Which value chain activity ensures that ongoing service activity meets your expectations?

Guide

Guide

ITIL 4 Service Value Chain

ITIL 4’s Service Value Chain is an important component of the Service Management best practice framework. In this article, we aim to explore the basics of what it is, what it does, and how it can be applied to transform service management.

ITIL 4 Service Value Chain and Service Value System

The Service Value Chain is a central component of the ITIL 4 Service Value System. The Service Value Chain is an operating model for creating, delivering, and improving services. It identifies the key activities involved in creating value for customers through the development of products and services in response to demand and opportunity.

The six activities with the ITIL service value chain are:

• Engage: Interacting with external stakeholders to provide a good understanding of needs, to promote transparency, and to foster good relationships with all stakeholders
• Plan: Creating a shared understanding of the vision, status and improvement directions for all four dimensions and all products and services
• Improve: Ensuring continual improvement of products, services and practices across all value chain activities and the four dimensions
• Design and Transition: Ensuring that products and services continually meet stakeholder expectations for quality, cost, and time to market
• Obtain/ Build: Ensuring that service components are available when and where they are needed, and that they meet agreed specifications
• Deliver and Support: Ensuring that services are delivered and supported according to agreed specifications and expectations.

Source: Axelos (2019)

ITIL Value Chain Activities

The six activities with the value chain can be combined and integrated into a myriad of ways to create a “journey” from demand to value that reflects how the service provider completes work.

So, the flow of this model is such that actions produce sustainable results. But, again, it’s important to stress that this is not a static, blueprint model, but is designed to be adapted according to the subject and the type of value chain. 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. Thus, critical judgement and common sense should be applied when using this model to make sure it’s applied in a relevant way to an organisation’s particular needs.

It’s also worth noting that the model can indeed serve as a workflow, but also be used simply as a high-level reminder of a sound thought process to ensure value chains are properly managed.

ITIL is a registered trademark of AXELOS Limited, used under the permission of AXELOS Limited. All rights reserved.

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ITIL 4 is the world’s leading framework for IT service management (ITSM). It was previously a ‘library’ of insight and best practices (hence the now outdated name, ‘IT Infrastructure Library’), but has since grown into a fully modern and ever-evolving framework based around the latest developments in digital and IT management.

Despite these changes, however, its purpose remains the same: the planning, development, implementation, and continuous improvement of IT services. This is hardly a one-size-fits-all job given the sheer range of IT service types we see even in typical organizations nowadays. For successful ITSM, a business needs a comprehensive yet adaptable approach.

At the heart of ITIL 4 lies the ‘Service Value System (SVS)’, which serves as the architecture of ITIL 4, mapping out the different elements used to not only create services but also to enable effective and continuous ITSM. The SVS, in turn, contains a number of components, the most important of which is the Service Value Chain (SVC).

The ITIL SVC is an operating model that enables the delivery of bespoke services. It utilizes six key ‘Activities’ that help ITIL practitioners to conceptualize, create, review, and improve high-quality services that are fully suited to client and stakeholder requirements.

The Activities each utilize inputs and outputs, with the results of one Activity usually flowing into the next. At the same time, Activities are interdependent in how they create stakeholder value and can be combined in various different ways depending on the requirements of the service in question.

What are the ITIL service value chain activities?

1. Plan – This Activity focuses on strategy. Practitioners develop an understanding of what a service needs to deliver, as well as its current status and its improvement direction in relation to the four dimensions of ITIL 4, Organizations and People, Value Streams and Processes, Information and Technology, and Partners and Suppliers.
2. Improve – This Activity is geared towards the continual improvement of practices, services, and products in all Service Value Chain activities, along with the four ITIL dimensions we mentioned previously. This Activity guides gradual and continuous improvement in all Activities and ITIL value streams.
3. Engage – This Activity is about engaging with stakeholders. Practitioners will find out what they need, guarantee complete transparency, and optimize stakeholder relationships. They will also take stakeholder and client requirements and turn them into tangible design points, which will be used in the fourth Activity.
4. Design and Transition – This Activity takes the expectations devised in the Engage stage and makes sure that the service or product in question can satisfy them. Requirements are also translated into specifications that can be used in the Obtain/ Build Activity. Finally, Design and Transition delivers new products and services for the sixth Activity, Deliver and Support.
5. Obtain/Build – This Activity ensures service components meet required specifications, including being available whenever and wherever necessary. It effectively turns requirements into service components, which can be used in both the Design and Transition and Deliver and Support Activities.
6. Deliver and Support – This Activity focuses on delivering services and products that meet the needs of clients and stakeholders. Its inputs come from Design and Transition, and it also utilizes service components from Obtain/Build.

ITIL Activities and practices are combined in various ways to create ITIL value streams for specific services. The shape of a value stream will depend on why it was created, such as to accomplish a singular task or respond to a specific situation. 

Value streams can also be amended as requirements change, such as when new best practices or technology emerges. 

Finally, ITIL value streams can also support different forms of service delivery. For example, the SVC would be fully compatible with services created via DevOps pipelines.

What are service value chain inputs and outputs?

Inputs and outputs are part of the ITIL 4 SVC Activities. Every value stream is geared towards the creation of outputs as well as products and services.

• Inputs are utilized within Activities. Inputs can be external from the SVC or created by an Activity. External inputs can include a business’s governance strategy demanding certain actions from IT. Inputs created by an Activity will typically be utilized in subsequent Activities.
• Outputs are created by Activities. Outputs can be provided internally to other Activities within the SVC or externally to consumers, clients, or other parts of a business.

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