ITIL service value chain

The ITIL service value chain is the application of the value chain model to service management that AXELOS Limited designs, markets, delivers, and owns.

Definitions

According to the ITIL Foundation 4e by Axelos,

ITIL service value chain. An operating model for service providers that covers all the key activities required to effectively manage products and services.

● What is the Service Value Chain?
o 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 creation through the creation and management of products and services.
o Doesn't introduce a linear sequence of actions
o Usually starts with Engage but not always
o Central activities depicted in the cube can interact in any order between each other
and with other activities
o Overlaps between Improve and Engage, Improve and central cube, Improve and Products & services illustrate the feedback loops that should be present between each part of the service value chain via the improvement cycle
o Perceived value drives the demand for the next order, service, product, and iteration of service relationships
o Perceived value should also be managed and understood
● Value Chain Interactions with Practices
o Service value chain activities represent the steps an organization takes in the creation of value. Each activity contributes to the value chain by transforming specific inputs into outputs.

o To convert inputs into outputs, the value chain activities use different combinations of ITIL practices. Each activity may draw upon internal or third-party resources, processes, skills and competencies from one of more practices.

Activities

Main wikipage: Value chain activity

The ITIL Foundation 4e by Axelos emphasizes value co-creation as its key concept and recognizes six value chain activities. Products and services, demand and value are not value chain activities; they are SVS components. PIEDOD is a mnemonic that can be used to memorize these six activities.

Plan

Planning at all levels is performed via plan activity. Its purpose is to ensure a shared understanding of the vision, current status and improvement direction for all four dimensions and all products and services across the organization.

o Inputs:
▪ Policies, requirements and constraints provided by the organization's governing body
▪ Consolidated demands and opportunities provided by engage
▪ Value chain performance information, improvement initiatives and plans provided by improve
▪ Improvement status reports from improve
▪ Knowledge and information about new and changed products and services from design and transition and obtain/build
▪ Knowledge and information about third party service components from engage

o Outputs:
▪ Strategic, tactical and operational plans
▪ Portfolio decisions for design and transition
▪ Architectures and policies for design and transition
▪ Improvement opportunities for improve
▪ Product and service portfolio for engage
▪ Contract and agreement requirements for engage

Improve

Improvements at all levels are initiated and managed via improve activity. Its purpose is to ensure continual improvement of products, services and practices across all value chain activities and the four dimensions of service management.

o Inputs:
▪ Product and service performance information provided by deliver and support
▪ Stakeholders' feedback provided by engage
▪ Performance information and improvement opportunities provided by all value chain activities
▪ Knowledge and information about new and changed products and services from design and transition and obtain/build
▪ Knowledge and information about third party service components form engage
o Outputs:
▪ Improvement initiatives and plans for all value chain activities
▪ Value chain performance information for plan and the governing body
▪ Improvement status reports for all value chain activities
▪ Contract and agreement requirements for engage
▪ Service performance information for design and transition

Engage

All incoming and outcoming interactions with parties external to the service provider are performed via engage value chain activity.

● Value Chain Activity: Engage
o The purpose of the engage value chain activity is to provide a good understanding of stakeholder needs, continual engagement with all stakeholders, transparency and good relationships with all stakeholders.
o Inputs:
▪ Product and service portfolio provided by plan
▪ High level demand for services and products provided by customers
▪ Requests and feedback from customers
▪ Incidents, service requests and feedback from users
▪ Information on the completion of user support tasks from deliver and support
▪ Market opportunities from current and potential customers and users

