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ITIL 4 New Paradigms: Value Chain and Streams

Joaquín García

Joaquín García

ITIL 4 New Paradigms: Value Chain and Streams
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I want to introduce you to some significant changes in the new version of ITIL®. I’ll start by reviewing what happened to the life cycle and whether or not the concept of Service Value Chain (SVC) replaces it.

In version 3, the concepts were organized in relation to the Service Life Cycle. The version was published in five books named after the five stages of the cycle.

Service Life Cycle. Copyright© AXELOS Limited 2007 – ITIL 4 New Paradigms: Value Chain and Streams

Why update ITIL V3?

1. It did not adjust to the new “Agile Times”.

Even though it was not one of ITIL®’s goals to relate the five stages to cascading projects, some graphics resembled the classic “Analysis, Design, Build, Test, and Implement” – Waterfall approach [Illustration 1 Service Life Cycle]. This suggested that ITIL®v3 was not suitable for the new era of iterative development and agility.

2. Processes appeared limited to one stage of the service life cycle.

The ITIL®v3 management processes seemed to be limited in scope to the stage corresponding to the book in which it was published. Certainly, this was not the purpose of ITIL®v3 either, as shown in the illustration below. However, many organizations interpreted this to mean that their model of “departmental silos” had to be changed into a new model of “stage silos”.

Governance and Service Management Model through the Service Life Cycle. Copyright © AXELOS Limited 2007 – ITIL 4 New Paradigms: Value Chain and Flows

3. It was not easy to see how to interrelate some management processes with others.

ITIL®v3 went to great lengths to explain that management processes should collaborate with each other as shown in the example in Illustration 3 below. However, it did not offer a guide on how to execute this in the various situations that the provider faced: a new service, modification of an existing service, addressing a type of incident, responding to a user’s service request, etc. Each Process Owner defined their objectives without a global service provider approach, and they in turn often became “process silos”.

4. For the client, the stages prior to Service Operation seemed to be decoupled from the concept of value.

Value to the client’s business materialized in the Service Operation stage, when customers used the service. The previous stages seemed to be very separated from the concept of Value, and again, did not favor the alignment of the provider organization or the collaboration of the different teams.

Alignment of new services to business requirements. Copyright © AXELOS Limited 2011 -ITIL 4 New Paradigms: Value Chain and Flows

How is ITIL 4 different?

Version 4 introduces the concept of the Service Value Chain formed by 6 high-level activities that, combined in different flows, allow us to transform the Demand or Need of our clients into Products and Services capable of creating value for the client.

Service Value Chain. Copyright © AXELOS Limited 2019 – ITIL 4 New Paradigms: Value Chain and Flows

This conceptual structure is made up of a generic operating model that should serve both to create a new service and to resolve an incident.

So, for example, to create a new service, we can see the following flow of activities:

Example of Value Flow for the creation of a new service. Copyright © AXELOS Limited 2019 -ITIL 4 New Paradigms: Value Chain and Flows

Or in the case of resolving an incident:

Example of Value Flow in the resolution of an incident. Copyright © AXELOS Limited 2019 – ITIL 4 New Paradigms: Value Chain and Flows

In both examples we can see that the design and sequence of the activities does not correspond to a single practice (in V3, these were called ITIL Management Processes). Instead, these activities may belong to different practices but are linked in such a way that they respond to demand and use the same general approach.

What are the advantages of ITIL 4?

  1. It breaks with the traditional cascading flow vision. The model adapts to both traditional waterfall and iterative/agile approaches.
  2. It allows us to formalize a value flow for each type of problem. The creation of a new service, the modification of an existing service, the resolution of a specific type of incident, user support for a type of service request, etc., are specific problems for which a Value Stream can be specifically designed and therefore a suitable and efficient operating mode.
  3. The ITIL® Practices are not directly associated with one specific Service Value Chain activity, as they seemed to be with Stages of the Service Life Cycle in ITIL® v3. The ITIL® 4 approach is based on a logical order of activities to address a demand; these activities may belong to different ITIL® practices.
  4. Every value stream always begins with a demand and ends with customer value. This makes it easier for the supplier organization to align the objectives based on the final value that we will provide to the client.
  5. It promotes and facilitates cooperation between different teams focused on the common goal of creating customer value. With this, it allows us to overcome the previously siloed organizational structures.

Thus, the Service Value Chain is an operational metamodel to establish specific operating modes (Value Streams) adapted to specific needs and results. In addition, each value stream, designed with a specific objective, represents a baseline for continuous improvement.

I hope this helps clarify why the move from ITIL v3 to ITIL 4 was made.

Joaquín García

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About the Author

Joaquín García

Joaquín García

Joaquín García is a Netmind Lead Trainer in Governance and IT Service Management. His certifications include ITIL® Expert, TOGAF® Certified, BAA, COBIT® 5, ISO 20000, ISO 27001, PRINCE2®, DevOps, Lean IT Instructor, Agile PM Practitioner and PMP®-ACP.

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