Chapter 4 -The ITIL service value system

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ITIL guiding principles

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. As such, it is universal and enduring. These guiding principles constitute the core message of ITIL and of service management in general. They can be used to guide organizations in their work as they adopt a service management approach and adapt ITIL to their own specific needs and circumstances. The guiding principles encourage and support organizations in continual improvement at all levels. Guiding Principle: ●*Focus on value.* ●*Start where you are.* ●*Progress iteratively with feedback.* ●*Collaborate and promote visibility.* ●*Think and work holistically.* ●*Keep it simple and practical.* ●*Optimize and automate.*

Overcoming the challenge of silos

A major challenge to an organization in trying to work effectively and efficiently, and with a shared vision, or to become more Agile and resilient, is the presence of organizational silos, which can form in many different ways and for many different reasons. Silos can be resistant to change and can prevent easy access to the information and specialized expertise present throughout the organization. This can in turn reduce efficiency and increase cost and risk. Silos also make it more inherently difficult for different groups in an organization to communicate or collaborate. it's important that all practices should have multiple interfaces with one another. Exchange of information between/among practices should be triggered at key points in the workflow. This is essential to the proper functioning of an organization.

Organizational agility and resilience

A successful organization is one that has achieved organizational agility to support internal changes, and the organizational resilience to withstand—and even thrive—in changing circumstances. It must consider itself part of a larger ecosystem of organizations, all of which deliver, coordinate, and consume products and services.

Agile

Agile methods applied to software development focus on the delivery of incremental changes to software products in response to the evolving needs of users. These methods foster a culture of continual learning, flexibility, and willingness to adopt and adapt new approaches to ever-changing needs. Agile techniques include, for example, "time-boxing" work, self-organizing and cross-functional teams, and ongoing communication and collaboration with customers and users. Agile software teams typically focus on the rapid delivery of product updates and the expense of a more holistic view that takes into account the operability, reliability, and maintainability of the products in a live environment. ITIL can provide software development organizations with a wider perspective, using a language by which to engage other service teams. Adopting Agile without ITIL can lead to higher costs over time—for example, the costs of adopting different technologies and architectures, as well as the costs required to release, operate, and maintain software increments. Likewise, implementing ITIL without Agile techniques can result in a lost focus on value to customers and users. The result can be a slow-moving, highly centralized bureaucracy.

Judging what to keep

As you decide what to keep, consider this advice: ●When analyzing a practice, process, service, metric, or other improvement target, always ask whether it contributes to value creation. ●When designing or improving service management, it's better to start with an uncomplicated approach and then carefully add controls, activities, or metrics when they're truly needed. ●Critical to keeping service management simple and practical is understanding exactly how something contributes to value creation.

Using automation

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. 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. Looking for opportunities to automate standard and repetitive tasks can help save the organization costs, reduce human error, and improve employee experience.

Collaboration from unexpected sources

Creative solutions, enthusiastic contributions, and important perspectives can be obtained from unexpected sources. Thus, inclusion is generally a better policy than exclusion. ●Cooperation and collaboration are better than isolated work, which is often called "silo activity." ●Silos are the result of the behavior of individuals and/or teams; however, their causes can also be structural. This happens most often when organizational functions or business units are impeded in their collaboration, or they are simply unable to do so, because their processes, systems, documentation, and communications are designed to fulfill the needs of only a specific part of the organization. ●Applying the guiding principle of thinking and working holistically (coming up next) can help organizations to break down barriers between silos of work.

Importance of customer experience

Customer experience represents the entirety of interactions between a customer and a service provider organization. This includes the products provided by the service organization. CX typically determines how the customer feels about the organization, its products, and its services. As such, CX is both objective and subjective, for example: ●*Objective CX: *When a customer receives a product they ordered, and it arrives as promised, and within the delivery time promised, the success of their experience is objectively measurable (e.g. through repeat purchases). ●*Subjective CX: *If it turns out that the customer doesn't like the design or navigability of a popular retailer's website while attempting to place an order, their experience is more of a subjective one, as another customer might find the design pleasant and easy to navigate. Such an experience would be subjectively measurable through a feedback survey.

Creating value by opportunity and demand

Demand represents the need or desire for products and services from internal and/or external customers. Opportunities represent the potential to add value for customers and other stakeholders (e.g. by delivering a new/improved service), or otherwise improve the organization (e.g. by improving a practice that lower costs or improves the quality of delivery). Opportunity and demand trigger activities within the ITIL SVS. These activities in turn lead to the creation of value.

