan activity:
Service request management can provide a channel for improvement initiatives, compliments, and Improve
complaints from users. It also contributes to improvement by providing trend, quality, and feedback information
about fulfilment of requests.
Service request management includes regular communication to collect user-specific requirements, set Engage
expectations, and to provide status updates.
Standard service components may be transitioned to the live environment through service Design and transition
request fulfilment.
Acquisition of pre-approved service components may be fulfilled through service requests.Obtain/build
Service request management makes a significant contribution to normal service delivery. This Deliver and support
activity of the value chain is mostly concerned with ensuring users continue to be productive, and sometimes
depends heavily on fulfilment of their requests.
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5.2.17 Service validation and testing
Key message
The purpose of the is to ensure that new or changed products and service validation and testing practice
services meet defined requirements. The definition of service value is based on input from customers, business
objectives, and regulatory requirements, and is documented as part of the value chain activity of design and
transition. These inputs are used to establish measurable quality and performance indicators that support the
definition of assurance criteria and testing requirements.
Service validation5.2.17.1
Service focuses on establishing deployment and release management acceptance criteria (conditions that validation
must be met for production readiness), which are verified through testing. Acceptance criteria can be either utility-
or warranty-focused, and are defined through understanding customer, regulatory, business, risk management, and
security requirements.
The service validation activities of this practice establish, verify, and document both utility- and warranty-focused
service assurance criteria and form the basis for the scope and focus of testing activities.
Testing5.2.17.2
A test strategy defines an overall approach to testing. It can apply to an environment, a platform, a set of services, or
an individual service. Testing should be carried out equally on both in-house developed systems and externally
developed solutions. The test strategy is based on the service acceptance criteria, and should align with the
requirements of appropriate stakeholders to ensure testing matches the risk appetite and is fit for purpose.
Typical test types include:
Utility/functional tests:
A test of a single system componentUnit test
Overall testing of the system, including software and platformsSystem test
Testing a group of dependent software modules togetherIntegration test
Testing whether previously working functions were impacted.Regression test
Warranty/non-functional tests:
Checking speed and capacity under loadPerformance and capacity test
Testing vulnerability, policy compliance, penetration, and denial of service riskSecurity test
Checking that legal and regulatory requirements have been metCompliance test
Testing for backup, event monitoring, failover, recovery, and reportingOperational test
Checking for verification of necessary documentation, training, support model Warranty requirements test
definition, and knowledge transfer
The test performed by users of a new or changed system to approve a release.User acceptance test
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Figure 5.36 shows the contribution of service validation and testing to the service value chain, with the practice
being involved in all value chain activities except the plan activity:
Metrics of service validation and testing, such as escaped defects, test coverage, and service performance Improve
against SLAs are critical success measures required to improve CX and lower risk.
Involvement of some stakeholders in service validation and testing activities helps to engage them and Engage
improves visibility and adoption of the services.
Service design, knowledge management, performance management, deployment Design and transition
management, and release management are all tightly integrated with the service validation and testing practice.
Service validation and testing activities are closely linked to all practices related to obtaining services Obtain/build
from external service providers, as well as to project management and software development activities in both
waterfall and Agile methods.
Known errors are captured by service validation and testing and shared with the service desk Deliver and support
and incident management practices to enable faster service restoration timeframes. Likewise, information
regarding service disruption or escaped defects are fed back into service validation and testing to increase the
effectiveness and coverage of acceptance criteria and testing activities.
Figure 5.36 Heat map of the contribution of service validation and testing to value chain activities
5.3 Technical management practices
5.3.1 Deployment management
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Key message
The purpose of the is to move new or changed hardware, software, deployment management practice
documentation, processes, or any other component to live environments. It may also be involved in deploying
components to other environments for testing or staging.
Deployment management works closely with release management and change enablement, but is a separate practice.
In some organizations the term ‘provisioning’ is used to describe the deployment of infrastructure, and deployment
is only used to mean software deployment, but in this case the term deployment is used to mean both.
There are a number of distinct approaches that can be used for deployment. Many organizations use a combination
of these approaches, depending on their specific services and requirements as well as the release sizes, types, and
impact.
