This year sees the publication of a new version of ITIL, the world’s leading best practice for IT service management (ITSM). The rollout of ITIL 4 will come in sections. In this blog, I want to give you an overview of what you’ll find in the just-now-released ITIL 4 Foundation.

About the release plans

ITIL 4 Foundation (publication and exams) will be available from February 2019. But this is just the initial release of ITIL 4, with further details to be released later in 2019, including additional publications and exams. You can read more about these future plans for ITIL 4 in my blog What’s Coming in ITIL 4?

Here @StuartRance shares everything you need to know about #ITIL4 from the newly introduced ITIL service value system (SVS) to the Guiding Principles. Click To Tweet

Value, outcomes, costs, and risks

The first thing you need to know about ITIL 4 is that it emphasizes the importance of value creation, rather than just delivering services.

ITIL 4 defines a service 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.”

The key to understanding what’s in ITIL 4 lies in understanding how the terms value, outcomes, costs and risks have been used, and how this is fundamental to delivering IT services.

• Value: ITIL 4 defines value as “The perceived benefits, usefulness, and importance of something.” It is vital to understand that value is not absolute. We can only measure the value of our services to our customers if we understand how the customers perceive them.
• Outcomes: There is a difference between service outputs and service outcomes. An outcome is a result that is enabled by the outputs of a service. For example, an output of a wedding photography service might be a photo album, but the outcome is the happy memories that are evoked when looking at the album.

• Co-creation of value: In ITSM, as service providers, we don’t create value for our customers per se, rather we work with them to create value for both parties (us and them). The customer clearly gets value because the service enables them to achieve something that is important to them. For example, a taxi service might enable a customer to get to a meeting in time. The service provider also gets value from the service. This might be in the form of money that the customer pays for the service, but there are other types of value for the service provider, for example they may develop new capabilities or relationships that enable them to offer additional services.
• Managing specific costs and risks: Every service removes some costs and risks from the customer. For example, the customer may no longer need to employ and manage expensive technical staff because the service provider has the required capability. Every service also imposes costs and risks on the customer. Costs include any charges that the customer must pay the service provider, and also other costs such as staff training, or providing a network connection so they can access the service. The value of the service is directly affected by the balance of these added and removed costs and risks.

Four dimensions of service management

The second thing that you need to know about ITIL 4 is that it describes four dimensions of service management that need to be considered to ensure that an organization adopts a balanced approach. These different dimensions, or perspectives, need to be included in any service design, in any service management design, and in any improvement plan. The four dimensions are:

• Organizations and people: This includes the culture, systems of authority, roles, skills, and competencies needed to plan, manage, and deliver services.
• Information and technology: This includes the information and technology needed to deliver services (servers, storage, networks, databases, etc.) as well as the information and technology needed to manage those services (ITSM tools, knowledge bases, configuration information, etc.).
• Partners and suppliers: The partners and suppliers dimension helps to ensure that we consider all the relationships needed to foster effective service delivery, since in the modern business environment no service provider can do everything by themselves. We all work with a wide number of other organizations who contribute in various ways to the services we deliver.
• Value streams and processes: This dimension considers all the activities, workflows, controls, and procedures needed to succeed. They need to work together seamlessly to take incoming demand from customers and users, and help to create value.

The ITIL service value system

The third thing you need to know about ITIL 4 is that it introduces the ITIL service value system (SVS), which is depicted in the diagram below.

The SVS challenges practitioners to think about how all the different components needed to deliver services can work together to help co-create value for customers. It encourages service providers to work flexibly and co-operatively to create value, instead of creating individual silos and focusing on optimizing what goes on inside them.

Instead of defining a rigid inflexible structure, the SVS shows how components can be combined together in different ways to suit the specific circumstances.

Let’s take a closer look at the components of the SVS.

Opportunity, demand, and value

As the above diagram shows, opportunity and demand are the triggers for everything a service provider does, and ultimately the service value system should result in the co-creation of value, for the service provider, their customers, and other stakeholders.

The service value chain

At the heart of the SVS is the service value chain, which describes six key activities needed to respond to demand and facilitate value realization.

The service value chain activities are:

1. Plan: This activity creates plans, portfolios, architectures, policies etc. to ensure a shared understanding of what the organization is trying to achieve, and how this will be done.
2. Improve: This activity creates improvement plans and initiatives to ensure continual improvement of all products, services, and practices across all four dimensions of service management
3. Engage: This activity provides engagement with stakeholders and an understanding of their needs.
4. Design and transition: This activity creates new and changed services and ensures that they meet stakeholder expectations for quality, cost, and time to market
5. Obtain/build: This activity creates service components, ensures they are available when and where they are needed, and that they meet agreed specifications.
6. Deliver and support: This activity ensures that services are delivered and supported in a way that meets stakeholder expectations.