DevOps

DevOps methods build on Agile software development and service management techniques by emphasizing close collaboration between the roles of software development and technical operations. DevOps can focus on aspects such as operability, reliability, and maintainability of software products that can assist in service management Cultural factors 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 by the same goals and use the same methods. It's 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).

Progress iteratively with feedback.

Don't attempt everything at once! Even huge initiatives can and should be accomplished iteratively. Organize work into smaller, more manageable components that can be executed in a timely manner. Doing so makes it easier to maintain sharper focus on each effort. Use feedback before, during, and after each iteration to ensure that actions are focused and appropriate, even if circumstances change. ●Even major initiatives must be accomplished iteratively. Organize the work into smaller, manageable sections that can be executed and completed in a timely manner. In doing so, the focus necessary for each effort will be sharper and easier to maintain. ●Improvement iterations can be sequential or simultaneous, according to the requirements of the improvement and the resources available. ●Each iteration should be both manageable and managed, to ensure that tangible results are returned in a timely manner and built upon to create further improvement.

Start where you are.

Don't invent or reinvent without first considering what's already available that can be leveraged. There can be a great deal in current services, processes, programs, projects, and people that can be used to create the desired outcome. The current state should be investigated and observed directly to ensure that it's fully understood and biases are minimized. first it's important to assess where you are. ●Measure and/or observe directly the services and methods already in place to properly understand their current state, and determine what can be used from them. ●Base your decisions for how to proceed on information that's as accurate as possible. In organizations, there's often a discrepancy between reports and reality. This is because of the difficulty involved in measuring certain types of data, or unintentional bias that's introduced into reports. ●Whenever possible, it's always best to obtain relevant data from primary sources to avoid assumptions which, if proven unfounded, could be disastrous to timelines, budgets, and the quality of results.

About governing bodies and governance

Every organization is directed by a governing body—a person or group who is accountable at the highest level for the performance and compliance of the organization. All sizes and types of an organization perform governance activities. The governing body might be a board of directors or executive managers who take on a separate governance role when performing governance activities. The governing body is accountable for the organization's compliance with policies and any external regulations.

Focus on value.

Everything the organization does must map, directly or indirectly, to stakeholder value. This principle encompasses many perspectives, including customer and user experiences The focus here is mostly on the creation of value for service consumers, although a service also contributes value to the organization and its stakeholders. The service provider must understand what the service consumer deems of value. The service provider must know: ●Why the consumer uses the services ●What the service enables them to do ●How the services enable them to achieve their goals ●The role of cost/financial consequences for the consumer ●The risks incurred by the consumer For the service consumer, value: ●Is defined by their needs ●Is achieved through intended outcomes, and optimization of costs and risks ●Changes over time, according to circumstances

Determine whom to collaborate with

Identifying and managing all the stakeholder groups an organization deals with is important, as the people and perspectives necessary for successful collaboration can be sourced within these stakeholder groups. 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.

Keep it simple and practical

If a value stream, process, service, action, or metric fails to provide value or produce a 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

Increasing urgency through visibility

Insufficient visibility of work leads to poor decision-making, which in turn impacts the organization's ability to improve its internal capabilities. It then becomes difficult to drive improvements, as it becomes unclear which improvements are likely to have the greatest positive impact on results. To avoid this potential problem, an organization should perform critical analysis activities such as: ●Understanding the flow of work in progress ●Identifying bottlenecks, as well as excess capacity ●Uncovering waste

The role of measurement

Measurement is important to the principle of starting where you are. However, it should support—not replace—what's observed. Although some things can only be properly understood through measuring their effects (e.g. natural phenomena), *direct observation should always be the preferred option.* It happens all too often that existing data are used with no consideration of direct, personal investigation. As Goodhart's Law states: "When a measure becomes a target, it ceases to be a good measure".

Think and work holistically.

No service—or element used to provide it—stands alone. Outcomes achieved by the service provider and service consumer will suffer unless the organization works on the service as a whole, not merely on its component parts. Results are delivered to internal and external customers through effective and efficient management and dynamic integration of information, technology, organization, people, practices, partners, and agreements, all of which should be coordinated to enable the realization of value.

Applying the principle Start where you are.