▪ Cooperation opportunities and feedback provided by partners and suppliers
▪ Contract and agreement requirements from all value chain activities
▪ Knowledge and information about new and changed products and services from design and transition and obtain/build
▪ Knowledge and information about third party service components from suppliers and partners
▪ Product and service performance information from deliver and support
▪ Improvements initiatives and plans from improve
▪ Improvement status reports from improve
o Outputs:
▪ Consolidated demands and opportunities for plan
▪ Product and service requirements for design and transition
▪ User support tasks for deliver and support
▪ Improvement opportunities and stakeholders' feedback for improve
▪ Change or project initiation requests for obtain/build
▪ Contracts and agreements with external and internal suppliers and partners for obtain/build and design and transition
▪ Knowledge and information about third party service components for all value chain activities
▪ Service performance reports for customers

Design and transition

o Creation, modification, delivery, maintenance and support of component, products and services are performed in integrated and coordinated way between design and transition, obtain/build and delivery and support activities

● Value Chain Activity: Design & Transition
o The purpose of the design and transition value chain activity is to ensure that products and services continually meet stakeholder expectations for quality, costs and time to market.
o Inputs:
▪ Portfolio decisions provided by plan
▪ Architectures and policies provided by plan
▪ Product and service requirements provided by engage
▪ Improvement initiatives and plans provided by improve
▪ Improvement status reports from improve
▪ Service performance information provided by deliver and support and improve
● Are certain targets met?
● Was transition successful?
▪ Service components form obtain/build
▪ Knowledge and information about third party service components from engage
▪ Knowledge and information about new and changed products and services from obtain/build
● Product specifications, known errors information
o Outputs:

▪ Requirements and specifications for obtain/build
▪ Contract and agreement requirements for engage
▪ New and changed products and services to deliver and support
▪ Knowledge and information about new and changed products and services to all value chain activities
▪ Performance information and improvement opportunities for improve

Obtain or build

All new resources are obtained through the obtain/build activity.

● Value Chain Activity: Obtain/Build

o The purpose of the obtain/build value chain activity is to ensure that service components are available when and where they are needed, and meet agreed specifications.
o Inputs:
▪ Architectures and policies provided by plan
▪ Contracts and agreements with external and internal suppliers and partners provided by engage
▪ Goods and services provided by external and internal suppliers and partners
● Engage – Information, interaction, and engagement
● Obtain/Build – components, goods, and services
▪ Requirements and specifications provided by design and transition
▪ Improvement initiatives and plans provided by improve
▪ Improvement status reports from improve
▪ Change or project initiation requests provided by engage
▪ Change requests provided by deliver and support
▪ Knowledge and information about new and changed products and services from design and transition
▪ Knowledge and information about third party service components from engage
o Outputs:
▪ Service components for deliver and support
● Examples:
o Spare parts, consumables (no need for design and transition)
▪ Service components for design and transition
▪ Knowledge and information about new and changed service components to all value chain activities
▪ Contract and agreement requirements for engage
▪ Performance information and improvement opportunities for improve

Deliver and support

● Value Chain Activity: Deliver & Support
o The purpose of the deliver and support value chain activity is to ensure that services are delivered and supported according to agreed specifications and stakeholders' expectations.

o Inputs:
▪ New and changed products and services provided by design and transition
▪ Contracts and agreements with external and internal suppliers and partners provided by engage
▪ Service components provided by obtain/build
▪ Improvement initiatives and plans provided by improve
▪ Improvement status reports from improve
▪ User support tasks provided by engage
▪ Knowledge and information about new and changed service components and services from design and transition and obtain/build
▪ Knowledge and information about third party service components from engage
o Outputs:
▪ Services delivered to customers and users
▪ Information on the completion of user support tasks for engage
▪ Product and service performance information for engage and improve
▪ Improvement opportunities for improve
▪ Contract and agreement requirements for engage
▪ Change requests for obtain/build
▪ Service performance information for design and transition
● Value Streams and the Service Value Chain
o In order to carry out a certain task, or respond to a particular situation, organizations create service value streams. Service value streams are specific combinations of activities and practices, and each one is designed for a particular scenario.
o As each value stream is made up of a different combination of value chain activities and practices, inputs and outputs must be understood as specific to particular value streams.