The Evolution of ITIL:<br />A New Operating Model in ITIL 4

This is 2019 folks, and a lot has changed over the past 10 years. The last update to the ITIL^® framework was in 2011, with a new edition of the five ITIL core books made available, and new certification training courses launch (along with many thousands of organizations implementing various aspect of ITIL, driving down costs, improving performance, and delivering higher quality services to their customers).

What are some of the key trends we have seen in business over the last 10 years, since the last major update?

• The economy is going through a “digital transformation” (some say a digital “revolution”), with more commerce being conducted over mobile devices and more and more business entirely dependent on IT-enabled services in order to conduct business.
• The pace of business and technology change is increasing. Business are demanding more frequency features and functionality in their mobile “Apps,” and IT must respond in order to keep the business ahead.
• With the transformation to a digital economy, the internet is the playing field. Business competition is now global in scope. Products and services from your business are being considered alongside those from Mumbai, London, and Dubai.
• To help support this digital transformation, best practices such as Agile, DevOps, and Lean have emerged and found increasing adoption. These practices each have their own focus, yet what is needed is a new digital operating model that can tie all of these practices together, enabling business to compete and thrive in this new landscape.

From Service Lifecycle to Service Value System

Released in 2007, ITIL V3 structure was based on a Service Lifecycle, the idea that a service should go through a set of stages as it progresses from conception to live operation. Thus, the V3 framework includes a Service Strategy (SS) stage and set of processes at its core to provide overall guidance and direction for a services organization. The Service Design (SD) stage and set of processes then takes that strategy and designs new and changed services for the live environment, so that the services can provide the lowest total cost with the highest quality throughout their life.

Once services have been designed, the Service Transition (ST) stage and processes take over to build, integrate, test, and deploy the new or changed services into the live environment, so that customers and users can begin utilizing these services to support their business processes.

Service Operation (SO) provided supporting processes and activities to keep the live operational services up and running, delivering value to the organization. Finally, a Continual Service Improvement (CSI) stage keeps everything aligned internally and in sync with a changing business environment.

The evolution of ITIL to version 4 introduces with it a new digital operating model, one that takes a different structure that ITIL V3. Whereas as ITIL V3 is service lifecycle and process focused, the structure of ITIL 4 is based on two key components:

• The Four Dimensions model. Based on the concept of the four Ps (people, products, partners, processes) in ITIL V3, the Four Dimensions model extends each of these four areas to include other critical considerations that ought to be provided for in the production and management of services
• The Service Value System (SVS). The SVS takes the place of the service lifecycle structure, bring a new digital operating model to organizations to help them face and overcome the challenges of a new digital world.

The Four Dimensions Model

The Four Dimensions model, an evolution of the four Ps in ITIL V3, ensures that an organization takes a holistic approach to service management. By giving each of these dimensions adequate consideration no matter what the activity, a service provider can ensure that their system for creating value in the form of products and services will remain balanced and effective.

• Organizations and People. Structure is not sufficient. An organization also needs a culture that supports its objectives and the right level of capacity and competency among its workforce.
• Information and Technology. This dimension includes the information and knowledge, as well as the technologies and tools required for the delivery and management of services.
• Partners and Suppliers. This refers to an organization’s relationships with other organizations involved in the design, development, deployment, delivery, support, and/or continual improvement of services.
• Value Streams and Processes. Refers to how the various parts of the organization work together in an integrated and coordinated way to enable value creation through products and services.

Failing to address all four dimensions properly may result in services becoming undeliverable, or not meeting expectations for quality or efficiency.

The Service Value System

Rather than a structure based on a lifecycle, the Service Value System (SVS) is an interactive system of components that work together to facilitate value co-creation through IT-enabled services. The ITIL 4 SVS offers a flexible and practical basis to support organizations on their digital journey, enabling an organization to respond quickly to opportunities for improvement in existing products/services, or new/increased demand from consumers in the marketplace. The SVS interfaces with other organizations (partners and suppliers), forming an ecosystem that can help create value for those other organizations as well, including their customers and stakeholders.