Properly understanding the current state of services and methods is important to selecting which elements to reuse, alter, or build upon. Consider the following points when applying this principle: ●Observe what exists as objectively as possible, using the customer or desired outcome as the starting point.Are the elements of the current state fit for purpose and for use?In all likelihood, many elements of current services, practices, projects, and skills can be re-used to create the desired future state, provided that the people making this judgment are objective. ●When examples of successful practices are observed in the current state, determine whether and how they can be replicated or expanded upon to achieve the desired state.In many cases, leveraging what already exists reduces the amount of work necessary to transition from the current state to the desired state.It's important to focus on learning and improvement, not merely replication and expansion. ●Apply your risk management skills.There are risks associated with reusing existing practices and processes (e.g. old behaviors that have been detrimental to services).There are also risks associated with establishing new practices (e.g. procedures that aren't performed correctly).These must be considered part of the decision-making process.The risks of making/not making a change must be evaluated to determine the best course of action. ●Recognize that sometimes nothing from the current state can be reused.Regardless of how desirable it might be to reuse, repurpose, recycle, or "upcycle" existing practices, it's possible that the only way to achieve the desired result is to start over from scratch.It's also true, however, that situations in which earlier practices must be abandoned entirely are exceedingly rare. In most cases, there's at least something to salvage from the old, even when it's necessary to create something new

The road to optimization

Regardless of the specific techniques used, the path to optimization follows these high-level steps: ●Understand and agree the context in which the proposed optimization exists. This includes agreeing the overall vision and objectives of the organization. ●Assess the current state of the proposed optimization. This helps in understanding where it can be improved and which improvement opportunities are likely to produce the biggest positive impact. ●Agree on 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 makes it easier to automate or optimize further at a later point. ●Ensure the optimization has the appropriate level of stakeholder engagement and commitment. ●Execute the improvements in an iterative way. Use metrics and other feedback to check progress, stay on track and adjust the approach to the optimization as needed. ●Continually monitor the impact of optimization. This helps in identifying opportunities to improve methods of working.

Optimize and automate

Resources of all types, particularly human resources, should be used to their best effect. Before automating an activity, streamline it to eliminate wasteful steps and optimize workflow. Then apply automation to reduce costs and human error, and enhance employee experience. People should intervene only when doing so truly contributes value. Optimization refers to making 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.

SVS architecture—flexible and value-oriented

The ITIL SVS architecture specifically enables flexibility and discourages siloed working. The activities of the service value chain and the practices of the SVS don't form a fixed, rigid structure. Instead, they can be combined in multiple value streams to address organizational needs in many different scenarios With all these components taken together, the ITIL SVS supports many different work approaches, such as Agile, DevOps, and Lean, as well as traditional process and project management, by providing a flexible, value-oriented operating model.

About the service value system

The ITIL SVS describes how all components and activities of an organization work together as a system to enable value creation. Each organization's SVS interfaces with other organizations, thus forming an ecosystem that services to facilitate value for the organizations, their customers, and other stakeholders.

The six value chain activities

The ITIL service value chain (SVC) includes six value chain activities that lead to the creation of products and services and, in turn, value. The six value chain activities are to: ●Plan. ●Improve. ●Engage. ●Design and transition. ●Obtain/build. ●Deliver and support. These six activities are the steps an organization should take in the creation of value. The function of each activity is to transform inputs into outputs. These inputs can be demand from outside the value chain or outputs of other activities. All the activities are interconnected; each activity receives and then triggers further action

The continual improvement model

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 continual improvement practice—supporting organizations in their day-to-day improvement efforts The TIL 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 ●Places a strong focus on customer value ●Ensures that improvement efforts can be linked back to the organization's vision

Communication for improvement

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.

Purpose

The purpose of the SVS is to ensure that the organization continually co-creates value with all stakeholders via the use and management of products and services.

Governance in the SVS

The role and position of governance in the ITIL SVS depends on how the SVS is applied in an organization. In an organization, the governing body can adopt 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 retain 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 its components, it's crucial to make sure that the following steps occur: ●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. ●Governance and management at all levels are continually improved to meet the expectations of the stakeholders

Organizational resilience

This is the ability of an organization to anticipate, prepare for, respond to, and adapt to incremental changes and sudden disruptions as external conditions change. External factors can be political, economic, social, technological, legal, or environmental. Resilience can only be achieved with a common understanding of the organization's priorities and objectives, which set its directions and promotes alignment as external circumstances change. The ITIL SVS provides the means necessary to achieve organizational agility and resilience.

Organizational agility

This is the ability of an organization to move and adapt quickly, flexibly, and decisively to support internal changes. These can include changes in: ●Organizational scope. ●Mergers and acquisitions. ●Organizational practices. ●Skills required by new technologies. ●Organizational structure. ●Partners and/or suppliers.