The new or changed components are deployed to just part of the production environment at a Phased deployment
time, for example to users in one office, or one country. This operation is repeated as many times as needed until
the deployment is complete.
Components are integrated, tested, and deployed when they are needed, providing frequent Continuous delivery
opportunities for customer feedback loops.
New or changed components are deployed to all targets at the same time. This approach is Big bang deployment
sometimes needed when dependencies prevent the simultaneous use of both the old and new components. For
example, there could be a database schema change that is not compatible with previous versions of some
components.
New or changed software is made available in a controlled repository, and users download the Pull deployment
software to client devices when they choose. This allows users to control the timing of updates, and can be
integrated with service request management to enable users to request software only when it is needed.
Components that are available for deployment should be maintained in one or more secure locations to ensure that
they are not modified before deployment. These locations are collectively referred to as a definitive media library
for software and documentation, and a definitive hardware store for hardware components.
Tools that support deployment are many and varied. They are often integrated with configuration management tools,
and can provide support for audit and change management. Most organizations have tools for deploying client
software, and these may be integrated with a service portal to support a request management practice.
Communication around deployments is part of release management. Individual deployments are not generally of
interest to users and customers until they are released.
If infrastructure is provided as a service, then deployment of new or changed servers, storage, or networking is
typically managed by the organization, often treating the infrastructure as a code, so that the organization can
automate deployment. In these environments it is possible that some deployments may be under the control of the
supplier, such as the installation of firmware updates, or if they provide the operating system as well as the
infrastructure they may deploy operating system patches. The IT organization must ensure that they know what
deployments are planned, and which have happened, to maintain a controlled environment.
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Figure 5.37 Heat map of the contribution of deployment management to value chain activities
If application development is provided as a service, then deployment may be carried out by the external application
developer, by the in-house IT department, or by a service integrator. Again, it is essential that the organization is
aware of all deployments so that a controlled environment can be maintained.
In an environment with multiple suppliers it is important to understand the scope and boundaries of each
organization’s deployment activities, and how these will interact. Most organizations have a process for deployment,
and this is often supported with standard tools and detailed procedures to ensure that software is deployed in a
consistent way. It is common to have different processes for different environments. For example, there may be one
process for the deployment of client application software, and a completely different process for the deployment of
server operating system patches.
Figure 5.37 shows the contribution of deployment management to the service value chain, with the practice being
applied mainly to the design and transition, and obtain/build value chain activities, but also to the improve activity:
Some improvements may require components to be deployed before they can be delivered, and these Improve
should be planned and managed in the same way as any other deployment.
Deployment management moves new and changed components to live environments, so it Design and transition
is a vital element of this value chain activity.
Changes can be deployed incrementally as part of this value chain activity. This is especially Obtain/build
common in DevOps environments using a complete automated toolchain for continuous integration, delivery,
and deployment.
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The ITIL story: Axle’s deployment management
Marco: Before we deploy changes to our booking app, we release the changes to a test
environment. After thorough testing, we make the changes available to our users and customers.
Radhika: We recently realized that the same logic can be applied to some of our non-digital
services and components. For example, last month we introduced two brand new hybrid models
for hire in some bigger cities. We created a promotional service offering for the new cars,
updated our marketing materials, trained our technicians to work with the new models, and
deployed everything in advance – including the vehicles. This happened before the official
launch of the hybrid cars by the manufacturer. And of course, it happened with their permission.
Su: By the time the launch date arrived, we were ready to go. We made the cars available to
hire that very day.
Henri: Partnering with our manufacturer meant we had a successful and well-prepared launch
that created a buzz with our customers and with theirs.
5.3.2 Infrastructure and platform management
Key message
The purpose of the is to oversee the infrastructure and infrastructure and platform management practice
platforms used by an organization. When carried out properly, this practice enables the monitoring of
technology solutions available to the organization, including the technology of external service providers.
IT infrastructure is the physical and/or virtual technology resources, such as servers, storage, networks, client
hardware, middleware, and operating systems software, that provide the environments needed to deliver IT services.
