ITIL 4 introduces many new models and concepts, one of which is the Service Value Chain. For those who missed my session,I briefly described this concept and how it can be used by IT organisations. I elaborate a little further here.

A service value chain is a set of loosely coupled activities that any service provider undertakes. An organisation will conduct the following activities at some point:

  • Engage: Interacting with external stakeholders to provide a good understanding of needs, to promote transparency, and foster good relationships with all stakeholders.
  • Plan: Creating a shared understanding of the vision, status and improvement directions for all four dimensions and all products and services.
  • Improve: Ensuring continual improvement of products, services and practices across all value chain activities and the four dimensions.
  • Design and Transition: Ensuring that products and services continually meet stakeholder expectations for quality, cost, and time to market.
  • Obtain/Build: Ensuring service components are available when and where they are needed, and they meet agreed specifications.
  • Deliver and Support: Ensuring that services are delivered and supported according to agreed specifications and expectations.

These activities can be combined and integrated in many ways to create a “journey”. ITIL 4 calls this “value streams”.They can bedefined at any level of the organization, and each represents how the organisation responds to specific scenarios or types of demand.

There are two key points to keep in mind about value streams:

  • Value chain activities can repeat themselves over the course of a value stream. 
  • Value streams always start with Demand, and always end with Value. Practices support value chain activities at various points in the value stream. A value stream orientation allows organisations to define their common scenarios and workflows, and map out the contributions needed from each practice.

The result of the value stream is a live, functioning product or service – something the service provider organisation uses to co-create value with consumers. It’s important that the focus on purpose of business value and tangible outcomes remains at the forefront, and the community doesn’t get embroiled in debates about the minutiae of the terminology as it has done in the past.