Applying the principle of Collaborate and promote visibility

To apply the principle of collaborating and promoting visibility, consider this advice: ●Collaboration does not mean consensus. It's not necessary, nor is it always wise, to get consensus from everyone involved in an initiative before proceeding. Some organizations are so concerned with arriving at a consensus that they try to make everyone happy; the result is that either nothing gets done, or something is produced that doesn't properly address anyone's needs. ●Communicate in a way the audience can hear. In an attempt to bring different stakeholders into the loop, many 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 to success. ●Decisions can only be made on visible data. Making decisions in the absence of data is risky. Decisions should be made about what data are 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

Applying the principle of Optimize and automate

To apply the principle of optimizing and automating, here's some advice: ●Simplify and/or optimize before automating. Attempting to automate something that is complex or sub-optimal is unlikely to achieve the desired outcome. Take time to map out the standard and repetitive processes as much as possible, and streamline where you can (optimize). From there you can start to automate. ●Define your metrics. The intended and actual result of the optimization should be evaluated using an appropriate set of metrics. Use the same metrics to define the baseline and measure the achievements. Make sure that the metrics are outcome-based and focused on value. ●Use the other guiding principles when applying this one. When optimizing and automating, it's smart to follow the other principles as well: ○Progress iteratively with feedback. Iterative optimization and automation renders progress visible and increases stakeholder buy-in for future iterations. ○Keep it simple and practical. It's possible for something to be simple but not optimized, so use these two principles together when selecting improvements. ○Focus on value. Selecting what to optimize and automate and how to do so should be performed according to what creates the best value for the organization. ○Start where you are. The technology already available in the organization may have features and functionalities that are currently untapped or underutilized. Make use of what's already there to implement opportunities for optimization and automation quickly and economically.

Applying the principle of Progress iteratively with feedback.

To apply the principle of progressing iteratively with feedback, consider this advice: ●Comprehend the whole, but do something. Often, the greatest enemy of progressing iteratively is the desire to understand and account for everything. This can lead to what's known as "analysis paralysis," whereby so much time is spent analyzing the situation that nothing is done about it. Understanding the big picture is no doubt important, but so is making progress! ●The ecosystem is constantly changing, so feedback is essential. Change happens constantly, so it's important to seek and use feedback at all times and at all levels. Doing so is the only way to adequately address change. ●"Fast" does not mean incomplete. Just because an iteration might be small enough to be accomplished quickly does not mean that it shouldn't include all elements necessary for success. Every iteration should be produced in keeping with the concept of the minimum viable product—a version of the final product that allows for the maximum amount of validated learning by the least amount of effort

Applying the principle of Think and work holistically.

To apply the principle of thinking and working holistically, consider the following advice: ●Recognize the complexity of the systems. Different levels of complexity require different heuristics for decision making. Applying methods and rules designed for a simple system can be ineffective, or even harmful, in a complex system, in which relationships among components are complicated and tend to change more frequently. ●Collaboration is key to thinking and working holistically. If the right mechanisms are put in place for all relevant stakeholders to collaborate in a timely manner, it becomes possible to address any issue holistically without undue delay. ●Where possible, look for patterns in the needs of and interactions between system elements. Draw on knowledge in each area to identify what's essential to success, and which relationships among elements influence outcomes. Armed with this information, needs can be anticipated, standards can be set, and a holistic viewpoint can be attained. ●Automation can facilitate working holistically. Where opportunity and sufficient resources are available, automation can support end-to-end visibility for the organization and provide it with an efficient means of integrated management

Applying the principle of Keep it simple and practical

To successfully apply the principle of keeping it simple and practical: ●Ensure that there's value. Every activity should contribute to the creation of value. ●Simplicity is the ultimate sophistication. It may seem harder to simplify, but it is often more effective.Do fewer things, but do them better. ●Minimizing activities to include only those with value for one or more stakeholders allows more focus on the quality of those actions. ●Respect the time of the people involved. A process that's overly complicated and bureaucratic is a poor use of the time of the people involved. ●The easier it is to understand, the more likely it is to be adopted. To ensure the adoption of a practice, make sure it's easy to follow. ●Simplicity is the best route to achieving quick wins. Whether in a project or while improving daily operations activities, quick wins allow organizations to demonstrate progress and manage stakeholder expectations. Working in an iterative way with feedback quickly delivers incremental value at regular intervals.

