The Business Benefits of Following ITIL Best Practices

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Last updated on
15th Mar, 2021
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15th Jul, 2020
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The Business Benefits of Following ITIL Best Practices

Information Technology Infrastructure Library® or ITIL® as it is widely known is the accepted best practice framework in IT Service Management (ITSM).Around the world, organizations have adopted it as an effective tool to transform management of IT services and for achieving business growth. 

IT Service Management is leveraged extensively to create competitive advantages. IT is no more a cost center, but it has come to be regarded as an important business driver which offers tremendous opportunities for value creation. Today, it is hard to come across any service not enabled by IT and with businesses faced with tremendous disruptions, IT services comprise the most significant and perhaps the largest component. 

With Digital transformation rapidly changing the global business and economic landscapes, corporations are striving to remain competitive and relevant. How a service is delivered and managed can determine who will survive and who will not. Creating value through services for customers and for themselves is what organizations are striving for. 

Many enterprises are embracing opportunities offered by digital transformation. These organizations realize that such transformations must be in sync with the need for stability, predictability, operational agility, and organization velocity. 

Therefore, improving and expanding capabilities in IT Service management is the name of the game! 

Overview of the ITIL4 framework 

ITIL4 is a major upgrade from the previous version, ITIL V3. In keeping with the changing business environment, ITSM is also evolving as organizations adopt newer ways of working.  Cross function teams are becoming commonplace and there is an increased integration of IT with other organizational capabilities. 

ITIL4 provides a new operating model – a model that is flexible as well as practical, one that can help organizations on their digital transformation journey. In the new framework, ITIL best practices are integrated with new ways of working such as Agile and DevOps. 

The key elements of ITIL4 are the four dimensions, the guiding principles, the move from processes to practices, and the ITIL service value system. In this article, we will discuss each of this in detail. 

Benefits of ITIL4 

Adoption of ITIL4 can bring a lot of benefits to the organizations and practitioners alike. 

In the new version, the framework accords strategic importance to ITSM by placing it in the wider context of customer experience and value co-creation. 

The main benefits of ITIL4 are: 

Holistic Approach to Service Management 

Understanding how all the parts of the organization – ITSM, development, operations, business relationship and governance – work together in an integrated way is key to a holistic approach to value creation. This provides end-to-end visibility and appropriate controls which is essential to the achievement of organizational agility, faster time to market, quality, optimized costs, and reduced risk through continual improvement and innovation. 

Focus on co-creating business value: 

While the focus of ITIL V3 was on IT services lifecycles(development, deployment, improving and retiring), ITIL4 has a focus across the entire organization. The four dimensions that are essential to creating value for all stakeholders, including customers are as follows: 

Organization and People 

This dimension is essentially about the people aspect of ITSM. The organizational culture needs to support its objectives and the right level of staff capacity, competencies and skill sets are required for value co-creation to take place. Organizational structure (horizontal or vertical),roles and responsibilities, adequate Governance and effective communication are some other key considerations to focus under this dimension.

ITIL4 shows how every dimension is affected by multiple factors
ITIL4 shows how every dimension is affected by multiple factors

Information and technology: 

This aspect applies to both service management and to the services being managed. This dimension includes information created, managed, and used in the course of service provision and consumption. The technology part considers components like storage, network, databases etc. that make up the service as well as technology that support service management at the enterprise level. 

Partners and suppliers 

Value is increasingly achieved through co-creation. Partners and suppliers play a vital role in the design, development, delivery, and continual improvement of services. The breadth and depth to which organizations integrate suppliers into their value chains depends on many factors like in-house capabilities, sourcing strategy, relationship, cost etc. 

Value streams and processes 

It is critical that the different parts of the organization work in an integrated and coordinated way to create value. ITIL4 introduces the service value chain which is an operating model which helps map how a value stream (the delivery process of a service) flows across various activities from demand to supply. Organizations should map a value stream for every product or service to provide a complete, end-to-end picture of how value is created. 

Improved Business and IT alignment 

With a flexible operating model in the form of Service Value System (SVS),the framework offers opportunities for better alignment of Business and IT whereby IT contributes works in tandem to realize organizational goals. This not only improves quality of service but also leads to higher customer satisfaction by reducing risks and cutting down time to market. 

Key concepts of ITIL V4 

Value Co-creation  

ITIL4 defines Services as: 

“A means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks” 

This definition marks a shift from the old definition as it outlines ‘value co-creation’. What this means is that the Service provider and Service Consumers must work together to create value. 

In ITILV3, value was described as something the Service Provider created for customers. 

The Service provider collaborates with customers to understand what constitutes value for customers rather than creating products and services in a vacuum. 

There are also two types of key stakeholders defined within ITIL4: 

Service Provider 

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. 

Service Consumer 

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. 

Just as there can be different provider roles, consumers are also divided into different roles or categories, namely: 

Customer 

a person who defines the requirements for a service and takes responsibility for the outcomes of service consumption 

User 

a person who uses the service 

Sponsor 

a person who authorizes budget for the service 

In some instances, the same person may serve in several roles. In other cases, different people may assume the various roles. As a Service Provider organization, it is important to understand who fills each of these roles and what expectation each of them wants and expects from the service provider. 

Products 

A configuration of an organization’s resources designed to offer value for a consumer 

A service provider may a product or portfolio of products that have the potential to co-create value for multiple customer segments. Service Provider can thus create one or more service offerings.