This includes any CI a customer uses to access the service or consume a product. IT infrastructure may be managed
by the service provider or by an external supplier as dedicated, shared, or cloud services. Infrastructure and platform
management may also include the buildings and facilities an organization uses to run its IT infrastructure.
The infrastructure and platform management practice includes the provision of technology needed to support
activities that create value for the organization and its stakeholders. This can include being ready to adopt new
technologies such as machine learning, chatbots, artificial intelligence, mobile device management, and enterprise
mobility management.
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It is important to consider that every single organization must develop its own strategy to achieve the intended
outcome with any type of infrastructure or platform. Each organization should design its own cloud management
system to orchestrate all the interrelated components of infrastructure and platform with its business goals and the
intended service quality and operational efficiency.
Figure 5.38 Heat map of the contribution of infrastructure and platform management to value chain activities
Figure 5.38 shows the contribution of infrastructure and platform management to the service value chain, with the
practice being involved in all value chain activities except the engage activity:
Infrastructure and platform management provides information about technology opportunities and constraints Plan
that is used for the organization’s strategic and tactical planning.
Information about technology opportunities that can support continual improvement, and any constraints Improve
of the technologies in use, is provided by this practice.
Product and service design benefits from the information provided about technology Design and transition
opportunities and constraints.
Infrastructure and platform management is a critical contributor to this activity as it provides Obtain/build
necessary information about the components to be obtained.
At the operational level, infrastructure and platform management supports ongoing Deliver and support
maintenance of the services and the infrastructure, including any executions of patch management, backups, etc.
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Cloud service models
Cloud service models include:
The consumer can use the applications running in the cloud infrastructure Software as a service (SaaS)
without having to control or even manage the underlying cloud infrastructure.
The consumer can deploy onto the cloud acquired applications created using Platform as a service (PaaS)
programming languages, services, libraries, and/or tools supported by the supplier without having to control
or even manage the underlying cloud infrastructure. They have control over the deployed applications and
sometimes the configuration settings for the application and hosting environment.
The consumer can get processing, storage, and/or any other computing Infrastructure as a service (IaaS)
resources without having to control the underlying infrastructure.
Cloud service deployment models
Every service model can be deployed in several ways, either independently or using a mix of the following:
This type of cloud may be located within the organization’s premises or outside of it. It is a Private cloud
cloud infrastructure or platform to be used exclusively by a specific organization which, at the same time,
can have one or several consumers. This cloud is normally managed and owned by an organization, a
provider, or a combination of both.
This type of cloud is located on the cloud provider premises. It is provisioned for open use and Public cloud
may be owned, managed, and operated by any type of organization interested in using it.
A community cloud may be owned, managed, and operated by one or more of the Community cloud
stakeholders in the community, and it may exist on or off the organization’s premises. This cloud
deployment model consists of several cloud services that are meant to support and share a collection of
cloud service customers with the same requirements and who have a relationship with one another.
This cloud infrastructure is a composition of two or more distinct cloud infrastructures (private, Hybrid cloud
community, or public) that remain unique entities, but are bound together by standardized or proprietary
technology that enables data and application portability.
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ITIL practices and cloud computing
The advent of the cloud has been one of the greatest challenges and opportunities within the IT world for
decades. The promise of rapid, elastic storage and IT services available at the touch of a button is one that
many organizations struggle to deliver internally, not because the benefits are not there to be had, but rather
because their own ITSM processes and controls have not been adapted to support a radically different way of
working.
The management and control of IT services is a key skill of IT departments no matter where those services are
physically located, and the processes and controls offered by ITIL are readily adaptable to support the
management of those cloud services.
A coordinated response to the management of cloud services is essential. Organizations that attempt to address
only a cloud service provision as an operational issue will suffer on the tactical front, just as an organization
that attempts to control cloud services on a tactical front will suffer at the strategic level. A joined-up approach
covering all three levels, strategic, tactical, and operational, is required.
