The visualization and establishment of Service value system in an organization is an essential need of modern business environment. ITIL®4 considers Service Value System (SVS), which depicts the representation of various service assets (components) & Organizational activities throughout the service life cycle.
In entirety the Service Value System (SVS) depicted in ITIL®, should facilitate and stress on integration and coordination across the service value stream and should provide direction to the organization through a strong and unified approach, considering the need for flexibility, adaptability, adaptability by organizations to enable sustainability and consistency.
Figure 11: The ITIL® Service Value System (copyright of AXELOS®, reproduced under the license from AXELOS® Limited)
The various components of ITIL® Service Value System (SVS) are;
To ensure the shared understanding, establishing common approach for service management across the organization and making appropriate organizational decisions & actions, the ITIL® guiding principles provide the required guidance. These guiding principles create the foundation required for establishing the culture and behaviour across the organization (i.e. strategic decision making in day-to-day Operation)
There are seven guiding principles. Those are;
For Example: Let us assume a scenario where an organization decides to implement an HR management portal with the features, attendance & leave management, claim processing, payroll processing, etc. Currently, it is done manually using MS Excel worksheet which is tedious and time consuming, which would lead to delay in processing, decreased production & employee satisfaction.
By doing this project organization can;
Governance is a formal framework which provides a structure for an organization to ensure that there is a means for an organization to establish direction and control. All the investments made by the organization support business objectives and create value.
Aligning an IT strategy to business strategy is an essential need which is fulfilled by the establishment of a formal governing structure, both at organization level & IT. That is, an IT governance is an integral part of overall enterprise governance. Through a formally established framework, an organization can achieve its strategies and goals, by producing measurable results.
In the absence of the direction from a governing body, it is almost impossible for an organization to move forward in the specific direction and make the investments justifiable and initiatives worthwhile.
In the above-mentioned example of organization’s decision to implement an HR Application, will be made based on the direction set by the organization to accomplish business excellence through continuous evaluation and improvements. In the absence of such directions, there is no context to the organization to move forward.
The ITIL service value chain provides an operating model for the creation, delivery, and continual improvement of 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 demands from their stakeholders in the most effective and efficient ways. (Ref: ITIL4 book from AXELOS®)
Figure 13:The Service Value Chain (Ref: ITIL4 book published by AXELOS®)
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. (Ref: ITIL4 book from AXELOS®)
The concept of value change was first described by Michael Porter in his best-seller, “Competitive Advantage: Creating and Sustaining Superior Performance”, during 1985. The value chain refers to the sequence of activities / processes that an organization performs to provide a value, through its Services or products to the customer / consumers.
For Example: The figure depicts the value chain activities of HR Service in an organization, which would be appropriate to portray the contributor for value chain for the services provided by HR to the employees of the organization.
Figure 14: HR Value Chain Activities
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. The ITIL SVS includes;
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:
With this bifurcation of practices, it helps ITSM organizations to focus on relevant practices and visualize correctly.
Continual improvement of services focuses on improvement by increasing the efficiency, maximizing the effectiveness and optimising the cost of services, resources and the underlying IT service management practices. The can be ensured through identification of improvement opportunities continually, throughout the lifecycle of a service & service value chain.
The primary objective is to continually align and re-align IT services to the changing business needs/demand, by identification and implementation of improvements to IT services that support business processes. Continual improvement should look at improving process effectiveness, efficiency and cost effectiveness.
In our example of HR Portal services, the service experience of the employee is improved by introduction of services through the portal. Further improving the efficiency and effectiveness through continual improvement of portal services is by adding more features like, improvement in portal performance, introducing employee connect programs, newsletter etc.
Opportunity and demand are the key inputs to the service value system. Opportunities are the ones which exist in the market and signify the available options or various possibilities enabling the service provider to add value to all the stakeholders or improve the organization’s capability to provide services. Demand also exists (or should exist) along with opportunities, which refers to the need or desire for services or products by a customer or consumers (both internal and external to the organization).
The perceived benefits to the consumers of the services, the usefulness of the services, and the importance of some needs to be fulfilled etc.should be the outcome of the service value system which can be termed as value. The value created by service value systems should also ensure the ability to create value for a wider group of stakeholders.
To create value continuously, the service management has to function as a system, and as a whole. The service value system depicted in ITIL®4 defines;
Opportunity & demand exist in the market to be fulfilled. A service provider, should realise these opportunities and demands in the market before strategizing & creating a service which is appropriate to address the needs and improve the customer experience.
For example, in the scenario of people purchasing tickets for movies or sports events standing in queue, there exists an opportunity to enable purchasing the ticket online by introducing an online portal service or mobile app service. This helps people to save their time & energy, plus enjoy the experience of purchasing tickets hassle-free. Before introducing the service, the service provider has to check the feasibility of introducing the services. Reason being that there should be access to internet, computer, a mobile network to the people who use these services. Else, the services introduced are not utilized and that results in a loss to the service provider.
By creating and delivering the appropriate services to customers to fulfil their need, the service should not ignore achievement of the organizational objectives and value for the organization. It is not only customer focused; the focus should be on all the stakeholders. The interest of all the stakeholders has to be considered and their objectives have to be fulfilled. In the above described scenario of online portal or mobile app service, introduction of service creates value to the service consumers, however the objectives of the service provider organization, ticket providing partners (like movie theatre owners, sports event organizers etc.) should also be considered and their objectives must be achieved.
To summarize, in this module we looked at the various components of ITIL® Service Value System (SVS) and their brief details. The components of SVS are;
Very good information with simple words and practical examples in understandable way and Really helpful who are seeking to learn ITIL and preparing to take an exam.
Hi Knowledge Hunt, I love this article, Preach it more and keep giving Amazing Information. I like your style of making things so easier for us to always read articles.
Thank you for sharing some of the things we will be learning in the event we take up an ITIL certification course. I like that you mentioned that students will learn about a product's lifecycle by using IT as I believe this will be advantageous for any company. Assuming that I own a business that sells a variety of products, I would definitely consider this qualification.
Very well written with good examples and a language easy to understand the concepts. I will surely recommend this to my friends who are pursuing the certification.
I read it and I am learnt a lot of things.