The SVS not only facilitates speed but is also more flexible and adaptable as an overall operating model for various types of IT service organizations—from the more traditional organization that favors a stable environment, and slow, steady product/serviced introduction, to the more high-velocity businesses that require the release of new and improved functionality in products/services on a daily basis. Let’s look at the key components of the SVS.

The ITIL 4 Service Value System not only facilitates speed but is also more flexible and adaptable as an overall operating model.

Guiding Principles for All Circumstances. The guiding principles as such are not new, having their roots in a 2016 update of the framework. However, they are extremely useful in helping IT professionals adapt ITIL guidance to their own context and needs. The principles are a set of recommendations that can guide an organization in all circumstances, regardless of changes in its strategies, goals, type of work, or management structure. The ITIL 4 guiding principles are:

• Focus on value. All activities conducted by the organization should link back, directly or indirectly, to value for itself, its customers, and other stakeholders. The first step is to know who is being served. Who is the consumer? In addition, realize that value is a perception, and can come in many forms—revenue, customer loyalty, lower costs, or increased market share.
• Start where you are. It’s not always necessary to reinvent the wheel. See what can be re-used from the current product or service when developing a new service offering. This helps reduce development costs and facilitates speed of delivery.
• Progress iteratively with feedback. Rather than take months to design, develop and deploy a new/changed service (and take on a considerable amount of risk), roll out your service in a series of small chunks, and with each release gather feedback. This enables faster time to market, less risk of missing expectations, and course correction if necessary.
• Collaborate and promote visibility. Services are not developed in a vacuum, and inclusion is better than exclusion. Encourage sharing and collaboration across teams to promote creativity and quality solutions. Share reporting on progress visibly, so that all can see the progress (or bottlenecks that require action).
• Think and work holistically. When designing and developing a service solution, pay attention to how all parts of the organization work together in an integrated way to produce products and services.
• Keep it simple and practical. Always use the minimum number of steps to accomplish an objective. Start with the outcome desired by the customer and other stakeholders (the results) and work backward to produce a solution that delivers that outcome. If a step in the process doesn’t add value, then why do it? Eliminate it.
• Optimize and automate. First optimize your value stream, process, or activity by taking the gaps out and streamlining the steps required. Then apply automation to make the process or activity as effective and efficient as possible.

By applying these principles at every stage in service delivery, IT professionals can better define approaches and navigate difficult decisions. ITIL 4’s focus on progressing iteratively, collaboration, automation, and keeping things simple, reflect principles found in Agile, DevOps, and Lean methodologies.

Governance to Ensure We are Aligned. Every organization is directed by a governing body (i.e., a person or group of people who are accountable for the performance and compliance of the organization). Governance, as a concept and practice, was included in ITIL V3 as a component of Service Strategy. In ITIL 4, it’s a key component of the SVS. The role and position of governance in the ITIL SVS depends on how the framework is applied in an organization—since the SVS is a universal model that can be applied to an organization as a whole, or to one or more of its units or products. However the SVS is applied, the governing body should retain oversight and perform governance activities to ensure alignment with the objectives and priorities of the organization.

The Service Value Chain—the heart of the SVS. The central element of the SVS is the Service Value Chain, an operating model that outlines the key activities required to respond to opportunity/demand and facilitate value realization through the creation and management of products and services. The ITIL service value chain includes six value chain activities that lead to the creation of product and services, and in turn, value for customers and other stakeholders.

• Plan. Activities ensure a shared understanding of the vision, current status, and improvement direction for all products and services across the organization.
• Improve. Activities ensure continual improvement of products, services, and practices across all value chain activities.
• Engage. Activities provide a good understanding of stakeholder needs, transparency, and continual engagement and a good relationship with all stakeholders.
• Design and transition. Activities ensure that products and services continually meet stakeholder expectations for quality, cost, and time to market.
• Obtain/build. Activities ensure that service components are available when and where needed and meet agreed specifications. Some service components may be obtained from third parties, while others may be built in-house.
• Deliver and support. Activities ensure that services are delivered and supported according to agreed specifications and meet stakeholder expectations.