But ITIL 4 does not just describe these key activities. It also provides guidance about how to plan, manage, and improve them.

Guiding principles

The ITIL 4 guiding principles provide practical guidance on how organizations can plan and manage IT services. They can be used to guide decision making, to prioritize and select improvement opportunities, and to help an organization adopt the ideas from ITIL and adapt them to their specific circumstances. If you’re familiar with ITIL Practitioner then you may recognise the ITIL guiding principles, but they have been extended and updated for ITIL 4.

These guiding principles should not be treated separately; you need to think about all of them whenever you need to make a decision. You could even print them out on a big sheet of paper and stick them on the wall of your meeting room. Here they are:

1. Focus on value
Everything that the organization does needs to map, directly or indirectly, to creation of value for stakeholders. The most important of these stakeholders are the service consumers, but value for other stakeholders should also be considered.

2. Start where you are
Don’t start from scratch and build something new without considering what is already available. There is usually a great deal in the current services, processes, programs, projects, and people that can be reused.

3. Progress iteratively with feedback
Don’t try to do everything at once. Organize work into smaller, manageable sections that can be completed in a timely manner. Use feedback before, during, and after each iteration to ensure that actions are focused and appropriate, even if circumstances change.

4. Collaborate and promote visibility
Working together across boundaries produces results that have greater buy-in, more relevance to objectives, and increased likelihood of long-term success. Work and consequences should be made visible, hidden agendas avoided, and information shared to the greatest degree possible.

5. Think and work holistically
Outcomes will suffer unless the organization works on the service as a whole, not just on its parts. Results are delivered to customers through proper management and integration of information, technology, organization, people, practices, partners, and agreements, which should all be coordinated to provide value.

6. Keep it simple and practical
Use the minimum number of steps necessary to accomplish the objectives. Eliminate anything that doesn’t contribute to value-creation. Use outcome-based thinking to produce practical solutions that deliver results.

7. Optimize and automate
You should optimize your work, and eliminate waste, before you automate anything. Then use technology to achieve whatever it is capable of. Human intervention should only happen where it really contributes value.

Continual improvement

To deliver great services, organizations need continual improvement for every aspect of the service management system. This includes improvement of the entire system, as well as of all the products, services, service components, people, practices, and relationships. ITIL 4 defines a continual improvement model that can help to guide and support improvement planning.

Practices describe how work is done

ITIL 4 also describes 34 practices that underpin and support the service value chain. These practices include many capabilities that will be familiar to people who studied earlier versions of ITIL, such as incident management, problem management, and release management; but there are also several new areas such as risk management, project management, and architecture management.

Practices are much more than just processes; they also include ideas from each of the four dimensions of service management (Organizations and People, Information and Technology, Partners and Suppliers, Value Streams and Processes).

The practices are grouped into three areas, but it’s important to realize that the practices are not independent. ITIL 4 describes how different combinations of practices work together to deliver value and discourages organizations from building silos around individual practices.

I am just going to list the practices here, because this blog is already far too long. I will be writing lots more about individual practices in future blogs.

General Management Practices

• Architecture management
• Continual improvement
• Information security management
• Knowledge management
• Measurement and reporting
• Organizational change management
• Portfolio management
• Project management
• Relationship management
• Risk management
• Service financial management
• Strategy management
• Supplier management
• Workforce and talent management

Service Management Practices

• Availability management
• Business analysis
• Capacity and performance management
• Change enablement
• Incident management
• IT asset management
• Monitoring and event management
• Problem management
• Release management
• Service catalogue management
• Service configuration management
• Service continuity management
• Service design
• Service desk
• Service level management
• Service request management
• Service validation and testing

Technology Management Practices

• Deployment management
• Infrastructure and platform management
• Software development and management

Governance

Lastly, ITIL 4 recognizes that governance is an essential part of the service value system. Governance directs and controls the organization, ensuring that management activities are aligned with the overall goals and intentions.

My conclusions

As a member of the lead architecture team for ITIL 4, I’ve enjoyed working with a great team of people to develop this new version of ITIL. Previous ITIL updates helped organizations move from a process focus to a lifecycle focus, and ITIL 4 continues that journey with a greater focus on the end-to-end creation of value.

ITIL 4 builds on ideas and processes developed in those earlier versions of ITIL, but it takes a much broader view of ITSM – as it takes into consideration everything service providers and service consumers need to co-create value.

It’s important to point out that the ideas and concepts that you learned from ITIL V3 are still just as valid as they always were, but ITIL 4 helps you to tie them together as part of a service value system. If your organization embraces this updated approach you’ll find that you’ll be able to work with your customers to co-create value efficiently and effectively!

I will be writing more on ITIL 4, so stay tuned for that. And I’ve also got a webinar scheduled. Meanwhile, feel free to follow me on Twitter @StuartRance.