ITIL and Agile

When Agile and ITIL are adopted together, software development and service management can both progress at a similar pace, share common terminology, and ensure that the organization continues to co-create value with all its stakeholders. Ways in which ITIL and Agile can work together include: ●Streamlining practices such as change control ●Establishing procedures to incorporate and prioritize management of unplanned interruptions (incidents), and to investigate causes of failure ●Separating interactions, if necessary, between "systems of record" (e.g. the configuration management database) needed to manage services from "systems of engagement" (e.g. collaboration tools) used by software development teams.

The role of feedback

While the iteration is undertaken, circumstances might change and new priorities arise; thus, the need for the iteration might also be altered or even eliminated. To ensure that these actions remain focused and appropriate—even in changing circumstances—it's important to seek and use feedback before, during, and after each iteration. Well-constructed feedback mechanisms facilitated the understanding of: ●End-user and customer perception of the value created ●The efficiency and effectiveness of value chain activities ●The effectiveness of service governance and management controls ●Interfaces between the organization and its partner-supplier network ●Demand for products and services Once it's received, feedback should be analyzed to identify improvement opportunities, risks, and issues.

Collaborate and promote visibility.

Work together across boundaries for greater buy-in, more relevance to objectives(because better information is available for decision making), and increased the likelihood of long-term success. Achieving objectives requires information, understanding, and trust among stakeholders. Work and consequences should be made visible, hidden agendas avoided, and information shared to the greatest extent possible.

Combining iteration and feedback

Working in a time-boxed, iterative manner with feedback loops embedded into the process allows for: ●Great flexibility ●Faster responses to customer and business needs ●Ability to discover and respond to failure earlier and more quickly ●Overall improvement in quality Appropriate feedback loops among participants of activity give everyone involved a better understanding of where their work comes from, where their outputs go, and how their actions and outputs affect outcomes. This, in turn, enables them to make better decisions.

Governance is realized through the following activities:

●*Evaluation: *The evaluation of the organization, its strategy, portfolios, and relationships with other parties. The governing body evaluates the organization on a regular basis as stakeholders' needs and external circumstances evolve. ●*Direction: *The governing body assigns responsibility for and directs the preparation and implementation of organizational strategy and policies. Strategies set the direction and prioritization for organizational activity, future investment, and so on. Policies establish the requirements for behavior across the organization and, where relevant, suppliers, partners, and other stakeholders. ●*Monitoring: *The governing body monitors the performance of the organization and its practices, products, and services. The purpose of this is to ensure that performance is in accordance with policies and direction

The SVS includes these components:

●*Guiding principles: *Recommendations for guiding an organization in all circumstances, regardless of changes in its goals, strategies, type of work, or management structure. ●*Governance: *The way(s) in which the organization is directed and controlled. ●*Service value chain: *A set of interconnected activities an organization performs to deliver a valuable product/service to its consumers, and to facilitate the realization of value. ●*Practices: *Sets of organizational resources designed for performing work or accomplishing an objective. ●*Continual improvement: *An ongoing organizational activity of continuous re-evaluation performed at all organizational levels to ensure that performance continually meets stakeholders' expectations. ITIL 4 enables this continual improvement activity through the application of the ITIL continual improvement model and supporting continual improvement practice.

apply the "focus on value" principle successfully:

●*Know how service consumers use each service.* Understand their expected outcomes, how each service contributes to them, and how the service consumers perceive the service provider. Continually collect feedback regarding value—not merely at the start of the service relationship. ●*Encourage a focus on value among the entire staff. *Instruct them to be continually aware of who their customers are, as well as understand the CX. ●*Focus on value during normal operations as well as during improvement activities. *The organization as a whole contributes to customer-perceived value. Thus, everyone in the organization must maximize the value they create. This task should not merely be left to those working on exciting projects or new products. ●*Focus on value is necessary during every step of any improvement initiative. *Everyone involved in the initiative must understand the outcomes the initiative is working to facilitate, how its value is to be measured, and how they must contribute to the co-creation of that value.

Key inputs to the SVS are:

●*Opportunity: *An option or possibility to add value for stakeholders or otherwise improve the organization. ●*Demand: *The need or desire for products and services among the organization's internal or external consumers.

The output of the SVS is

●*Value: *The perceived benefits, usefulness, and importance of the thing in question. The ITIL SVS enables the generation of many different types of value for a wide range of stakeholders.

DevOps methods present further opportunities for improving how software products are developed and managed

●Creating fast feedback loops from delivery and support to software development and technology operations ●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


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