On Location: Frankenstein Castle, Mühltal, Germany
Case Topic: Key Terminology from ITIL 4
I was working in the lab late one night …
Someone recently asked me, “What are these terms that ITIL 4 talks about, the Service Value System and the Service Value Chain?” I replied, “It sounds like you just might be preparing for your certification exam so let’s see if I can help.”
The Service Value System is an organizational view of what your organization does and how it does it, as it all relates to providing services for your customers. It is a strategic, “big picture” approach. It asks the questions, “What are the demands that we see and predict and what do we need to do to provide products and services to meet those demands?”
Understanding the demands, this strategic approach then wants to identify and understand the resources and capabilities that will be needed to provide the products and services.
ITIL 4 describes 5 main components for a Service Value System and 3 of these are very closely tied into the larger, overall corporate strategies and culture. The first 3 components are – Governance, Continual Improvement and Guiding Principles.
Governance – the creation of policies and practices that provide assurances that our performance is directed towards meeting standards and providing value. Does our organization prioritize meeting standards?
Continual Improvement – are we a learning and evolving organization? Is improvement and growth a shared culture across the organization?
Guiding Principles – what are our structures and frameworks for how we manage and monitor performance and achievements? Are there existing objectives and methods that guide how we approach the prioritization of responsibilities? ITIL Identifies and describes 7 Guiding Principles.
These first 3 components have strong strategic ties with the larger organization and are key in defining the strategic direction of our service providing organization. For example you could imagine defining a mission statement here for your IT Service Delivery Organization.
The 2 remaining components of the Service Value System are much more tactical and deal directly with “how” do we do things. These 2 components are – Practices and The Service Value Chain.
Practices – comprised of processes and other work and performance activities that are directed toward accomplishing objectives.
The Service Value Chain – descriptions of interconnected activities that are performed to deliver a product or a service.
In describing a Service Value System we discuss The Service Value Chain as one of its components. It is made up of activity categories that are used to describe the various services and products that are created by the Service Value System. In other words we have different Service Value Chain descriptions for each different service provided and these descriptions are called Value Streams.
Here is our summary. We have three important terms for discussing value from an ITIL 4 perspective.
Service Value System – describes your service organization
Service Value Chain – activity categories used to describe your value streams
Value Stream – activities and resources used to provide a service of value
I’m sure that Dr. Frankenstein would have some additional ideas on how to “bolt” all of these terms and concepts together.
P.S. – Value Stream is a term that is heavily used in Lean, Agile and DevOps approaches. Once you have completed your certification exam for ITIL Foundations “Value Stream” will be the term that you encounter most often as it is regularly the basis for discussions related to how value is provided to customers.
About the Author
Jim Jackson is the Managing Director of Blue Sky AFC Associates LLC. Jim holds the ITIL Expert Certificate (V3), ITIL 4 Foundations and DevOps Fundamentals certification. Jim is a service management professional and has been an accredited instructor of ITIL Foundations since 2005 and DevOps Fundamentals. He has shared his open, non- restricted view of the ITIL framework as he has trained and assisted hundreds of candidates to prepare for and pass the ITIL Foundations examinations. Jim has also written accredited courseware for earlier versions of ITIL Foundations and he contributed to ITIL 4 accredited course materials for Thought Rock in 2019.
About the Series – IT Service Management Around the World
These are fictional stories of service management and any similarity, you may find, to your own organization is purely coincidental. The purpose of these service management musings is to introduce service management and ITIL concepts as well as postulate on how ITIL and its components could be at play in any size business located anywhere in the world. The opinion stories are written to motivate customer centric, service oriented thinking and discussions. The content is not intended to constitute advice of any sort. While every effort is made to ensure the accuracy and reliability of the information no liability is accepted for any loss resulting from the use of or reliance on this content.
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Diagrams and images contained in this article have been created by Jim Jackson and remain the property of Blue Sky AFC Associates LLC, copyright 2020.