Apart from the infrastructure and platform management practice, the operation and management of cloud-
based services involves many other practices. It should be noted that this is not a comprehensive list:
One of the adjustments that IT departments often have to make for cloud Service financial management
computing is to their fiscal planning, which typically uses both traditional capital expenditure (CAPEX)
and operational expenditure (OPEX). With the advent of cloud computing, OPEX is preferred over
CAPEX, as cloud services are often consumed as utilities and paid out of the operational budget. If cloud
services are quicker and easier to access than in-house services, the costs associated with them will grow as
more parts of the business use them. The IT cost model must be adjusted, and the service financial
management practice can help to determine the techniques and controls required to ensure that the
organization does not run out of OPEX unexpectedly.
The focus of this practice will need to change from simply selecting suppliers and Supplier management
onboarding them to acting as the front end for a full-on release management process. This will ensure that
areas such as IT security, data protection, and regulatory compliance are routinely assessed prior to the
onboarding of a new cloud offering.
Coupled with service financial management, this practice should Capacity and performance management
establish and monitor budgets, with thresholds tracked and warnings published if an upswing in demand
leads to an increase in the cost of cloud services.
The boundaries of this practice will have to be redefined, as cloud service providers Change enablement
often make changes with minimal customer involvement, and almost no customer approval. Products and
services built on top of cloud services will need to make far greater use of standard changes to unlock the
benefits that cloud platforms (and associated business models) provide.
The focus of this practice will change from knowing how to fix in-house issues, to Incident management
knowing which service is supported by which cloud provider, and what information they will require to
resolve an issue. Greater care will be needed to support impacted customers and teams.
This practice will continue to be critical to IT departments, but the ability to safely Deployment management
onboard or offboard a cloud provider will become a common requirement for IT departments. Deployment
management will be a key capability for successful IT organizations, to ensure new cloud capabilities are
rapidly deployed and embedded within the in-house service offerings.
5.3.3 Software development and management
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Key message
The purpose of the is to ensure that applications meet software development and management practice
internal and external stakeholder needs, in terms of functionality, reliability, maintainability, compliance, and
auditability.
The term ‘software’ can be used to describe anything from a single program (or suite of programs) to larger
constructs (such as an operating system, an operating environment, or a database) on which various smaller
application programs, processes, or workflows can run. Therefore the term includes, but is not limited to, desktop
applications, or mobile apps, embedded software (controlling machines and devices), and websites.
Software applications, whether developed in house or by a partner or vendor, are of critical importance in the
delivery of customer value in technology-enabled business services. As a result, software development and
management is a key practice in every modern IT organization, ensuring that applications are fit for purpose and use.
The software development and management practice encompasses activities such as:
solution architecture
solution design (user interface, CX, service design, etc.)
software development
software testing (which can include several components, such as unit testing, integration testing, regression testing,
information security testing, and user acceptance testing)
management of code repositories or libraries to maintain integrity of artefacts
package creation, for the effective and efficient deployment of the application
version control, sharing, and ongoing management of smaller blocks of code.
The two generally accepted approaches to software development are referred to as the waterfall and Agile methods
(see for more information on these methods).section 5.1.8
Software management is a wider practice, encompassing the ongoing activities of designing, testing, operating, and
improving software applications so they continue to facilitate value creation. Software components can be
continually evaluated using a lifecycle that tracks the component from ideation through to ongoing improvement,
and eventually retirement. This lifecycle is represented in .Figure 5.39
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Figure 5.39 The software lifecycle
Figure 5.40 shows the contribution of software development and management to the service value chain, with the
practice being involved in all value chain activities except the engage activity:
Software development and management provides information about opportunities and constraints related to Plan
the creation and changing of the organization’s software.
Service improvements involving software components of the services, especially those developed in Improve
house, rely on this practice.
Software development and management often requires ongoing collaboration and coordination with Engage
stakeholders.
Software development and management allows the organization to holistically design and Design and transition
manage changes to products and services.
The creation of in-house products and the configuration of products developed by partners and Obtain/build
suppliers depend on this practice.
Software development and management provides delivery and support teams with Deliver and support
documentation needed to use products that facilitate the co-creation of value.
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Figure 5.40 Heat map of the contribution of software development and management to value chain activities
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