Products are a configuration of an organization’s resources
Products are a configuration of an organization’s resources Source: AXELOS

Service Value System and Management Practices 

The ITIL4Service Value System (SVS) describes how all the components and activities of the organization work together as a system to enable value creation. 

A system can be defined as an interconnected network or as a set of things working together as parts of a mechanism. An organization is a system. 

The Service provider as a system, receives demand from multiple sources and converts them into value by creating/offering services for customers.

ITIL Foundation: ITIL4 Edition (2019).
ITIL Foundation: ITIL4 Edition (2019). Source: AXELOS

The Service Value System (SVS) is a different way of looking at the organization. The SVS is interconnected. It has individual parts; but they are all part of the same mechanism, working together. This includes how  organizations get things done (Service Value Chain), how decisions are made (Guiding Principles), how do they improve (Continual Improvement), how do they ensure they are doing what they profess to be doing (Governance), and how do they process work (Practices). Successful organizations exploit opportunities and respond to demand by delivering high-quality products and services in a fast and efficient way. They stand out for their agility and they do it by breaking down silos.  

Now, let us break down those components and discuss how each contributes to making the Service Value System successful. 

Guiding Principles 

Guiding principles guide an organization in all circumstances. These should form the basis for decision making in the organization. 

The guiding principles provide a comprehensive and holistic vision of how a service or service management organization should manage and execute its work. The seven guiding principles include: 

  1. Focus on value 
  2. Start where you are 
  3. Progress iteratively with feedback 
  4. Collaborate and promote visibility 
  5. Think and work holistically 
  6. Keep it simple and practical 
  7. Optimize and automate

Governance 

Governance is the means by which an organization is directed and controlled by defining policies and rules. 

Service value chain 

It is 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. 

Service Value Chain in ITIL4.
Service Value Chain in ITIL4. Source: Axelos

The service value chain outlines six value chain activities –  

  1. Plan 
  2. Engage 
  3. Design and transition  
  4. Obtain or build  
  5. Deliver and support, and  
  6. Improve

Typically, a service provider will engage with external stakeholders, plan work, deliver and support live products and services. 

Practice 

ITIL4 moved away from processes towards more expanded ‘practices’ and defines them as ‘a set of organizational resources designed for performing work or accomplishing an objective. ’They are both practical and flexible and each practice supports multiple SVC activities and aids the flexibility of the entire service value chain. 

These practices are leveraged in order to cater to the various aspects like time to market, responding to demand and resource allocation and scaling. 

ITIL4 has 34 practices as follows: 

General Management Practices 

14 general management practices have been identified. These are generally practiced across the organization and are adopted for use in ITSM as well. 

Service Management Practices 

17 service management practices have been developed for specific area of IT service management and ITSM industries as a whole. 

Technical Management Practices 

There are three technical management practices which come from technology management domains for service management. They have been adopted in such a way that expand their applicability in IT services domain as well. Namely, these are: (1) deployment management, (2) infrastructure and platform management, and (3) software development and management. 

The 34 practices of ITIL4 have been summarized in the following table: 

General Management practices(14)Service Management Practices(17)Technical Management Practices(3)
Architecture management Availability managementDeployment management
Continual improvement Business analysisInfrastructure and platform management
Information Security managementCapacity and performance managementSoftware development and Management
Knowledge managementChange Control
Measurement and reportingIncident management
Organizational change managementIT asset management
Portfolio managementMonitoring and event management
Project managementProject management
Relationship managementRelease management
Risk managementService catalogue management
Service financial managementService configuration management
Strategy managementService continuity management
Supplier managementService design
Workforce and talent managementService desk

Service level management
Service request management
Service validation and testing

34 practices of ITIL. Source: Axelos.

Implementing ITIL4 in your organization – Best Practices 

Implementing ITIL4 in your organization, is all about the ABC of an organization - attitude, behavior, and culture. It is these three ABCs that will determine the success or otherwise of ITIL implementation.  

A culture that accords highest importance to holistic service delivery and value co-creation, naturally evokes right attitude and behavior from all sections of the organization. 

With that said, the following are some of the key factors to be considered: 

Start where you are 

An objective evaluation of the current situation needs to be carried out before initiating a transformation. This gives us a perspective of our current capabilities, things that are working well and things that are not, what we can do and what we can’t, the processes that are currently being used, the prevailing organizational culture etc. 

So, the current baseline is the best starting point. 

Organizational Vision 

For organization wide adoption, it is important that there is a common big picture, an organizational vision which everyone, understands, aligns, and is committed to. Everyone should be able to know what the organizational goals are they are working for, how do their role fit into the larger scheme of things and what role does IT play in the achievement of the business strategy. Therefore, the following factors, among others, need to be looked at: 

  • The People 
  • The Practices  
  • The product and technology 
  • The culture, service, and attitude 
  • The organization, communication, and relationships  

Build capability and evaluate progress: 

Having a clear vision helps in building what matters the most to the organization. It helps draw a roadmap. Capability building in ITSM should include having defined practices, effective tools for ITSM and as also for collaboration, competency building for the staff, putting the right governance structures in place etc. 

Measuring and evaluating progress at key milestones is important to know if we are headed in the right direction and, if the changes that are being introduced bring value or not. 

Concluding thoughts

ITSM has evolved well with times and ITIL has kept pace. The new version is both practical and flexible and takes ITSM to the next level of maturity by embracing a holistic view of service management and aligning itself with newer ways of working like Agile, DevOps and lean. 

The new version, which has received a lot of contribution from members of the ITSM community and industry practitioners, has made ITIL more relevant than ever before.

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