From Processes to Practices. Previous versions of ITIL have emphasized the importance of “processes” to plan, design, transition and manage IT services. ITIL 4 expands the notion of processes to “practices,” so that elements such as culture, technology, information, and data management can also be considered in order to arrive at a holistic vision of the desired ways of working. This element of the SVS is known as practices and is a fundamental part of the ITIL 4 framework. The SVS includes general management practices, service management practices, and technical management practices, each of which are sets of organizational resources for performing work or accomplishing an objective.

Many of the processes found in ITIL v3 are carried over to ITIL 4—for example, incident management, problem management, service level management. Some are refined, such as change control. The ITIL practices share the same value and importance as the current ITIL processes but follow a more holistic approach.

Continual Improvement Embedded in Everything We Do. Continual Improvement was entitled Continual Service Improvement (CSI) in the ITIL v3 framework. It was represented as a formal stage in the service lifecycle, the idea being that once a service was live in production, it ought to be monitored and continually improved. But the scope of CSI in ITIL v3 extended beyond just services. Its objective was to monitor and continually improve all lifecycle stages, processes, activities, functions, technology components, and even deliverables.

The importance of continual improvement continues with ITIL 4, however, the term has been simplified in ITIL 4, since continual improvement should take place in all areas of the organization, at all levels—from strategic activities, to ongoing tactical design and transition activities, and in daily operations. To maximize the quality and effectiveness of services, every person involved in the provision of services should keep continual improvement in mind and be looking for opportunities to improve.

Continual improvement, being a key component of the Service Value System, applies to the SVS in its entirety—to all of the organization’s stakeholders, products, services, service components, and relationships. To ensure continual improvement is considered at all levels, the SVS includes the following:

• A seven-step continual improvement model, a slight evolution of the CSI Approach that is part of ITIL v3. This provides a structed approach to implementing any improvement.
• The Service Value Chain embeds continual improvement in its set of activities with the Improve SVC activity. The notion is that improvement capabilities should be embedded in all products and services produced.
• The Continual Improvement practice is also one of the supporting general management practices that supports Service Value Chain activities and the production of quality products and services.

Why Transition to ITIL 4 as Your Service Management Framework?

The new digital age we have entered is a faced paced and complex environment, requiring that individuals and organizations meet new challenges and change their way of thinking and working in order to compete and thrive. Service providers must cultivate all relationships—not only with customers, but other stakeholders—to stay in touch with changing needs and new opportunities for services and to ensure quality service provision.

Due to the complexity of the environment, and the nature of service solutions, a four-dimensional holistic approach is essential so that all aspects are considered in the development of a new/revised service offering. To enable organizations to be responsive to the pace of business change, and to function as a flexible and adaptable framework for all types of businesses, a new operating model—the Service Value System—is called for, so that all the components and activities of an organization can quickly and effectively work together to enable value realization for all stakeholders.

In this SVS, the guiding principles will enable an organization to improve the quality of decision making in all circumstances. Governance will ensure the service provider is aligned with its parent organization and is compliant with standards and regulations. A series of service value change activities will ensure that the organization carries out the key activities quickly and effectively to produce products and services that enable value realization by its stakeholders. Supporting practices will provide the necessary support for all service value chain activities. And continual improvement will become the mind-set of all personnel involved in the provision of services. 

The new ITIL 4 framework, composed of the Service Value System, along with the Four Dimensions model, will help guide, enable, and equip organizations of all types and sizes to meet the challenges of the new digital age that is upon us.

ITIL^® is a (registered) Trade Mark of AXELOS Limited. All rights reserved.

Paul is the president and principal consultant of Optimal Connections LLC. With more than 30 years of experience in planning and managing technology services, Paul has held numerous positions in both support and management for companies such as Motorola, FileNet, and QAD. He is also experienced in service desk infrastructure development, support center consolidation, deployment of web portals and knowledge management systems, as well as service marketing strategy and activities. Currently Paul delivers a variety of services to IT organizations, including Support Center Analyst and Manager training, ITIL Foundation and Intermediate level training, Best-Practice Assessments, Support Center Audits, and general IT consulting. His degrees include a BA and an MBA. Paul is certified in most ITIL Intermediate levels and is a certified ITIL Expert. He is also on the HDI Faculty and trains for ITpreneurs, Global Knowledge, Phoenix TS, and other training organizations. For more about Paul, please visit www.optimalconnections.com.